8-KOther Events

CHURCH & DWIGHT CO INC /DE/ 8-K Report (Feb 9, 2004)

Filed February 9, 2004For Securities:CHD

Summary

Church & Dwight Co., Inc. (CHD) reported its financial results for the fourth quarter and full fiscal year ended December 31, 2003. For the full year, net income increased by 20% to $81.0 million, or $1.92 per diluted share, compared to $66.7 million, or $1.60 per diluted share, in the prior year. This growth was influenced by a $0.06 per share gain from the reversal of prior year tax reserves and a $0.07 per share contribution from its affiliate, Armkel LLC, primarily from litigation settlement. Excluding these and other fourth quarter adjustments, adjusted net income saw a 16% increase. The company also announced the completion of the acquisition of Unilever's oral care business in the U.S. and Canada. This acquisition, while impacting fourth-quarter earnings due to associated charges, is expected to strengthen the company's product portfolio. Full-year sales reached $1,056.9 million, a 0.9% increase over the previous year. The company reaffirmed its long-term financial objectives, targeting average annual earnings per share growth of 12.5% to 15% from 2003 to 2005 and anticipates high single-digit sales growth for 2004.

Key Highlights

  • 1Full-year 2003 net income rose 20% to $81.0 million ($1.92 per diluted share) from $66.7 million ($1.60 per diluted share) in 2002.
  • 2The company successfully completed the acquisition of Unilever's oral care business in the United States and Canada.
  • 3Full-year 2003 sales were $1,056.9 million, a 0.9% increase over the prior year.
  • 4The company reaffirmed its commitment to achieving average annual earnings per share growth of 12.5% to 15% for the period 2003-2005.
  • 5Church & Dwight anticipates high single-digit sales growth for the full year 2004, including contributions from acquired brands.
  • 6The company expects 2004 earnings per share to be in the range of $2.07 to $2.10.
  • 7A regular quarterly dividend of $0.08 per share was declared, marking the 412th consecutive quarterly dividend.

Frequently Asked Questions

The primary drivers for the net income increase in 2003 included a $0.06 per share gain from the reversal of prior year tax reserves and a $0.07 per share contribution from its affiliate, Armkel LLC, largely due to litigation settlement. Excluding these items, adjusted net income still showed a significant increase of 16%.

The acquisition of Unilever's oral care business resulted in a $0.04 per share reduction in fourth-quarter earnings due to associated costs, including an $11.0 million accounting charge related to inventory step-up and financing costs. However, the company expects this acquisition to strengthen its product portfolio and contribute to future growth.

Church & Dwight aims to achieve average annual earnings per share growth of 12.5% to 15% from 2003 to 2005. For the full year 2004, the company projects earnings per share to be between $2.07 and $2.10 and anticipates high single-digit sales growth.

At year-end 2003, Church & Dwight had a net debt position of $321 million. Excluding the Unilever acquisition investment, net debt would have decreased by approximately $80 million. Net cash provided by operating activities was approximately $120 million for the year, and Adjusted EBITDA was an estimated $151 million.