================================================================================
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 March 27, 1999
Commission File No. 1-12620
PLAYTEX PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0312772
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 Nyala Farms Road
Westport, Connecticut 06880
---------------------------
(Address of principal executive offices)
Telephone number: (203) 341-4000
--------------------------------
(Registrant's telephone number, including area code)
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 |_|
At May 7, 1999, 60,456,158 shares of Playtex Products, Inc. common stock,
par value $.01 per share, were outstanding.
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<PAGE>
PLAYTEX PRODUCTS, INC
INDEX
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements...................... 3 - 10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................11 - 17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings................................................ 18
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits..................................................... 18
(b) Reports on Form 8-K.......................................... 18
Signatures....................................................... 19
Exhibit Index ................................................... 20
2
<PAGE>
PLAYTEX PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 27, December 26,
1999 1998
----------- -----------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash ............................................................... $ 13,221 $ 6,871
Receivables, less allowance for doubtful accounts .................. 132,802 103,185
Inventories ........................................................ 62,596 58,790
Deferred income taxes .............................................. 14,978 14,650
Other current assets ............................................... 1,763 5,650
----------- -----------
Total current assets ............................................ 225,360 189,146
Net property, plant and equipment ..................................... 100,989 78,906
Intangible assets, net ................................................ 626,402 531,592
Deferred financing costs .............................................. 15,665 16,448
Due from related party ................................................ 80,017 80,017
Other noncurrent assets ............................................... 3,114 3,112
----------- -----------
Total assets .................................................... $ 1,051,547 $ 899,221
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................... $ 33,936 $ 38,298
Accrued expenses ................................................... 66,860 59,981
Income taxes payable ............................................... 11,609 8,444
Current maturities of long-term debt ............................... 4,563 3,875
----------- -----------
Total current liabilities ....................................... 116,968 110,598
Long-term debt ........................................................ 936,563 807,875
Due to related party .................................................. 78,386 78,386
Other noncurrent liabilities .......................................... 13,181 14,049
Deferred income taxes ................................................. 33,673 29,288
----------- -----------
Total liabilities ............................................... 1,178,771 1,040,196
----------- -----------
Stockholders' equity:
Common stock, $0.01 par value, authorized 100,000,000 shares, issued
60,417,824 shares at March 27, 1999 and
60,401,822 shares at December 26, 1998 ........................... 604 604
Additional paid-in capital ......................................... 518,311 518,179
Retained earnings (deficit) ........................................ (643,264) (656,835)
Foreign currency translation adjustment ............................ (2,875) (2,923)
----------- -----------
Total stockholders' equity ...................................... (127,224) (140,975)
----------- -----------
Total liabilities and stockholders' equity ...................... $ 1,051,547 $ 899,221
=========== ===========
</TABLE>
See the accompanying notes to consolidated financial statements.
3
<PAGE>
PLAYTEX PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
-------------------
March 27, March 28,
1999 1998
-------- --------
<S> <C> <C>
Net sales .................................................................. $190,452 $172,689
Cost of sales .............................................................. 80,907 72,946
-------- --------
Gross profit ............................................................ 109,545 99,743
Operating expenses:
Advertising and sales promotion ......................................... 37,282 36,891
Selling, distribution and research ...................................... 18,814 15,778
Administrative .......................................................... 6,224 5,491
Amortization of intangibles ............................................. 4,846 3,864
-------- --------
Total operating expenses ............................................. 67,166 62,024
Operating earnings ................................................. 42,379 37,719
Interest expense including related party interest expense
of $3,037 for both periods presented, net of related party
interest income of $3,001 for both periods presented .................... 18,838 17,950
-------- --------
Earnings before income taxes ....................................... 23,541 19,769
Income taxes ............................................................... 9,970 8,459
-------- --------
Net earnings ....................................................... $ 13,571 $ 11,310
======== ========
Earnings per share:
Basic ................................................................... $ 0.22 $ 0.20
======== ========
Diluted ................................................................. $ 0.22 $ 0.20
======== ========
Weighted average shares outstanding:
Basic ................................................................... 60,413 56,969
======== ========
Diluted ................................................................. 63,205 57,725
======== ========
</TABLE>
See the accompanying notes to consolidated financial statements.
4
<PAGE>
PLAYTEX PRODUCTS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited, in thousands)
<TABLE>
<CAPTION>
Foreign
Additional Retained Currency
Common Paid-In Earnings Translation
Stock Capital (Deficit) Adjustment Total
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance, December 26, 1998 ....................... $ 604 $ 518,179 $(656,835) $ (2,923) $(140,975)
Net earnings ..................................... -- -- 13,571 -- 13,571
Foreign currency translation adjustment .......... -- -- -- 48 48
---------
Comprehensive earnings ....................... 13,619
Stock issued to employees exercising stock options -- 132 -- -- 132
--------- --------- --------- --------- ---------
Balance, March 27, 1999 .................. $ 604 $ 518,311 $(643,264) $ (2,875) $(127,224)
========= ========= ========= ========= =========
</TABLE>
See the accompanying notes to consolidated financial statements.
5
<PAGE>
PLAYTEX PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months Ended
----------------------
March 27, March 28,
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operations:
Net earnings .................................................... $ 13,571 $ 11,310
Non-cash items included in earnings:
Amortization of intangibles ................................... 4,846 3,864
Amortization of deferred financing costs ...................... 783 715
Depreciation .................................................. 2,159 2,069
Deferred income taxes ......................................... 4,731 5,486
Other, net .................................................... 30 196
Net increase in working capital accounts, net of acquisitions . (21,692) (34,903)
--------- ---------
Net cash flows from (used for) operations .................. 4,428 (11,263)
Cash flows used for investing activities:
Purchases of property, plant and equipment ...................... (6,737) (2,278)
Businesses acquired, net of cash acquired ....................... (120,849) (106,246)
--------- ---------
Net cash flows used for investing activities ............... (127,586) (108,524)
Cash flows provided by (used for) financing activities:
Net borrowings under credit facilities .......................... 80,001 24,600
Issuance of note payable ........................................ -- 500
Long-term debt borrowings ....................................... 50,000 100,000
Long-term debt repayments ....................................... (625) (625)
Payment of financing costs ...................................... -- (3,027)
Issuance of shares of common stock .............................. 132 666
--------- ---------
Net cash flows provided by financing activities ............ 129,508 122,114
Increase in cash ................................................... 6,350 2,327
Cash at beginning of period ........................................ 6,871 3,231
--------- ---------
Cash at end of period .............................................. $ 13,221 $ 5,558
========= =========
Supplemental disclosures of cash flow information
Cash paid during the periods for:
Interest ....................................................... $ 13,731 $ 11,545
Income taxes, net of refunds ................................... $ 2,066 $ 160
</TABLE>
In connection with the acquisition of Personal Care Holdings, Inc. in
January 1998, the Company issued 9,257,345 shares of Common Stock with a value
of $9.875 per share, aggregating $91,417.
See the accompanying notes to consolidated financial statements.
6
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Financial Statements
The accompanying quarterly condensed 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 a fair presentation of the
financial position, results of operations and cash flows of the Company. The
results of the interim period ended March 27, 1999 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 26, 1998.
Accordingly, all footnote disclosures which would substantially duplicate the
disclosures contained therein have been omitted.
2. Acquisitions
1999 Acquisition
On January 29, 1999, the Company completed the acquisition of the Diaper
Genie business, the leading diaper disposal system in the U.S., from
privately-held Mondial Industries L.P. ("Mondial") for approximately $122
million (the "1999 Acquisition"). The purchase price consisted of $72 million in
cash and the issuance to Mondial of $50 million principal amount of convertible
notes. The cash portion of the consideration was financed through the Company's
1997 revolving credit facility. The newly issued convertible notes bear interest
at a rate of 6.00% and are convertible after January 29, 2000, at the holders'
option, into approximately 2.6 million shares of the Company's Common Stock. The
conversion price is approximately $19.15 per share. The notes will mature in
2004 and are callable by the Company after January 29, 2002. The acquisition was
accounted for as an asset purchase.
1998 Acquisitions
On January 28, 1998, the Company acquired Personal Care Holdings, Inc.
("PCH") for approximately $91.0 million in cash and 9,257,345 shares of the
Company's Common Stock. The cash portion of the consideration paid for the PCH
transaction was financed with borrowings under the Company's credit facility
(see Note 4). The acquisition was accounted for as a purchase. On January 26,
1998, the Company acquired certain tangible and intangible assets related to the
Binky(R) pacifier business ("Binky") from Binky-Griptight, Inc. for
approximately $1.2 million in cash and $0.5 million in notes payable due and
paid on July 27, 1998. On January 6, 1998, the Company acquired Carewell
Industries, Inc. ("Carewell") for approximately $9.2 million in cash.
As indicated above, the 1999 Acquisition was accounted for as an asset
purchase and the acquisitions of PCH, Binky, and Carewell (the "1998
Acquisitions") were accounted for as purchases. The Company has substantially
completed the assignment of fair value to all assets acquired and liabilities
assumed in the 1999 Acquisition and has completed the assignment of fair value
to all assets acquired and liabilities assumed in the 1998 Acquisitions
In connection with the 1999 and 1998 Acquisitions, the Company accrued for
certain direct costs as part of the purchase price allocations. These costs
include $4.2 million for costs to exit activities of the acquired companies,
$3.0 million of costs to involuntarily terminate employees of the acquired
companies, and $0.2 million to relocate employees of the acquired companies. As
of March 27, 1999, the Company has incurred $1.5 million of costs associated
with exit activities, $2.1 million of costs associated with involuntary
terminations and $0.1 million associated with relocating employees of the
acquired companies. As of March 27, 1999, the Company's remaining acquisition
liability of $3.7 million relates primarily to lease obligations.
7
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Balance Sheet Components
<TABLE>
<CAPTION>
March 27, December 26,
The components of certain balance sheet accounts are as follows (in thousands): 1999 1998
--------- ---------
(Unaudited)
<S> <C> <C>
Receivables ................................................................................... $ 135,491 $ 105,280
Less allowance for doubtful accounts .......................................................... (2,689) (2,095)
--------- ---------
Net ..................................................................................... $ 132,802 $ 103,185
========= =========
Inventories:
Raw materials .............................................................................. $ 20,496 $ 17,722
Work in process ............................................................................ 1,134 763
Finished goods ............................................................................. 40,966 40,305
--------- ---------
Total ................................................................................... $ 62,596 $ 58,790
========= =========
Net property, plant and equipment:
Land ....................................................................................... $ 2,376 $ 1,435
Buildings .................................................................................. 35,656 30,000
Machinery and equipment .................................................................... 147,585 130,000
--------- ---------
185,617 161,435
Less accumulated depreciation .............................................................. (84,628) (82,529)
--------- ---------
Net ..................................................................................... $ 100,989 $ 78,906
========= =========
Accrued expenses:
Advertising and sales promotion ............................................................ $ 21,770 $ 22,580
Employee compensation and benefits ......................................................... 6,800 11,917
Interest ................................................................................... 14,942 9,053
Insurance .................................................................................. 3,012 3,038
Other ...................................................................................... 20,336 13,393
--------- ---------
Total ................................................................................... $ 66,860 $ 59,981
========= =========
</TABLE>
4. Long-Term Debt
<TABLE>
<CAPTION>
Long-term debt consists of the following (in thousands): March 27, December 26,
1999 1998
--------- ---------
(Unaudited)
<S> <C> <C>
1997 Credit Agreement:
Term A Loan ................................................................................ $ 55,000 $ 55,000
Revolving Credit Facility .................................................................. 80,001 --
Term Loan .................................................................................. 246,125 246,750
6% Convertible Subordinated Notes due 2004 .................................................... 50,000 --
8 7/8% Senior Notes due 2004 .................................................................. 150,000 150,000
9% Senior Subordinated Notes due 2003 ......................................................... 360,000 360,000
--------- ---------
941,126 811,750
Less current maturities .................................................................... (4,563) (3,875)
--------- ---------
Total long-term debt .................................................................... $ 936,563 $ 807,875
========= =========
</TABLE>
8
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Long-Term Debt (continued)
In connection with the 1999 Acquisition (see Note 2), the Company issued
to Mondial $50 million of 6% Convertible Subordinated Notes due 2004 (the
"Convertible Notes"). Required semi-annual interest payments on the Convertible
Notes commence July 31, 1999. The Convertible Notes are convertible after
January 29, 2000, at the holders' option, into approximately 2.6 million shares
of Common Stock. The conversion price is approximately $19.15 per share. The
notes will mature in 2004 and are callable by the Company after January 29,
2002.
On July 21, 1997, the Company completed a refinancing of its senior
indebtedness (the "1997 Refinancing") designed to increase its financial and
operational flexibility. The 1997 Refinancing included: (i) the issuance of
$150.0 million principal amount of 8 7/8% senior notes due July 15, 2004 (the
"Senior Notes"), (ii) a $150.0 million senior secured term loan due September
15, 2003 (the "1997 Term Loan"), and (iii) senior secured credit facilities (the
"1997 Senior Secured Credit Facilities") of $170.0 million comprised of a $115.0
million revolving credit facility (the "1997 Revolving Credit Facility") and a
$55.0 million term loan facility (the "1997 Term A Loan"). The 1997 Term Loan
and the 1997 Senior Secured Credit Facilities are known collectively as the 1997
Credit Agreement ("1997 Credit Agreement"). In connection with the Company's
acquisition of PCH on January 28, 1998 (see Note 2), the Company increased its
borrowings under the 1997 Term Loan by $100.0 million.
The 1997 Revolving Credit Facility matures on June 15, 2003 and
commitments thereunder are automatically and permanently reduced by (i) $5.0
million on December 15, 2000 and June 15, 2001, (ii) $7.0 million on December
15, 2001 and June 15, 2002, and (iii) $8.0 million on December 15, 2002 and June
15, 2003. The 1997 Term A Loan requires a reduction in commitment amounts of
$1.4 million in fiscal 1999, $7.6 million in fiscal 2000, $15.1 million in
fiscal 2001, $19.9 million in fiscal 2002, and $11.0 million in fiscal 2003. The
Term Loan provides for quarterly repayment of principal of $625,000 from March
15, 1998 through June 15, 2003. The remaining principal balance on the 1997 Term
Loan, expected to be $235.5 million, is due on September 15, 2003.
The rate of interest on borrowings under the 1997 Credit Agreement is, at
the Company's option, a function of various alternative short-term borrowing
rates, as defined in the 1997 Credit Agreement. At March 27, 1999 and March 28,
1998, the weighted average variable interest rate was 6.43% and 7.13%,
respectively. The weighted average variable interest rate for the quarters ended
March 27, 1999 and March 28, 1998 was 6.59% and 7.24%, respectively. Quarterly
commitment fees of three-eighths of 1% on the unutilized portion of the 1997
Credit Agreement and an agency fee of $0.1 million per annum are also required.
At March 27, 1999, aggregate unused lines of credit (giving effect to
outstanding letters of credit) under the 1997 Credit Agreement amounted to $34.0
million.
5. Business Segments
The Company is organized in three divisions: the U.S. Personal Products
Division, the U.S. Consumer Products Division, and the International and Other
Division. The Company's divisions have been designated as business segments in
accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information." This divisional structure allows management to focus on
individual product lines, category management initiatives and efficient
integration of acquired brands. The two largest divisions, the U.S. Personal
Products Division and the U.S. Consumer Products Division constituted 91% and
88% of the Company's consolidated net sales for the three months ended March 27,
1999 and March 28, 1998, respectively. All of the sales in these two divisions
are within the 50 United States. The third division, International and Other
Division, constituted 9% and 12% of the Company's consolidated net sales for the
three months ended March 27, 1999 and March 28, 1998, respectively. Net sales
from the International and Other Division are derived from: export sales, sales
of the Company's Canadian subsidiary, sales in Puerto Rico and sales of private
label tampons. The International and Other Division sell the majority of the
Company's products sold in both the U.S. Personal and U.S. Consumer Products
Divisions.
9
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company evaluates division performance based on the division's product
contribution excluding general corporate allocations. Product contribution is
defined as gross profit less advertising and sales promotion expenses. All other
operating expenses are managed at a corporate level and are not used by
management to evaluate the results of the divisions. The Company does not
segregate assets, amortization, capital expenditures, or interest income and
interest expense to its divisions.
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------
March 27, 1999 March 28, 1998
-------------------- ------------------
(Unaudited, dollars in thousands) Net Product Net Product
Sales Contrib. Sales Contrib.
-------- ------- -------- ------
<S> <C> <C> <C> <C>
U.S. Personal Products..................... $103,778 $45,041 $ 87,816 $34,542
U.S. Consumer Products..................... 68,695 24,464 64,946 24,769
International and Other.................... 17,979 4,713 19,927 5,808
Unallocated Charges (1).................... -- (1,955) -- (2,267)
-------- ------- -------- ------
Total Consolidated...................... $190,452 72,263 $172,689 62,852
======== ========
Reconciliation to operating earnings:
Selling, distribution and research......... 18,814 15,778
Administrative............................. 6,224 5,491
Amortization of intangibles................ 4,846 3,864
------- -------
Operating earnings...................... $42,379 $37,719
======= =======
</TABLE>
- -----------
(1) Certain unallocated corporate charges such as business license taxes and
product liability insurance that are included in consolidated gross
margin, but not included in the evaluation of the division's performance.
6. 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 material adverse effect on the consolidated financial
position, results of operations or cash flows of the Company.
Reference is made to the discussion of litigation contained under the
caption "Financial Condition and Liquidity" in Item 2 of this report
(Management's Discussion and Analysis of Financial Condition and Results of
Operations), which is incorporated herein by reference.
10
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 historical audited consolidated financial statements and notes to
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 26, 1998 filed with the Securities and
Exchange Commission (File No. 1-12620).
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995
This document contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. When used in this document, the words "anticipates," "intends," "plans,"
"believes," "estimates," "expects" and similar expressions are intended to
identify forward-looking statements. 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:
the Company's highly leveraged capital structure, its substantial principal
repayment obligations, price and product changes and promotional activity by
competitors, the loss of a significant customer, the difficulties of integrating
acquisitions, issues related to the year 2000, adverse publicity and product
liability claims and dependence on key employees. The risk factors described
herein could cause actual results or outcomes to differ materially from those
expressed in any forward-looking statements of the Company and investors,
therefore, should not place undue reliance on any such forward-looking
statements. Further, any forward-looking statement speaks only as of the date on
which such statement is made, and the Company undertakes no obligation to update
any forward-looking statement or statements to reflect events or circumstances
after the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for management to predict all of such factors. Further, management
cannot assess the impact of each such factor on the Company's business or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements.
Trademarks
The Company has proprietary rights to a number of trademarks important to
its businesses, such as: Playtex, Banana Boat, Gentle Glide, Mr. Bubble, Wet
Ones, Binaca, Most Like Mother, Binky, Chubs, QuickStraw, BioSun, Diaparene,
Diaper Genie, Drop-Ins, Quik Blok, Tan Express, Natural Action, CoolStraw,
Avance, Safe'N Sure, Eazy-Feed, Wet Ones Lunchkins, Slimfits, Silk Glide,
Portables, Sooth-A-Caine, Action Sport, Cool Colorz, Get On The Boat, LipPops,
Better Off, Blasters, Dentax, Dorothy Gray, HandSaver, Stain Solutions,
Jhirmack, Living, Ogilvie, Tek, and Tussy. The Company also owns a royalty free
license in perpetuity to the Woolite trademark for rug and upholstery cleaning
products in the United States and Canada.
Results of Operations
Basis of Management's Discussion and Analysis
The Company is organized in three divisions to allow management to focus
more effectively on individual product lines, category management initiatives,
and the efficient integration of acquired brands (see Note 5 of Condensed Notes
to Consolidated Financial Statements). In January 1999, the Company acquired the
Diaper Genie business from Mondial (see Note 2 of Condensed Notes to
Consolidated Financial Statements). The Diaper Genie business
11
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
has been incorporated in the Infant Care group of the U.S. Personal Products
Division. The results of operations of the Company for the three months ended
March 27, 1999 includes the results of the Diaper Genie business for the two
month period then ended.
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations presents a consolidated view of the Company's results
and where appropriate also provides insight to the key indicators of each
division's performance.
Three Months Ended March 27, 1999 Compared To
Three Months Ended March 28, 1998
Consolidated Net Sales--Consolidated net sales increased $17.8 million, or
10%, to $190.5 million for the first quarter of 1999 from $172.7 million in the
first quarter of 1998. Excluding the impact of the 1998 and 1999 Acquisitions,
the consolidated net sales of the Company grew by $5.7 million in the first
quarter of 1999, or 4%, compared to the first quarter of 1998.
U.S. Personal Products Division--Net sales for the first quarter of 1999
increased $16.0 million, or 18%, to $103.8 million from $87.8 million in the
first quarter of 1998. Excluding the impact of the Acquisitions, the net sales
of the U.S. Personal Products Division grew by $6.8 million in the first quarter
of 1999, or 9%, compared to the first quarter of 1998.
Net sales of Infant Care products increased $11.7 million, or 26%, to
$56.7 million in the first quarter of 1999 from $45.0 million in the first
quarter of 1998. These results reflect the impact of the Infant Care brands
acquired in the Acquisitions and continued growth in the Company's base Infant
Care product lines. Net sales of the Company's pre-acquisition Infant Care
product lines consisting of infant feeding and soothing products increased by
$2.5 million, or 8%, over the comparable period in 1998. The Company's dollar
market share in the infant feeding category grew by 1.4 percentage points to
43.5% in the first quarter of 1999 from 42.1% in the first quarter of 1998.
Fueling the growth in the infant feeding category was the Company's disposable
feeding systems which grew at twice the rate of the category, reaching a record
dollar market share of 84.9% for the quarter, a gain of 4.9 percentage points
over the first quarter of 1998. The infant feeding category grew 6.5% in dollars
during the first quarter of 1999 and the Company's retail takeaway grew 10.0%
during the same period as compared to the first quarter of 1998.
Net sales of Feminine Care products increased $4.2 million, or 10%, to
$47.1 million in the first quarter of 1999 from $42.9 million in the first
quarter of 1998. In December 1997, the Company successfully launched Gentle
Glide Odor Absorbing, a plastic applicator tampon with an all-natural material
which absorbs odors without the use of fragrance or deodorant. Following the
debut of Gentle Glide Odor Absorbing, the Company in late 1998 incorporated the
unique all-natural odor absorbing feature into the cardboard applicator line,
Silk Glide. These introductions, combined with general strength in the Company's
branded tampon business, increased the Company's dollar market share 2.1
percentage points in the first quarter of 1999 to 28.6% from 26.5% in the first
quarter of 1998. The tampon category, in dollars, grew 3.7% in the first quarter
of 1999 and the Company's retail takeaway grew 11.8%.
U.S. Consumer Products Division--Net sales for the first quarter of 1999
increased $3.8 million, or 6%, to $68.7 million from $64.9 million in the first
quarter of 1998. Excluding the impact of the Acquisitions, the net sales of the
U.S. Consumer Products Division grew by $1.7 million in the first quarter of
1999, or 3%, compared to the first quarter of 1998.
Net sales of Sun Care products increased $2.4 million, or 6%, to $42.7
million in the first quarter of 1999 from $40.3 million in the first quarter of
1998. The Company's Sun Care line continued to gain unit market share in the
first quarter of 1999 up 1.6 percentage points to 19.2% from 17.6% in the first
quarter of 1998. The sun care category, in
12
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
dollars, grew 23.8% for the first quarter of 1999 compared to the first quarter
of 1998, while the Company's retail takeaway increased 32.7% in the first
quarter of 1999 compared to the comparable period in 1998. The category growth
and the growth in retail takeaway was due largely to a more normal spring season
in Florida and the Southwest compared to the first quarter of 1998 which was
hampered by the unfavorable weather conditions, the result of the El Nino
weather system.
Net sales of Household Products increased $0.1 million, or less than 1%,
to $13.3 million in the first quarter of 1999 from $13.2 million in the first
quarter of 1998. Although the Household Products business was relatively flat
compared to the first quarter of 1998, both Woolite and Playtex Gloves
experienced increases in retail takeaway and dollar market share. Woolite dollar
market share increased 2.6 percentage points to 19.8% in the first quarter of
1999 from 17.2% in the first quarter of 1998. Playtex Gloves dollar market share
increased 1.1 percentage points to 33.9% in the first quarter of 1999 from 32.8%
in the first quarter of 1998.
Net sales of Personal Grooming increased $1.2 million, or 10%, to $12.7
million in the first quarter of 1999 from $11.5 million in the first quarter of
1998. The impact of the Personal Grooming brands acquired in the 1998
Acquisitions offset lower net sales of Jhirmack products.
International and Other Division--Net sales in the first quarter of 1999
decreased $1.9 million, or 10%, to $18.0 million from $19.9 million in the first
quarter of 1998. The decrease was primarily due to lower net sales in
International markets resulting from general economic uncertainties and lower
net sales associated with the Company's private label tampon business.
Consolidated Gross Profit--Consolidated gross profit increased $9.8
million, or 10%, to $109.5 million in the first quarter of 1999 from $99.7
million in the first quarter of 1998. As a percent of net sales, gross profit
decreased marginally, to 57.5% in the first quarter of 1999 from 57.8% in the
first quarter of 1998 due primarily to lower overall gross margins for acquired
brands. The dollar increase in gross profit was primarily due to the higher net
sales noted previously.
Consolidated Product Contribution--Consolidated product contribution
increased $9.4 million, or 15%, to $72.3 million in the first quarter of 1999
from $62.9 million in the first quarter of 1998. The increase was primarily due
to the higher net sales noted previously. As a percent of net sales, product
contribution increased 1.5 percentage points to 37.9% in the first quarter of
1999 from 36.4% in the first quarter of 1998, primarily as a result of lower
overall advertising and sales promotion expenses as a percentage of net sales.
U.S. Personal Products Division--Product contribution increased $10.5
million, or 30%, to $45.0 million in the first quarter of 1999 from $34.5
million in the first quarter of 1998. As a percent of net sales, product
contribution increased 4.1 percentage points, to 43.4% in the first quarter of
1999 from 39.3% in the first quarter of 1998. This increase in product
contribution was primarily due to a change in product sales mix and the timing
of certain advertising and promotional activities.
U.S. Consumer Products--Product contribution decreased $0.3 million, or
1%, to $24.5 million in the first quarter of 1999 from $24.8 million in the
first quarter of 1998. As a percent of net sales, product contribution decreased
2.5 percentage points, to 35.6% from 38.1% in the first quarter of 1998. This is
primarily due to a change in sales mix and the timing of certain advertising and
promotional activities.
International and Other--Product contribution decreased $1.1 million, or
19%, to $4.7 million in the first quarter of 1999 from $5.8 million in the first
quarter of 1998. As a percent of net sales, product contribution decreased 2.9
percentage points, to 26.2% from 29.1% in the first quarter of 1998. This is
primarily due to the sales decline noted previously as well as a change in sales
mix and the timing of certain advertising and promotional activities.
13
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Consolidated Operating Earnings--Consolidated operating earnings increased
$4.7 million, or 12%, to $42.4 million in the first quarter of 1999 from $37.7
million in the first quarter of 1998. The increase in operating earnings
resulted from (i) higher net sales resulting from the 1999 and 1998
Acquisitions, (ii) higher net sales in the Company's pre-acquisition product
lines, and (iii) lower operating expenses as a percent of net sales.
Consolidated Interest Expense--Consolidated interest expense in the first
quarter of 1999 increased $0.8 million, or 4%, to $18.8 million in the first
quarter of 1999 from $18.0 million in the first quarter of 1998. This resulted
from an increase in long-term debt of $78.9 million at March 27, 1999 compared
to March 28, 1998, primarily additional borrowings to finance the acquisition of
the Diaper Genie business (see Note 2 and Note 4 of Condensed Notes to
Consolidated Financial Statements). The impact of the higher debt balance was
offset, in part, by lower weighted average variable interest rates in the first
quarter of 1999 compared to the first quarter of 1998.
Consolidated Income Taxes--Consolidated income taxes increased $1.5
million, or 18%, to $10.0 million in the first quarter of 1999 from $8.5 million
in the first quarter of 1998. As a percent of pretax earnings, the Company's
effective tax rate decreased 0.4 percentage points to 42.4% of pretax earnings
in the first quarter of 1999 from 42.8% of pretax earnings in the first quarter
of 1998. The decrease in the Company's effective tax rate is primarily due to
the fixed nature of the Company's non-deductible amortization expenses.
Consolidated Net Earnings--Consolidated net earnings in the first quarter
of 1999 increased $2.3 million, or 20%, to $13.6 million from $11.3 million in
the first quarter of 1998. This increase is due to the combined effects of all
of the factors described above.
Financial Condition and Liquidity
At March 27, 1999, the Company's working capital (current assets net of
current liabilities) increased to $108.4 million from $78.5 million at December
26, 1998. The increase resulted primarily from (i) an increase of $29.6 million
in receivables, primarily as a result of higher net sales compared to the fourth
quarter of 1998, the impact of Sun Care seasonal extended dating and the impact
of the 1999 Acquisition, and (ii) an increase of $6.4 million in cash and $3.8
million in inventory, both resulting principally from the Acquisitions. These
working capital increases were partially offset by an increase in accrued
expenses of $6.9 million primarily due to the 1999 Acquisition and higher
returns reserves associated with the seasonal nature of Sun Care sales. All
other working capital components decreased $3.0 million.
The Company's product lines, with the exception of Sun Care, generally
have not been seasonal. However, Sun Care product sales are highly seasonal,
with 80 to 90 percent of sales occurring in the first six months of the year.
This seasonality requires increased inventory to support the selling season and
extended credit terms, which are typical in the sun care industry, result in
higher receivables for the Company.
Capital expenditures for equipment and facility improvements were $6.7
million for the three months ended March 27, 1999. These expenditures were used
primarily to upgrade production equipment and maintain facilities in the
ordinary course of business. Capital expenditures in the first quarter of 1999
included increased expenditures related to the brands acquired in the 1998
Acquisitions. Capital expenditures for 1999 are expected to be approximately
$22.7 million, mostly for production related equipment and facility improvements
and for projects consistent with those of the prior years. The 1999 projection
includes increased capital expenditures related to the 1999 Acquisition.
At March 27, 1999, long-term debt (including current portion but excluding
obligations due to related party) was $941.1 million compared to $811.8 million
at December 26, 1998, an increase of $129.3 million. The increase was
14
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
primarily as a result of debt incurred to fund the 1999 Acquisition. At March
27, 1999, the Company had unused lines of credit (giving effect to outstanding
letters of credit) under the 1997 Revolving Credit Facility of $34.0 million.
Terms of the 1997 Credit Agreement require the Company to meet certain
financial covenants and ratios and also include conditions or restrictions on
new indebtedness and liens, major acquisitions or mergers, capital expenditures
and disposition of assets, certain dividends and other distributions, and
prepayment and modification of indebtedness or equity capitalization. The 9%
Senior Subordinated Notes and the Senior Notes (collectively, the "Notes") also
contain restrictions and requirements with regard to similar matters. Under the
terms of these debt instruments, payment of cash dividends on the Common Stock
of the Company is restricted.
The Company believes that it will generate sufficient cash flow from
operations for working capital, capital expenditures and to make the scheduled
interest and principal payments under the 1997 Term Loan and the 1997 Senior
Secured Credit Facilities, and interest payments on the Convertible Notes and
the Notes. However, the Company does not expect to generate sufficient cash flow
from operations to make the $360 million principal payment due in 2003 on the 9%
Senior Subordinated Notes or the $150 million principal payment due in 2004 on
the Senior Notes. Accordingly, the Company will either have to refinance its
obligations with respect to the Notes prior to their maturity, or raise equity
capital to repay the principal amounts of the Notes. The Company's ability to
make scheduled principal payments, to refinance its obligations with respect to
its indebtedness, and or raise equity capital depends on its financial and
operating performance, which 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 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.
On January 29, 1999, the Company completed the acquisition of the Diaper
Genie business, the leading diaper disposal system in the U.S., from Mondial for
approximately $122 million. The purchase price consisted of $72 million in cash
and the issuance to Mondial of $50 million principal amount of convertible
notes. The cash portion of the consideration was financed utilizing the
Company's 1997 Revolving Credit facility. The newly issued convertible notes
bear a rate of interest of 6.00% and are convertible after January 29, 2000, at
the holders' option, into approximately 2.6 million shares of the Company's
Common Stock. The conversion price is approximately $19.15 per share. The
convertible notes will mature in 2004 and are callable by the Company after
January 29, 2002.
The Company will continue to regularly consider the acquisition of other
companies or businesses engaged in the manufacture and distribution of related
products. Such potential transactions may require substantial capital resources,
which would, in certain circumstances, require the Company to seek additional
debt or equity financing. Because there can be no assurance that such financing
will be available, the Company's ability to expand its operations through
acquisition may be restricted. However, the Company believes that capital will
be available to achieve its acquisition objectives.
Inflation in the United States and Canada has not had a significant effect
on the Company during recent periods.
On August 13, 1998, the Company filed an action in the United States
District Court, District of Delaware (the "Court") seeking, among other things,
a judgment declaring that United States Patent No. 5,747,011 (the " '011
patent"), related to a "sunscreen with disappearing color indicator," and held
by Schering-Plough HealthCare Products, Inc. ("S-P HealthCare"), as assigned, is
invalid. On September 8, 1998, S-P HealthCare answered the Company's complaint
denying its material allegations, and asserted a counterclaim against the
Company for infringement of the '011 patent, seeking unspecified damages and
injunctive relief. On October 19, 1998, S-P HealthCare moved for a preliminary
injunction against the Company which would prohibit the Company from selling its
Banana Boat Cool Colorz sunscreen, which
15
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
allegedly infringes the '011 patent. As of May 7, 1999 the motion for
preliminary injunction had not been granted. The Company intends to vigorously
pursue its claim and request for declaratory relief.
Change in Estimates
Beginning in 1999, the Company revised the estimated average useful lives
used to compute depreciation on most of the Company's Buildings from 30 years to
40 years and on a portion of its building improvements from 10 and 15 years to
20 years. The Company also revised the estimated useful lives of certain of the
Company's manufacturing equipment and land improvements. These revisions were
made to more properly reflect the true economic lives of the Company's fixed
assets based on historical experiences of the Company. For the first quarter of
1999, the change had the effect of increasing the Company's net earnings by $0.4
million, and had no impact on the Company's earnings per share.
Recently Issued Accounting Standards
In June of 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities" which is
effective for the Company beginning in fiscal year 2000. The Statement requires
the recognition of certain derivative instruments on the balance sheet, with
resulting transition adjustments reported in other comprehensive earnings or net
earnings as the effect of a change in accounting principle, as appropriate. The
Company is currently evaluating the effect this Statement will have on its
financial position and results from operations.
Year 2000
Historically certain computer programs were written using two digits
rather than four to define the applicable year. Accordingly, the Company's
software may recognize a date using "00" as 1900 rather than the year 2000,
which could result in computer system failures or miscalculations, commonly
referred to as the Year 2000 ("Y2K") issue. The Y2K issue can arise at any point
in the Company's supply, manufacturing, processing, distribution and financial
chains. Incomplete or untimely resolution of the Y2K issue by the Company, key
suppliers, customers and other parties could result in a temporary inability to
process transactions or engage in normal manufacturing or other business
activities. Such inabilities could potentially have a material adverse effect on
the Company's results of operations, financial condition and cash flows.
The Company, with the assistance of outside consultants, is addressing the
Y2K issue. The Company has inventoried and assessed all date-sensitive
information and transaction processing computer systems and determined that a
portion of its information technology must be modified or replaced. The Company
has identified the critical software and hardware installations that need to be
replaced or modified and has developed a four-tiered program (the "Y2K project")
to deal with the Y2K issue. These tiers include: (i) network and
hardware/software infrastructure, (ii) internally developed and purchased
application software, (iii) critical manufacturing and other operating systems
including those that use embedded technology such as micro-controllers and
micro-processors, and (iv) external relationships including customers, suppliers
and service providers.
The Company believes the complete Y2K project will be completed prior to
the year 2000. However, unforeseen difficulties may arise which could adversely
affect the Company's ability to complete its systems modifications correctly,
completely, on time and/or within its cost estimate. In addition, there can be
no assurance that customers, suppliers and service providers on whom the Company
relies will resolve their Y2K issues accurately, thoroughly and on time. Failure
to complete the Y2K project by the year 2000 could have a material adverse
affect on the Company's results of operations, financial condition and cash
flows.
16
<PAGE>
PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
At March 27, 1999, the Company has completed, as planned, necessary
modifications to the primary network and hardware/software infrastructure and
has completed necessary modifications to the Company's core transaction
processing and financial systems. Remediation work on several peripheral systems
will continue through the second and third quarter of 1999. The Company has
begun formal integration and validation testing of systems deemed to be Y2K
compliant and will continue integrating and testing systems deemed to be Y2K
compliant for the balance of the calendar year. The Company's efforts as related
to embedded chip technology such as micro-controllers and micro-processors
utilized in manufacturing or other operating systems will be updated, replaced
and validated as necessary by the end of the third quarter of 1999. The Company
has initiated formal communications with its significant suppliers, customers
and service providers to determine the extent to which the Company may be
vulnerable to their failure to correct their own Y2K issues. The Company has
begun developing contingency plans with respect to its principal customers,
suppliers and service providers and estimates that formal plans will be
developed by the end of the third quarter of 1999. There can be no assurance,
however, that the Company will be able to predict adequately Y2K problems
experienced by its suppliers, customers and service providers or the Company's
ability to address these potential issues on a timely basis or to develop
adequate contingency plans related thereto.
The total cost associated with required modifications of hardware and
software is not expected to be material to the Company's financial position. The
Company anticipates that its total cost associated with the Y2K project will be
approximately $3.9 million, including $0.6 million expended in 1997, $2.2
million expended in 1998 and $1.1 million estimated to be spent in 1999. Costs
related to addressing the Y2K issues are either expensed as incurred or
capitalized as appropriate. All Y2K related costs have been and will be funded
from operating cash flows.
The failure to properly anticipate and correct a material Y2K problem
could result in an interruption in, or a failure of, certain normal business
activities or operations. Such failures could materially and adversely affect
the Company's results of operations, financial condition and cash flows. Due to
the general uncertainty inherent in the Y2K problem, resulting in part from the
uncertainty of the Y2K readiness of suppliers, customers and service providers,
the Company is unable to determine at this time whether the consequences of Y2K
failures will have a material impact on the Company's results of operations,
financial condition or cash flows. The Y2K project is expected to significantly
reduce the Company's level of uncertainty about the Y2K problem. The Company
believes that, with the implementation of new business systems and completion of
the Y2K project as scheduled, the possibility of significant interruptions of
normal operations should be reduced.
While the Company believes its efforts to address the Y2K issue will be
successful in avoiding any material adverse effect on the Company's results of
operations, financial condition and cash flows, investors and other interested
third parties should recognize that the Company's failure to resolve Y2K issues
on a timely basis would, in a "most reasonably likely worst case scenario",
significantly limit its ability to manufacture and distribute its products and
process its daily business transactions for a period of time, especially if such
failure is coupled with third party or infrastructure failures. Similarly, the
failure of significant suppliers, customers and service providers, or one or
more components of the Company's infrastructure, could significantly affect the
Company's operations subsequent to 1999. Adverse affects on the Company could
include, among other things, business disruption, increased costs, loss of
business and other similar risks, and litigation related thereto. The Company
believes that contingency plans will be developed prior to the year 2000, which
address the most likely risks related to the Y2K problem.
The foregoing discussion regarding Y2K project timing, effectiveness,
implementation and costs are based on management's current evaluation using
available information. Factors that might cause material changes include, but
are not limited to, the availability of key Y2K personnel, the readiness of
third parties, and the Company's ability to respond to unforeseen Y2K
complications.
17
<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 26, 1998.
As of the end of March 1999, there were approximately 12 pending toxic
shock syndrome claims relating to Playtex tampons, although additional claims
may be made in the future.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
b. Reports on Form 8-K
On January 14, 1999, the Company filed a Current Report on Form 8-K with
the Securities and Exchange Commission pursuant to Item 5 of such Form to file a
copy of the press release announcing a definitive agreement to acquire
substantially all of the assets of Mondial Industries Limited Partnership.
On February 12, 1999, the Company filed a Current Report on Form 8-K with
the Securities and Exchange Commission pursuant to Item 2 of such Form to report
the completion of the acquisition of substantially all of the assets of Mondial
Industries Limited Partnership. Pursuant to Item 5 of such Form, the Company
also filed a copy of the press release announcing the completion of the
acquisition.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: May 11, 1999 By: /s/ MICHAEL R. GALLAGHER
------------------ ------------------------------
Michael R. Gallagher
Chief Executive Officer
(Principal Executive Officer)
Date: May 11, 1999 By: /s/ MICHAEL F. GOSS
------------------ ------------------------------
Michael F. Goss
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
19
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
11 Statement re Computation of Earnings Per Share
27 Financial Data Schedule
20
Exhibit 11
Playtex Products, Inc.
Computation of Earnings Per Share
(Unaudited, in thousands, except per share data)
March 27, March 28,
1999 1998
------- -------
Basic Earnings Per Common Share
- -------------------------------
Net Earnings Available to Common Stockholders ............ $13,571 $11,310
======= =======
Weighted Average Common Shares Outstanding ............... 60,413 56,969
======= =======
Net Earnings Per Common Share ............................ $ 0.22 $ 0.20
======= =======
Diluted Earnings Per Common Share
- ---------------------------------
Net Earnings Available to Common Stockholders ............ $13,571 $11,310
Adjustment to Net Earnings (1) ........................... 315 --
------- -------
Adjusted Net Earnings Available to Common Stockholders ... $13,886 $11,310
======= =======
Weighted Average Shares Outstanding ...................... 60,413 56,969
Assumed Dilutive Effect of Stock Options (2) ............. 1,128 756
Assumed Conversion of the Convertible Notes (1) .......... 1,664 --
------- -------
Weighted Average Common Shares Outstanding - Diluted ..... 63,205 57,725
======= =======
Net Earnings Per Common Share - Diluted .................. $ 0.22 $ 0.20
======= =======
(1) Based on the If-Converted Method for Convertible Securities
(2) Based on the Treasury Stock Method
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<FISCAL-YEAR-END> DEC-25-1999
<PERIOD-END> MAR-27-1999
<CASH> 13,221
<SECURITIES> 0
<RECEIVABLES> 135,491
<ALLOWANCES> 2,689
<INVENTORY> 62,596
<CURRENT-ASSETS> 225,360
<PP&E> 185,617
<DEPRECIATION> 84,628
<TOTAL-ASSETS> 1,051,547
<CURRENT-LIABILITIES> 116,968
<BONDS> 941,126
0
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<COMMON> 604
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<TOTAL-LIABILITY-AND-EQUITY> 1,051,547
<SALES> 190,452
<TOTAL-REVENUES> 190,452
<CGS> 80,907
<TOTAL-COSTS> 80,907
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