<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED SEPTEMBER 30, 1997 COMMISSION FILE NUMBER
1-10395
FIRST BRANDS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06-1171404
State of Incorporation (IRS Employer
Identification No.)
83 Wooster Heights Rd., Building 301
P.O. Box 1911
Danbury, Connecticut 06813-1911
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 203-731-2300
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS Outstanding at November 1, 1997
----- -------------------------------
Common Stock, $.01 par value 39,742,944 shares
<PAGE>
<PAGE>
FIRST BRANDS CORPORATION
INDEX TO FORM 10-Q
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Statements of Income -
For the Three Month Periods
Ended September 30, 1997 and 1996 ........................................ 3
Consolidated Condensed Balance Sheets -
September 30, 1997 and June 30, 1997 ..................................... 4
Consolidated Condensed Statement of Stockholders'
Equity - For the Three Month Period
Ended September 30, 1997................................................. 5
Consolidated Condensed Statements of Cash
Flows - For the Three Month Periods
Ended September 30, 1997 and 1996........................................ 6
Notes to Consolidated Condensed Financial
Statements............................................................... 7-9
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial Condition......................... 10-12
Independent Auditors' Review Report....................................... 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings................................................. 14
Items 2 - 6............................................................... 14
SIGNATURE................................................................. 15
-2-
<PAGE>
<PAGE>
FIRST BRANDS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
------------ ------------
<S> <C> <C>
(in thousands - except per share amounts)
Net sales................................................... $ 269,480 $ 255,597
Cost of goods sold.......................................... 183,195 167,408
Selling, general and
administrative expenses................................... 53,911 50,219
Amortization and other depreciation......................... 3,860 3,254
Interest expense and amortization of debt
discount and expense...................................... 7,114 4,249
Discount on sale of receivables............................. 1,147 1,020
Other income (expense), net................................. (288) 585
---------- ---------
Income before provision for income taxes 19,965 30,032
Provision for income taxes.................................. 7,792 12,025
--------- --------
Net income.................................................. $ 12,173 $ 18,007
======== ========
Net income per common share and common
equivalent share (Note 6).................................. $ 0.30 $ 0.43
======= =======
Weighted average common and common
equivalent shares outstanding (Note 6) 40,775 42,253
======== =========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
-3-
<PAGE>
<PAGE>
FIRST BRANDS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
(dollars in thousands, except share amounts) 1997 1997
------------- --------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Cash and cash equivalents....................................... $ 9,195 $ 7,465
Accounts and notes receivable - net............................. 121,164 137,380
Inventories..................................................... 164,618 151,976
Deferred tax assets............................................. 23,453 24,702
Prepaid expenses................................................ 7,299 7,551
-------------- -----------
Total current assets.......................................... 325,729 329,074
Property, plant and equipment (net of accumulated
depreciation of $150,302 and $141,691)........................ 385,479 377,128
Patents, trademarks, proprietary technology
and other intangibles (net of accumulated
amortization of $195,887 and $192,631)........................ 304,089 310,095
Deferred charges and other assets (net of
accumulated amortization of $52,171 and $52,029) 38,291 37,311
----------- -----------
Total assets.......................................... $ 1,053,588 $ 1,053,608
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities
Notes payable................................................... $ 21,616 $ 8,432
Current maturities of long-term debt............................ 2,899 2,811
Accrued income and other taxes.................................. 10,930 7,373
Accounts payable................................................ 46,665 61,877
Accrued liabilities............................................. 71,649 104,201
------------- ----------
Total current liabilities.................................. 153,759 184,694
Long-term debt.................................................. 408,062 380,467
Deferred taxes payable.......................................... 75,862 74,058
Deferred gain on sale of assets................................. 111 148
Other long-term obligations..................................... 20,451 20,325
Stockholders' Equity
Preferred stock, $1 par value, 10,000,000
shares authorized; none issued................................ - -
Common stock, $0.01 par value, 120,000,000 shares
authorized at September 30, 1997 and June 30, 1997; issued
43,458,544 shares at September 30, 1997
and 43,394,044 shares at June 30, 1997 (Note 6)............... 434 434
Capital in excess of par value.................................. 131,781 130,994
Cumulative foreign currency translation adjustment (15,154) (12,455)
Common stock in treasury, at cost; 3,634,000 shares at
September 30, 1997 and 3,355,000 at June 30, 1997 (102,464) (96,837)
Retained earnings............................................... 380,746 371,780
------------ -----------
Total stockholders' equity................................. 395,343 393,916
----------- -----------
Total liabilities and stockholders' equity $ 1,053,588 $ 1,053,608
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
-4-
<PAGE>
<PAGE>
FIRST BRANDS CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
Capital Foreign
Common in Excess Currency
Stock of Par Translation Treasury Retained
(in thousands) Par Value Value Adjustment Stock Earnings Total
--------- --------- ----------- --------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance as of
June 30, 1997 .............. $ 434 $ 130,994 $ (12,455) $ (96,837) $ 371,780 $ 393,916
Exercise of
Stock Options............... - 787 - - - 787
Cash Dividends............... - - - - (3,207) (3,207)
Purchase of
Treasury Stock.............. - - - (5,627) - (5,627)
Net Income................... - - - - 12,173 12,173
Foreign Currency
Translation Adjustment - - (2,699) - - (2,699)
----- --------- ---------- --------- --------- --------
Balance as of
September 30, 1997 $ 434 $ 131,781 $ (15,154) $(102,464) $ 380,746 $395,343
===== ========= ========== ========= ========= ========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
-5-
<PAGE>
<PAGE>
FIRST BRANDS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
(in thousands) 1997 1996
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income................................................... $ 12,173 $ 18,007
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.............................. 11,625 10,254
Deferred income taxes...................................... 2,997 1,637
Change in certain non-cash current assets and liabilities:
Decrease in accounts receivable......................... 32,897 19,634
(Increase) in inventories............................... (12,642) (3,402)
Decrease in prepaid expenses........................... 252 1,689
Increase in accrued income and other taxes ............. 3,557 14,031
(Decrease) in accounts payable.......................... (15,212) (24,916)
(Decrease) in accrued liabilities (32,552) (27,798)
Other changes................................................ 1,984 (1,525)
-------- --------
Total adjustments........................................ (7,097) (10,396)
-------- --------
Net cash provided by operating activities 5,079 7,611
-------- --------
Cash flows from investing activities:
Capital expenditures........................................ (8,234) (5,751)
Acquisition of leased assets................................ (10,208) -
Purchase and installation of information system ............ (2,727) (1,908)
-------- --------
Net cash (used for) investing activities....................... (21,169) (7,659)
-------- --------
Cash flows from financing activities:
Increase in credit facility borrowings, net 26,345 20,000
Increase in other borrowings, net.......................... 14,522 3,071
(Decrease) in securitization of accounts receivable........ (15,000) -
Proceeds from exercise of stock options.................... 787 957
Purchase of common stock for treasury...................... (5,627) (19,941)
Dividends paid............................................. (3,207) (2,553)
-------- --------
Net cash provided by financing activities 17,820 1,534
-------- --------
Net increase in cash and cash equivalents...................... 1,730 1,486
Cash and cash equivalents at beginning of period............... 7,465 8,326
-------- --------
Cash and cash equivalents at end of period..................... $ 9,195 $ 9,812
======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
-6-
<PAGE>
<PAGE>
FIRST BRANDS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements include all adjustments (all of which were of a normal
recurring nature) necessary to fairly present the results of operations for the
interim periods. All material intercompany transactions and balances have been
eliminated. The results of operations for the three month period ended September
30, 1997 are not necessarily indicative of the results for a full year.
First Brands Corporation ("First Brands" or the "Company") is engaged in the
development, manufacture, marketing and sale of consumer products under branded
and private labels. Principal branded products include: GLAD and GLAD-LOCK
(plastic wrap and bags); STP (oil and fuel additives and other specialty
automotive products); SCOOP AWAY, EVER CLEAN, EVERFRESH and JONNY CAT (cat
litters) and STARTERLOGG (fire starters) and HEARTHLOGG (fire logs).
INVENTORIES
Inventories were comprised of:
<TABLE>
<CAPTION>
September 30, June 30,
1997 1997
------------ --------
(in thousands)
<S> <C> <C>
Raw materials............................................. $ 37,729 $ 34,518
Work-in-process........................................... 3,903 5,795
Finished goods............................................ 122,986 111,663
--------- ---------
Total................................................. $ 164,618 $ 151,976
========= =========
</TABLE>
2. LONG-TERM DEBT
First Brands had long-term debt outstanding as of September 30, 1997 and June
30, 1997 as follows:
<TABLE>
<CAPTION>
September 30, June 30,
1997 1997
------------- ---------
(in thousands)
<S> <C> <C>
Senior Debt:
$300,000,000 Revolving Credit Facility, 5 year term
expiring February 2002, interest at prime rate, LIBOR
plus .275% or CD rate plus .4%; facility fee of .15%....... $ 190,000 $ 162,000
$72,410,000 Australian and New Zealand Credit
Facility, 7 year term expiring March 2004,
interest at local Bill Rate plus .7% ..................... 57,036 58,727
$11,613,000 Canadian Credit Facility, 5 year term expiring
March 2002, interest at Canadian prime rate, LIBOR plus
.425% or Canadian Bankers Acceptance plus .425% .......... 8,655 8,619
Other........................................................ 5,270 3,932
---------- ---------
260,961 233,278
Less: current maturities..................................... (2,899) (2,811)
---------- ---------
Senior Debt........................................... 258.062 230,467
---------- ---------
Subordinated Debt:
7 1/4% Senior Notes Due 2007.............................. 150,000 150,000
--------- ---------
Total Long-term debt.................................. $ 408,062 $ 380,467
========= =========
</TABLE>
-7-
<PAGE>
<PAGE>
The Company's revolving credit facility is unsecured, however, it does contain
certain restrictive covenants pertaining to the ratio of debt to equity,
dividend payments and stock repurchases.
The Australian and New Zealand credit facility is composed of two parts; one of
which was used to acquire the NationalPak business and a second part which can
be used for working capital needs. There are fixed periodic payments associated
with the acquisition borrowing, the working capital borrowing can be drawn on
and repaid at NationalPak's discretion. The facility is secured by the accounts
receivable, inventory and fixed assets of NationalPak.
The Canadian credit facility requires fixed periodic payments. The facility is
secured by the accounts receivable, inventory and fixed assets of the Canadian
business.
The 7 1/4% Note Indenture contains certain restrictive covenants and limitations
principally relating to the Company's right to incur debt and to engage in
certain sale and leaseback transactions.
First Brands was in compliance with the covenants of all debt agreements at
September 30, 1997.
3. ACCOUNTS RECEIVABLE
The Company is engaged in a program to sell up to $100,000,000 in fractional
ownership interest, without recourse, in a defined pool of eligible trade
accounts receivable. Under the current terms of this agreement, the facility
automatically renews each year. The fractional interest sold as of September 30,
1997 totaled $70,000,000. The amounts sold are reflected as a reduction in
accounts receivable on the accompanying Consolidated Condensed Balance Sheets
and costs associated with this program are recorded on the Consolidated
Condensed Statements of Income as discount on sale of receivables.
4. NOTES PAYABLE
Notes payable at September 30, 1997 of $21,616,000 consisted of a fully utilized
$15,000,000 unsecured domestic line of credit and $6,616,000 of the Company's
international subsidiaries' working capital borrowings with local lenders. The
Company's international working capital credit facilities aggregated
$19,554,000, of which $12,938,000 was available at September 30, 1997. The
international facilities are generally secured by the assets of the respective
subsidiaries, with approximately $2,000,000 of the availability at one
subsidiary being guaranteed by First Brands Corporation (U.S.).
-8-
<PAGE>
<PAGE>
5. TAXES
The provision for income tax expense for the three months ended September 30,
1997 and 1996 consists of the following:
<TABLE>
<CAPTION>
Three Months
Ended
September 30,
------------------
1997 1996
---- ----
<S> <C> <C>
(in thousands)
Current:
Federal............................. $ 3,200 $ 7,904
State............................... 754 1,777
Foreign............................. 841 707
------- -------
Total current................... 4,795 10,388
Deferred:
Federal............................. 2,397 1,398
State............................... 531 310
Foreign............................. 69 (71)
------- -------
Total deferred.................. 2,997 1,637
------- -------
Total provision............. $ 7,792 $12,025
======= =======
</TABLE>
6. EARNINGS PER SHARE AND DIVIDENDS
Net income per share has been computed using the weighted average number of
common shares and common share equivalents outstanding for the periods.
The Company has paid its shareholders quarterly cash dividends of $0.08 and
$0.0625 per share for the first quarter of fiscal 1998 and 1997, respectively.
-9-
<PAGE>
<PAGE>
FIRST BRANDS CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion and analysis of the consolidated results of operations
for the three month period ended September 30, 1997 should be read in
conjunction with the accompanying unaudited Consolidated Condensed Financial
Statements and related Notes. The Company is primarily engaged in the
development, manufacture, marketing and sale of branded and private label
consumer products for the home and automotive markets. The Company's products
which include "GLAD", "GLAD-LOCK", "STP", "SCOOP AWAY", "EVERFRESH", "EVER
CLEAN", "JONNY CAT", "STARTERLOGG" and "HEARTHLOGG" can be found in large mass
merchandise stores, chain supermarkets and other retail outlets. The Company
believes that the significant market positions occupied by its products are
attributable to brand name recognition, comprehensive product offerings,
continued product innovation, strong emphasis on vendor support and aggressive
advertising and promotion.
RESULTS OF OPERATIONS
The following table sets forth the percentages of net sales of the Company
represented by the components of income and expense for the three month periods
ended September 30, 1997 and 1996:
<TABLE>
<CAPTION>
Three Months
Ended
September 30,
-----------------
1997 1996
---- ----
<S> <C> <C>
Net sales........................................... 100.0% 100.0%
Cost of goods sold.................................. 68.0 65.5
----- -----
Gross profit........................................ 32.0 34.5
Selling, general, and
administrative expenses........................... 20.0 19.6
Amortization and other depreciation................. 1.4 1.3
Interest expense and amortization of debt
discount and expense.............................. 2.7 1.7
Discount on sale of receivables..................... 0.4 0.4
Other income (expense), net......................... (0.1) 0.2
----- -----
Income before provision for income taxes............ 7.4 11.7
Provision for income taxes........................... 2.9 4.7
----- -----
Net income........................................... 4.5% 7.0%
===== =====
</TABLE>
-10-
<PAGE>
<PAGE>
QUARTER ENDED SEPTEMBER 30 1997 COMPARED TO THE QUARTER ENDED
SEPTEMBER 30, 1996
Sales for the three month period ended September 30, 1997 were $269,480,000, 5%
ahead of last year's $255,597,000. Household product sales increased 12%,
reflecting sales from recent acquisitions (NationalPak) along with higher
fireplace product sales. These gains were partially offset by a 5% decline in
plastic wrap and bag sales. The shortfall in the plastic wrap and bag category
was primarily due to soft market conditions and heavy competitive activity,
particularly in the zipper bag market. Excluding the Company's NationalPak
acquisition and unfavorable exchange rates, international sales from household
products were even with last year. Automotive product sales were down 12% due to
the residual effects of inventory reductions by a major customer, as well as
timing of certain customer orders. Pet product sales for the quarter were up 11%
due to continued market growth, market share increases and new products.
Higher volumes generated from the NationalPak acquisition and increased
polyethylene resin costs combined to increase cost of goods sold by 9%, to
$183,195,000 from the prior year's level of $167,408,000. Gross profit for the
quarter of $86,285,000 (32.0% of sales) was 98% of last year's $88,189,000
(34.5% of sales). The reduced gross margin reflects the aforementioned raise in
polyethylene costs along with a less favorable product mix.
Selling, general and administrative expenses during the quarter of $53,911,000
(20.0% of sales), were 107% of last year's $50,219,000 (19.6% of sales). Costs
associated with the NationalPak business and new product marketing costs
resulted in the quarterly increase.
Amortization and other depreciation expense for the quarter was $3,860,000, 119%
of the prior year's $3,254,000. The higher cost primarily reflects amortization
expense associated with the NationalPak acquisition. Interest expense for the
quarter was $7,114,000, up 67% over the prior year due to borrowing costs
associated with the NationalPak acquisition. Discount on sale of receivables
reflects the costs associated with the sale of a fractional ownership interest,
without recourse, in a defined pool of the Company's eligible trade accounts
receivable.
The Company's effective tax rate for the quarter was 39%, compared to the prior
year's quarterly rate of 40%. Lower rates in the current year reflects a
geographic change in the composition of worldwide pre-tax income, with a larger
share of income coming from foreign operations with lower effective tax rates.
FINANCIAL CONDITION
Worldwide credit facilities in place at September 30, 1997 aggregated
$420,982,000 of which $141,137,000 was available, but unused. Excluding costs
associated with acquisitions, leased asset or stock repurchases, the Company
expects to repay up to $60,000,000 on these credit facilities over the next
twelve months by utilizing the positive cash flow generated by its businesses.
During the quarter, the Company repurchased common shares valued at $5,627,000.
The Company's current forecast for the 1998 fiscal year reflects capital
expenditures of approximately $42,500,000, and fixed payments (interest,
principal, discount on sale of receivables and lease payments) of approximately
$47,000,000.
Certain forward-looking statements are contained within this report, reflecting
management's current estimate of future events. These forward-looking statements
are based on many assumptions, primarily related to the Company's expected
operating performance, any variance from these assumptions may result in
significantly different results.
Based on the Company's ability to generate funds from operations and the
availability of credit under its financing facilities, management believes it
will have the funds necessary to meet all of its described financing
requirements and all other financial obligations.
-11-
<PAGE>
<PAGE>
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
First Brands' independent certified public accountants have performed a limited
review of the financial information furnished herein in accordance with
standards established by the American Institute of Certified Public Accountants.
The Independent Auditors' Review Report is presented on Page 13 of this report.
-12-
<PAGE>
<PAGE>
Independent Auditors' Review Report
The Board of Directors
First Brands Corporation:
We have reviewed the consolidated condensed balance sheet of First Brands
Corporation and subsidiaries as of September 30, 1997, and the related
consolidated condensed statements of income for the three-month periods ended
September 30, 1997 and 1996, the consolidated condensed statements of cash flows
for the three-month periods ended September 30, 1997 and 1996, and the
consolidated condensed statement of stockholders' equity for the three-month
period ended September 30, 1997. These consolidated condensed financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the consolidated condensed financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of First Brands Corporation and
subsidiaries as of June 30, 1997, and the related consolidated statement of
income, stockholders' equity, and cash flows for the year then ended (not
presented herein); and in our report dated August 1, 1997, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying consolidated condensed balance
sheet as of June 30, 1997, is fairly presented, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
/s/ KPMG Peat Marwick LLP
New York, New York
October 30, 1997
-13-
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit Index:
Exhibit
Number Description of Exhibit
- ------- ----------------------
11* -- Computation of Net Income Per Common Share
15* -- Accountants' Acknowledgment
27* -- EDGAR Financial Data Schedule
- ------------
* Filed herewith
B. Reports on Form 8-K
None.
-14-
<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST BRANDS CORPORATION
(Registrant)
Date: November 7, 1997 By: /s/ Donald A. DeSantis
-----------------------
Donald A. DeSantis
Senior Vice President and
Chief Financial Officer
(Principal Accounting
and Duly Authorized
Officer)
-15-
<PAGE>
<PAGE>
Exhibit 11
(Page 1 of 2)
COMPUTATION OF NET INCOME PER COMMON SHARE
(in thousands - except per share amounts)
<TABLE>
<CAPTION>
Three months
ended September 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
COMPONENTS OF PRIMARY NET INCOME
PER COMMON SHARE:
Net income................................. $ 12,173 $ 18,007
======== ========
Average common shares outstanding
during the period........................ 43,406 43,149
Average treasury shares held
during the period........................ (3,464) (1,822)
Common shares issuable with
respect to common equivalents
for stock options........................ 833 926
-------- ----
Average common and common
equivalent shares outstanding............ 40,775 42,253
======== ======
Primary earnings per share:
Net income............................. $ 0.30 $ 0.43
====== ======
</TABLE>
<PAGE>
<PAGE>
Exhibit 11
(Page 2 of 2)
COMPUTATION OF NET INCOME PER COMMON SHARE
(in thousands - except per share amounts)
<TABLE>
<CAPTION>
Three months
ended September 30,
1997 1996
---- ----
<S> <C> <C>
COMPONENTS OF FULLY DILUTED NET INCOME
PER COMMON SHARE:
Net income................................. $ 12,173 $ 18,007
======== ========
Average common shares outstanding
during the period........................ 43,406 43,149
Average treasury shares held
during the period........................ (3,464) (1,822)
Common shares issuable with
respect to common equivalents
for stock options........................ 1,040 1,020
-------- ------
Average common and common
equivalent shares outstanding 40,982 42,347
======== ======
Fully diluted earnings per share:
Net income............................. $ 0.30 $ 0.43
====== ======
</TABLE>
<PAGE>
<PAGE>
Exhibit 15
Accountants' Acknowledgment
First Brands Corporation
83 Wooster Heights Road
Danbury, CT 06813-1911
Ladies and Gentlemen:
RE: FORM S-8 REGISTRATION STATEMENTS NO. 33-35770, NO. 33-56992,
NO. 33-56503 AND NO. 333-56503
With respect to the subject registration statements, we acknowledge our
awareness of the use therein of our report dated October 30, 1997 related to our
review of interim financial information.
Pursuant to Rule 436 (C) under the Securities Act of 1933, such reports are
not considered part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of sections 7 and 11 of the Act.
Very truly yours,
/s/ KPMG Peat Marwick LLP
New York, New York
November 12, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 9,195
<SECURITIES> 0
<RECEIVABLES> 122,755
<ALLOWANCES> 1,591
<INVENTORY> 164,618
<CURRENT-ASSETS> 325,729
<PP&E> 535,781
<DEPRECIATION> 150,302
<TOTAL-ASSETS> 1,053,588
<CURRENT-LIABILITIES> 153,759
<BONDS> 408,062
<COMMON> 434
0
0
<OTHER-SE> 395,343
<TOTAL-LIABILITY-AND-EQUITY> 1,053,588
<SALES> 269,480
<TOTAL-REVENUES> 269,480
<CGS> 183,195
<TOTAL-COSTS> 183,195
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,114
<INCOME-PRETAX> 19,965
<INCOME-TAX> 7,792
<INCOME-CONTINUING> 12,173
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,173
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
