SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 2, 2004
Church & Dwight Co., Inc.
(Exact name of Registrant as Specified in Charter)
| Delaware | 1-10585 | 13-4996950 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 469 North Harrison Street, Princeton, New Jersey | 08543 | |
| (Address of principal executive offices) | Zip Code |
Registrant’s telephone, including area code: (609) 683-5900
N/A
(Former name and former address, if changed since last report)
ITEM 5. OTHER EVENTS.
Set forth below is unaudited capsule information for the quarter and fiscal year ended December 31, 2003:
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
| Three Months Ended |
Twelve Months Ended |
|||||||||||||||
| (In thousands, except per share data) |
Dec. 31, 2003 |
Dec. 31, 2002 |
Dec. 31, 2003 |
Dec. 31, 2002 |
||||||||||||
| Net Sales |
$ | 286,747 | $ | 268,098 | $ | 1,056,874 | $ | 1,047,149 | ||||||||
| Cost of sales |
202,705 | 187,265 | 738,883 | 735,928 | ||||||||||||
| Gross profit |
84,042 | 80,833 | 317,991 | 311,221 | ||||||||||||
| Marketing expenses |
22,671 | 24,458 | 88,807 | 86,195 | ||||||||||||
| Selling, general and administrative expenses |
32,224 | 31,530 | 117,333 | 120,512 | ||||||||||||
| Income from Operations |
29,147 | 24,845 | 111,851 | 104,514 | ||||||||||||
| Equity in earnings of affiliates |
2,788 | 3,786 | 28,632 | 21,520 | ||||||||||||
| Other income (expense), net |
(10,246 | ) | (5,770 | ) | (23,518 | ) | (24,799 | ) | ||||||||
| Income before minority interest and taxes |
21,689 | 22,861 | 116,965 | 101,235 | ||||||||||||
| Income taxes |
5,814 | 7,307 | 35,974 | 34,402 | ||||||||||||
| Minority Interest |
8 | 14 | 30 | 143 | ||||||||||||
| Net Income |
$ | 15,867 | $ | 15,540 | $ | 80,961 | $ | 66,690 | ||||||||
| Net Income per share - Basic |
$ | 0.39 | $ | 0.39 | $ | 2.01 | $ | 1.68 | ||||||||
| Net Income per share - Diluted |
$ | 0.37 | $ | 0.37 | $ | 1.92 | $ | 1.60 | ||||||||
| Dividend per share |
$ | 0.08 | $ | 0.075 | $ | 0.31 | $ | 0.30 | ||||||||
| Weighted average shares outstanding - Basic |
40,515 | 39,875 | 40,227 | 39,630 | ||||||||||||
| Weighted average shares outstanding - Diluted |
42,682 | 41,984 | 42,199 | 41,809 | ||||||||||||
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CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
| (Dollars in thousands) |
Dec. 31, 2003 |
Dec. 31, 2002 | ||||
| Assets |
||||||
| Current Assets |
||||||
| Cash, equivalents and securities |
$ | 75,634 | $ | 76,302 | ||
| Accounts receivable |
107,553 | 100,252 | ||||
| Inventories |
84,176 | 82,674 | ||||
| Other current assets |
21,859 | 26,208 | ||||
| Total Current Assets |
$ | 289,222 | 285,436 | |||
| Property, Plant and Equipment (Net) |
258,010 | 240,007 | ||||
| Equity Investment in Affiliates |
152,575 | 131,959 | ||||
| Intangibles and other assets |
419,810 | 330,839 | ||||
| Total Assets |
$ | 1,119,617 | $ | 988,241 | ||
| Liabilities and Stockholders’ Equity |
||||||
| Short-Term Debt |
$ | 65,897 | $ | 15,945 | ||
| Other Current Liabilities |
166,157 | 169,236 | ||||
| Total Current Liabilities |
232,054 | 185,181 | ||||
| Long-Term Debt |
331,149 | 352,488 | ||||
| Other Long-Term Liabilities |
117,920 | 102,926 | ||||
| Stockholders’ Equity |
438,494 | 347,646 | ||||
| Total Liabilities and Stockholders’ Equity |
$ | 1,119,617 | $ | 988,241 | ||
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Supplemental Information
For the year ended December 31, 2003 net income was $81.0 million or $1.92 per diluted share. This compares to $66.7 million or $1.60 per share for 2002.
2003’s first half results included a $0.06 per share gain from the reversal of prior year tax reserves and a net $0.07 per share contribution by the Company’s affiliate, Armkel LLC, primarily resulting from the settlement of litigation.
For the quarter ended December 31, 2003, net income was $15.9 million or $0.37 per diluted share as compared to $15.5 million or $0.37 per share in the year ago period.
The fourth quarter of 2003’s results included a $0.03 per share earnings reduction from a change in revenue recognition from FOB shipping point to FOB destination point, reducing sales by $6.3 million for the quarter.
Fourth quarter results in 2003 included sales of $25.2 million for the former Unilever oral care brands. As previously announced by the Company, on October 20, 2003, the Company completed the acquisition of the former Unilever oral care business in the United States and Canada, comprising the MENTADENT brand of toothpaste and toothbrushes, PEPSODENT and AIM toothpaste, and exclusive licensing rights to CLOSE-UP toothpaste.
In connection with the acquisition of the Unilever oral care brands and its financing, the Company recorded a $6.1 million accounting charge related to the step-up of opening inventory values in accordance with purchase accounting principles, and took an additional $4.9 million charge to write off deferred financing costs and interest rate hedges incurred on previous financing transactions. Including these charges, the acquired oral care business generated a pretax loss of $2.6 million or $0.04 per share from the date of acquisition through December 31, 2003. The Company provided minimal marketing support during this transition period for the acquired business, and expects to increase such support in 2004.
Other Expense in 2003 includes the fourth quarter acquisition-related financing charges of $4.9 million mentioned in the previous paragraph.
At December 31,2003, the Company had total outstanding debt of $397 million, and cash of $76 million. The investment in the Unilever acquisition was about $110 million including working capital. Net Cash Provided by Operating Activities was approximately $119 million for the year.
At its January 28 Board Meeting, the Board declared a regular quarterly dividend of $0.08 per share. The dividend is payable March 1, 2004 to stockholders of record at the close of business on February 6, 2004.
Forward Looking Statements
The above discussion contains forward-looking statements relating to, among other things, the level of marketing support the Company expects to provide for the acquired Unilever oral care brands in 2004. These statements represent the intentions, plans, expectations and beliefs of the Company, and are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. The uncertainties include assumptions as to market growth and consumer demand (including the effect of political and economic events on consumer demand), consumer reaction
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to marketing efforts and uncertainties and unanticipated delays involved in integrating the Oral Care Business into the Company’s existing operations. For a description of additional cautionary statements, see the Company’s quarterly reports on Form 10-Q and annual reports on Form 10-K filed with the SEC.
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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 hereunto duly authorized.
| CHURCH & DWIGHT CO., INC. | ||||
| Date: March 2, 2004 |
By: |
/s/ Robert A. Davies, III | ||
| Name: |
Robert A. Davies, III | |||
| Title: |
Chief Executive Officer | |||
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