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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 27, 2003
Commission file Number 1-10585
CHURCH & DWIGHT CO., INC.
(Exact name of registrant as specified in its charter)
Delaware 13-4996950
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
469 North Harrison Street, Princeton, N.J. 08543-5297
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (609) 683-5900
------------------------------------------
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 twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---------- ----------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act)
Yes X No
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As of August 1, 2003, there were 40,288,934 shares of Common Stock outstanding.
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TABLE OF CONTENTS
PART I
ITEM PAGE
1. Financial Statements 3
2. Management's Discussion and Analysis 12
3. Quantitative and Qualitative Disclosure About Market Risk 15
4. Controls and Procedures 15
PART II
6. Exhibits and Reports on Form 8-K 17
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
Three Months Ended Six Months Ended
---------------------- ----------------------
(Dollars in thousands, except per share data) June 27, June 28, June 27, June 28,
2003 2002 2003 2002
---- ---- ---- ----
Net Sales.......................................... $ 256,263 $ 258,463 $ 504,561 $ 515,265
Cost of sales...................................... 176,690 182,525 351,154 366,077
---------- ---------- ---------- ----------
Gross Profit....................................... 79,573 75,938 153,407 149,188
Marketing expense.................................. 26,288 22,153 43,231 38,985
Selling, general and administrative expenses....... 28,236 29,492 56,346 58,683
---------- ---------- ---------- ----------
Income from Operations............................. 25,049 24,293 53,830 51,520
Equity in earnings of affiliates................... 12,528 11,364 20,680 12,281
Investment earnings................................ 350 440 654 1,005
Other income (expense), net........................ 612 (894) 617 (1,087)
Interest expense................................... (4,715) (6,097) (9,895) (12,185)
----------- ---------- ----------- ----------
Income before taxes and minority interest ......... 33,824 29,106 65,886 51,534
Income taxes....................................... 9,192 10,414 20,299 17,830
Minority interest.................................. 6 40 15 129
---------- ---------- ---------- ----------
Net Income......................................... 24,626 18,652 45,572 33,575
Retained earnings at beginning of period........... 385,162 324,390 367,211 312,409
---------- ---------- ---------- ----------
409,788 343,042 412,783 345,984
Dividends paid..................................... 3,040 2,970 6,035 5,912
---------- ---------- ---------- ----------
Retained earnings at end of period................. $ 406,748 $ 340,072 $ 406,748 $ 340,072
========== ========== ========== ==========
Weighted average shares outstanding - Basic........ 40,132 39,584 40,039 39,425
========== ========== ========== ==========
Weighted average shares outstanding - Diluted...... 42,072 41,855 41,967 41,677
========== ========== ========== ==========
Earnings Per Share:
Net income per share - Basic....................... $0.61 $0.47 $1.14 $0.85
========== ========== =========== ==========
Net income per share - Diluted..................... $0.59 $0.45 $1.09 $0.81
========== ========== ============ ==========
Dividends Per Share................................ $0.075 $0.075 $0.15 $0.15
========== ========== ============ ==========
See Notes to Condensed Consolidated Financial Statements.
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) June 27, 2003 Dec. 31, 2002
------------- -------------
Assets (Unaudited)
Current Assets
Cash and cash equivalents........................................................... $ 54,011 $ 76,302
Accounts receivable, less allowances of $1,750 and $1,546........................... 102,383 100,252
Inventories......................................................................... 86,535 82,674
Deferred income taxes............................................................... 17,883 18,154
Note receivable - current........................................................... 942 870
Prepaid expenses.................................................................... 4,799 7,184
---------- ----------
Total Current Assets................................................................ 266,553 285,436
---------- ----------
Property, Plant and Equipment (Net)................................................. 244,839 240,007
Note Receivable..................................................................... 8,766 9,708
Equity Investment in Affiliates..................................................... 148,479 131,959
Long-term Supply Contracts.......................................................... 6,062 6,538
Tradenames and Other Intangibles.................................................... 88,647 90,036
Goodwill ........................................................................... 205,726 202,388
Other Assets........................................................................ 23,595 22,169
---------- ----------
Total Assets........................................................................ $ 992,667 $ 988,241
========== ============
Liabilities and Stockholders' Equity
Current Liabilities
Short-term borrowings............................................................... $ 63,268 $ 4,490
Accounts payable and accrued expenses............................................... 152,728 162,907
Current portion of long-term debt................................................... 3,213 11,455
Income taxes payable................................................................ 17,697 12,315
---------- ----------
Total current liabilities........................................................... 236,906 191,167
Long-term Debt...................................................................... 253,243 352,488
Deferred Income Taxes............................................................... 62,694 57,103
Deferred and Other Long-term Liabilities............................................ 26,541 24,014
Postretirement and Postemployment Benefits.......................................... 15,663 15,609
Minority Interest................................................................... 271 214
Commitments and Contingencies
Stockholders' Equity
Preferred Stock-$1.00 par value
Authorized 2,500,000 shares, none issued....................................... -- --
Common Stock-$1.00 par value
Authorized 100,000,000 shares, issued 46,660,988 shares........................ 46,661 46,661
Additional paid-in capital.......................................................... 43,527 39,550
Retained earnings................................................................... 406,748 367,211
Accumulated other comprehensive (loss).............................................. (13,851) (16,919)
----------- ----------
483,085 436,503
Common stock in treasury, at cost:
6,406,254 shares in 2003 and 6,763,554 shares in 2002.......................... (85,736) (88,857)
----------- ----------
Total Stockholders' Equity.......................................................... 397,349 347,646
---------- ----------
Total Liabilities and Stockholders' Equity.......................................... $ 992,667 $ 988,241
========== ============
See Notes to Condensed Consolidated Financial Statements.
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Six Months Ended
(Dollars in thousands) June 27, 2003 June 28, 2002
------------- --------------
Cash Flow From Operating Activities
Net Income.......................................................................... $ 45,572 $ 33,575
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, depletion and amortization....................................... 14,888 13,985
Equity in earnings of affiliates............................................... (20,680) (12,281)
Deferred income taxes.......................................................... 5,845 10,482
Other.......................................................................... 1,073 1,609
Change in assets and liabilities:
(Increase) in accounts receivable.............................................. (724) (332)
(Increase)/decrease in inventories............................................. (2,490) 2,861
Decrease in prepaid expenses................................................... 2,537 2,957
(Decrease) in accounts payable................................................. (11,846) (8,582)
Increase in income taxes payable............................................... 7,152 544
Increase in other liabilities.................................................. 2,201 1,688
--------- ---------
Net Cash Provided By Operating Activities........................................... 43,528 46,506
--------- ---------
Cash Flow From Investing Activities
Additions to property, plant and equipment.......................................... (14,092) (20,268)
Biovance acquisition (net of cash acquired)......................................... (3,424) (7,714)
Proceeds from note receivable....................................................... 870 803
Distributions from affiliates....................................................... 2,255 1,627
Other long-term assets.............................................................. (370) (740)
Adjustment to purchase price of product lines....................................... -- (137)
Proceeds from sale of fixed assets.................................................. -- 81
--------- ---------
Net Cash Used In Investing Activities............................................... (14,761) (26,348)
--------- ---------
Cash Flow From Financing Activities
Long-term debt (repayment).......................................................... (109,557) (1,879)
Short-term debt borrowing........................................................... 59,553 1,482
Proceeds from stock options exercised............................................... 5,232 9,465
Payment of cash dividends........................................................... (6,035) (5,912)
Other............................................................................... (251) (475)
--------- ---------
Net Cash (Used In) Provided By Financing Activities................................. (51,058) 2,681
--------- ---------
Net Change In Cash and Cash Equivalents............................................. (22,291) 22,839
Cash And Cash Equivalents At Beginning Of Year...................................... 76,302 52,446
--------- ---------
Cash And Cash Equivalents At End Of Period.......................................... $ 54,011 $ 75,285
========= =========
See Notes to Condensed Consolidated Financial Statements.
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated balance sheet as of June 27, 2003, the consolidated
statements of income and retained earnings for the three and six months ended
June 27, 2003 and June 28, 2002 and the consolidated statements of cash flow for
the six months then ended have been prepared by the Company without audit. 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 27, 2003 and for all periods presented have
been made.
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, 2002 annual
report to shareholders. The results of operations for the period ended June 27,
2003 are not necessarily indicative of the operating results for the full year.
2. Inventories consist of the following:
(In thousands) June 27, 2003 Dec. 31, 2002
------------- -------------
Raw materials and supplies.......................................................... $ 32,422 $ 30,987
Work in process..................................................................... 247 142
Finished goods ..................................................................... 53,866 51,545
---------- ----------
$ 86,535 $ 82,674
========== ==========
3. Property, Plant and Equipment consist of the following:
(In thousands) June 27, 2003 Dec. 31, 2002
------------- -------------
Land................................................................................ $ 6,150 $ 6,079
Buildings and improvements.......................................................... 106,554 105,469
Machinery and equipment............................................................. 271,621 267,568
Office equipment and other assets................................................... 22,128 30,556
Software ........................................................................... 6,000 5,945
Mineral rights ..................................................................... 574 467
Construction in progress............................................................ 23,907 9,920
---------- ----------
436,934 426,004
Less accumulated depreciation, depletion and amortization........................... 192,095 185,997
---------- ----------
Net Property, Plant and Equipment................................................... $ 244,839 $ 240,007
========== ==========
During the second quarter of 2003, the Company disposed of approximately $8.3
million of fully depreciated assets.
4. Earnings Per Share
Basic EPS is calculated based on income available to common shareholders and the
weighted-average number of shares outstanding during the reported period.
Diluted EPS includes additional dilution from potential common stock issuable
pursuant to the exercise of stock options outstanding. The weighted average
number of common shares outstanding used to calculate Basic EPS is reconciled to
those shares used in calculating Diluted EPS as follows:
Three Months Ended Six Months Ended
(In thousands) June 27, 2003 June 28, 2002 June 27, 2003 June 28, 2002
------------- ------------- ------------- -------------
Basic............................................ 40,132 39,584 40,039 39,425
Dilutive effect of stock options................. 1,940 2,271 1,928 2,252
---------- ---------- ---------- ----------
Diluted.......................................... 42,072 41,855 41,967 41,677
========== ========== ========== ==========
The Company had 1.1 million and .6 million shares of anti-dilutive stock options
outstanding for the three and six month periods ending June 27, 2003 and June
28, 2002, respectively.
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
5. Stock Based Compensation
The Company accounts for costs of stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", rather than the fair-value based method in Statement of Financial
Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation". During the second quarter of 2003, there were 556,940 stock
options granted at an average fair value of $11.95 per share.
The Company's pro forma net income and pro forma net income per share for the
second quarter and six months of 2003 and 2002 are as follows:
Three Months Ended Six Months Ended
(In thousands, except for per share data) June 27, 2003 June 28, 2002 June 27, 2003 June 28, 2002
------------- ------------- ------------- -------------
Net Income
As reported........................................... $ 24,626 $ 18,652 $ 45,572 $ 33,575
Add: Stock-based employee compensation
expense included in reported net income,
net of related tax effects -- -- -- --
Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related tax effects. (878) (1,072) (1,819) (1,937)
--------- --------- -------- ---------
Pro forma............................................. $ 23,748 $ 17,580 $ 43,753 $ 31,638
========= ========= ======== =========
Net Income per Share: basic
As reported........................................... $0.61 $0.47 $1.14 $0.85
Pro forma............................................. 0.59 0.44 1.08 0.79
Net Income per Share: diluted
As reported...................................... $0.59 $0.45 $1.09 $0.81
Pro forma............................................ 0.56 0.42 1.03 0.75
6. Segment Information
Sales and operating results in affiliate companies over which the Company exerts
significant influence, but does not control the financial and operating
decisions, are reported for segment purposes in a manner similar to consolidated
subsidiaries. The effect of this convention is eliminated to adjust management
reporting results to the amounts in the financial statements. The sales and
operating results are presented in this manner to enable the chief decision
maker (the CEO) to make decisions about allocating resources and assessing
performance of the segments.
Segment sales and income from operations for the second quarter and year to date
of 2003 and 2002 are as follows:
Unconsolidated
Affiliates and
(In thousands) Consumer Specialty Eliminations Total
-------- --------- -------------- -----
Net Sales
Second quarter 2003......................... $ 322,447 $ 58,270 $ (124,454) $ 256,263
Second quarter 2002......................... 316,408 56,804 (114,749) 258,463
Year to date 2003........................... 625,618 113,073 (234,130) 504,561
Year to date 2002........................... 616,611 110,049 (211,395) 515,265
Income from Operations
Second quarter 2003......................... $ 51,890 $ 7,728 $ (34,569) $ 25,049
Second quarter 2002......................... 43,592 7,952 (27,251) 24,293
Year to date 2003........................... 101,800 12,784 (60,754) 53,830
Year to date 2002........................... 75,212 15,047 (38,739) 51,520
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Product line net sales data for the second quarter periods are as follows:
Three Months Ended June 27, 2003 Three Months Ended June 28, 2002
---------------------------------------------- ----------------------------------------------
As Unconsol. Including As Unconsol. Including
Reported Affiliates Elim.** Affiliates Reported Affiliates Elim.** Affiliates
---------------------------------------------- ----------------------------------------------
Deodorizing and
Cleaning Products..... $ 61,162 $ -- $ -- $ 61,162 $ 63,431 $ -- $ -- $ 63,431
Laundry Products......... 98,193 -- -- 98,193 97,698 -- -- 97,698
Personal Care Products... 40,892 57,553 -- 98,445 43,295 58,284 -- 101,579
International............ 9,245 55,924 (522) 64,647 7,553 46,147 -- 53,700
--------- -------- -------- --------- --------- --------- --------- ---------
Total Consumer........... 209,492 113,477 (522) 322,447 211,977 104,431 -- 316,408
Specialty Products Division 46,771 13,848 (2,349) 58,270 46,486 11,688 (1,370) 56,804
--------- -------- -------- --------- --------- --------- --------- ---------
Total Net Sales.......... $ 256,263 $127,325 $(2,871) $ 380,717 $ 258,463 $ 116,119 $ (1,370) $ 373,212
========= ======== ======== ========= ========= ========= ========= =========
**Includes elimination of intercompany sales
Product line net sales data for the six month periods are as follows:
Three Months Ended June 27, 2003 Three Months Ended June 28, 2002
---------------------------------------------- ----------------------------------------------
As Unconsol. Including As Unconsol. Including
Reported Affiliates Elim.** Affiliates Reported Affiliates Elim.** Affiliates
---------------------------------------------- ----------------------------------------------
Deodorizing and
Cleaning Products..... $ 114,326 $ -- $ -- $ 114,326 $ 126,063 $ -- $ -- $ 126,063
Laundry Products......... 198,808 -- -- 198,808 197,908 -- -- 197,908
Personal Care Products... 83,485 109,681 -- 193,166 84,878 106,944 -- 191,822
International............ 17,149 103,449 (1,280) 119,318 15,959 84,859 -- 100,818
--------- -------- -------- --------- --------- --------- -------- ---------
Total Consumer........... 413,768 213,130 (1,280) 625,618 424,808 191,803 -- 616,611
Specialty Products Division 90,793 25,781 (3,501) 113,073 90,457 21,707 (2,115) 110,049
--------- --------- --------- --------- --------- --------- -------- ---------
Total Net Sales.......... $ 504,561 $238,911 $ (4,781) $ 738,691 $ 515,265 $ 213,510 $ (2,115) $ 726,660
========= ======== ========= ========= ========= ========= ======== =========
**Includes elimination of intercompany sales
7. Armkel LLC
The following table summarizes financial information for Armkel LLC. The Company
accounts for its 50% interest under the equity method.
Three Months Ended Six Months Ended
------------------------------- ------------------------------
(In thousands) June 27,2003 June 28, 2002 June 27, 2003 June 28, 2002
------------ ------------- ------------- -------------
Income statement data:
Net sales................................... $ 113,477 $ 104,431 $ 213,130 $ 191,803
Gross profit................................ 64,526 58,880 123,011 101,018
Net income ................................. 22,520 15,585 37,740 15,893
Equity in affiliate ........................ 11,260 10,138 18,870 10,446
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 27, December 31,
(In thousands) 2003 2002
---- ----
Balance sheet data:
Current assets...................................................................... $ 249,985 $ 246,307
Noncurrent assets................................................................... 560,644 562,207
Short-term debt..................................................................... 7,217 28,556
Current liabilities (excluding short-term debt)..................................... 104,263 110,224
Long-term debt...................................................................... 398,888 411,634
Other long-term liabilities......................................................... 30,265 28,420
Partners' equity.................................................................... 269,996 229,680
Under the partnership agreement with Kelso, the Company is allocated 50% of all
book and tax profits. If there are losses, the Company is allocated 50% of all
book and tax losses up to $10 million and 100% of such losses above that level
for the period starting September 29, 2001, the date of the acquisition. The
Company is entitled to 100% of the profits up to an amount equal to the
accumulated excess losses it recorded. As a result, the Company recorded 50% of
the first half of 2003's net income of $37.7 million as compared to 100% of the
first $5 million and 50% of the balance of 2002's net income.
Armkel's results for the second quarter of 2003 include a $13.1 million net gain
from the settlement of litigation partially offset by a $3.1 million impairment
charge related to the former Carter-Wallace facility being held for sale. During
the first quarter, Armkel closed on its previously announced sale of its Italian
subsidiary for a sales price of approximately $22.6 million and Armkel
recognized a pretax gain on the sale of approximately $1.9 million.
The Company invoiced Armkel $14.0 million and $10.1 million for primarily
administrative and management oversight services (which is included as a
reduction of selling, general and administrative expenses), and purchased $1.4
million and $5.4 million of deodorant anti-perspirant inventory produced by
Armkel in the first half of 2003 and 2002, respectively. The Company sold Armkel
$1.3 million and $.1 million of Arm & Hammer products to be sold in
international markets in the first half of 2003 and 2002, respectively. The
Company had a net open receivable from Armkel at June 27, 2003 and December 31,
2002 of approximately $4.9 million and $4.8 million, respectively, that
primarily related to administrative services, partially offset by amounts owed
for inventory.
8. Goodwill, Tradenames and Other Intangible Assets
The following tables discloses the carrying value of all intangible assets:
(In thousands) June 27, 2003 December 31, 2002
------------------------------------ --------------------------------
Gross Gross
Carrying Accum. Carrying Accum.
Amount Amort. Net Amount Amort. Net
------------------------------------ --------------------------------
Amortized intangible assets:
Tradenames...................... $ 36,970 $ (6,231) $ 30,739 $ 36,970 $ (5,182) $ 31,788
Formulas........................ 6,281 (1,148) 5,133 6,281 (866) 5,415
Non Compete Agreement........... 1,143 (175) 968 1,143 (117) 1,026
--------- ---------- --------- -------- -------- --------
Total........................... $ 44,394 $ (7,554) $ 36,840 $ 44,394 $ (6,165) $ 38,229
========= ========= ========= ======== ======== ========
Unamortized intangible assets - Carrying value
Tradenames...................... $ 51,807 $ 51,807
--------- --------
Total........................... $ 51,807 $ 51,807
========= ========
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Intangible amortization expense amounted to $1.4 million in the six months of
2003 and $1.0 million for the same period of 2002. The estimated intangible
amortization for each of the next five years is approximately $2.9 million.
The changes in the carrying amount of goodwill for the six months ended June 27,
2003 is as follows:
(In thousands) Consumer Specialty Total
-------- --------- -----
Balance December 31, 2002......................................... $ 182,498 $ 19,890 $ 202,388
Additional purchase price......................................... -- 3,424 3,424
Foreign exchange/other............................................ 26 (112) (86)
----------- ---------- -----------
Balance June 27, 2003............................................. $ 182,524 $ 23,202 $ 205,726
=========== ========== ===========
Based upon the terms of the Biovance purchase agreement, an additional payment
of $3.4 million was made during the first quarter of 2003 based upon 2002
operating performance and was recorded as goodwill in the accompanying balance
sheet. An additional payment will be required based on the provisions of the
purchase agreement, which cannot exceed $8.6 million and will be accounted for
as additional purchase price.
9. Comprehensive Income
The following table presents the Company's Comprehensive Income for the six
months ended June 27, 2003 and June 28, 2002:
Three Months Ended Six Months Ended
----------------------- -------------------------
(In thousands) June 27, June 28, June 27, June 28,
2003 2002 2003 2002
---- ---- ---- ----
Net Income......................................... $ 24,626 $ 18,652 $ 45,572 $ 33,575
Other Comprehensive Income, net of tax:
Foreign exchange translation adjustments........ 3,502 (1,263) 4,374 (1,494)
Interest rate swap agreements................... 458 (1,318) 561 (272)
Minimum pension liability....................... (219) -- (1,867) --
---------- ---------- ---------- ----------
Comprehensive Income............................... $ 28,367 $ 16,071 $ 48,640 $ 31,809
========== ========== ========== ==========
10. Accounts Receivable Securitization
During the first quarter of 2003, the Company entered into a receivables
purchase agreement with an issuer of receivables-backed commercial paper in
order to refinance a portion, $60,000,000, of its primary credit facility. This
transaction resulted in a reclassification of long-term debt to short-term debt
in the Company's Consolidated Balance Sheet. Under this arrangement, the Company
sold, and will sell from time to time, throughout the 3 year term of the
agreement, its trade accounts receivable to a wholly-owned, consolidated,
special purpose finance subsidiary, Harrison Street Funding LLC, a Delaware
limited liability company ("Harrison"). Harrison in turn sold, and will sell on
an ongoing basis, to the commercial paper issuer an undivided interest in the
pool of accounts receivable. The receivables assets and the short-term
borrowings of Harrison are included in the consolidated financial statements of
the Company. The transactions were entered into to reduce certain expenses
associated with the credit facility in addition to lowering the Company's
financing costs by accessing the commercial paper market. The balance
outstanding under the agreement is $58 million at June 27, 2003.
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
11. Recent Accounting Pronouncements
In April 2003, the FASB issued SFAS No. 149,"Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." This Statement is effective for
contracts entered into or modified after June 30, 2003, with certain exceptions.
The Company will adopt the provisions of the statement on its effective date and
does not anticipate a material impact to its consolidated financial statements.
On May 15, 2003, the FASB issued SFAS No. 150 "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity", which aims to
eliminate diversity in practice by requiring that the "freestanding" financial
instruments be reported as liabilities by their issuers.
The provisions of SFAS 150, which also include a number of new disclosure
requirements, are effective for instruments entered into or modified after May
31, 2003 and for pre-existing instruments as of the beginning of the first
interim period that commences after June 15, 2003. The Company adopted the
provisions of the statement on its effective date and does not anticipate a
material impact to its consolidated financial statements.
12. Contingencies
a. Certain former shareholders of Carter-Wallace have brought legal action
against the Company that purchased the pharmaceutical business of
Carter-Wallace regarding the fairness of the consideration these
shareholders received. Pursuant to various indemnification agreements,
Armkel could be liable for damages up to $12 million, and the Company could
be liable directly to Armkel for an amount up to $2.1 million.
The Company believes that the consideration offered was fair to the former
Carter-Wallace shareholders, and it cannot predict with certainty the
outcome of this litigation.
On March 27, 2003, GAMCO Investors, Inc. filed another complaint in the New
York Supreme Court seeking damages from MedPointe Healthcare Inc. (the new
name of the company formerly known as Carter-Wallace), the former directors
of Carter-Wallace, and one of the former shareholders of Carter-Wallace.
The complaint alleges breaches of fiduciary duty in connection with certain
employment agreements with former Carter-Wallace executives, the sale of
Carter Wallace's consumer products business to Armkel (some of the products
acquired by Armkel were subsequently sold by Armkel to the Company) and the
merger of MCC Acquisition Sub Corporation with and into Carter-Wallace.
The complaint seeks monetary damages and equitable relief, including among
other things, invalidation of the transactions. The defendants have moved
to dismiss the complaint. The Company has not been named as a defendant in
this action and believes it has no liability.
b. On February 28, 2003 a class action suit was filed against the Company
and Armkel, and two unrelated condom manufacturers, in the Superior Court
of New Jersey alleging injuries sustained due to the use of condoms with
N-9. In June 2003, the plaintiffs voluntarily dismissed the suit after
defendants filed a motion to dismiss on the ground that their compliance
with comprehensive federal medical device regulations precluded recovery.
c. The Company has commitments to acquire approximately $12 million of raw
material and packaging supplies from our vendors. The packaging supplies
are in either a converted or non-converted status. This enables the Company
to respond quickly to changes in customer orders/requirements.
d. The Company, in the ordinary course of its business, is the subject of,
or a 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 consolidated financial statements.
13. Reclassification
Certain prior year amounts have been reclassified in order to conform with the
current year presentation.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
- ---------------------
For the quarter ended June 27,2003, the Company reported net income of $ 24.6
million or diluted net income per share of $0.59.This includes a $0.09 per share
gain resulting from settlement of litigation and a $0.02 per share charge
associated with an impairment of a former Carter-Wallace facility being held for
sale, both of which relate to the Company's Armkel LLC joint venture, and a
$0.06 per share gain associated with a settlement of a State tax dispute. Net
income in the year ago quarter was $18.7 million or $0.45 per diluted share,
which included income of $0.05 per share related to the disproportionate
allocation of profits to the Company under the terms of the Armkel joint venture
agreement. The settlement of litigation referred to above relates to a $13.1
million net gain, after expenses and costs, from the settlement of patent
infringement litigation, the net proceeds of which Armkel expects to receive in
August.
For the six months, net income increased to $45.6 million or $1.09 per diluted
share compared to $33.6 million or $0.81 per diluted share. Besides the items
noted in the first paragraph, net income in 2002 also includes a $0.06 per share
first quarter acquisition related charge associated with the step-up of opening
inventory values by Armkel.
Net sales for the quarter were $256.3 million, or $2.2 million or 0.9% lower
than last year. The decline reflects the discontinuation of certain former USA
Detergents cleaners and former Carter-Wallace pet care products as well as a
$2.3 million reversal in last year's second quarter of prior year promotion
reserves due to a change in estimate. At the product line level, higher sales of
liquid laundry detergent and certain deodorizers and cleaners, as well as higher
exports, were offset by lower sales of laundry detergent powder, fabric
softeners and certain oral care products. Specialty products sales were
essentially unchanged from the year ago quarter at $46.8 million.
Net sales for the six month period were $504.6 million or $10.7 million or 2.1%
lower than last year. The reasons for the decline result from the matters
described in the current quarter. In addition, international sales were
adversely affected in the first quarter of 2003 because certain export
operations were transferred to Armkel. Specialty products sales were
essentially unchanged from the year ago period at $90.8 million.
Gross Profit for the quarter was $79.6 million or 31.1% of net sales, a $3.6
million increase or 1.7 percentage point increase over last year. This increase
is primarily due to integration benefits from the USA Detergents and
Carter-Wallace acquisitions, and other cost reduction programs, partially offset
by energy-related and other commodity-based cost increases. For the six month
period, gross profit was $153.4 million or 30.4% of net sales compared to to
$149.2 million or 29.0% of net sales last year. The reasons for the six month
change result from the matters described in the current quarter.
Marketing expenses increased $4.1 million and $4.2 million over the comparable
three and six month periods of 2002. The increase is primarily associated with
Personal Care products, namely higher Arm & Hammer Dentifrice and Arrid brands'
advertising expenses, partially offset by a reduction in advertising expenses
for Arm & Hammer Advanced Breathcare.
Selling, general and administrative expenses decreased $1.3 million to $28.2
million in the quarter and $2.3 million to $56.3 million for the six month
period. The decrease is primarily a result of the elimination of transition
related expenses incurred in 2002 that were associated with the acquired
Carter-Wallace products and a reduction in deferred compensation expenses,
partially offset by higher personnel related expenses.
Equity in earnings of affiliates increased $1.2 million in the quarter and $8.4
million for the six month period as a result of higher earnings by Armkel.
Armkel's earnings in the quarter were higher as a result of the litigation
settlement, partially offset by an impairment of an asset held for sale.
Earnings in the year ago quarter reflect the disproportionate recapture in
accordance with the terms of the Armkel joint venture agreement of $5 million of
allocated losses sustained in the fourth quarter of 2001. (See note 7 to the
consolidated financial statements for additional information.) The six month
period increase is also impacted by the inventory step-up charge in the first
quarter of 2002 relating to Armkel's opening inventory values.
Investment earnings were lower as a result of lower interest rates.
Interest expense was lower due to lower interest rates and a lower amount of
debt outstanding.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS - Continued
Other income and expense in 2003 reflect foreign exchange gains by the Company's
Brazilian subsidiary; in 2002, the Brazilian subsidiary recognized foreign
exchange losses.
The tax rate for the six months was 30.8%, compared to 34.6% a year ago. This
decrease is a result of a settlement of a State tax dispute partially offset by
a higher state tax rate and taxes associated with Armkel's sale of its Italian
subsidiary in 2003.
Segment Results
Sales and operating results in affiliate companies over which the Company exerts
significant influence, but does not control the financial and operating
decisions, are reported for segment purposes in a manner similar to consolidated
subsidiaries. The effect of this convention is eliminated to adjust management
reporting results to the amounts in the financial statements. The sales and
operating results are presented in this manner to enable the chief decision
maker (the CEO) to make decisions about allocating resources and assessing
performance of the segments.
Unconsolidated
Affiliates and
(In thousands) Consumer Specialty Eliminations Total
-------- --------- -------------- -----
Net Sales
Second quarter 2003......................... $ 322,447 $ 58,270 $ (124,454) $ 256,263
Second quarter 2002......................... 316,408 56,804 (114,749) 258,463
Year to date 2003........................... 625,618 113,073 (234,130) 504,561
Year to date 2002........................... 616,611 110,049 (211,395) 515,265
Income from Operations
Second quarter 2003......................... $ 51,890 $ 7,728 $ (34,569) $ 25,049
Second quarter 2002......................... 43,592 7,952 (27,251) 24,293
Year to date 2003........................... 101,800 12,784 (60,754) 53,830
Year to date 2002........................... 75,212 15,047 (38,739) 51,520
Consumer Products
Combined Consumer Product net sales of the Company and its affiliate grew 2% to
$322.4 million in the quarter. International sales increased due to foreign
exchange gains and a strong performance by the European businesses, particularly
in the areas of skin care, oral care and depilatories. Domestic sales were lower
due to discontinuation of some former USA Detergents cleaners and former
Carter-Wallace pet care products, as well as the reversal in last year's second
quarter of $2.3 million of prior year promotion reserves due to a change in
estimates. At the product line level, higher sales of liquid laundry detergent,
certain deodorizers and cleaners, and Trojan Condoms were offset by lower sales
of laundry detergent powder, fabric softeners, certain oral care products as
well as Nair depilatories, a highly seasonal product line which was affected by
the unseasonably cool and wet weather conditions.
Income from operations in the quarter increased $8.3 million or 19% to $51.9
million due to integration benefits from the USA Detergents and Carter-Wallace
acquisitions, and other cost reduction programs, partially offset by
energy-related and other commodity-based cost increases. Marketing expenses were
higher due to an increase in advertising costs in support of personal care
products, both domestically and internationally. Operating profit also
reflects the net effect of the litigation settlement and the impairment of the
former Carter-Wallace facility held for sale. For the six month period,
operating profit increased to $101.8 million or an increase of 35.3% from $75.2
million last year. The reasons for the increase , besides the items noted for
the quarter , relate to the prior year $8.1 million charge for the remaining
step-up of Armkel's opening inventory values established as part of purchase
accounting.
Specialty Products
Combined Specialty Products sales grew $1.5 million or 2.6% in the current
quarter and $3.0 million or 2.7% for the six month period due to higher
specialty chemicals sales, partially offset by lower sales of animal nutrition
products.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS - Continued
Operating profit was relatively unchanged in the quarter but was lower by $2.3
million for the six month period primarily as a result of higher manufacturing
costs in certain animal nutrition and specialty chemical products.
Liquidity and Capital Resources
- -------------------------------
The Company had outstanding total debt of $319.7 million, and cash of $54.0
million, for a net debt position of $265.7 million at June 27, 2003. This
compares to $292.1 million at December 31, 2002.
In the fourth quarter of 2001, the Company financed its investment in Armkel,
the acquisition of USA Detergents and the Anti-perspirant and Pet Care
businesses from Carter-Wallace with a $510 million credit facility consisting of
a $125 million five year term loan (Term Loan A), a $285 million six year
term loan (Term Loan B) and a $100 million revolving credit facility. The entire
amount of the term loans was drawn at closing and the revolving credit facility
remains fully un-drawn. Term Loan A paid interest at 200 basis points over
LIBOR and Term Loan B pays interest at 250 basis points over LIBOR, with
interest rates determined based on the ratio of total debt to EBITDA during the
second quarter of 2003. Term Loan A was paid off in full during the second
quarter 2003. EBITDA is a required component of the financial covenants
contained in the Company's primary credit facility and management believes that
the presentation of EBITDA is useful to investors as a financial indicator of
the Company's ability to service its indebtedness. Financial covenants include
a total debt to EBITDA leverage ratio and an interest coverage ratio, which if
not met, could result in an event of default and trigger the early termination
of the credit facility if not remedied within a certain period of time. EBITDA,
as defined by the Company's loan agreement, was approximately $70.6 million for
the six months of 2003. The leverage ratio at June 27, 2003 per the loan
agreement was approximately 2.13 versus the agreement's maximum 3.25, and the
interest coverage ratio was approximately 6.74 versus the agreement's minimum of
4.25. This credit facility is secured by a blanket lien on all of the Company's
assets. The reconciliation of Net Cash Provided by Operating Activities (the
most directly comparable GAAP financial measure) to the Company's key liquidity
measure, "EBITDA", per the term loan agreement, is as follows (in millions):
Net Cash Provided by Operating Activities..................... $ 43.5
Plus:
Interest Expense...................................... 9.9
Current Income Tax Provision.......................... 14.5
Distributions from Affiliates......................... 2.3
Increase in Working Capital........................... 5.4
Less:
Interest Income....................................... (.7)
Other................................................. (4.3)
----------
EBITDA (per loan agreement)................................... $ 70.6
==========
During the first half of 2003, cash flow from operating activities was $43.5
million. Major factors contributing to the cash flow from operating activities
included operating earnings before non-cash charges for depreciation and
amortization, offset by an increase in working capital, and by the net non-cash
impact from the equity in earnings of affiliates. Operating cash flow was used
for additions to property, plant and equipment and to make an additional payment
related to the Biovance acquisition. Operating cash together with proceeds from
stock options exercised, were used to make both voluntary and mandatory debt
repayments and to pay cash dividends.
During the first quarter of 2003, the Company entered into a receivables
purchase agreement with an issuer of receivables-backed commercial paper in
order to refinance a portion, $60,000,000, of its primary credit facility. The
transaction resulted in a reclassification of long-term debt to short-term debt
in the Company's Consolidated Balance Sheet. Under this arrangement, the Company
sold, and will sell from time to time, throughout the 3 year term of the
agreement, its trade accounts receivable to a wholly-owned, consolidated,
special purpose finance subsidiary, Harrison Street Funding LLC, a Delaware
limited liability company ("Harrison"). Harrison in turn sold, and will sell on
an ongoing basis, to the commercial paper issuer an undivided interest in the
pool of accounts receivable. The receivables assets and the short-term
borrowings of Harrison are included in the consolidated financial statements of
the Company. The transactions were entered into to reduce certain expenses
associated with the credit facility in addition to lowering the Company's
financing costs by accessing the commercial paper market. The balance
outstanding under the agreement is $58 million at June 27, 2003.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS - Continued
Recent Accounting Pronouncements
- --------------------------------
In April 2003, the FASB issued SFAS No. 149,"Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." This Statement is effective for
contracts entered into or modified after June 30, 2003, with certain exceptions.
The Company will adopt the provisions of the statement on its effective date and
does not anticipate a material impact to its consolidated financial statements.
On May 15, 2003, the FASB issued SFAS No. 150 "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity", which aims to
eliminate diversity in practice by requiring that the "freestanding" financial
instruments be reported as liabilities by their issuers.
The provisions of SFAS 150, which also include a number of new disclosure
requirements, are effective for instruments entered into or modified after May
31, 2003 and for pre-existing instruments as of the beginning of the first
interim period that commences after June 15, 2003. The Company adopted the
provisions of the statement on its effective date and does not anticipate a
material impact to its consolidated financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
At current prices, the Company expects to incur over $10 million in energy and
other commodity-based cost increases for the year, for materials such as resin,
surfactants and palm oil. While these cost increases will slow down gross margin
growth, the Company still expects to achieve a gross margin improvement for the
year, through reductions in other raw and packaging materials costs, and
improved manufacturing and distribution efficiencies.
For additional information, refer to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2002.
ITEM 4. CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon that evaluation, we have concluded that the Company's disclosure controls
and procedures are effective in recording, processing, summarizing and reporting
within the time periods specified in the SEC's rules and forms material
information relating to the Company (including its consolidated subsidiaries)
required to be included in the Company's periodic SEC filings.
Since the Chief Executive Officer's and Chief Financial Officer's most recent
review of the Company's internal controls systems, there have been no
significant changes in internal controls or in other factors that could
significantly affect these controls.
Cautionary Note on Forward-Looking Statements
This report contains forward-looking statements relating, among others, to
short- and long-term financial objectives, sales growth, cash flow and cost
improvement programs. These statements represent the intentions, plans,
expectations and beliefs of Church & Dwight, 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), raw material and energy prices, the financial condition of
major customers, and the Company's determination and ability to exercise its
option to acquire the remaining 50% interest in Armkel. With regard to the new
product introductions referred to in this report, there is particular
uncertainty relating to trade, competitive and consumer reactions. Other
factors, which could materially affect the results, include the outcome of
contingencies, including litigation, pending regulatory proceedings,
environmental remediation and the acquisition or divestiture of assets.
The Company undertakes no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise.
You are advised, however, to consult any further disclosures the Company makes
on related subjects in its filings with the U.S. Securities and Exchange
Commission. This discussion is provided as permitted by the Private Securities
Litigation Reform Act of 1995.
PART II - Other Information
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
(3.1) Restated Certificate of Incorporation of the
Corporation filed on June 6, 2003, as filed with the
Secretary of State of the State of Delaware.
(3.2) Certificate of Correction of the Amended and Restated
Certificate of Incorporation of the Corporation filed on
July 12, 1990, as filed with the Secretary of the State of
Delaware on July 24, 2003.
(3.3) Certificate of Correction of the Amended and Restated
Certificate of Incorporation of the Corporation filed on
October 22, 1992, as filed with the Secretary of the State
of Delaware on July 24, 2003.
(3.4) Certificate of Correction of the Certificate of
Incorporation of the Corporation filed on June 6, 2003, as
filed with the Secretary of the State of Delaware on July
24, 2003.
(3.5) Restated Certificate of Incorporation of the Corporation,
as amended through July 24, 2003.
* (10) Employment Agreement, dated June 16, 2003 by and between
Church & Dwight Co., Inc. and Susan E. Goldy for the position of
Vice President, General Counsel and Secretary.
(99.1) Certification of the CEO of Church & Dwight Co., Inc.
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
906 of the Sarbanes-Oxley Act of 2002.
(99.2) Certification of the CFO of Church & Dwight Co., Inc.
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
906 of the Sarbanes-Oxley Act of 2002.
b. Reports on Form 8-K
On May 7, 2003, a report on Form 8-K was filed to announce that
the Company issued a press release relating to earnings for the
quarter ended March 28, 2003.
* Indicates a management contract or compensatory plan or
arrangement required to be filed as an Exhibit to this Form.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHURCH & DWIGHT CO.,INC.
------------------------------------
(REGISTRANT)
DATE: August 5, 2003 /s/ Zvi Eiref
---------------------------- -------------------------------------
ZVI EIREF
VICE PRESIDENT FINANCE
DATE: August 5, 2003 /s/ Gary P. Halker
--------------------------- --------------------------------------
GARY P. HALKER
VICE PRESIDENT FINANCE
AND TREASURER
CERTIFICATION
I, Robert A. Davies, III, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Church & Dwight Co.,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of any material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls: and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls:
and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: August 5, 2003
--------------------
/s/ Robert A. Davies, III
------------------------------------
Robert A. Davies, III
Chairman and Chief Executive Officer
CERTIFICATION
I, Zvi Eiref, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Church & Dwight Co.,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of any material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls: and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls:
and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: August 5, 2003
--------------------
/s/ Zvi Eiref
-----------------------------------
Zvi Eiref
Chief Financial Officer
EXHIBITS
(3.1) Restated Certificate of Incorporation of the Corporation filed on June 6,
2003, as filed with the Secretary of State of the State of Delaware.
(3.2) Certificate of Correction of the Amended and Restated Certificate of
Incorporation of the Corporation filed on July 12, 1990, as filed with the
Secretary of the State of Delaware on July 24, 2003.
(3.3) Certificate of Correction of the Amended and Restated Certificate of
Incorporation of the Corporation filed on October 22, 1992, as filed with the
Secretary of the State of Delaware on July 24, 2003.
(3.4) Certificate of Correction of the Certificate of Incorporation of the
Corporation filed on June 6, 2003, as filed with the Secretary of the State of
Delaware on July 24, 2003.
(3.5) Restated Certificate of Incorporation of the Corporation, as amended
through July 24, 2003.
(10) Employment Agreement, dated June 16, 2003 by and between Church & Dwight
Co., Inc. and Susan E. Goldy for the position of Vice President, General
Counsel and Secretary.
(99.1) Certification of the CEO of Church & Dwight Co., Inc. pursuant to 18
U.S.C. Section 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of
2002.
(99.2) Certification of the CFO of Church & Dwight Co., Inc. pursuant to 18
U.S.C. Section 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of
2002.