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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 2002
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file Number 333-73160
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ARMKEL, LLC
(Exact name of registrant as specified in its certificate of formation)
Organized in Delaware
469 North Harrison Street
Princeton, New Jersey 08543-5297 13-4181336
(Address of principal executive offices) (Zip Code) I.R.S Employer Identification No.
(609) 683-5900
Registrant's telephone Number, including area code
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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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 |_|
As of August 8, 2002, all of the 10,000 outstanding membership interests in
Armkel, LLC were held by affiliates.
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PART I - FINANCIAL INFORMATION
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
CHANGES IN MEMBERS' EQUITY/NET ASSETS TO BE SOLD
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
Successor Predecessor Successor Predecessor
Company Company Company Company
(Dollars in thousands) June 28, June 30, June 28, June 30,
2002 2001(1) 2002 2001(1)
---- ---- ---- ----
Net Sales.............................................. $ 115,858 $ 113,894 $ 212,311 $ 208,185
Cost of goods sold..................................... 52,575 48,778 103,595 91,728
----------- ----------- ----------- -----------
Gross Profit........................................... 63,283 65,116 108,716 116,457
Marketing expenses..................................... 13,439 12,342 24,906 23,263
Selling, general and administrative expenses........... 23,607 21,008 46,253 39,471
----------- ----------- ----------- -----------
Income from Operations................................. 26,237 31,766 37,557 53,723
Interest expense....................................... 8,931 257 18,352 641
Interest (income)...................................... (254) (98) (555) (262)
Other (income) expense................................. (1,666) (704) (1,588) 76
----------- ----------- ----------- -----------
Income before taxes.................................... 19,226 32,311 21,348 53,268
Income taxes........................................... 3,641 13,539 5,455 24,172
----------- ----------- ----------- -----------
Net Income............................................. 15,585 18,772 15,893 29,096
Other Comprehensive Income (Loss)...................... 517 (4,478) (790) (3,534)
----------- ----------- ----------- -----------
Total Comprehensive Income............................. 16,102 14,294 15,103 25,562
Members' Equity at Beginning of Period................. 202,405 -- 203,404 --
----------- -----------
Members' Equity at End of Period....................... $ 218,507 -- $ 218,507 --
=========== ===========
Net Assets to be Sold at Beginning of Period........... 255,762 244,494
----------- -----------
Net Assets to be Sold at End of Period................. $ 270,056 $ 270,056
=========== ===========
- -----------------
(1) The three months and six months ended June 30, 2001 represent the
predecessor company combined financial information reclassified for conformity
to the 2002 presentation.
See Notes to Condensed Consolidated Financial Statements.
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
CONDENSED CONSOLIDATED BALANCE SHEETS
June 28, 2002 Dec. 31, 2001
------------- -------------
(Dollars in thousands) (Unaudited)
Assets
Current Assets
Cash and cash equivalents....................................................... $ 41,145 $ 55,837
Accounts receivable, less allowances of $4,796 and $5,317....................... 125,560 96,672
Inventories..................................................................... 62,689 69,876
Prepaid expenses................................................................ 4,072 3,919
---------- -----------
Total Current Assets............................................................ 233,466 226,304
Property, Plant and Equipment (Net)............................................. 120,110 119,880
Tradenames and Patents.......................................................... 263,525 265,411
Goodwill........................................................................ 173,879 176,698
Deferred Financing Costs........................................................ 19,583 20,892
Other Assets.................................................................... 1,548 4,608
----------- -----------
Total Assets.................................................................... $ 812,111 $ 813,793
=========== ===========
Liabilities and Members' Equity
Current Liabilities
Short-term borrowings........................................................... $ 2,565 $ 2,425
Accounts payable and accrued expenses........................................... 117,334 133,253
Current portion of long-term debt............................................... 6,812 3,246
Taxes payable................................................................... 3,710 3,004
----------- -----------
Total Current Liabilities....................................................... 130,421 141,928
Long-term Debt.................................................................. 436,487 439,750
Deferred and Other Long-term Liabilities........................................ 26,696 28,711
Commitments and Contingencies -- --
Members' Equity................................................................. 218,507 203,404
----------- -----------
Total Liabilities and Members' Equity........................................... $ 812,111 $ 813,793
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Six Months Ended
Successor Predecessor
Company Company
June 28, June 30,
(Dollars in thousands) 2002 2001(1)
---- ----
Cash Flow From Operating Activities:
Net Income........................................................................ $ 15,893 $ 29,096
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................................................ 8,534 5,590
Unrealized gain on foreign exchange transactions............................. (1,413) --
Change in assets and liabilities:
(Increase) in accounts receivable............................................ (27,471) (25,791)
Decrease(increase) in inventories............................................ 8,586 (2,229)
(Decrease) increase in accounts payable and
other accrued expenses.................................................... (12,726) 2,633
Decrease (Increase) in other................................................. 448 (4,767)
----------- ------------
Net Cash (Used in)/Provided by Operating Activities............................... (8,149) 4,532
----------- -----------
Cash Flow From Investing Activities:
Additions to property, plant and equipment........................................ (4,632) (4,694)
Proceeds from sale of property, plant and equipment............................... -- 1,315
Payment of acquisition-related costs.............................................. (1,132) --
------------ -------------------
Net Cash Used in Investing Activities............................................. (5,764) (3,379)
----------- ------------
Cash Flow From Financing Activities:
Repayment of syndicated bank credit facility...................................... (750) --
Repayment of other debt........................................................... -- (1,530)
Payment of deferred financing costs............................................... (459) --
Other ............................................................................ -- (845)
---------- -------------
Net Cash Used in Financing Activities............................................. (1,209) (2,375)
----------- ------------
Effect of exchange rate changes on cash and cash equivalents...................... 430 (284)
----------- -------------
Net Change in Cash and Cash Equivalents........................................... (14,692) (1,506)
Cash and Cash Equivalents at Beginning of Period.................................. 55,837 8,661
----------- -----------
Cash and Cash Equivalents at End of Period........................................ $ 41,145 $ 7,155
=========== ===========
- ----------------
(1) The six months ended June 30, 2001 represent the predecessor company
combined financial information reclassified for conformity to the 2002
presentation.
See Notes to Condensed Consolidated Financial Statements.
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Financial Statement Presentation
The consolidated balance sheet as of June 28, 2002, the consolidated statements
of income and members' equity and consolidated statements of cash flow for the
three months and six months ended June 28, 2002 have been prepared by Armkel,
LLC and subsidiaries (the "Company" or the "Successor") and are unaudited. The
period for the three months and six months ended June 30, 2001 represents the
combined income statement of the Carter-Wallace Consumer Business - Excluding
Antiperspirant/Deodorant Products in the United States and Canada and Pet
Products (the "Predecessor") and is unaudited. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flow at
June 28, 2002 and for all periods presented have been made.
The Company acquired the Predecessor on September 28, 2001 (see Note 6 for
further details on the acquisition). The Predecessor income statement has been
prepared pursuant to the Asset Purchase Agreement and Product Line Purchase
Agreement in accordance with accounting principles generally accepted in the
United States of America as detailed in the Company's December 31, 2001 Form
10-K filing. The principal differences in accounting between the Company and the
Predecessor relate to the income tax status of the entities and amortization. As
the Company is treated as a partnership for U.S. tax purposes, it is generally
not subject to U.S taxes on income. The Predecessor tax provision was calculated
as if it was fully taxable under U.S tax law and as if it was filing tax returns
on a stand-alone basis. As the Company adopted Statement of Financial Accounting
Standard No. 142, Goodwill and Other Intangible Assets, the Company does not
amortize goodwill and tradenames. The Predecessor recorded amortization expense
for its goodwill and tradenames.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 2001
required Form 10-K filing. Certain items previously reported in specific
captions in the accompanying financial statements have been reclassed to conform
with current period classification. The results of operations for the period
ended June 28, 2002 are not necessarily indicative of the operating results for
the full year.
2. Inventories consist of the following:
June 28, 2002 Dec. 31, 2001
------------- -------------
(In thousands)
Raw materials and supplies............................................. $ 16,062 $ 14,681
Work in process........................................................ 7,098 13,772
Finished goods......................................................... 39,529 41,423
---------- ---------
$ 62,689 $ 69,876
========== =========
3. Property, Plant and Equipment consist of the following:
June 28, 2002 Dec. 31, 2001
------------- -------------
(In thousands)
Land................................................................... $ 24,012 $ 23,922
Buildings and improvements............................................. 44,153 43,508
Machinery and equipment................................................ 43,334 39,917
Office equipment and other assets...................................... 9,302 8,567
Construction in progress............................................... 5,937 6,156
---------- ---------
126,738 122,070
Less accumulated depreciation, depletion and amortization.............. 6,628 2,190
---------- ---------
Net Property, Plant and Equipment...................................... $ 120,110 $ 119,880
========== =========
4. Recent Accounting Pronouncements
a. Effective January 1, 2002, the Company adopted EITF 01-9, "Accounting
for Consideration given to a Customer or a Reseller of the Vendor's
Products", which codifies and reconciles certain issues from EITF 00-14,
"Accounting for Certain Sales Incentives", and EITF 00-25, "Vendor Income
Statement Characterization of Consideration from a Vendor to a Retailer."
EITF 01-9 addresses the income statement classification for offers by a
vendor directly to end consumers that are exercisable after a single
exchange transaction in the form of coupons,
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
rebate offers, or free products or services disbursed on the same date as
the underlying exchange transaction. The issue requires the cost of these
items to be accounted for as a reduction of revenues, not included as a
marketing expense as the Company did previously. The issue also outlines
required accounting treatment of certain sales incentives, including
slotting or placement fees, cooperative advertising arrangements, buydowns
and other allowances. The Company previously recorded such costs as
marketing expenses. The issue requires the Company to report the paid
consideration expense as a reduction of sales, rather than marketing
expense. The Predecessor's second quarter and year to date 2001 net sales
have been restated for this issue. The impact was a reduction of net sales
and marketing expense for the three month and six month periods of
approximately $13.1 million and $25.3 million in 2002 and $11.3 million and
$22.3 million in 2001, respectively, and did not have an effect on net
income.
b. In January 2002, the Company adopted SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses
financial accounting and reporting for the impairment or disposal of
long-lived assets. This statement supersedes FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets to Be Disposed Of" and
the accounting and reporting provisions of APB Opinion No. 30, Reporting
the Results of Operations Reporting the Effects of Disposal of a Segment of
a Business, and Extraordinary, Unusual and Infrequently Occurring Events
and Transactions", for the disposal of a business (as previously defined in
that Opinion). This statement also amends ARB No. 51, "Consolidated
Financial Statements"' to eliminate the exception to consolidation for a
subsidiary for which control is likely to be temporary. The Company has
evaluated this statement and has determined there is no material impact on
the Company's consolidated financial statements.
c. In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections." This Statement rescinds FASB Statement No. 4,
"Reporting Gains and Losses from Extinguishment of Debt", and an amendment
of that Statement, FASB Statement No. 64, "Extinguishment of Debt Made to
Satisfy Sinking-Fund Requirements." This Statement also rescinds FASB
Statement No. 44, "Accounting for Intangible Assets of Motor Carriers."
This Statement amends FASB Statement No. 13, "Accounting for Leases", to
eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. This Statement also amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings or
describe their applicability under changed conditions. The Company will
adopt the provisions of this Statement upon its effective date and does not
anticipate it to have a material effect on its financial statements.
d. In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." The standard requires
companies to recognize costs associated with exit or disposal commitments
to an exit or disposal plan. Examples of costs covered by the standard
include lease termination costs and certain employee severance costs that
are associated with a restructuring, discontinued operation, plant closing,
or other exit or disposal activity. Statement 146 is to be applied
prospectively to exit or disposal activities initiated after December 31,
2002. The Company is currently evaluating the impact this pronouncement
will have on its consolidated financial statements.
5. Goodwill and Intangible Assets
In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which supersedes APB Opinion No. 17, "Intangible Assets". Under its
changes, SFAS No. 142 establishes new standards for goodwill acquired in a
business combination and eliminates amortization of goodwill and instead sets
forth methods to periodically evaluate goodwill for impairment. The Company, at
its inception, adopted certain provisions of this statement. The impairment
provisions of the statement were adopted January 1, 2002 and did not have any
impact on the Company's consolidated financial statements.
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The following tables discloses the carrying value of all intangible assets:
June 28, 2002 December 31, 2001
------------- -----------------
Gross Carrying Accum. Gross Carrying Accum.
(In thousands) Amount Amortization Net Amount Amortization Net
------ ------------ --- ------ ------------ ---
Amortized intangible assets:
- ---------------------------
Patents $ 27,500 $ 3,375 $ 24,125 $ 27,500 $ 1,125 $ 26,375
========= ======== ========== ========== ======= =========
Unamortized intangible assets - Carrying value(1)
- -----------------------------
Tradenames $ 239,400 $ -- $ 239,400 $ 239,036 $ -- $ 239,036
========= ======== ========== ========== ======= ==========
- -------------
(1) Change in unamortized tradenames is primarily due to translation adjustments.
Intangible amortization expense amounted to $2.3 million and $1.4 million for
the six months ended June 28, 2002 and June 30, 2001, respectively. The
estimated intangible amortization for each of the next five years is
approximately $4.5 million. The weighted average amortization period for patents
is 6.4 years.
The changes in the carrying amount of goodwill for the six months ended June 28,
2002 is as follows:
(In thousands) Domestic International Total
-------- ------------- -----
Balance December 31, 2001......................................... $145,237 $ 31,461 $ 176,698
Purchase accounting adjustments................................... (7,463) 4,336 (3,127)
Foreign exchange/other............................................ -- 308 308
--------- ---------- ----------
Balance June 28, 2002............................................. $ 137,774 $ 36,105 $ 173,879
========= ========== ==========
In accordance with SFAS No. 142, the Company completed the impairment test of
the valuation of goodwill and intangibles as of January 1, 2002 and based upon
the results, there was no impairment.
6. Acquisitions
On May 7, 2001 the Company and Carter-Wallace entered into a definitive Asset
Purchase Agreement which was consummated on September 28, 2001. The Company
acquired the assets and liabilities that related primarily to the consumer
products business of Carter-Wallace, as well as 100% of the capital stock of
certain foreign subsidiaries of Carter-Wallace (the "Acquisition"). Under a
separate agreement dated May 7, 2001, Church & Dwight Co., Inc. ("C&D") agreed
to simultaneously purchase from the Company the assets relating to the
antiperspirant/deodorant product lines in the United States and Canada and the
assets relating to the Lambert-Kay line of pet products, and assumed the
liabilities of these businesses. The Acquisition was accounted for as a purchase
under the provisions of SFAS No. 141, "Business Combinations" and has been
included in the Company's financial statements from the date of the acquisition.
An appraisal is currently in process and the purchase price allocation will be
modified based on its results by the end of the third quarter.
Pro forma results
The following reflects pro forma results for the three and six months ended June
30, 2001.
For the three For the six
Months ended months ended
June 30, 2001 June 30, 2001
------------- -------------
(In millions) Pro forma Pro forma
Net Sales..................................................... $ 113.9 $ 208.2
Income from operations........................................ 22.4 32.9
Net Income.................................................... 20.3 29.1
The pro forma results adjusts for additional interest expense related
principally to the debt incurred to finance the Acquisition and for income taxes
under the Company's LLC status. Adjustments were also made to depreciation and
amortization expense related to the fair value of the assets acquired and the
implementation of SFAS No. 142, "Goodwill and Other Intangible Assets."
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
7. Related Party Transactions
Arrangements with Church & Dwight
As part of the acquisition, the Company entered into a management services
agreement ("MSA") with C&D whereby C&D has agreed to provide the Company with
corporate management and administrative services primarily for the Company's
domestic operations. These services generally include, but are not limited to,
sales, marketing, facilities operations, finance, accounting, MIS, legal and
regulatory, human resources, R&D, Canadian sales and executive and senior
management oversight of each of the above services.
The term of the management services agreement is five years, with automatic
one-year renewals unless the Company provides six months' notice that it does
not want to renew the agreement.
For the three and six months ended June 28, 2002, the Company paid C&D $5.4 and
$10.1 million for administrative and management oversight services and sold $0.0
million and $5.4 million of deodorant antiperspirant inventory to C&D at its
cost, respectively. The Company charged C&D $0.1 million and $1.1 million of
transition administrative services for the current quarter and six months,
respectively. The Company had a net payable at June 28, 2002 of approximately
$8.2 million to C&D that primarily related to administration fees and invoices
paid by C&D on behalf of Armkel.
Arrangements with Kelso
Kelso has agreed to provide the Company with financial advisory services for
which the Company will pay an annual fee of $1.0 million. The Company has agreed
to indemnify Kelso against certain liabilities and reimburse expenses in
connection with its engagement. For the three and six months ended June 28,
2002, the Company paid Kelso $0.3 million and $0.5 million, respectively.
8. Contingencies
The Acquisition, and the concurrent sale of the remainder of Carter-Wallace's
business to a third party, involved a number of arrangements between the Company
and Medpointe (the successor to Carter-Wallace) relating to assets and
liabilities purchased and assumed as part of the transaction. These arrangements
have given rise to a number of disputes among the parties which may lead to the
incurrence of costs or liabilities, and the Company's payment of funds.
There exists a dispute related to retiree medical costs. Pursuant to the Asset
Purchase Agreement, the Company has agreed to assume the liability for 60% of
the future retiree medical costs incurred with respect to certain specifically
identified employees of the consumer products business that terminated
employment with Carter-Wallace during the period from May 7, 2001, through and
including September 28, 2001, the date the Acquisition was consummated.
Medpointe has asserted that all of the specifically identified employees of the
consumer products business were terminated by Carter-Wallace on the date of
closing, and that the Company is therefore liable for 60% of the future retiree
medical costs with respect to all of those former employees. Medpointe estimates
the Company's share of the liability for the specifically identified employees
to be approximately $6 million to $10 million (depending upon final actuarial
valuation), based on current plan design, which is subject to change at any time
by such entity. The Company disagrees with Medpointe's position although it does
not believe that it has any liability for those employees who chose not to
retire but to instead work for the Company or C&D, it cannot be certain that the
dispute will be resolved in the Company's favor. Due to the uncertainty
regarding the resolution of this dispute, any potential liability for this
amount has not been reflected in these financial statements.
Pursuant to the Asset Purchase Agreement, the purchase price shall be adjusted
with respect to domestic net working capital at close. The Company and Medpointe
are currently negotiating this adjustment. This may result in an approximate $4
million liability to the Company. However, due to the uncertainty of the
outcome, no amount has been reflected in these financial statements.
The Company has entered into an agreement with Medpointe pursuant to which the
Company has agreed to indemnify it and certain related parties against 60% of
all liabilities relating to any action challenging the validity of
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
the Acquisition or the merger (other than antitrust-based action), including 60%
of all Appraisal Damages (defined as the recovery greater than the per share
merger price times the number of shares in the appraisal class) claims made by
former Carter-Wallace shareholders.
While the Company's potential exposure with respect to the Appraisal Damages
claims is effectively capped at $12 million (because of a separate agreement
between Carter-Wallace and certain shareholders of Carter-Wallace), there is no
cap on the Company's indemnification obligation arising out of other transaction
related liabilities of Carter-Wallace. Due to uncertainty of the outcome of
currently asserted Appraisal Damages claims, no amount has been reflected in
these financial statements. In connection with the sale of the Disposed
Businesses to C&D, C&D agreed to indemnify the Company for up to 17.4% of any
amounts that the Company may become liable for pursuant to the Company's
indemnification agreement with Carter-Wallace. If the Company is required to
perform under these indemnification obligations, its liability could be
substantial. This could materially and adversely affect the Company's financial
condition and results of operations.
Carter-Wallace has been engaged in litigation with Tambrands Inc. in the Supreme
Court of the State and County of New York arising out of a patent infringement
and misappropriation suit previously filed against both companies in the United
States District Court, Southern District of New York, by New Horizons
Diagnostics Corporation, or "NHDC", et al. The NHDC suit, which was settled and
discontinued in July 1996, asserted claims with respect to certain "gold sol"
technology (used in the First Response and Answer home pregnancy and ovulation
test kits) that Carter-Wallace had acquired from Tambrands pursuant to a written
purchase agreement in March 1990. Carter-Wallace paid an immaterial amount
toward that settlement. In the pending Supreme Court action, Tambrands seeks
reimbursement from Carter-Wallace of an unspecified portion of the amount paid
by Tambrands in settlement of the NHDC suit, and for defense costs. Both
Tambrands and Carter-Wallace moved for summary judgment, and the Supreme Court
granted Carter-Wallace's motion. Tambrands has appealed that ruling. The Company
has assumed this litigation as part of the Acquisition. The Company believes it
has good defenses, under the terms of the 1990 purchase agreement, to Tambrands'
claim.
The Company, in the ordinary course of its business, is the subject of, or party
to, various pending or threatened legal actions. The Company believes that any
ultimate liability arising from these actions will not have a material adverse
effect on its financial position or results of operation.
9. Restructuring Reserve
As of the date of the Acquisition, the Company started to implement a plan to
reorganize the operation of the acquired consumer business. The main components
of the plan included rationalizing facilities for which the Company expects to
incur lease termination costs of $1.8 million, environmental remediation costs
of $1.8 million and rationalizing the Company's work force.
The accrual for severance is consistent with the Company's plan to have C&D
provide various services instead of the current infrastructure of the
Predecessor company. The accrued severance is for identified employees from
various areas including executives, administrative support and corporate
functions (finance, human resources, legal, MIS, R&D, logistics, marketing,
sales and purchasing). There may be other employees identified for involuntary
termination to complete the plan and, if so, an additional amount of severance
will be accrued and goodwill will increase. Actions required by the plan of
termination began immediately after consummation of the transaction and the
period of time to complete the plan will not extend past 12 months after the
Acquisition date.
The following table summarizes the activity in the Company's restructuring
accruals:
Reserves at Payments and Reserves at
(In thousands) Dec. 31, 2001 Adjustments June 28, 2002
------------- ----------- -------------
Severance and other charges....................................... $ 40,709 $ (27,997) $ 12,712
Environmental remediation costs................................... 250 1,596 1,846
Site clearance costs.............................................. 1,753 (519) 1,234
--------- ---------- -----------
$ 42,712 $ (26,920) $ 15,792
========= =========== ===========
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
10. Segments and Supplemental Information
Segment Information
The Company has two operating segments: Domestic Consumer Products Division and
International Consumer Products Division.
Measurement of Segment Results and Assets
The accounting policies of the segments are generally the same as those
described in Note 1.
Supplemental Financial Information of Domestic and International Operations
The senior subordinated notes registered by the Company are fully and
unconditionally guaranteed by the domestic subsidiaries of the Company on a
joint and several basis. The following information is being presented to comply
with SEC Regulation SX, Item 3-10 and to provide required segment disclosures.
Supplemental information for condensed consolidated balance sheets at June 28,
2002, condensed consolidated income statements and consolidated cash flows for
the period from December 31, 2001 to June 28, 2002 is summarized as follows
(amounts in thousands):
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Successor Consolidated Statement of Income For The Three Months Ended June 28, 2002
--------------------------------------------------------------------
Total
Domestic International Eliminations Consolidated
Net sales........................................ $ 60,470 $ 57,574 $ (2,186) $ 115,858
Cost of goods sold............................... 24,969 29,792 (2,186) 52,575
----------- ----------- ----------- -----------
Gross profit..................................... 35,501 27,782 -- 63,283
Operating expenses............................... 20,404 16,642 -- 37,046
----------- ----------- ----------- -----------
Income from operations........................... 15,097 11,140 -- 26,237
Interest expense................................. 8,621 310 -- 8,931
Interest income.................................. (120) (134) -- (254)
Other (income) expense........................... (6,106) 4,440 -- (1,666)
----------- ----------- ----------- ------------
Income before taxes.............................. 12,702 6,524 -- 19,226
Income taxes..................................... -- 3,641 -- 3,641
----------- ----------- ----------- -----------
Net Income....................................... $ 12,702 $ 2,883 $ -- $ 15,585
=========== =========== ========== ===========
Predecessor Combined Statement of Income For the Three Months Ended June 30, 2001
--------------------------------------------------------------------
Total
Domestic International Eliminations Consolidated
Net sales........................................ $ 60,059 $ 53,835 $ -- $ 113,894
Cost of goods sold............................... 21,894 26,884 -- 48,778
----------- ----------- ----------- -----------
Gross profit..................................... 38,165 26,951 -- 65,116
Operating expenses............................... 14,547 18,803 -- 33,350
---------- ----------- ----------- -----------
Income from operations........................... 23,618 8,148 -- 31,766
Interest expense................................. -- 257 -- 257
Interest income.................................. (98) -- -- (98)
Other (income) expense........................... (799) 95 -- (704)
----------- ----------- ----------- -----------
Income before taxes.............................. 24,515 7,796 -- 32,311
Income taxes..................................... 10,916 2,623 -- 13,539
----------- ----------- ----------- -----------
Net Income....................................... $ 13,599 $ 5,173 $ -- $ 18,772
=========== =========== =========== ===========
Successor Consolidated Statement of Income For The Six Months Ended June 28, 2002
--------------------------------------------------------------------
Total
Domestic International Eliminations Consolidated
Net sales........................................ $ 111,902 $ 105,367 $ (4,958) $ 212,311
Cost of goods sold............................... 53,667 54,886 (4,958) 103,595
----------- ----------- ----------- -----------
Gross profit..................................... 58,235 50,481 -- 108,716
Operating expenses............................... 37,409 33,750 -- 71,159
----------- ----------- ----------- -----------
Income from operations........................... 20,826 16,731 -- 37,557
Interest expense................................. 17,736 3,720 (3,104) 18,352
Interest income.................................. (3,375) (284) 3,104 (555)
Other (income) expense........................... (3,791) 2,203 -- (1,588)
----------- ----------- ----------- -----------
Income before taxes.............................. 10,256 11,092 -- 21,348
Income taxes..................................... -- 5,455 -- 5,455
----------- ----------- ----------- -----------
Net Income....................................... $ 10,256 $ 5,637 $ -- $ 15,893
=========== =========== =========== ==========
Predecessor Combined Statement of Income For the Six Months Ended June 30, 2001
--------------------------------------------------------------------
Total
Domestic International Eliminations Consolidated
Net sales........................................ $ 105,488 $ 102,697 $ -- $ 208,185
Cost of goods sold............................... 38,096 53,632 -- 91,728
----------- ----------- ----------- -----------
Gross profit..................................... 67,392 49,065 -- 116,457
Operating expenses............................... 27,833 34,901 -- 62,734
---------- ----------- ----------- -----------
Income from operations........................... 39,559 14,164 -- 53,723
Interest expense................................. -- 641 -- 641
Interest income.................................. (98) (164) -- (262)
Other (income) expense........................... (932) 1,008 -- 76
----------- ----------- ----------- -----------
Income before taxes.............................. 40,589 12,679 -- 53,268
Income taxes..................................... 18,792 5,380 -- 24,172
----------- ----------- ----------- -----------
Net Income....................................... $ 21,797 $ 7,299 $ -- $ 29,096
=========== =========== =========== ===========
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Successor Consolidated Balance Sheets June 28, 2002
-------------------------------------------------------------------
Total
Domestic International Eliminations Consolidated
Cash and cash equivalents........................ $ 22,471 $ 18,674 $ -- $ 41,145
Accounts receivable, less allowances............. 41,404 84,156 -- 125,560
Inventories...................................... 25,704 36,985 -- 62,689
Prepaid expenses................................. 453 3,619 -- 4,072
----------- ----------- ----------- -----------
Total current assets......................... 90,032 143,434 -- 233,466
Property, plant and equipment (net).............. 89,706 30,404 -- 120,110
Notes receivable................................. 57,935 231 (58,166) --
Investment in subsidiaries....................... 63,557 -- (63,557) --
Tradenames and patents........................... 225,325 38,200 -- 263,525
Goodwill......................................... 137,774 36,105 -- 173,879
Deferred financing costs......................... 19,583 -- -- 19,583
Other assets..................................... -- 1,548 -- 1,548
----------- ----------- ----------- -----------
Total assets................................ $ 683,912 $ 249,922 $ (121,723) $ 812,111
=========== =========== =========== ===========
Short-term borrowings............................ $ -- $ 2,565 $ -- $ 2,565
Accounts payable and accrued expenses............ 52,236 65,118 (20) 117,334
Current portion of long-term debt................ 4,237 2,575 -- 6,812
Taxes payable.................................... -- 3,710 -- 3,710
----------- ----------- ----------- -----------
Total current liabilities................... 56,473 73,968 (20) 130,421
Long-term debt................................... 404,731 31,756 -- 436,487
Notes payable.................................... -- 68,435 (68,435) --
Deferred and other long-term liabilities......... 7,074 19,622 -- 26,696
---------- ----------- ----------- -----------
Total liabilities........................... 468,278 193,781 (68,455) 593,604
Net members' equity and subsidiary capital....... 215,634 56,141 (53,268) 218,507
----------- ----------- ----------- -----------
Total Liabilities and Members' Equity...... $ 683,912 $ 249,922 $ (121,723) $ 812,111
=========== =========== =========== ===========
December 31, 2001
-------------------------------------------------------------------
Total
Domestic International Eliminations Consolidated
Cash and cash equivalents........................ $ 40,444 $ 15,393 $ -- $ 55,837
Accounts receivable, less allowances............. 31,958 68,936 (4,222) 96,672
Inventories...................................... 36,137 33,739 -- 69,876
Prepaid expenses................................. 648 3,271 -- 3,919
----------- ----------- ---------- -----------
Total current assets........................ 109,187 121,339 (4,222) 226,304
Property, plant and equipment (net).............. 88,790 31,090 -- 119,880
Investment in subsidiaries....................... 52,061 -- (52,061) --
Notes receivable................................. 65,540 -- (65,540) --
Tradenames and patents........................... 227,575 37,836 -- 265,411
Goodwill......................................... 145,237 31,461 -- 176,698
Deferred financing costs......................... 20,892 -- -- 20,892
Other assets..................................... -- 4,608 -- 4,608
------------ ----------- ---------- -----------
Total assets................................ $ 709,282 $ 226,334 $ (121,823) $ 813,793
============ =========== =========== ===========
Short-term borrowings............................ $ -- $ 2,425 $ -- $ 2,425
Accounts payable and accrued expenses............ 87,752 49,723 (4,222) 133,253
Current portion of long-term debt................ 2,413 833 -- 3,246
Taxes payable.................................... -- 3,004 -- 3,004
------------- ----------- ----------- -----------
Total current liabilities................... 90,165 55,985 (4,222) 141,928
Long-term debt................................... 407,235 32,515 -- 439,750
Notes payable.................................... -- 65,540 (65,540) --
Deferred and other long-term liabilities......... 6,011 22,700 -- 28,711
---------- ----------- ---------- -----------
Total liabilities........................... 503,411 176,740 (69,762) 610,389
Net members' equity and subsidiary capital....... 205,871 49,594 (52,061) 203,404
----------- ----------- ----------- -----------
Total Liabilities and Members' Equity...... $ 709,282 $ 226,334 $ (121,823) $ 813,793
=========== =========== =========== ===========
ARMKEL, LLC AND SUBSIDIARIES ("SUCCESSOR")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Successor Consolidated Statement of Cash Flow For The Six Months Ended June 28, 2002
--------------------------------------
Total
Domestic International Consolidated
Cash Flow From Operating Activities:
Net Income........................................................ $ 10,256 $ 5,637 $ 15,893
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................................ 6,603 1,931 8,534
Unrealized (gain) loss on foreign exchange transactions...... (3,891) 2,478 (1,413)
Change in assets and liabilities:
(Increase) in accounts receivable............................ (13,346) (14,125) (27,471)
Decrease (Increase) in inventories........................... 10,904 (2,318) 8,586
(Decrease) Increase in accounts payable and other accrued expenses (21,197) 8,471 (12,726)
(Decrease) Increase in other................................ (1,328) 1,776 448
------------ ------------ ----------
Net Cash (Used in) Provided by Operating Activities............... (11,999) 3,850 (8,149)
----------- ------------ ----------
Cash Flow From Investing Activities:
Additions to property, plant & equipment..................... (3,633) (999) (4,632)
Payment of acquisition-related costs......................... (1,132) -- (1,132)
----------- ------------ ----------
Net Cash Used in Investing Activities............................. (4,765) (999) (5,764)
----------- ------------ ----------
Cash Flow from Financing Activities:
Repayment of syndicated bank credit facility................. (750) -- (750)
Payment of deferred financing costs.......................... (459) -- (459)
----------- ------------ ----------
Net Cash Used in Financing Activities............................. (1,209) -- (1,209)
----------- ------------ ----------
Effect of exchange rate changes on cash and cash equivalents...... -- 430 430
----------- ------------ ----------
NET CHANGE IN CASH & CASH EQUIVALENTS............................. (17,973) 3,281 (14,692)
CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD.................... 40,444 15,393 55,837
----------- ------------ ----------
CASH & CASH EQUIVALENTS AT END OF PERIOD.......................... $ 22,471 $ 18,674 $ 41,145
=========== ============ ==========
The following table sets forth the Company's principal product lines and related
data for the three and six months period ended June 28, 2002 and June 30, 2001.
Three Months Ended Six Months Ended
------------------ -----------------
Successor Predecessor Successor Predecessor
Company Company Company Company
Net Sales (In thousands) June 28, 2002 June 30, 2001 June 28, 2002 June 30, 2001
------------- ------------- ------------- -------------
Products
Family Planning(1).......................... $ 49,037 $ 50,347 $ 91,751 $ 90,584
Depilatories and waxes; face and skincare... 27,529 26,724 45,888 44,562
Oral care................................... 8,967 7,366 16,126 15,172
OTC Products................................ 10,764 10,910 23,727 22,955
Other consumer products..................... 19,561 18,547 34,819 34,912
---------- --------- ---------- ----------
Total net sales............................. $ 115,858 $ 113,894 $ 212,311 $ 208,185
========== ========= ========== ==========
- ----------------
(1) Family Planning includes condom product sales and pregnancy and ovulation
kits.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Armkel, LLC and subsidiaries (the "Company" or the "Successor") is an equally
owned joint venture formed by Church & Dwight Co., Inc. (C&D) and affiliates of
Kelso & Company, L.P. (Kelso). On September 28, 2001, the Company acquired
certain of the domestic consumer product assets of Carter-Wallace, primarily
Trojan condoms, Nair depilatories, and First Response and Answer test kits, and
the international subsidiaries of Carter-Wallace. The remainder of
Carter-Wallace, comprised of its healthcare and pharmaceuticals businesses, was
merged with an unrelated third party after the completion of the Acquisition.
Simultaneously with the consummation of the acquisition, the Company sold the
remainder of the consumer products businesses, Arrid antiperspirant in the U.S
and Canada and the Lambert-Kay line of pet care products, to C&D (the "Disposed
Businesses").
Prior to the Acquisition, Carter-Wallace reported its historical financial
results for the combined business, including the business the Company acquired,
the Disposed Businesses and the healthcare and pharmaceuticals business on a
consolidated basis. In connection with the Acquisition, the Carter-Wallace
consumer business predecessor financial statements were prepared to reflect the
operating performance of the Company's business for the years ended March 31,
2000 and 2001 and for the period from April 1, 2001 to September 28, 2001. The
Company's historical financial statements were not compiled separately at any
prior time, as the Company was not a stand-alone subsidiary, with the exception
of the international division. As a result, certain cost allocation assumptions
were made.
The following section discusses comparisons to the three-month and six-month
period ended June 28, 2002 compared to the same period in the prior year for the
predecessor company.
Three Months Ended Six Months Ended
------------------ ----------------
(In millions) (In millions)
Successor Predecessor Successor Predecessor
Company Company Company Company
June 28, June 30, June 28, June 30
2002 2001(1) 2002 2001(1)
---- ---- ---- ----
Net sales(1)......................................... $ 115.9 $ 113.9 $ 212.3 $ 208.2
Cost of goods sold(2)................................ 52.6 48.8 103.6 91.7
--------- --------- --------- --------
Gross Profit......................................... 63.3 65.1 108.7 116.5
Marketing expenses.................................. 13.4 12.3 24.9 23.3
Selling, General & Administrative expenses(2)........ 23.6 21.0 46.3 39.5
Interest Expense & Other Income...................... 7.1 (.5) 16.2 .4
--------- -------- --------- --------
Income before taxes.................................. $ 19.2 $ 32.3 $ 21.3 $ 53.3
========= ========= ========= ======== =
(1) Net Sales for the predecessor financial statements has been adjusted
to conform with EITF 01-9.
(2) Distribution expense reclassified from operating expense to cost of
goods sold for predecessor financial statements in order to conform to
the Company's presentation.
The results of operations for the period from January 1, 2002 to June 28, 2002
are affected by certain expenses related to accounting and other acquisition
related integration expenses. These items are outlined below and addressed in
further detail in the discussion below:
Three Months Ended Six Months Ended
June 28, 2002 June 28, 2002
------------- -------------
(in millions)
Inventory Step-up Expenses.................................. $ -- $ 8.1
Transition Expenses......................................... $ 3.2 $ 4.2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (Continued)
Net Sales
Net sales for the quarter increased $2.0 million, or 1.8%, to $115.9 million
from $113.9 million in the same period last year. Domestic Net Sales decreased
$1.8 million, or 3.0%, to $58.3 million from $60.1 million. This decrease in
Domestic Net Sales (net of intercompany eliminations) is primarily due to lower
sales for condoms and depilatories in the quarter due to promotional timing
differences for the Company compared to the predecessor company. International
Net Sales increased $3.7 million, or 7.0%, to $57.6 million from $53.8 million.
The increase in International Net Sales is principally due to higher sales of
Nair and Trojan.
Net sales for the six months ended June 28, 2002 increased $4.1 million, or
2.0%, to $212.3 million from $208.2 million in the same period last year.
Domestic Net Sales increased $1.4 million, or 1.3%, to $106.9 million from
$105.5 million. This increase in Domestic Net Sales (net of intercompany
eliminations) is primarily due to the continued growth in the domestic condoms
and depilatories businesses. International Net Sales increased $2.7 million, or
2.6%, to $105.4 million from $102.7 million. The increase in International Net
Sales is principally due to higher sales of Sterimar, Nair and Trojan.
Effective January 1, 2002, the Company adopted EITF 01-9 "Accounting for
Consideration given to a Customer or a Reseller of the Vendor's Products", which
codifies and reconciles certain issues from EITF 00-14 and EITF 00-25. EITF 01-9
addresses the income statement classification for offers by a vendor directly to
end consumers that are exercisable after a single exchange transaction in the
form of coupons, rebate offers, or free products or services disbursed on the
same date as the underlying exchange transaction. The issue requires the cost of
these items to be accounted for as a reduction of revenues, not included as a
marketing expense as the Company did previously. The EITF also outlines required
accounting treatment of certain sales incentives, including slotting or
placement fees, cooperative advertising arrangements, buydowns and other
allowances. The Company previously recorded such costs as marketing expenses.
The issue requires the Company to report the paid consideration expense as a
reduction of sales, rather than marketing expense. The Predecessor's second
quarter and year to date 2001 net sales have been restated for this issue. The
impact was a reduction of net sales and marketing expense for the three month
and six month periods of approximately $13.1 million and $25.3 million in 2002
and $11.3 million and $22.3 million in 2001, respectively, and did not have an
effect on net income.
Cost of Goods Sold
Cost of goods sold for the quarter increased $3.8 million, or 7.8%, to $52.6
million from $48.8 million in the same period last year. As a percentage of net
sales, cost of goods sold for the quarter grew to 45.4% from 42.8% in 2001. The
increase in cost of goods sold is primarily due to the $1.6 million excess cost
to carry the Cranbury plant with minimal production in the quarter. Excluding
this cost, cost of goods sold, as a percentage of net sales, would be 44.0% of
net sales.
Cost of goods sold for the six months ended June 28, 2002 increased $11.9
million, or 13.0%, to $103.6 million from $91.7 million in the same period last
year. As a percentage of net sales, cost of goods sold year to date grew to
48.8% from 44.0% in 2001. This increase in cost of goods sold is due to the
remaining $8.1 million of additional expense relating to inventory step-up
adjustments incurred at the Acquisition and due to the excess cost to carry the
Cranbury plant of $1.6 million. Excluding these adjustments, cost of goods sold,
as a percentage of net sales, would be 44.2% of net sales.
Operating Costs excluding Interest Expense and Other Income
Total operating expenses for the quarter, excluding interest expense and other
income, increased $3.7 million, or 11.1%, to $37.0 million from $33.3 million in
the same period last year. Total operating expenses for the six months ended
June 28, 2002, excluding interest expense and other income, increased $8.4
million, or 13.4%, to $71.2 million from $62.8 million in the six months ended
June 30, 2001. The operating expense increases are addressed below.
Marketing expenses for the quarter increased by $1.1 million, or 8.9%, to $13.4
million from $12.3 million in the same period last year. The increase in
spending in the quarter is primarily related to higher advertising spending
behind Trojan, Nair and First Response in the domestic market. Marketing
expenses in the six months ended June 28, 2002 increased by $1.6 million, or
6.9%, to $24.9 million from $23.3 million in the six months ended June 30, 2001.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (Continued)
Selling, general and administrative expenses for the quarter increased $2.6
million, or 12.4%, to $23.6 million from $21.0 million in the same period last
year. Selling, general and administrative expenses in the six months ended June
28, 2002 increased $6.8 million, or 17.2% to $46.3 million from $39.5 million in
the same period last year. This year to date increase is primarily related to
estimated transitional costs of $2.6 million for former Carter-Wallace employees
employed during the integration process, $3.1 million in fees to Church & Dwight
and Kelso, and a net increase of $0.9 million in amortization for acquired
patents and goodwill.
Interest Expense and Other Income
Interest expense for the quarter was $8.9 million compared to $0.3 million for
the same period last year. Interest expense for the six months ended June 28,
2002 was $18.4 million compared to $0.6 million for the same period last year.
The interest expense in 2002 is related to the $225 million in outstanding bonds
and $220 million in term loans incurred at the time of the Acquisition.
Interest income for the quarter of $0.3 million increased $0.2 million compared
to the same period last year. Interest income for the six months ended June 28,
2002 of $0.6 million increased $0.3 million compared to the same period last
year.
Liquidity and capital resources
The Company considers cash and cash equivalents, and availability under its
revolving credit facility, as the principal measurement of its liquidity. At
June 28, 2002, cash, including cash equivalents, totaled $41.1 million as
compared to $55.8 million at December 31, 2001. At June 28, 2002, the Company
had an unused revolving credit facility of $85 million.
The Company had outstanding long-term debt of $436 million, and the
aforementioned cash and cash equivalents less short term and related party debt
of $23 million, for a net debt position of $413 million at June 28, 2002. Based
on the definition in its loan agreements, the Company's EBITDA is estimated at
$33 million for the three months ending June 28, 2002 and $57 million for the
six months ended June 28, 2002.
Financial covenants in the Company's loan agreements include a leverage ratio
and an interest coverage ratio, both of which the Company was in compliance. The
Company believes cash on hand, along with the $85 million revolving credit
facility, is sufficient to operate its businesses, to make expected capital
expenditures, to make severance payments, and to meet foreseeable liquidity
requirements.
Cash flow used in operating activities for the six months ended June 28, 2002
was $8.1 million which includes $9.9 million in semi-annual subordinated debt
interest payments and $21 million in severance payments partially offset by
income from operations. Cash flow used in investing activities for the six
months ended June 28, 2002 was $5.8 million which is related to capital
expenditures and acquisition related costs.
The Company has incurred and will incur severance and other change in control
related liabilities to certain employees. In the six-month period ending June
28, 2002 it paid $21 million in severance payments. The Company currently
anticipates that the total severance payments will equal approximately $44
million and the Company has paid out $31 million since the start of the
acquisition. It anticipates the remaining $13 million in severance and related
costs to be principally paid out in 2002 and 2003, although the restructuring
plan will be completed in the third quarter of 2002.
Cautionary Note on Forward-Looking Statements
This report contains forward-looking statements relating, among others, to
financial objectives, liquidity needs, severance costs, contingencies and other
matters. These statements, represent the intentions, expectations and beliefs of
the Company, and are subject to risks, uncertainties and other factors, many of
which are outside the Company's control. These factors, which include the
ability of Church & Dwight to successfully complete the integration of the
Company's operations, and assumptions as to market growth and consumer demand
(including but not limited to general economic and marketplace conditions and
events, competitors' actions and the Company's costs), and the
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (Continued)
outcome of contingencies, including litigation, environmental remediation and
the divestiture of assets, could cause actual results to differ materially from
such forward-looking statements. For a description of additional cautionary
statements, see the Company's 2001 Form 10-K for the year ended December 31,
2001 and in the Company's subsequent SEC filings, as well as Carter-Wallace's
historical SEC reports.
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
(99.1) Statement regarding the Certification of the CEO of Armkel, LLC
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 906 of the
Sarbanes-Oxley Act of 2002
(99.2) Statement regarding the Certification of the CFO of Armkel, LLC
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 906 of the
Sarbanes-Oxley Act of 2002
b. No reports on Form 8-K were filed for the three months ended June 28,
2002.
EXHIBIT 99.1
The Certification of the Chief Executive Officer of Armkel, LLC Pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 is not being filed with the Quarterly Report but has been submitted
to the Securities and Exchange Commission under separate cover.
EXHIBIT 99.2
The Certification of the Chief Financial Officer of Armkel, LLC Pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 is not being filed with the Quarterly Report but has been submitted
to the Securities and Exchange Commission under separate cover.
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.
ARMKEL, LLC.
---------------------------------------
(REGISTRANT)
DATE: August 9, 2002 /s/ Maureen K. Usifer
-------------------- ---------------------------------------
MAUREEN K. USIFER
CHIEF FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER
DATE: August 9, 2002 /s/ Zvi Eiref
-------------------- ---------------------------------------
ZVI EIREF
DIRECTOR