UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 29, 1996
PLAYTEX PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-25485-01 51-0312772
(State or other (Commission File (I.R.S.
jurisdiction of No.) Employer
incorporation or Identificatio
organization) n No.)
300 Nyala Farms Road
Westport, Connecticut 06880
(203) 341 - 4000
(Address, including zip code, and
telephone number, including area
code, of principal executive offices)
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
registrants were required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
At August 7, 1996, 50,885,367 shares of Playtex Products, Inc. common
stock, par value of $.01 per share, were outstanding.
<PAGE>
PLAYTEX PRODUCTS, INC.
INDEX
PAGE
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits 15
(b) Reports on Form 8-K 15
Signatures 16
-2-
<PAGE>
PLAYTEX PRODUCTS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 29, December 30,
ASSETS 1996 1995
--------- ------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 15,291 $ 5,940
Receivables, less allowance for
doubtful accounts 84,713 58,019
Inventories 34,737 49,190
Current deferred taxes 12,627 13,154
Other current assets 1,844 4,545
-------- --------
Total current assets 149,212 130,848
Net property, plant and equipment 52,863 52,462
Intangible assets, net:
Goodwill 353,979 359,629
Patents, trademarks and other 37,184 38,076
Deferred financing costs 16,417 17,426
Due from related party 80,017 80,017
Other noncurrent assets 4,463 4,403
-------- --------
Total assets $694,135 $682,861
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,587 $ 20,057
Accrued expenses 70,427 60,257
Income taxes payable 6,039 1,897
Current maturities of long-term debt 22,500 20,000
-------- --------
Total current liabilities 117,553 102,211
Long-term debt 752,500 770,050
Due to related party 78,386 78,386
Other noncurrent liabilities 14,932 16,784
Deferred income taxes 20,219 16,406
-------- --------
Total liabilities 983,590 983,837
Stockholders' equity:
Common stock, $.01 par value, authorized
100,000,000 shares, issued 50,885,367
shares at June 29, 1996 and
50,879,701 shares at
December 30, 1995 509 509
Additional paid-in capital 424,262 424,217
Retained earnings (deficit) (712,447) (723,917)
Foreign currency
translation adjustment (1,779) (1,785)
-------- --------
Total stockholders'
equity (deficit) (289,455) (300,976)
-------- --------
Total liabilities and
stockholders' equity $694,135 $682,861
======== ========
See condensed notes to consolidated financial statements.
-3-
<PAGE>
PLAYTEX PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share data)
Three Months Three Months
Ended Ended
June 29, July 1,
1996 1995 (a)
------------ ------------
Net sales $131,872 $135,627
Cost of sales 49,960 53,519
-------- --------
Gross profit 81,912 82,108
Operating expenses:
Advertising and sales promotion 33,296 31,398
Selling, distribution and research 14,403 13,600
Administrative 4,276 4,151
Amortization of intangibles 3,202 2,760
-------- --------
Total operating expenses 55,177 51,909
-------- --------
Operating earnings 26,735 30,199
Interest expense, including related
party interest
expense of $3,038 for both
periods presented,
net of related party interest
income of $3,000
for both periods presented 16,300 18,963
-------- --------
Earnings before income taxes and
extraordinary loss
10,435 11,236
Income taxes 4,946 4,715
-------- --------
Earnings before extraordinary loss 5,489 6,521
Extraordinary loss on early
extinguishment of debt,
net of $5,180 tax benefit -- (7,935)
-------- --------
Net earnings $ 5,489 $ (1,414)
======== ========
Weighted average common
shares outstanding 50,881 36,594
======== ========
Earnings per share -
primary and fully diluted
Before extraordinary loss $ .11 $ .18
======== ========
Net earnings $ .11 $ (.04)
======== ========
(a) Certain prior year accounts have been reclassified for consistency
with the 1996 presentation.
See condensed notes to consolidated financial statements.
-4-
<PAGE>
PLAYTEX PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share data)
Six Months Six Months
Ended Ended
June 29, July 1,
1996 1995 (a)
---------- ----------
Net sales $274,939 $268,394
Cost of sales 105,610 106,734
-------- --------
Gross profit 169,329 161,660
Operating expenses:
Advertising and sales promotion 71,602 64,104
Selling, distribution and research 28,245 26,538
Administrative 8,504 8,142
Amortization of intangibles 6,402 5,418
-------- --------
Total operating expenses 114,753 104,202
-------- --------
Operating earnings 54,576 57,458
Interest expense, including
related party interest
expense of $6,075 for both
periods presented,
net of related party interest
income of $6,001
for both periods presented 32,962 39,636
-------- --------
Earnings before income taxes and
extraordinary loss 21,614 17,822
Income taxes 10,144 7,548
-------- --------
Earnings before extraordinary loss 11,470 10,274
Extraordinary loss on early
extinguishment of debt,
net of $5,180 tax benefit -- (7,935)
-------- --------
Net earnings $ 11,470 $ 2,339
======== ========
Weighted average shares outstanding 50,881 33,737
======== ========
Earnings per share - primary and
fully diluted
Before extraordinary loss $ .23 $ .30
======== ========
Net earnings $ .23 $ .07
======== ========
(a) Certain prior year accounts have been reclassified for consistency with
the 1996 presentation.
See condensed notes to consolidated financial statements.
-5-
<PAGE>
PLAYTEX PRODUCTS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited, in thousands)
<TABLE>
<CAPTION>
Foreign
Additional Retained Currency
Common Paid-In Earnings Translation
Stock Capital (Deficit) Adjustment
------ ---------- --------- -----------
<S> <C> <C> <C> <C>
Balance, December 30, 1995 $509 $424,217 $(723,917) $(1,785)
Net earnings -- -- 11,470 --
Shares issued for exercise
of stock options -- 45 -- --
Foreign currency translation
adjustment -- -- -- 6
---- -------- --------- -------
Balance, June 29, 1996 $509 $424,262 $(712,447) $(1,779)
==== ======== ========= =======
</TABLE>
See condensed notes to consolidated financial statements.
-6-
<PAGE>
PLAYTEX PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Six Months Six Months
Ended Ended
June 29, July 1,
1996 1995
---------- -----------
Cash flows from operations:
Net earnings $ 11,470 $ 2,339
Non-cash items included in earnings:
Extraordinary loss -- 7,935
Amortization of intangibles 6,402 5,418
Amortization of deferred financing costs 1,009 1,263
Depreciation 4,338 4,172
Deferred taxes 4,340 (986)
Other, net (15) 73
Net decrease (increase) in working
capital accounts 1,450 (11,782)
-------- --------
Net cash flows from operations 28,994 8,432
-------- --------
Cash flows used for investing activities:
Purchases of property, plant and equipment (4,644) (6,278)
Business acquired -- (20,100)
-------- --------
Net cash flows used for investing activities (4,644) (26,378)
-------- --------
Cash flows (used for) from financing activities:
Repayments under working capital facilities, net (5,050) (17,350)
Long-term debt borrowings -- 387,500
Long-term debt payments (10,000) (481,000)
Payment of financing costs -- (8,800)
Issuance of common shares 45 169,300
Other, net 6 84
-------- --------
Net cash flows (used for) from
financing activities (14,999) 49,734
-------- --------
Increase in cash and cash equivalents 9,351 31,788
Cash and cash equivalents at beginning of period 5,940 10,373
-------- --------
Cash and cash equivalents at end of period
$ 15,291 $ 42,161
======== ========
Supplemental disclosures of cash flow information
Net cash paid during the periods for:
Interest $ 32,326 $ 38,749
======== ========
Income taxes, net of refunds $ 1,662 $ 9,680
======== ========
See condensed notes to consolidated financial statements.
-7-
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Financial Statements
The accompanying quarterly consolidated financial statements of Playtex
Products, Inc. ("Playtex" or the "Company") are unaudited; however, such
statements include all adjustments (consisting of normal recurring adjustments)
considered necessary in the opinion of management for fair presentation of the
financial position, results of operations and cash flows of the Company. The
results of the interim period ended June 29, 1996 are not necessarily
indicative of the results that may be expected for the full year.
The Company presumes the users of this Quarterly Report on Form 10 - Q have
read or have access to the audited financial statements contained in the
Company's Annual Report on Form 10 - K for the year ended December 30, 1995.
Accordingly, all footnote disclosures which would substantially duplicate the
disclosures contained therein have been omitted.
2. Balance Sheet Components
The components of certain balance sheet accounts are as follows (in
thousands):
June 29, December 30,
1996 1995
----------- ------------
(Unaudited)
Receivables $ 86,753 $ 60,061
Less allowance for doubtful accounts (2,040) (2,042)
-------- --------
Net $ 84,713 $ 58,019
======== ========
Inventories:
Raw materials $ 13,623 $ 18,187
Work in process 868 1,267
Finished goods 20,246 29,736
-------- --------
Total $ 34,737 $ 49,190
======== ========
Net property, plant and equipment:
Land $ 1,190 $ 1,190
Buildings 23,266 24,055
Machinery and equipment 92,666 86,955
-------- --------
117,122 112,200
Less accumulated depreciation (64,259) (59,738)
-------- --------
Net $ 52,863 $ 52,462
======== ========
-8-
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Balance Sheet Components (continued) June 29, December 30,
1996 1995
--------- -----------
(Unaudited)
Goodwill $446,482 $446,482
Less accumulated amortization (92,503) (86,853)
-------- --------
Net $353,979 $359,629
======== ========
Patents, trademarks and other $ 49,629 $ 49,769
Less accumulated amortization (12,445) (11,693)
-------- --------
Net $ 37,184 $ 38,076
======== ========
Deferred financing costs $ 19,463 $ 19,463
Less accumulated amortization (3,046) (2,037)
-------- --------
Net $ 16,417 $ 17,426
======== ========
Accrued expenses:
Advertising and sales promotion $ 29,310 $ 29,401
Interest 5,947 6,320
Employee compensation and benefits 9,287 10,162
Insurance 5,689 4,858
Accrued returns reserve 11,139 500
Other 9,055 9,016
-------- --------
Total $ 70,427 $ 60,257
======== ========
3. Long-Term Debt
Long-term debt consists of the
following (in thousands): June 29, December 30,
1996 1995
--------- -----------
(Unaudited)
1995 Credit Agreement:
1995 Term Loan Facility $377,500 $387,500
1995 Acquisition Credit Facility 37,500 37,500
1995 Working Capital Facility -- 5,050
9% Senior Subordinated Notes due 2003 360,000 360,000
-------- --------
775,000 790,050
Less current maturities (22,500) (20,000)
-------- --------
Total long-term debt $752,500 $770,050
======== ========
-9-
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Long-Term Debt (continued)
The 1995 Term Loan Facility provides for semi-annual repayment of
principal, including payments of $10.0 million due on September 15, 1996 and
$12.5 million on March 15, 1997. The rate of interest on borrowings under the
1995 Credit Agreement is, at the Company's option, a function of various
alternative short-term borrowing rates, as defined in the 1995 Credit Agreement.
At June 29, 1996, the weighted average variable interest rate was 7.27%. The
weighted average variable interest rate for the quarter ended June 29, 1996 was
7.31%. The weighted average variable interest rate, under the previous credit
agreement, for the quarter ended July 1, 1995 was 8.20%. Quarterly commitment
fees of three-eighths of 1% on the unutilized portion of the 1995 Credit
Agreement and an agency fee of $100,000 per annum are also required. At June
29, 1996, aggregate unused lines of credit (giving effect to outstanding letters
of credit) under the 1995 Credit Agreement amounted to $73.1 million.
The provisions of the 1995 Credit Agreement require the Company to meet
certain financial covenants and ratios and also include limitations or
restrictions on: new indebtedness and liens; major acquisitions or mergers;
capital expenditures; disposition of assets; certain dividends and other
distributions; and prepayment and modification of all indebtedness or equity
capitalization. The 9% Senior Subordinated Notes (the "9% Notes") contain
certain similar restrictions and requirements. Under the terms of the 1995
Credit Agreement and the 9% Notes, payment of cash dividends on the common stock
of the Company is restricted.
On July 1, 1996, the Company entered into an agreement such that $150.0
million of the Company's variable rate debt is fixed at 5.59% plus the
applicable spread, for a two year period commencing July 25, 1996. This
agreement is terminated if at any of the quarterly reset dates, the 90 day LIBOR
rate equals or exceeds 6.25%.
Additionally, subsequent to the quarter end, the Company prepaid the $10.0
million payment on the Term Loan Facility which was due on the September 15,
1996. Concurrently, the Company paid down $10.0 million of the Acquisition
Credit Facility.
4. Earnings Per Share
Earnings per share is calculated using net earnings divided by the weighted
average number of common shares issued and outstanding and common stock
equivalents for the periods presented. At June 29, 1996 and at December 30,
1995, no shares of common stock were held in treasury.
5. Contingent Liabilities
In the opinion of management, there are no claims, commitments, guarantees
or litigation pending to which the Company or any of its subsidiaries is a party
which would have a materially adverse effect on the consolidated financial
position, results of operations or cash flows of the Company.
-10-
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the financial data
and condensed notes thereto included elsewhere in this quarterly report and with
the Annual Report on Form 10-K for the year ended December 30, 1995 filed with
the Securities and Exchange Commission (No. 33-25485).
Certain statements in this Quarterly Report or others made hereafter
(including orally) may constitute "forward looking statements" within the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward looking statements. Such factors include
but are not limited to: intensified competition, higher spending for advertising
and promotion, new product initiatives and continued activity in the private
label sector, the loss of significant customers, product liability litigation
and changes in governmental regulations.
Results of Operations
- ---------------------
Three Months Ended June 29, 1996 Versus
Three Months Ended July 1, 1995:
Net Sales - Net sales of $131.9 million for the quarter ended June 29, 1996
were $3.8 million, or 2.8%, lower than for the same quarter in fiscal 1995. Net
sales of the Company's Feminine Care products were $8.1 million, or 12.9%, below
the second quarter of 1995, despite a gain in unit market share at the retail
level from 23.2 to 25.2. This decline in net sales was related primarily to
reduced trade promotions relative to the same period last year. Infant Care net
sales were up 16.7%, led by the continued strength of the Playtex Spill-Proof
------- -----------
cup. Sun Care net sales increased 10.8%. Additionally, versus the same period
in 1995, Household Product net sales increased 4.9%. Hair Care net sales, which
represented 4.6% of the Company's total net sales for the quarter, decreased
30.2% versus the second quarter of 1995.
Gross Profit - Gross profit of $81.9 million for the second quarter of
fiscal 1996 was flat with the corresponding fiscal 1995 quarter. Period to
period, gross margin increased, as a percent of net sales, 1.6% to 62.1%. This
increase was attributable primarily to favorable product mix and increased
margin on Sun Care products as a result of the BBH Acquisition .
Operating Earnings - Operating earnings of $26.7 million for the second
quarter of 1996 were $3.5 million, or 11.5%, lower than for the comparable
period in fiscal 1995. The most significant factor contributing to the decrease
in operating earnings was an increase of $1.9 million, or 6.0%, in advertising
and promotional spending. Also contributing to the decrease in operating margin
were increases in certain other operating expenses primarily attributable to the
BBH acquisition.
Interest Expense - Interest expense decreased $2.7 million, or 14.0%. This
decrease resulted from lower interest rates in the second quarter of fiscal 1996
versus fiscal 1995 and the
-11-
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
reduction in average long-term debt (including current portion) which was
primarily the result of the sale on June 6, 1995 of 20.0 million of the
Company's common stock at $9.00 to a group of limited partnerships managed by
Haas Wheat & Partners (the "Investment") and, concurrent with the Investment, a
new credit agreement with Chase Manhattan Bank (formerly Chemical Bank), partly
offset by the financing of the fourth quarter 1995 BBH Acquisition.
Net Earnings Before Extraordinary Loss - Net earnings of $5.5 million for
the second quarter of fiscal 1996 were $1.0 million, or 15.8%, lower than for
the same quarter in fiscal 1995. The variance resulted from the combined effect
of all factors described above. In the second quarter of 1995, the Company
recorded a $7.9 million extraordinary loss on early extinguishment of debt, net
of $5.2 million of related tax benefits.
Six Months Ended June 29, 1996 Versus
Six Months Ended July 1, 1995:
Net Sales - Net sales of $274.9 million for the six months ended June 29,
1996 were $6.5 million, or 2.4%, higher than for the same period in fiscal 1995.
Net sales of the Company's Feminine Care products were down $8.3 million, or
6.9%, versus the first six months of 1995. Sun Care net sales increased $10.6
million, or 20.3%. Excluding the impact of the BBH Acquisition, which occurred
in the fourth quarter of 1995, Sun Care net sales increased 7.5%. Infant Care
net sales continued to show growth, with a $9.0 million, or 20.0% increase over
the six months ended July 1, 1995. Additionally, versus the same period in
1995, Household Product net sales increased 12.2%, due in part to the impact of
a full six months of net sales in 1996 of the Woolite rug and upholstery
-------
cleaning business ("Woolite"). Hair Care net sales, which represented 5.0% of
-------
the Company's total net sales, decreased 35.3% versus the first six months of
fiscal 1995.
Gross Profit - Gross profit of $169.3 million for the first six months of
fiscal 1996 increased by $7.7 million, or 4.7%, from the corresponding six
months in 1995. Period to period, gross margin increased 1.4% to 61.6% of net
sales. This increase was primarily attributable to favorable product mix and
increased margin on Sun Care products as a result of the BBH Acquisition. This
increase in Sun Care margin was partially tempered due to the impact of a $1.8
million non-cash acquisition accounting adjustment as required by Accounting
Principles Board Opinion No. 16 - "Business Combinations".
Operating Earnings - Operating earnings of $54.6 million for the six months
of 1996 were $2.9 million, or 5.0%, lower than for the comparable period in
fiscal 1995. Operating earnings were favorably impacted by the 4.7% increase in
gross profit. However, this gain was more than offset by an 11.7% increase in
advertising and promotional spending. Also contributing to the decrease in
operating margin were increases in certain other operating expenses,
attributable primarily to the Woolite and BBH acquisitions.
-------
Interest Expense - Interest expense decreased $6.7 million or 16.8%. This
decrease resulted from lower interest rates in the first six months of fiscal
1996 versus fiscal 1995 and the reduction in average long-term debt (including
current portion) versus the comparable period in 1995. The decrease in the
long-term debt was primarily the result of an equity infusion, the Investment,
and the new credit agreement with Chase Manhattan Bank (formerly Chemical Bank)
in June 1995, partly offset by the financing of the BBH Acquisition.
-12-
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
Net Earnings Before Extraordinary Loss - Net earnings before extraordinary
loss of $11.5 million for the first six months of fiscal 1996 were $1.2 million,
or 11.6%, higher than for the same period in fiscal 1995. The favorable
variance resulted from the combined effect of all factors described above. In
the second quarter of 1995, the Company recorded a $7.9 million extraordinary
loss on early extinguishment of debt, net of $5.2 million of related tax
benefits.
Financial Condition
- -------------------
At June 29, 1996, the Company's working capital increased by $3.0 million
to $31.6 million from $28.6 million at December 30, 1995. On a significant
component basis: a) inventory decreased $14.4 million, due primarily to the sell
off of the seasonal Sun Care inventory and promotional inventory built in the
fourth quarter of 1995, b) a $10.2 million increase in accrued expenses
resulting almost entirely from the increased accrued returns for seasonal Sun
Care products versus the balance at the year end of 1995, c) a $4.1 million
increase in income taxes payable, primarily the result of the difference in the
earnings in the second quarter of 1996 and the fourth quarter of 1995, and d) a
$2.5 million increase in the current portion of long term debt. These working
capital decreases were partly offset by a) $9.4 million increase in cash and b)
receivables which increased by $26.7 million, principally due to the seasonal
nature of Sun Care product sales with extended credit terms and to an increase
in sales in the second quarter of 1996 when compared with the fourth quarter of
1995. All other working capital components decreased by a net $1.9 million.
Long-term debt (including current portion) of $775.0 million at June 29,
1996 was $15.1 million lower than at December 30, 1995. The net decrease in
long-term borrowings reflected the impact of the scheduled $10.0 million
principal payment on the 1995 Term Loan Facility and a $5.1 million reduction in
the 1995 Working Capital Facility. In early July, the Company prepaid the $10.0
million payment on the Term Loan Facility which was due on September 15, 1996.
Concurrently, the Company paid down $10.0 million of the Acquisition Credit
Facility.
The Company believes that it will generate sufficient cash flow from
operations to be able to make the scheduled interest and principal payments
under the 1995 Credit Agreement and interest payments on the 9% Notes; however
the Company does not expect to generate sufficient cash flow from operations to
make the principal payment due in 2003 on the 9% Notes. Accordingly, the
Company will have to either refinance its obligations with respect to the 9%
Notes prior to maturity, sell assets or raise equity capital to repay the
principal amount of the 9% Notes. The Company's ability to make scheduled
principal payments, to refinance its obligations with respect to its
indebtedness, sell assets or raise equity capital depends on its financial and
operating performance, which, in turn, is in part subject to prevailing economic
conditions and to financial, business and other factors beyond its control.
Although the Company's cash flow from its operations and borrowings have been
sufficient to meet its historical debt service obligations, there can be no
assurance that the Company's operating results will continue to be sufficient or
that future borrowing facilities will be available for the payment or
refinancing of the Company's indebtedness.
Capital Expenditures for equipment and facility improvements were $4.6
million and $6.3 million for the six month periods ended June 29, 1996 and July
1, 1995, respectively.
-13-
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
Inflation in the United States and Canada has not been a significant
concern of the Company during recent periods.
The Company's businesses, with the exception of Banana Boat, have generally
-----------
not been seasonal. Banana Boat sales are highly seasonal with 85 to 90 percent
-----------
of sales occurring in the first six months of the year. In addition, the
seasonality requires increased working capital needs to support inventory builds
prior to the selling season and higher receivable levels resulting from extended
credit terms which are typical in the sun care industry.
-14-
<PAGE>
PLAYTEX PRODUCTS, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The following should be read in conjunction with Part 1, Item 3., "Legal
Proceedings" in the Registrant's Annual Report on Form 10-K for the year ended
December 30, 1995.
As of the end of June 1996, there were approximately 9 pending Toxic Shock
Syndrome ("TSS") claims relating to Playtex tampons, although additional claims
may be made in the future.
In the previously reported action, "Harding, Hayes et. al. v. Tambrands,
Inc. and Playtex Family Products Corp.", in which plaintiffs purported to
represent and sought to certify a nationwide class of tampon users who
allegedly contracted TSS from the use of rayon fiber tampons manufactured by
Playtex, the Court denied class certification in March, 1996. The plaintiff's
time to appeal this ruling has not expired.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
(27) Financial Data Schedule
b. Reports on Form 8-K - None
-15-
<PAGE>
SIGNATURES
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.
PLAYTEX PRODUCTS, INC.
Date: August 7, 1996 By: /s/Michael R. Gallagher
-------------------------
Michael R. Gallagher
Chief Executive
Officer
Date: August 7, 1996 By: /s/Michael F. Goss
----------------------
Michael F. Goss
Executive Vice
President and
Chief Financial
Officer
-16-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUL-29-1996
<CASH> 15,291
<SECURITIES> 0
<RECEIVABLES> 86,753
<ALLOWANCES> 2,040
<INVENTORY> 34,737
<CURRENT-ASSETS> 149,212
<PP&E> 117,122
<DEPRECIATION> 64,259
<TOTAL-ASSETS> 694,135
<CURRENT-LIABILITIES> 117,553
<BONDS> 752,500
0
0
<COMMON> 509
<OTHER-SE> (289,964)
<TOTAL-LIABILITY-AND-EQUITY> 694,135
<SALES> 274,939
<TOTAL-REVENUES> 274,939
<CGS> 105,610
<TOTAL-COSTS> 105,610
<OTHER-EXPENSES> 114,753
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,962
<INCOME-PRETAX> 21,614
<INCOME-TAX> 10,144
<INCOME-CONTINUING> 11,470
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,470
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
