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)
|
Large accelerated filer | x | Accelerated filer | o | ||
Non-accelerated filer | o | Smaller reporting company | o |
Item
|
Page
|
|
1.
|
3
|
|
2.
|
23
|
|
3.
|
27
|
|
4.
|
28
|
1.
|
29
|
|
1A.
|
29
|
|
4.
|
29
|
|
6.
|
30
|
Three
Months Ended
|
||||||||
March
28,
|
March
30,
|
|||||||
(Dollars
in thousands, except per share data)
|
2008
|
2007
|
||||||
Net
Sales
|
$ | 552,867 | $ | 514,335 | ||||
Cost
of sales
|
328,761 | 314,459 | ||||||
Gross
Profit
|
224,106 | 199,876 | ||||||
Marketing
expense
|
53,485 | 45,852 | ||||||
Selling,
general and administrative expenses
|
77,859 | 71,881 | ||||||
Income
from Operations
|
92,762 | 82,143 | ||||||
Equity
in earnings of affiliates
|
2,380 | 2,260 | ||||||
Investment
earnings
|
2,569 | 1,633 | ||||||
Other
income (expense), net
|
2,198 | (414 | ) | |||||
Interest
expense
|
(12,505 | ) | (15,201 | ) | ||||
Income
before minority interest and income taxes
|
87,404 | 70,421 | ||||||
Minority
interest
|
2 | (5 | ) | |||||
Income
before income taxes
|
87,402 | 70,426 | ||||||
Income
taxes
|
31,211 | 25,327 | ||||||
Net
Income
|
$ | 56,191 | $ | 45,099 | ||||
Weighted
average shares outstanding - Basic
|
66,343 | 65,570 | ||||||
Weighted
average shares outstanding - Diluted
|
70,817 | 70,024 | ||||||
Net
income per share - Basic
|
$ | 0.85 | $ | 0.69 | ||||
Net
income per share - Diluted
|
$ | 0.81 | $ | 0.66 | ||||
Dividends
Per Share
|
$ | 0.08 | $ | 0.07 |
March
28,
|
December
31,
|
|||||||
(Dollars
in thousands, except share and per share data)
|
2008
|
2007
|
||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 208,062 | $ | 249,809 | ||||
Accounts
receivable, less allowances of $4,512 and $4,548
|
243,513 | 247,898 | ||||||
Inventories
|
214,966 | 213,651 | ||||||
Deferred
income taxes
|
13,370 | 13,508 | ||||||
Note
receivable – current
|
1,324 | 1,263 | ||||||
Prepaid
expenses
|
11,554 | 9,224 | ||||||
Total
Current Assets
|
692,789 | 735,353 | ||||||
Property,
Plant and Equipment (Net)
|
339,808 | 350,853 | ||||||
Note
Receivable
|
2,342 | 3,670 | ||||||
Equity
Investment in Affiliates
|
9,563 | 10,324 | ||||||
Long-term
Supply Contracts
|
2,323 | 2,519 | ||||||
Tradenames
and Other Intangibles
|
657,464 | 665,168 | ||||||
Goodwill
|
688,128 | 688,842 | ||||||
Other
Assets
|
72,866 | 75,761 | ||||||
Total
Assets
|
$ | 2,465,283 | $ | 2,532,490 | ||||
Liabilities
and Stockholders' Equity
|
||||||||
Current
Liabilities
|
||||||||
Short-term
borrowings
|
$ | 15,293 | $ | 115,000 | ||||
Accounts
payable and accrued expenses
|
269,958 | 303,071 | ||||||
Current
portion of long-term debt
|
39,582 | 33,706 | ||||||
Income
taxes payable
|
24,561 | 6,012 | ||||||
Total
Current Liabilities
|
349,394 | 457,789 | ||||||
Long-term
Debt
|
692,982 | 707,311 | ||||||
Deferred
Income Taxes
|
161,152 | 162,746 | ||||||
Other
Long Term Liabilities
|
93,515 | 87,769 | ||||||
Pension,
Postretirement and Postemployment Benefits
|
34,716 | 36,416 | ||||||
Minority
Interest
|
196 | 194 | ||||||
Total
Liabilities
|
1,331,955 | 1,452,225 | ||||||
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
150,000,000 shares, issued 69,991,482 shares
|
69,991 | 69,991 | ||||||
Additional
paid-in capital
|
127,812 | 121,902 | ||||||
Retained
earnings
|
942,752 | 891,868 | ||||||
Accumulated
other comprehensive income
|
33,923 | 39,128 | ||||||
1,174,478 | 1,122,889 | |||||||
Common
stock in treasury, at cost:
|
||||||||
3,579,010
shares in 2008 and 3,747,719 shares in 2007
|
(41,150 | ) | (42,624 | ) | ||||
Total
Stockholders’ Equity
|
1,133,328 | 1,080,265 | ||||||
Total
Liabilities and Stockholders’ Equity
|
$ | 2,465,283 | $ | 2,532,490 |
Three
Months Ended
|
||||||||
March
28,
|
March
30,
|
|||||||
(Dollars
in thousands)
|
2008
|
2007
|
||||||
Cash
Flow From Operating Activities
|
||||||||
Net
Income
|
$ | 56,191 | $ | 45,099 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
15,212 | 14,614 | ||||||
Equity
in earnings of affiliates
|
(2,380 | ) | (2,260 | ) | ||||
Distributions
from unconsolidated affiliates
|
2,564 | 1,461 | ||||||
Deferred
income taxes
|
2,103 | 4,096 | ||||||
Gain
on sale of subsidiary
|
(3,005 | ) | - | |||||
Asset
impairment charges and other asset write-offs
|
5,626 | 595 | ||||||
Non
cash compensation expense
|
2,424 | 2,819 | ||||||
Unrealized
foreign exchange gain and other
|
(2,558 | ) | 176 | |||||
Change
in assets and liabilities:
|
||||||||
Accounts
receivable
|
3,436 | 2,183 | ||||||
Inventories
|
(3,549 | ) | (20,176 | ) | ||||
Prepaid
expenses
|
(2,409 | ) | (2,217 | ) | ||||
Accounts
payable and accrued expenses
|
(30,473 | ) | (30,556 | ) | ||||
Income
taxes payable
|
20,936 | 14,546 | ||||||
Excess
tax benefit on stock options exercised
|
(1,872 | ) | (3,837 | ) | ||||
Other
liabilities
|
477 | 3,057 | ||||||
Net
Cash Provided By Operating Activities
|
62,723 | 29,600 | ||||||
Cash
Flow From Investing Activities
|
||||||||
Additions
to property, plant and equipment
|
(6,283 | ) | (11,294 | ) | ||||
Proceeds
from sale of subsidiary
|
9,620 | - | ||||||
Acquisitions
(net of cash acquired)
|
- | (181 | ) | |||||
Return
of capital from equity affiliates
|
- | 150 | ||||||
Proceeds
from note receivable
|
1,263 | - | ||||||
Contingent
acquisition payments
|
(305 | ) | (370 | ) | ||||
Other
|
(111 | ) | 152 | |||||
Net
Cash Provided by (Used In) Investing Activities
|
4,184 | (11,543 | ) | |||||
Cash
Flow From Financing Activities
|
||||||||
Long-term
debt repayment
|
(8,453 | ) | (39,537 | ) | ||||
Short-term
debt (repayments) borrowings - net
|
(100,000 | ) | 15,011 | |||||
Bank
overdrafts
|
293 | (1,939 | ) | |||||
Proceeds
from stock options exercised
|
2,761 | 6,445 | ||||||
Excess
tax benefit on stock options exercised
|
1,872 | 3,837 | ||||||
Payment
of cash dividends
|
(5,307 | ) | (4,584 | ) | ||||
Net
Cash Used In Financing Activities
|
(108,834 | ) | (20,767 | ) | ||||
Effect
of exchange rate changes on cash and cash equivalents
|
180 | (28 | ) | |||||
Net
Change in Cash and Cash Equivalents
|
(41,747 | ) | (2,738 | ) | ||||
Cash
and Cash Equivalents at Beginning Of Period
|
249,809 | 110,476 | ||||||
Cash
and Cash Equivalents at End Of Period
|
$ | 208,062 | $ | 107,738 |
Three
Months Ended
|
||||||||
SUPPLEMENTAL
CASH FLOW INFORMATION
|
March
28,
|
March
30,
|
||||||
(Dollars
in thousands)
|
2008
|
2007
|
||||||
Cash
paid during the three months for:
|
||||||||
Interest
(net of amounts capitalized)
|
$ | 9,270 | $ | 12,424 | ||||
Income
taxes (net of refunds)
|
$ | 7,584 | $ | 4,369 | ||||
Supplemental
disclosure of non-cash investing activities:
|
||||||||
Property,
plant and equipment expenditures included in Accounts
Payable
|
$ | 932 | $ | 686 |
Number
of Shares
|
Amounts
|
|||||||||||||||||||||||||||||||
(In
thousands)
|
Common
Stock
|
Treasury
Stock
|
Common
Stock
|
Treasury
Stock
|
Additional
Paid-In Capital
|
Retained
Earnings
|
Accumulated
Other Comprehensive Income (Loss)
|
Comprehensive
Income
|
||||||||||||||||||||||||
December
31, 2007
|
69,991 | (3,748 | ) | $ | 69,991 | $ | (42,624 | ) | $ | 121,902 | $ | 891,868 | $ | 39,128 | ||||||||||||||||||
Net
income
|
- | - | - | - | - | 56,191 | - | $ | 56,191 | |||||||||||||||||||||||
Translation
adjustments
|
- | - | - | - | - | - | (2,880 | ) | (2,880 | ) | ||||||||||||||||||||||
Interest
rate agreements (net of taxes)
|
- | - | - | - | - | - | (2,325 | ) | (2,325 | ) | ||||||||||||||||||||||
Comprehensive
income
|
- | - | - | - | - | - | - | $ | 50,986 | |||||||||||||||||||||||
Cash
dividends
|
- | - | - | - | - | (5,307 | ) | - | ||||||||||||||||||||||||
Stock
based compensation expense
|
||||||||||||||||||||||||||||||||
and
stock option plan
|
||||||||||||||||||||||||||||||||
transactions
(including tax benefit)
|
- | 163 | - | 1,423 | 5,790 | - | - | |||||||||||||||||||||||||
Stock
purchases
|
- | - | - | - | - | - | - | |||||||||||||||||||||||||
Other
stock issuances
|
- | 6 | - | 51 | 120 | - | - | |||||||||||||||||||||||||
March
28, 2008
|
69,991 | (3,579 | ) | $ | 69,991 | $ | (41,150 | ) | $ | 127,812 | $ | 942,752 | $ | 33,923 |
1.
|
Basis
of Presentation
|
2.
|
Recently
Adopted Accounting Pronouncements
|
March
28, 2008
|
||||||||||||||||
(In thousands) |
Carrying
Amount
|
Quoted
Prices in
Active
Markets
|
Significant
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||||||
Assets
|
||||||||||||||||
Deferred compensation related investments
|
$ | 32,175 | $ | - | $ | 32,175 | $ | - | ||||||||
Diesel
hedge contract
|
1,936 | - | 1,936 | - | ||||||||||||
$ | 34,111 | $ | - | $ | 34,111 | $ | - | |||||||||
Liabilities
|
||||||||||||||||
Interest
rate collars
|
$ | 5,767 | $ | - | $ | 5,767 | $ | - | ||||||||
Deferred
compensation liability
|
48,543 | 15,006 | 33,537 | - | ||||||||||||
$ | 54,310 | $ | 15,006 | $ | 39,304 | $ | - |
3.
|
Inventories
consist of the following:
|
March
28,
|
December
31,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Raw
materials and supplies
|
$ | 51,009 | $ | 53,516 | ||||
Work
in process
|
9,308 | 9,169 | ||||||
Finished
goods
|
154,649 | 150,966 | ||||||
$ | 214,966 | $ | 213,651 |
4.
|
Property,
Plant and Equipment consist of the
following:
|
March
28,
|
December
31,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Land
|
$ | 11,069 | $ | 11,343 | ||||
Buildings
and improvements
|
145,167 | 147,114 | ||||||
Machinery
and equipment
|
423,746 | 436,104 | ||||||
Office
equipment and other assets
|
38,792 | 40,380 | ||||||
Software
|
32,504 | 33,336 | ||||||
Mineral
rights
|
1,521 | 1,490 | ||||||
Construction
in progress
|
18,841 | 15,915 | ||||||
671,640 | 685,682 | |||||||
Less
accumulated depreciation and amortization
|
331,832 | 334,829 | ||||||
Net
Property, Plant and Equipment
|
$ | 339,808 | $ | 350,853 |
5.
|
Earnings
Per Share
|
Three
Months Ended
|
||||||||
(In
thousands)
|
March
28,
2008
|
March
30,
2007
|
||||||
Basic
|
66,343 | 65,570 | ||||||
Dilutive
effect of stock options
|
1,240 | 1,228 | ||||||
Dilutive
effect of convertible debentures
|
3,234 | 3,226 | ||||||
Diluted
|
70,817 | 70,024 | ||||||
Anti-dilutive
stock options outstanding - not included in the calculation of
earnings
per share
|
490 | 108 |
6.
|
Stock-Based
Compensation
|
Options
(000)
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term
|
Aggregate
Intrinsic Values
($000)
|
|||||||||||||
Outstanding
at January 1, 2008
|
4,231 | $ | 30.24 | |||||||||||||
Granted
|
10 | 52.37 | ||||||||||||||
Exercised
|
(163 | ) | 16.59 | |||||||||||||
Cancelled
|
(20 | ) | 33.99 | |||||||||||||
Outstanding at March 28, 2008 | 4,058 | $ | 30.81 |
6.2
|
$ | 90,343 | ||||||||||
Exercisable
at March 28, 2008
|
1,982 | $ | 21.95 | 4.3 | $ | 61,677 |
Three
Months Ended
|
||||||||
March
28,
2008
|
March
30,
2007
|
|||||||
Intrinsic
Value of Stock Options Exercised (in millions)
|
$ | 6.0 | $ | 12.3 | ||||
Stock
Compensation Expense Related To Stock Option Awards (in
millions)
|
$ | 2.3 | $ | 2.8 | ||||
Issued
Stock Options (in thousands)
|
10 | -- | ||||||
Average
Fair Value of Stock Options Issued
|
$ | 16.12 | $ | -- | ||||
Assumptions
Used:
|
||||||||
Risk-free
interest rate
|
3.9 | % | -- | |||||
Expected
life in Years
|
6.5 | -- | ||||||
Expected
volatility
|
23.4 | % | -- |
7.
|
Goodwill
and Other Intangible Assets
|
(In thousands) |
March
28, 2008
|
December
31, 2007
|
||||||||||||||||||||||
|
Gross
Carrying
|
Accumulated
Amortization
|
Net
|
Gross
Carrying
|
Accumulated
Amortization
|
Net
|
||||||||||||||||||
Amortizable intangible
assets:
|
||||||||||||||||||||||||
Tradenames
|
$ | 121,577 | $ | (31,172 | ) | $ | 90,405 | $ | 107,066 | $ | (31,154 | ) | $ | 75,912 | ||||||||||
Customer
Relationships
|
130,747 | (15,669 | ) | 115,078 | 131,366 | (13,758 | ) | 117,608 | ||||||||||||||||
Patents/Formulas
|
27,220 | (12,606 | ) | 14,614 | 27,220 | (11,816 | ) | 15,404 | ||||||||||||||||
Non
Compete Agreement
|
1,143 | (723 | ) | 420 | 1,143 | (695 | ) | 448 | ||||||||||||||||
Total
|
$ | 280,687 | $ | (60,170 | ) | $ | 220,517 | $ | 266,795 | $ | (57,423 | ) | $ | 209,372 | ||||||||||
Unamortizable
intangible assets - carrying value
|
||||||||||||||||||||||||
Tradenames
|
$ | 436,947 | $ | 455,796 |
Consumer
|
Consumer
|
|||||||||||||||
(In
thousands)
|
Domestic
|
International
|
SPD
|
Total
|
||||||||||||
Balance
December 31, 2007
|
$ | 633,030 | $ | 33,224 | $ | 22,588 | $ | 688,842 | ||||||||
Subsidiary
Divestiture
|
- | - | (971 | ) | (971 | ) | ||||||||||
Additional
Unilever contingent consideration
|
257 | - | - | 257 | ||||||||||||
Balance
March 28, 2008
|
$ | 633,287 | $ | 33,224 | $ | 21,617 | $ | 688,128 |
8.
|
Short-term
Borrowings and Long-Term Debt
|
March
28,
|
December
31,
|
|||||||||||
(In
thousands)
|
2008
|
2007
|
||||||||||
Short-term
borrowings
|
||||||||||||
Securitization
of accounts receivable
|
$ | 15,000 | $ | 115,000 | ||||||||
Bank
overdraft debt
|
293 | - | ||||||||||
Total
short-term borrowings
|
$ | 15,293 | $ | 115,000 | ||||||||
Long-term
debt
|
||||||||||||
Term
Loan facility
|
$ | 382,642 | $ | 391,069 | ||||||||
Amount
due 2008
|
$ | 25,279 | ||||||||||
Amount
due 2009
|
$ | 57,211 | ||||||||||
Amount
due 2010
|
$ | 149,680 | ||||||||||
Amount
due 2011
|
$ | 66,310 | ||||||||||
Amount
due 2012
|
$ | 84,162 | ||||||||||
Convertible
debentures due on August 15, 2033
|
99,922 | 99,948 | ||||||||||
Senior
subordinated notes (6%) due December 22, 2012
|
250,000 | 250,000 | ||||||||||
Total
long-term debt
|
732,564 | 741,017 | ||||||||||
Less:
current maturities
|
39,582 | 33,706 | ||||||||||
Net
long-term debt
|
$ | 692,982 | $ | 707,311 |
(In thousands) | ||||||||
Due
by March 31, 2009
|
$ |
39,582
|
||||||
Due
by March 31, 2010
|
77,778 | |||||||
Due
by March 31, 2011
|
127,563 | |||||||
Due
by March 31, 2012
|
81,612 | |||||||
Due
by March 31, 2013
|
306,107 | |||||||
Due
March 31, 2014 and subsequent
|
99,922 | |||||||
$ | 732,564 |
9.
|
Comprehensive
Income
|
Three
Months Ended
|
||||||||
March
28,
|
March
30,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Net
Income
|
$ | 56,191 | $ | 45,099 | ||||
Other
Comprehensive Income, Net of Tax:
|
||||||||
Foreign
Exchange Translation Adjustments (Net of Divestiture)
|
(2,880 | ) | 1,052 | |||||
Interest
Rate Hedge Agreements
|
(2,325 | ) | (73 | ) | ||||
Comprehensive
Income
|
$ | 50,986 | $ | 46,078 |
10.
|
Pension
and Postretirement Plans
|
Pension
Costs
|
||||||||
Three
Months Ended
|
||||||||
March
28,
|
March
30,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Components
of Net Periodic Benefit Cost:
|
||||||||
Service
cost
|
$ | 723 | $ | 626 | ||||
Interest
cost
|
1,937 | 1,708 | ||||||
Expected
return on plan assets
|
(2,179 | ) | (1,856 | ) | ||||
Amortization
of prior service cost
|
4 | 3 | ||||||
Recognized
actuarial loss
|
(9 | ) | 51 | |||||
Net
periodic benefit cost
|
$ | 476 | $ | 532 | ||||
Postretirement
Costs
|
||||||||
Three
Months Ended
|
||||||||
March
28,
|
March
30,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Components
of Net Periodic Benefit Cost:
|
||||||||
Service
cost
|
$ | 187 | $ | 182 | ||||
Interest
cost
|
367 | 354 | ||||||
Amortization
of prior service cost
|
11 | 10 | ||||||
Recognized
actuarial loss
|
- | 5 | ||||||
Net
periodic benefit cost
|
$ | 565 | $ | 551 |
11.
|
Commitments,
contingencies and
guarantees
|
a.
|
The
Company has a partnership with a supplier of raw materials which mines and
processes sodium mineral deposits. This agreement
terminates upon two years’ written notice by either
company. The Company has an annual commitment to purchase
240,000 tons at the prevailing market price and purchases the majority of
its sodium raw material requirements from the partnership. The
Company is not engaged in any other material transactions with the
partnership or the Company’s
partner.
|
b.
|
The
Company’s distribution of condoms under the TROJAN and other trademarks is
regulated by the U.S. Food and Drug Administration (FDA). Certain of the
Company’s condoms and similar condoms sold by its competitors contain the
spermicide nonoxynol-9 (N-9). The World Health Organization and other
interested groups have issued reports suggesting that N-9 should not be
used rectally or for multiple daily acts of vaginal intercourse, given the
ingredient’s potential to cause irritation to human membranes. In 2005,
the FDA issued non-binding draft guidance concerning the labeling of
condoms in general and those with N-9 in particular. The Company filed a
response recommending alternative labeling to the FDA and has engaged in
further discussions with the FDA since that time. While awaiting further
FDA guidance, the Company implemented an interim label statement change
cautioning against rectal use and more-than-once-a-day vaginal use of
condoms with N-9 and launched a public information campaign to communicate
these messages to the affected communities. The Company believes that its
present labeling for condoms with N-9 is compliant with the overall
objectives of the FDA’s draft guidance and that condoms with N-9 will
remain a viable contraceptive choice for those couples who wish to use
them. The Company cannot predict the nature of the labeling that
ultimately will be required by the FDA if the FDA or state governments
eventually promulgate rules which prohibit or restrict the use of N-9 in
condoms (such as new labeling requirements). The Company could
incur costs from obsolete products, packaging or raw materials, and sales
of condoms could decline, which, in turn, could decrease the Company’s
operating income.
|
c.
|
As
of March 28, 2008, the Company has commitments to acquire approximately
$99.9 million of raw material, packaging supplies and services from its
vendors at market prices.
|
d.
|
The
Company has $6.0 million of outstanding letters of credit drawn on several
banks which guarantee payment for such things as finished goods inventory,
insurance claims and one year of rent on a warehouse in the event of the
Company’s insolvency.
|
e.
|
In
connection with the Company’s October 2003 acquisition of Unilever’s oral
care brands in the United States and Canada in October 2003, the Company
is required to make additional performance-based payments of a minimum of
$5.0 million and a maximum of $12.0 million over the eight year period
following the acquisition. The Company made cash payments of
$0.3 million, and accrued a payment of $0.3 million in the first three
months of 2008. The payment and accrual were accounted for as
additional purchase price. The Company has paid approximately
$8.3 million, exclusive of the $0.3 million accrual, in additional
performance-based payments since the
acquisition.
|
f.
|
The
Company filed suit against Abbott Laboratories, Inc (“Abbott”) in April
2005 claiming infringement of certain patents resulting from Abbott’s
manufacture and sale of its Fact Plus pregnancy diagnostic test
kits. Following a trial in February 2008, the jury found that
the Company’s patents were valid and willfully infringed by Abbott during
the period from April 1999 through September 2003 and awarded damages to
the Company in the amount of $14.6 million. There are several
post-trial motions pending in the litigation seeking, among other things,
to set aside the verdict. These motions are pending, and the
Company will vigorously contest them. In June 2007, Abbott
filed suit against the Company claiming infringement of certain patents
that are licensed to Abbott, also in relation to pregnancy diagnostic test
kits. The Company intends to continue its vigorous defense of
this action.
|
g.
|
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 financial
position.
|
12.
|
Related
Party Transactions
|
13.
|
Gain
on Sale of Business
|
14.
|
Segment
Information
|
Segment
|
Products
|
||
Consumer
Domestic
|
Household
and personal care products
|
||
Consumer
International
|
Primarily
personal care products
|
||
SPD
|
Specialty
chemical products
|
|
|
|||||||||||||||||||
(In
thousands)
|
Consumer
Domestic
(3)
|
Consumer
International
(3
)
|
SPD
|
Corporate
|
Total
|
|||||||||||||||
Net Sales
(1)
|
||||||||||||||||||||
First
Quarter 2008
|
$ | 382,744 | $ | 99,694 | $ | 70,429 | $ | - | $ | 552,867 | ||||||||||
First
Quarter 2007
|
$ | 369,834 | $ | 86,739 | $ | 57,762 | $ | - | $ | 514,335 | ||||||||||
Income before Minority Interest and
Income Taxes
(2)
|
||||||||||||||||||||
First
Quarter 2008
|
$ | 67,831 | $ | 7,252 | $ | 9,941 | $ | 2,380 | $ | 87,404 | ||||||||||
First
Quarter 2007
|
$ | 52,765 | $ | 10,869 | $ | 4,527 | $ | 2,260 | $ | 70,421 |
(1)
|
Intersegment
sales from Consumer International to Consumer Domestic were $2.1 million
and $1.2 million for the three months ended March 28, 2008 and March 30,
2007, respectively.
|
(2)
|
In
determining Income Before Minority Interest and Income Taxes, interest
expense, investment earnings, and other income (expense)were allocated to
the segments based upon each segment’s relative operating profit. The
Corporate segment income consists of equity in earnings of
affiliates.
|
(3)
|
As
of January 1, 2008, the Company modified its organizational structure,
resulting in a change in classification of certain Consumer Domestic
export sales. Therefore, 2007 results have been restated to
reflect a change in sales of $2.5 million and $0.3 million of Income
Before Minority Interest that are now included in the Consumer
International Segment.
|
Three
Months Ended
|
||||||||
March
28,
|
March
30,
|
|||||||
(In thousands) |
2008
|
2007
|
||||||
Household
Products
|
$ | 242,827 | $ | 236,378 | ||||
Personal
Care Products
|
139,917 | 133,456 | ||||||
Total
Consumer Domestic
|
382,744 | 369,834 | ||||||
Total
Consumer International
|
99,694 | 86,739 | ||||||
Total
SPD
|
70,429 | 57,762 | ||||||
Total
Consolidated Net Sales
|
$ | 552,867 | $ | 514,335 |
For
the Three Months Ended March 28, 2008
|
||||||||||||||||||||
Guarantor
|
Non-Guarantor
|
Total
|
||||||||||||||||||
Parent
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Net
Sales
|
$ | 445,352 | $ | 32,470 | $ | 117,507 | $ | (42,462 | ) | $ | 552,867 | |||||||||
Cost
of sales
|
288,239 | 13,695 | 69,289 | (42,462 | ) | 328,761 | ||||||||||||||
Gross
Profit
|
157,113 | 18,775 | 48,218 | - | 224,106 | |||||||||||||||
Marketing
expenses
|
41,970 | - | 11,515 | - | 53,485 | |||||||||||||||
Selling,
general and administrative expenses
|
46,812 | 5,541 | 25,505 | - | 77,858 | |||||||||||||||
Income
from Operations
|
68,331 | 13,234 | 11,198 | - | 92,763 | |||||||||||||||
Equity
in earnings of affiliates
|
24,421 | - | 1,880 | (23,921 | ) | 2,380 | ||||||||||||||
Investment
earnings
|
1,648 | 216 | 705 | - | 2,569 | |||||||||||||||
Intercompany
dividends/interest
|
(9,040 | ) | 10,030 | (990 | ) | - | - | |||||||||||||
Other
income (expense), net
|
1,361 | - | 837 | - | 2,198 | |||||||||||||||
Interest
expense
|
(11,085 | ) | - | (1,420 | ) | - | (12,505 | ) | ||||||||||||
Income before minority interest
and taxes
|
75,636 | 23,480 | 12,210 | (23,921 | ) | 87,405 | ||||||||||||||
Minority
interest
|
- | - | 3 | - | 3 | |||||||||||||||
Income
before income taxes
|
75,636 | 23,480 | 12,207 | (23,921 | ) | 87,402 | ||||||||||||||
Income
taxes
|
19,445 | 8,829 | 2,937 | - | 31,211 | |||||||||||||||
Net
Income
|
$ | 56,191 | $ | 14,651 | $ | 9,270 | $ | (23,921 | ) | $ | 56,191 |
For
the Three Months Ended March 30, 2007
|
||||||||||||||||||||
Guarantor
|
Non-Guarantor
|
Total
|
||||||||||||||||||
Parent
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Net
Sales
|
$ | 426,275 | $ | 31,785 | $ | 98,984 | $ | (42,709 | ) | $ | 514,335 | |||||||||
Cost
of sales
|
285,399 | 13,416 | 58,353 | (42,709 | ) | 314,459 | ||||||||||||||
Gross
Profit
|
140,876 | 18,369 | 40,631 | - | 199,876 | |||||||||||||||
Marketing
expenses
|
35,868 | - | 9,984 | - | 45,852 | |||||||||||||||
Selling,
general and administrative expenses
|
52,696 | 3,646 | 15,539 | - | 71,881 | |||||||||||||||
Income
from Operations
|
52,312 | 14,723 | 15,108 | - | 82,143 | |||||||||||||||
Equity
in earnings of affiliates
|
32,864 | - | 1,687 | (32,291 | ) | 2,260 | ||||||||||||||
Investment
earnings
|
962 | 219 | 452 | - | 1,633 | |||||||||||||||
Intercompany
dividends/interest
|
(11,273 | ) | 8,922 | 2,351 | - | - | ||||||||||||||
Other
income (expense), net
|
56 | - | (470 | ) | - | (414 | ) | |||||||||||||
Interest
expense
|
(13,658 | ) | - | (1,543 | ) | - | (15,201 | ) | ||||||||||||
Income before minority interest
and taxes
|
61,263 | 23,864 | 17,585 | (32,291 | ) | 70,421 | ||||||||||||||
Minority
interest
|
- | - | (5 | ) | - | (5 | ) | |||||||||||||
Income
before income taxes
|
61,263 | 23,864 | 17,590 | (32,291 | ) | 70,426 | ||||||||||||||
Income
taxes
|
16,164 | 3,544 | 5,619 | - | 25,327 | |||||||||||||||
Net
Income
|
$ | 45,099 | $ | 20,320 | $ | 11,971 | $ | (32,291 | ) | $ | 45,099 |
March 28, 2008 | ||||||||||||||||||||
Guarantor
|
Non-Guarantor
|
Total
|
||||||||||||||||||
Parent
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Current
Assets
|
||||||||||||||||||||
Cash
and cash equivalents
|
$ | 116,161 | $ | 22,673 | $ | 69,228 | $ | - | $ | 208,062 | ||||||||||
Accounts
receivable, less allowances
|
2,561 | 1,014 | 239,938 | - | 243,513 | |||||||||||||||
Inventories
|
135,303 | 6,747 | 72,916 | - | 214,966 | |||||||||||||||
Deferred
income taxes
|
10,470 | - | 2,900 | - | 13,370 | |||||||||||||||
Note
receivable – current
|
1,324 | - | - | - | 1,324 | |||||||||||||||
Prepaid
expenses
|
7,076 | - | 4,478 | - | 11,554 | |||||||||||||||
Total
Current Assets
|
272,895 | 30,434 | 389,460 | - | 692,789 | |||||||||||||||
Property,
Plant and Equipment (Net)
|
245,776 | 42,982 | 51,050 | - | 339,808 | |||||||||||||||
Note
Receivable
|
2,342 | - | - | - | 2,342 | |||||||||||||||
Equity
Investments in Subsidiaries
|
627,272 | - | 8,380 | (626,089 | ) | 9,563 | ||||||||||||||
Long-term
Supply Contracts
|
2,323 | - | - | - | 2,323 | |||||||||||||||
Tradenames
and Other Intangibles
|
407,549 | 177,005 | 72,910 | - | 657,464 | |||||||||||||||
Goodwill
|
681,763 | - | 6,365 | - | 688,128 | |||||||||||||||
Other
Assets
|
89,916 | 352 | 10,611 | (28,014 | ) | 72,865 | ||||||||||||||
Total
Assets
|
$ | 2,329,836 | $ | 250,773 | $ | 538,776 | $ | (661,357 | ) | $ | 2,465,282 | |||||||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||||||
Current
Liabilities
|
||||||||||||||||||||
Short-term
borrowings
|
$ | - | $ | - | $ | 15,293 | $ | - | $ | 15,293 | ||||||||||
Accounts
payable and accrued expenses
|
189,867 | 2,341 | 77,750 | - | 269,958 | |||||||||||||||
Current
portion of long-term debt
|
39,582 | - | - | - | 39,582 | |||||||||||||||
Due
to/from Subsidiaries
|
(9,021 | ) | (101,737 | ) | 139,983 | (29,225 | ) | - | ||||||||||||
Income
taxes payable
|
22,187 | - | 2,374 | - | 24,561 | |||||||||||||||
Total
Current Liabilities
|
242,615 | (99,396 | ) | 235,400 | (29,225 | ) | 349,394 | |||||||||||||
Long-term
Debt
|
692,982 | - | - | - | 692,982 | |||||||||||||||
Deferred
Income Taxes
|
146,217 | - | 14,935 | - | 161,152 | |||||||||||||||
Deferred
and Other Long Term Liabilities
|
90,481 | 95 | 2,939 | - | 93,515 | |||||||||||||||
Pension,
Postretirement and Postemployment Benefits
|
24,209 | - | 10,507 | - | 34,716 | |||||||||||||||
Minority
Interest
|
5 | - | 191 | - | 196 | |||||||||||||||
Commitments
and Contingencies
|
||||||||||||||||||||
Total
Liabilities
|
1,196,509 | (99,301 | ) | 263,972 | (29,225 | ) | 1,331,955 | |||||||||||||
Stockholders'
Equity
|
||||||||||||||||||||
Common
Stock-$1.00 par value
|
69,991 | 225,703 | 66,628 | (292,331 | ) | 69,991 | ||||||||||||||
Additional
paid-in capital
|
127,812 | 4,940 | 72,804 | (77,744 | ) | 127,812 | ||||||||||||||
Retained
earnings
|
942,752 | 119,431 | 94,375 | (213,806 | ) | 942,752 | ||||||||||||||
Accumulated
other comprehensive income (loss)
|
33,922 | - | 40,997 | (40,997 | ) | 33,922 | ||||||||||||||
1,174,477 | 350,074 | 274,804 | (624,878 | ) | 1,174,477 | |||||||||||||||
Common
stock in treasury, at cost:
|
(41,150 | ) | - | - | - | (41,150 | ) | |||||||||||||
Total
Stockholders’ Equity
|
1,133,327 | 350,074 | 274,804 | (624,878 | ) | 1,133,327 | ||||||||||||||
Total
Liabilities and Stockholders’ Equity
|
$ | 2,329,836 | $ | 250,773 | $ | 538,776 | $ | (661,357 | ) | $ | 2,465,282 |
December
31, 2007
|
||||||||||||||||||||
Guarantor
|
Non-Guarantor
|
Total
|
||||||||||||||||||
Parent
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Current
Assets
|
||||||||||||||||||||
Cash
and cash equivalents
|
$ | 150,783 | $ | 21,014 | $ | 78,012 | $ | - | $ | 249,809 | ||||||||||
Accounts
receivable, less allowances
|
1,471 | 2,113 | 244,314 | - | 247,898 | |||||||||||||||
Inventories
|
133,183 | 6,102 | 74,366 | - | 213,651 | |||||||||||||||
Deferred
income taxes
|
10,470 | - | 3,038 | - | 13,508 | |||||||||||||||
Note
receivable – current
|
1,263 | - | - | - | 1,263 | |||||||||||||||
Prepaid
expenses
|
6,085 | - | 3,139 | - | 9,224 | |||||||||||||||
Total
Current Assets
|
303,255 | 29,229 | 402,869 | - | 735,353 | |||||||||||||||
Property,
Plant and Equipment (Net)
|
248,292 | 42,887 | 59,674 | - | 350,853 | |||||||||||||||
Note
Receivable
|
3,666 | - | 4 | - | 3,670 | |||||||||||||||
Equity
Investments in Subsidiaries
|
620,837 | - | 8,911 | (619,424 | ) | 10,324 | ||||||||||||||
Long-term
Supply Contracts
|
2,519 | - | - | - | 2,519 | |||||||||||||||
Tradenames
and Other Intangibles
|
411,722 | 177,018 | 76,428 | - | 665,168 | |||||||||||||||
Goodwill
|
682,477 | - | 6,365 | - | 688,842 | |||||||||||||||
Other
Assets
|
89,438 | 368 | 12,904 | (26,949 | ) | 75,761 | ||||||||||||||
Total
Assets
|
$ | 2,362,206 | $ | 249,502 | $ | 567,155 | $ | (646,373 | ) | $ | 2,532,490 | |||||||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||||||
Current
Liabilities
|
||||||||||||||||||||
Short-term
borrowings
|
$ | - | $ | - | $ | 115,000 | $ | - | $ | 115,000 | ||||||||||
Accounts
payable and accrued expenses
|
211,394 | 2,098 | 89,579 | - | 303,071 | |||||||||||||||
Current
portion of long-term debt
|
33,706 | - | - | - | 33,706 | |||||||||||||||
Due
to/from Subsidiaries
|
73,705 | (95,096 | ) | 49,629 | (28,238 | ) | - | |||||||||||||
Income
taxes payable
|
2,304 | - | 3,708 | - | 6,012 | |||||||||||||||
Total
Current Liabilities
|
321,109 | (92,998 | ) | 257,916 | (28,238 | ) | 457,789 | |||||||||||||
Long-term
Debt
|
707,311 | - | - | - | 707,311 | |||||||||||||||
Deferred
Income Taxes
|
144,216 | - | 18,530 | - | 162,746 | |||||||||||||||
Deferred
and Other Long Term Liabilities
|
84,799 | 76 | 2,894 | - | 87,769 | |||||||||||||||
Pension,
Postretirement and Postemployment Benefits
|
24,501 | - | 11,915 | - | 36,416 | |||||||||||||||
Minority
Interest
|
5 | - | 189 | - | 194 | |||||||||||||||
Commitments
and Contingencies
|
||||||||||||||||||||
Total
Liabilities
|
1,281,941 | (92,922 | ) | 291,444 | (28,238 | ) | 1,452,225 | |||||||||||||
Stockholders'
Equity
|
||||||||||||||||||||
Common
Stock-$1.00 par value
|
69,991 | 225,703 | 66,978 | (292,681 | ) | 69,991 | ||||||||||||||
Additional
paid-in capital
|
121,902 | 4,940 | 72,804 | (77,744 | ) | 121,902 | ||||||||||||||
Retained
earnings
|
891,868 | 111,781 | 91,699 | (203,480 | ) | 891,868 | ||||||||||||||
Accumulated
other comprehensive income (loss)
|
39,128 | - | 44,230 | (44,230 | ) | 39,128 | ||||||||||||||
1,122,889 | 342,424 | 275,711 | (618,135 | ) | 1,122,889 | |||||||||||||||
Common
stock in treasury, at cost:
|
(42,624 | ) | - | - | - | (42,624 | ) | |||||||||||||
Total
Stockholders’ Equity
|
1,080,265 | 342,424 | 275,711 | (618,135 | ) | 1,080,265 | ||||||||||||||
Total
Liabilities and Stockholders’ Equity
|
$ | 2,362,206 | $ | 249,502 | $ | 567,155 | $ | (646,373 | ) | $ | 2,532,490 |
For the Three Months Ended March 28, 2008 | ||||||||||||||||||||
Guarantor
|
Non-Guarantor
|
Total
|
||||||||||||||||||
Parent
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Cash
Flow From Operating Activities
|
||||||||||||||||||||
Net
Income
|
$ | 56,191 | $ | 14,651 | $ | 9,270 | $ | (23,921 | ) | $ | 56,191 | |||||||||
Adjustments
to reconcile net income to net cash
provided
by operating activities:
|
||||||||||||||||||||
Depreciation
and amortization
|
12,056 | 962 | 2,194 | - | 15,212 | |||||||||||||||
Equity
in earnings of affiliates
|
(24,423 | ) | - | (1,878 | ) | 23,921 | (2,380 | ) | ||||||||||||
Distributions
from unconsolidated affiliates
|
9,064 | - | 1,832 | (8,332 | ) | 2,564 | ||||||||||||||
Deferred
income taxes
|
3,055 | - | (952 | ) | - | 2,103 | ||||||||||||||
Gain
on sale of subsidiary
|
(3,005 | ) |
-
|
-
|
-
|
(3,005 | ) | |||||||||||||
Asset
impairment charges and other asset write-offs
|
4 | - | 5,622 | - | 5,626 | |||||||||||||||
Non
cash compensation expense
|
2,424 | - | - | - | 2,424 | |||||||||||||||
Unrealized
foreign exchange gain and other
|
(1,099 | ) | - | (1,459 | ) | - | (2,558 | ) | ||||||||||||
Change
in assets and liabilities:
|
||||||||||||||||||||
Accounts
receivable
|
(1,090 | ) | 1,099 | 3,427 | - | 3,436 | ||||||||||||||
Inventories
|
(2,120 | ) | (645 | ) | (784 | ) | - | (3,549 | ) | |||||||||||
Prepaid
expenses
|
(991 | ) | - | (1,418 | ) | - | (2,409 | ) | ||||||||||||
Accounts
payable and accrued expenses
|
(21,426 | ) | 243 | (9,290 | ) | - | (30,473 | ) | ||||||||||||
Income
taxes payable
|
22,966 | - | (2,030 | ) | - | 20,936 | ||||||||||||||
Excess
tax benefit on stock options exercised
|
(1,872 | ) | - | - | - | (1,872 | ) | |||||||||||||
Intercompany
activity
|
(81,143 | ) | (6,626 | ) | 87,769 | - | - | |||||||||||||
Other
liabilities
|
458 | 19 | - | - | 477 | |||||||||||||||
Net
Cash Provided By (Used In) Operating Activities
|
(30,951 | ) | 9,703 | 92,303 | (8,332 | ) | 62,723 | |||||||||||||
Cash
Flow From Investing Activities
|
||||||||||||||||||||
Additions
to property, plant and equipment
|
(4,520 | ) | (1,044 | ) | (719 | ) | - | (6,283 | ) | |||||||||||
Net
proceeds from assets
|
9,620 |
-
|
-
|
-
|
9,620 | |||||||||||||||
Proceeds
from note receivable
|
1,263 | - | - | - | 1,263 | |||||||||||||||
Contingent
acquisition payments
|
(305 | ) | - | - | - | (305 | ) | |||||||||||||
Other
|
(602 | ) | - | 491 | - | (111 | ) | |||||||||||||
Net
Cash (Used In) Provided By Investing Activities
|
5,456 | (1,044 | ) | (228 | ) | - | 4,184 | |||||||||||||
Cash
Flow From Financing Activities
|
||||||||||||||||||||
Long-term
debt repayment
|
(8,453 | ) | - | - | - | (8,453 | ) | |||||||||||||
Short-term
debt (repayments) borrowings - net
|
- | - | (100,000 | ) | - | (100,000 | ) | |||||||||||||
Bank
overdrafts
|
- | - | 293 | - | 293 | |||||||||||||||
Proceeds
from stock options exercised
|
2,761 | - | - | - | 2,761 | |||||||||||||||
Excess
tax benefit on stock options exercised
|
1,872 | - | - | - | 1,872 | |||||||||||||||
Payment
of cash dividends
|
(5,307 | ) | (7,000 | ) | (1,332 | ) | 8,332 | (5,307 | ) | |||||||||||
Net
Cash (Used In) Provided by Financing Activities
|
(9,127 | ) | (7,000 | ) | (101,039 | ) | 8,332 | (108,834 | ) | |||||||||||
Effect
of exchange rate changes on cash and cash equivalents
|
- | - | 180 | - | 180 | |||||||||||||||
Net
Change in Cash and Cash Equivalents
|
(34,622 | ) | 1,659 | (8,784 | ) | - | (41,747 | ) | ||||||||||||
Cash
and Cash Equivalents at Beginning Of Period
|
150,783 | 21,014 | 78,012 | - | 249,809 | |||||||||||||||
Cash
and Cash Equivalents at End Of Period
|
$ | 116,161 | $ | 22,673 | $ | 69,228 | $ | - | $ | 208,062 |
For the Three Months Ended March 30, 2007 | ||||||||||||||||||||
Guarantor
|
Non-Guarantor
|
Total
|
||||||||||||||||||
Parent
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
Cash
Flow From Operating Activities
|
||||||||||||||||||||
Net
Income
|
$ | 45,099 | $ | 20,320 | $ | 11,971 | $ | (32,291 | ) | $ | 45,099 | |||||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||||||||||
Depreciation
and amortization
|
11,937 | 884 | 1,793 | - | 14,614 | |||||||||||||||
Equity
in earnings of affiliates
|
(32,863 | ) | - | (1,688 | ) | 32,291 | (2,260 | ) | ||||||||||||
Distributions
from unconsolidated affiliates
|
7,461 | - | 1,219 | (7,219 | ) | 1,461 | ||||||||||||||
Deferred
income taxes
|
3,782 | - | 314 | - | 4,096 | |||||||||||||||
Asset
impairment charges and other asset write-offs
|
211 | 361 | 23 | - | 595 | |||||||||||||||
Non
cash compensation expense
|
2,819 | - | - | - | 2,819 | |||||||||||||||
Unrealized
foreign exchange gain
|
658 | - | (482 | ) | - | 176 | ||||||||||||||
Change
in assets and liabilities:
|
||||||||||||||||||||
Accounts
receivable
|
3,344 | (68 | ) | (1,093 | ) | - | 2,183 | |||||||||||||
Inventories
|
(16,525 | ) | (207 | ) | (3,444 | ) | - | (20,176 | ) | |||||||||||
Prepaid
expenses
|
(1,531 | ) | - | (686 | ) | - | (2,217 | ) | ||||||||||||
Accounts
payable and accrued expenses
|
(23,387 | ) | (79 | ) | (7,090 | ) | - | (30,556 | ) | |||||||||||
Income
taxes payable
|
15,449 | (301 | ) | (602 | ) | - | 14,546 | |||||||||||||
Excess
tax benefit on stock options exercised
|
(3,837 | ) | - | - | - | (3,837 | ) | |||||||||||||
Intercompany
activity
|
43,916 | (12,424 | ) | (31,492 | ) | - | - | |||||||||||||
Other
liabilities
|
2,860 | 25 | 172 | - | 3,057 | |||||||||||||||
Net
Cash Provided By (Used In) Operating Activities
|
59,393 | 8,511 | (31,085 | ) | (7,219 | ) | 29,600 | |||||||||||||
Cash
Flow From Investing Activities
|
||||||||||||||||||||
Additions
to property, plant and equipment
|
(8,666 | ) | (1,365 | ) | (1,263 | ) | - | (11,294 | ) | |||||||||||
Acquisitions
(net of cash acquired)
|
(181 | ) | - | - | - | (181 | ) | |||||||||||||
Return
of capital from equity affiliates
|
150 | - | 150 | (150 | ) | 150 | ||||||||||||||
Contingent
acquisition payments
|
(370 | ) | - | - | - | (370 | ) | |||||||||||||
Other
|
113 | 41 | (2 | ) | - | 152 | ||||||||||||||
Net
Cash Used In Investing Activities
|
(8,954 | ) | (1,324 | ) | (1,115 | ) | (150 | ) | (11,543 | ) | ||||||||||
Cash
Flow From Financing Activities
|
||||||||||||||||||||
Long-term
debt repayment
|
(39,537 | ) | - | - | - | (39,537 | ) | |||||||||||||
Short-term
debt (repayments) borrowings - net
|
(40 | ) | - | 15,051 | - | 15,011 | ||||||||||||||
Bank
overdrafts
|
(1,939 | ) | - | - | - | (1,939 | ) | |||||||||||||
Proceeds
from stock options exercised
|
6,445 | - | - | - | 6,445 | |||||||||||||||
Excess
tax benefit on stock options exercised
|
3,837 | - | - | - | 3,837 | |||||||||||||||
Payment
of cash dividends
|
(4,584 | ) | (6,000 | ) | (1,369 | ) | 7,369 | (4,584 | ) | |||||||||||
Net
Cash (Used In) Provided by Financing Activities
|
(35,818 | ) | (6,000 | ) | 13,682 | 7,369 | (20,767 | ) | ||||||||||||
Effect
of exchange rate changes on cash and cash equivalents
|
- | - | (28 | ) | - | (28 | ) | |||||||||||||
Net
Change in Cash and Cash Equivalents
|
14,621 | 1,187 | (18,546 | ) | - | (2,738 | ) | |||||||||||||
Cash
and Cash Equivalents at Beginning Of Period
|
22,111 | 20,302 | 68,063 | - | 110,476 | |||||||||||||||
Cash
and Cash Equivalents at End Of Period
|
$ | 36,732 | $ | 21,489 | $ | 49,517 | $ | - | $ | 107,738 |
15.
|
Subsequent
Event
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS
|
Segment
|
Products
|
Consumer
Domestic
|
Household
and personal care products
|
Consumer
International
|
Primarily
personal care products
|
SPD
|
Specialty
chemical products
|
(In
thousands)
|
Consumer
Domestic
(3)
|
Consumer
International
(3)
|
SPD
|
Corporate
|
Total
|
|||||||||||||||
Net Sales
(1)
|
||||||||||||||||||||
First Quarter
2008
|
$
|
382,744
|
$
|
99,694
|
$
|
70,429
|
$
|
-
|
$
|
552,867
|
||||||||||
First
Quarter 2007
|
$
|
369,834
|
$
|
86,739
|
$
|
57,762
|
$
|
-
|
$
|
514,335
|
||||||||||
Income before Minority Interest and Income
Taxes
(2)
|
||||||||||||||||||||
First
Quarter 2008
|
$
|
67,831
|
$
|
7,252
|
$
|
9,941
|
$
|
2,380
|
$
|
87,404
|
||||||||||
First
Quarter 2007
|
$
|
52,765
|
$
|
10,869
|
$
|
4,527
|
$
|
2,260
|
$
|
70,421
|
(1)
|
Intersegment
sales from Consumer International to Consumer Domestic were $2.1 million
and $1.2 million for the three months ended March 28, 2008 and March 30,
2007, respectively.
|
(2)
|
In
determining Income Before Minority Interest and Income Taxes, interest
expense, investment earnings, and other income (expense) were allocated to
the segments based upon each segment’s relative operating profit. The
Corporate segment income consists of equity in earnings of
affiliates.
|
(3)
|
As
of January 1, 2008, the Company modified its organizational structure,
resulting in a change in classification of certain Consumer Domestic
export sales. Therefore, 2007 results have been restated to
reflect a change in sales of $2.5 million and $0.3 million of Income
Before Minority Interest that are now included in the Consumer
International Segment.
|
Three Months
Ended
|
||||||||
March
28,
|
March
30,
|
|||||||
(In thousands) |
2008
|
2007
|
||||||
Household
Products
|
$ | 242,827 | $ | 236,378 | ||||
Personal
Care Products
|
139,917 | 133,456 | ||||||
Total
Consumer Domestic
|
382,744 | 369,834 | ||||||
Total
Consumer International
|
99,694 | 86,739 | ||||||
Total
SPD
|
70,429 | 57,762 | ||||||
Total
Consolidated Net Sales
|
$ | 552,867 | $ | 514,335 |
Three
Months Ended
|
||||||||
Cash Flow Analysis
(In
millions)
|
March
28, 2008
|
March
30, 2007
|
||||||
Net
Cash Provided by Operating Activities
|
$ | 62.7 | $ | 29.6 | ||||
Net
Cash Provided by (Used in) Investing Activities
|
$ | 4.2 | $ | (11.5 | ) | |||
Net
Cash Used in Financing Activities
|
$ | (108.8 | ) | $ | (20.8 | ) |
|
Accounts
receivable decreased $3.4 million due to decreases at certain foreign
subsidiaries.
|
|
Inventories
increased $3.5 million primarily to support higher anticipated sales.
|
|
Accounts
payable and other accrued expenses decreased $30.5 million primarily due
to incentive compensation and profit sharing
payments.
|
|
Taxes
payable increased $20.9 million due to higher tax expense associated with
higher earnings.
|
Net
Cash Provided by Operating Activities
|
$ | 62.7 | ||
Interest
Expense
|
12.5 | |||
Current
Portion Of Income Tax Provision
|
29.1 | |||
Tax
Benefit On Stock Options Exercised
|
1.9 | |||
Change
in Working Capital and Other Liabilities
|
11.6 | |||
Investment
Income
|
(2.6 | ) | ||
Other | 1.9 | |||
Adjusted
EBITDA (per loan agreement)
|
$ | 117.1 |
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
Nominees
|
For
|
Withheld
|
||||||
James
R. Craigie
|
56,687,171 | 845,196 | ||||||
Robert
A. Davies, III
|
56,525,701 | 1,006,666 | ||||||
Rosina
B. Dixon, M.D.
|
56,555,016 | 977,351 | ||||||
Robert
D. Leblanc
|
56,887,396 | 644,971 |
For
|
Against
|
Abstain
|
||
50,723,448
|
6,614,912
|
194,006
|
For
|
Against
|
Abstain
|
Broker Non-votes
|
|||
45,448,525
|
4,342,298
|
230,666
|
7,510,878
|
For
|
Against
|
Abstain
|
||
56,846,642
|
654,126
|
31,599
|
CHURCH & DWIGHT CO.,
INC.
|
|||
(REGISTRANT)
|
|||
DATE:
|
May
6, 2008
|
/s/
Matthew T. Farrell
|
|
MATTHEW
T. FARRELL
|
|||
CHIEF
FINANCIAL OFFICER
|
|||
DATE:
|
May
6, 2008
|
/s/
Steven J. Katz
|
|
STEVEN
J. KATZ
|
|||
VICE
PRESIDENT AND
|
|||
CONTROLLER
|
|||
(PRINCIPAL
ACCOUNTING OFFICER)
|
Vesting
Date
|
Shares for Which the Option is
Exercisable on the Vesting
Date
|
Third
anniversary of the Date of Grant
|
100
%
|
CHURCH
& DWIGHT CO., INC.
|
||
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Grantee:
|
||
Date:
|
Vesting
Date
|
Shares for Which the Option is
Exercisable on the Vesting
Date
|
Third
anniversary of the Date of Grant
|
100
%
|
CHURCH
& DWIGHT CO., INC.
|
||
By:
|
||
Name:
|
||
Title:
|
||
Grantee:
|
||
Date:
|
6.
|
CASH
OPTION, ISSUANCE OF COMMON STOCK FOR FEE-BASED
COMPENSATION:
|
3.1.
|
A
Director may elect to have all or any portion of the Compensation payable
to him or her with respect to a Plan Year deferred until his or her
Deferral Date. An election made pursuant to this Article III
shall be referred to as a “Deferral Election” and shall be irrevocable
once made.
|
3.2.
|
An
election to defer Compensation for a Plan Year, as well as any change or
revocation pursuant to Section 3.4 below, shall be made in writing, in a
form prescribed by the Board, and delivered to the Secretary of the
Corporation prior to the beginning of the Plan Year for which the
Compensation to be deferred is to be
earned.
|
3.3
|
Any
person who is elected as a Director by the Board to fill a vacancy, or who
is elected by the stockholders of the Corporation and who was not a
Director on the preceding December 31st, may elect, within thirty (30)
days following his or her election as a Director, to defer all or any
portion of Compensation to be earned for the balance of the Plan Year
following such election. Such election shall be irrevocable for
the Plan Year to which it relates.
|
3.4
|
A
Participant’s Deferral Election with respect to a Plan Year shall be
deemed to remain in effect with respect to the following Plan Year unless
the Participant revokes or changes such Deferral Election prior to the
commencement of such following Plan
Year.
|
4.1
|
The
Corporation shall establish, for each Director who elects to participate
in the Plan, a special ledger account (referred to herein as a “
Deferred Compensation
Account
”). Deferred Compensation Accounts shall be
maintained on the Corporation’s books and records solely as a device for
measuring the amount payable to a Participant under the
Plan. Deferred Compensation Accounts shall not constitute or be
treated as a trust fund of any kind. Notwithstanding the
foregoing, the Corporation may set aside shares of Common Stock and/or
other assets in a grantor "rabbi" trust or similar arrangement for the
purpose of providing benefits
hereunder.
|
4.2
|
Compensation
deferred under the Plan shall be credited to a Director’s Deferred
Compensation Account and, except as provided in Section 4.5, shall be
deemed to be invested in Stock Equivalent Units in the manner set forth in
Sections 4.3 and 4.4 hereof.
|
4.3
|
Except
as provided in Section 4.5, Compensation deferrals that are credited to a
Director’s Deferred Compensation Account shall be deemed to be invested in
Stock Equivalent Units from the date the Compensation would otherwise have
been paid. The number of Stock Equivalent Units (including
fractional Units) credited to each Director’s Deferred Compensation
Account as a result of a Deferral Election shall be derived by dividing
the Compensation deferred by the Director by the Closing Price of a share
of Common Stock on the day such Compensation would otherwise have been
paid.
|
4.4
|
If
the Corporation declares a stock dividend with respect to Common Stock,
then there shall be credited to each Participant’s Deferred Compensation
Account on the payment date of such dividend a number of Stock Equivalent
Units (including fractional Units) equal to the number of shares and
fractional shares of Common Stock that would have been received with
respect to the number of Stock Equivalent Units credited to such Deferred
Compensation Account as of the record date of such dividend had each Stock
Equivalent Unit been a share of Common Stock on such record
date. If the Corporation declares a cash dividend with respect
to Common Stock, then there shall be credited to each Participant’s
Deferred Compensation Account on the payment date of such dividend, a
number of Stock Equivalent Units that is equal to the number derived by
dividing (i) the total dollar amount of the cash dividends that would have
been received with respect to the number of Stock Equivalent Units
credited to a Participant’s Deferred Compensation Account as of the record
date of such dividend had each such Stock Equivalent Unit been a share of
Common Stock on such record date, by (ii) the Closing Price of a share of
Common Stock on such payment date.
|
4.5
|
Notwithstanding
anything contained herein to the contrary, a portion of the Deferred
Compensation Account of each Participant who was a non-employee director
of the Corporation prior to 1980, as set forth on the books and records of
the Corporation, shall not be deemed to be invested in Stock Equivalent
Units. Instead, such portion (referred to in the Plan as the
"
Cash
Account
") shall be deemed to be held in cash. As of the
last day of each calendar quarter, the balance of each Cash Account on
such date shall be credited with interest based on the applicable 90-day
dealer commercial paper rate as reported by
The Wall Street Journal
for the last business day of the immediately preceding calendar
quarter.
|
5.1
|
Except
as otherwise provided herein, all distributions hereunder shall be made in
shares of Common Stock issued pursuant to the Omnibus Stock Plan;
provided, however, that if shares of Common Stock are exchanged for and/or
are converted into other shares or consideration in connection with a
Change in Control, then distributions hereunder shall be made in such
other shares and/or consideration and any references hereunder to Common
Stock shall be deemed to refer to such other shares and/or other
consideration. The number of Stock Equivalent Units credited to
the Participant’s Deferred Compensation Account shall be reduced by an
equal number of shares and fractional shares of Common Stock (or cash in
lieu of fractional shares) distributed to the Participant under the
Omnibus Equity Plan to satisfy the obligations of the Corporation under
this Plan.
|
5.2
|
Upon,
or as soon as administratively practicable after, a Participant’s Deferral
Date, there shall be distributed to such Participant a number of shares,
of Common Stock that is equal to the number of Stock Equivalent Units
credited to his or her Deferred Compensation Account (any fractional Stock
Equivalent Units shall be distributed in cash based on the Closing Price
as of the Deferral Date); provided, however, that in no event shall
distribution be made later than December 31 of the year in which such
Deferral Date occurs. To the extent that a Participant's
Deferred Compensation Account consists of a Cash Account under Section
4.5, such Deferred Compensation Account shall be distributed in
cash. Upon full distribution of a Participant's Deferred
Compensation Account, his or her Deferred Compensation Account shall be
canceled.
|
5.3
|
(a)
|
In
lieu of a single distribution pursuant to Section 5.2, a Director may, by
written election delivered to the Secretary of the Corporation, elect to
have his or her Deferred Compensation Account distributed in annual
installments over a period of years, not to exceed a period of ten (10)
years, commencing with his or her Deferral Date. Such election
shall be made at the same time a Deferral Election is made under Article
III and may not be changed or revoked except as provided by Sections 5.4
or 5.5. No change in distribution form may be made after
distribution has been made or
commenced.
|
(b)
|
If
a Director elects to receive distribution of his or her Deferred
Compensation Account in annual installments, the first installment shall
be payable on the Director’s Deferral Date, and each subsequent
installment shall be payable on the succeeding anniversary date of the
Deferral Date. Each installment payment date shall be treated
as a separate payment date for purposes of Section 409A of the Code such
that each installment shall be considered timely paid if made by no later
than December 31 of the Plan Year in which the installment is payable.
Upon payment of the final installment due hereunder, the Director’s
Deferred Compensation Account shall be
canceled.
|
(c)
|
The
number of shares of Common Stock distributed in each annual installment
shall be equal to (i) the number of Stock Equivalent Units credited to the
Participant’s Deferred Compensation Account immediately before the
installment distribution, divided by (ii) the number of installment
payments, including the current installment payment, remaining to be
made. If a Participant's Cash Account is paid in installments,
the amount of each annual installment shall be equal to (i) the amount
credited to the Participant’s Cash Account immediately before the
installment distribution, divided by (ii) the number of installment
payments, including the current installment payment, remaining to be
made.
|
5.4
|
Notwithstanding
anything contained herein to the contrary (other than Section 5.5), a
Participant may file a written election with the Secretary of the
Corporation to change the form of distribution elected in the
Participant’s Deferral Election to a different form of distribution
permitted by this Article V, provided that the new Deferral Election is
filed with the Secretary of the Corporation at least twelve (12) months
before the Participant’s Deferral Date. If a Participant makes
such a change in the form of distribution of his or her Deferred
Compensation Account, then, notwithstanding anything contained in the Plan
or a Deferral Election to the contrary (other than Section 5.5), such
Participant’s Deferred Compensation Account shall be paid or commence to
be paid, as the case may be, on the first business day of January of the
fifth Plan Year following the Plan Year in which the Participant ceased to
be a Director and incurred a “separation from service” with respect to the
Corporation (within the meaning of Section 409A of the Code).
|
5.5
|
Notwithstanding
anything contained in the Plan to the contrary, a Participant shall be
permitted to elect to change the form of distribution elected in the
Participant’s Deferral Election to a different form of distribution
permitted by this Article V by filing a new Deferral Election with the
Secretary of the Corporation by no later than December 31,
2008. Any such election must be filed with the Secretary of the
Corporation by no later than December 31, 2008, apply only to amounts that
would not otherwise be payable during 2008 and may not cause an amount to
be paid in 2008 that would not otherwise have been paid in
2008.
|
5.6
|
Notwithstanding
anything contained in the Plan to the contrary, in the event of a Change
in Control, the Deferred Compensation Accounts of all Participants,
including Deferred Compensation Accounts that are then being paid in
installments, shall be immediately
distributed.
|
6.1
|
If
a Participant dies prior to his or her Deferral Date, there shall be
distributed to such Participant’s Beneficiary a number of shares of Common
Stock that is equal to the number of Stock Equivalent Units credited to
such Participant’s Deferred Compensation Account (any fractional Stock
Equivalent Units shall be distributed in cash based on the Closing Price
as of the Participant's date of death) and a cash amount equal to the
Participant's Cash Account, if any. Such distribution shall be
made as soon as administratively practicable following the Participant’s
death, but no later than the later of the December 31
st
following the Participant’s death or 75 days following the Participant’s
death.
|
6.2
|
If
a Participant who elected to receive installment distributions dies on or
after his or her Deferral Date, and before all amounts have been paid to
him or her under the Plan, there shall be distributed to such
Participant’s Beneficiary a number of shares of Common Stock that is equal
to the remaining number of Stock Equivalent Units that are credited to
such Participant’s Deferred Compensation Account (any fractional Stock
Equivalent Units shall be distributed in cash based on the Closing Price
as of the Participant's date of death) and a cash amount equal to the
Participant's Cash Account, if any. Such distribution shall be
made as soon as administratively practicable following the Participant’s
death, but no later than the later of the December 31
st
following the Participant’s death or 75 days following the Participant’s
death.
|
6.3
|
The
Participant’s Beneficiary shall not be permitted, directly or indirectly,
to designate the taxable year of
distribution.
|
6.4
|
If
the Board determines that an individual entitled to benefits under this
Plan is incompetent, the Board may direct that all shares distributable in
respect of the Participant’s Deferred Compensation Account be paid to the
individual’s spouse, or his or her legal guardian, for the Participant’s
benefit. The Board shall not be obligated to inquire as to the
actual use of the funds by the person receiving them, and any such payment
shall completely discharge the obligations of the Corporation under the
Plan.
|
7.1
|
No
Participant or Beneficiary shall have the right to transfer, assign,
alienate, anticipate, pledge, or encumber any part of the benefits
provided by this Plan, nor shall such benefits be subject to seizure by
legal process by any creditor of such Participant or
Beneficiary. Any attempt to effect such a diversion or seizure
shall be deemed null and void for all purposes
hereunder. Notwithstanding the foregoing or anything contained
in the Plan to the contrary, distribution of a Participant’s Deferred
Compensation Account may be accelerated to the extent necessary to fulfill
a domestic relations order (as defined in Section 414(p)(1)(B) of the
Code).
|
7.2
|
The
Corporation shall not be required to set aside funds for payment of
benefits under the Plan. Any liability of the Corporation to
any person with respect to benefits distributable under the Plan shall be
based solely upon such contractual obligations, if any, as shall be
created by the Plan, and shall give rise only to a claim against the
general assets of the Corporation. No such liability shall be
deemed to be secured by any pledge or any other encumbrance on any
specific property of the
Corporation.
|
7.3
|
The
Plan shall not confer on any Director any right to be retained as a member
of the Board.
|
7.4
|
Any
election or form that is required to be delivered or filed with the
Secretary of the Corporation shall be deemed delivered or filed with the
Secretary of the Corporation if timely delivered or filed with such
delegate of the Secretary of the Corporation as may be designated by the
Secretary of the Corporation or the
Board.
|
7.5
|
The
Corporation shall furnish each Director an annual statement showing the
balance in such Director’s Deferred Compensation Account as of the end of
each calendar year.
|
7.6
|
The
Compensation & Organization Committee of the Board shall administer,
construe, and interpret the Plan. The Committee’s construction
or interpretation of any provision of the Plan shall be final and
conclusive on the Corporation, each Director and his or her
Beneficiary.
|
7.7
|
The
Board may amend or terminate the Plan at any time, provided that no
amendment or termination shall affect the right of a Director or his or
her Beneficiary to payment of his or her Deferred Compensation Account
accrued through the date of such amendment or termination, as provided
herein. Upon termination of the Plan, the Board may distribute
all Deferred Compensation Accounts in accordance with Treasury Regulation
§1.409A-3(j)(4)(ix).
|
7.8
|
The
Plan shall be binding upon, and shall inure to the benefit of the heirs,
legatees and personal representatives of the Directors, and upon any
successors and assigns of the
Corporation.
|
7.9
|
The
Corporation shall be entitled to withhold taxes from amounts payable to
any person under the Plan in such amounts as may be required by applicable
law.
|
7.10
|
The
rights and obligations of all persons affected hereby shall be construed
and determined in accordance with the laws of the State of New Jersey,
without regard to conflicts or choice of law
principles.
|
7.11
|
This
Plan shall be interpreted to avoid any penalty sanctions under Section
409A of the Code. If any payment or benefit cannot be provided
or made at the time specified herein without incurring sanctions under
Section 409A, then such benefit or payment shall be provided in full at
the earliest time thereafter when such sanctions will not be
imposed. For purposes of Section 409A of the Code, each payment
made under this Plan shall be treated as a separate payment. In
no event may a Participant, directly or indirectly, designate the calendar
year of payment.
|
CHURCH
& DWIGHT CO., INC.
|
||
By:
|
||
Name:
|
||
Title:
|
WITNESS:
|
|
Three
Months Ended
|
||||||||
March
28, 2008
|
March
30, 2007
|
|||||||
BASIC:
|
||||||||
Net
Income
|
$ | 56,191 | $ | 45,099 | ||||
Weighted
average shares outstanding
|
66,343 | 65,570 | ||||||
Basic
earnings per share
|
$ | 0.85 | $ | 0.69 | ||||
DILUTED:
|
||||||||
Net
Income
|
$ | 56,191 | $ | 45,099 | ||||
After-tax
interest cost of convertible debt
|
918 | 922 | ||||||
Net
Income plus assumed debt conversion
|
$ | 57,109 | $ | 46,021 | ||||
Weighted
average shares outstanding
|
66,343 | 65,570 | ||||||
Dilutive
effect of convertible debt
|
3,234 | 3,226 | ||||||
Incremental
shares under stock option plans
|
1,240 | 1,228 | ||||||
Adjusted
weighted average shares outstanding
|
70,817 | 70,024 | ||||||
Diluted
earnings per share
|
$ | 0.81 | $ | 0.66 |
1.
|
I
have reviewed this quarterly report on Form 10-Q of Church & Dwight
Co., Inc.;
|
2.
|
Based
on my knowledge, this 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
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this 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
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-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, 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 report
is being prepared;
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on our evaluation;
and
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
|
May
6, 2008
|
/s/
James R. Craigie
|
|
James
R. Craigie
|
|||
Chief
Executive Officer
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Church & Dwight
Co., Inc.;
|
2.
|
Based
on my knowledge, this 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
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this 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
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-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, 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 report is being
prepared;
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on our evaluation;
and
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
|
May
6, 2008
|
/s/
Matthew T. Farrell
|
|
Matthew
T. Farrell
|
|||
Chief
Financial Officer
|
By:
|
/s/
James R. Craigie
|
|||
James
R. Craigie
|
||||
Chief
Executive Officer
|
||||
Dated:
|
May
6, 2008
|
|||
By:
|
/s/
Matthew T. Farrell
|
|||
Matthew
T. Farrell
|
||||
Chief
Financial Officer
|
||||
Dated:
|
May
6, 2008
|
|||