UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October~~April 1, ~~2004~~2005

Commission file ~~Number~~number 1-10585

CHURCH & DWIGHT CO., INC.

(Exact name of registrant as specified in its charter)

Delaware

13-4996950

(State or other jurisdiction of

of incorporation or organization)

(I.R.S. Employer

Identification No.)


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 ¨

As of ~~November 5, 2004,~~May 6, 2005, there were ~~62,379,765~~63,485,239 shares of Common Stock outstanding.

TABLE OF CONTENTS

ITEM
   PAGE
PART I
1.
Financial Statements    3
2.
Management’s Discussion and Analysis    21
3.
Quantitative and Qualitative Disclosure About Market Risk    26
4.
Controls and Procedures    26
PART II
6.
Exhibits    27

PART I


ITEM		PAGE
1.	Financial Statements	3
2.	Management’s Discussion and Analysis	15
3.	Quantitative and Qualitative Disclosure About Market Risk	18
4.	Controls and Procedures	18

	PART II

4.	Submission of Matters to a Vote of Security Holders	19
6.	Exhibits	19

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						Nine Months Ended						Three Months Ended
*(Dollars in thousands, except per share data)*	Oct. 1, 2004			Sept. 26, 2003			Oct. 1, 2004			Sept. 26, 2003			Apr. 1, 2005			Apr. 2, 2004
Net Sales	$	420,310		$	265,566		$	1,057,086		$	770,127		$	420,674		$	295,991
Cost of sales		259,721			185,024			680,259			536,178			260,437			199,429

Gross Profit		160,589			80,542			376,827			233,949			160,237			96,562
Marketing expense		51,019			22,905			111,325			66,136			37,647			24,188
Selling, general and administrative expenses		56,169			28,763			132,213			85,109			55,438			33,914

Income from Operations		53,401			28,874			133,289			82,704			67,152			38,460
Equity in earnings of affiliates		1,143			5,164			13,759			25,844			1,270			9,824
Investment earnings		860			256			1,699			910			783			464
Loss on early extinguishment of debt		—			—			(7,995	)		—
Other income (expense), net		551			(83	)		860			534
Other income (expense) — net														(740	)		425
Interest expense		(17,786	)		(4,821	)		(29,336	)		(14,716	)		(10,610	)		(4,531	)

Income before taxes and minority interest		38,169			29,390			112,276			95,276
Income before minority interest and taxes														57,855			44,642
Minority interest														(9	)		6

Income before taxes														57,864			44,636
Income taxes		10,764			9,861			35,379			30,160			20,163			14,730
Minority interest		4			7			17			22

Net Income		27,401			19,522			76,880			65,094			37,701			29,906
Retained earnings at beginning of period		478,603			406,748			435,677			367,211			510,480			435,677

		506,004			426,270			512,557			432,205			548,181			465,583
Dividends paid		3,708			3,223			10,261			9,258			3,799			3,268

Retained earnings at end of period	$	502,296		$	423,047		$	502,296		$	423,047		$	544,382		$	462,315

Weighted average shares outstanding - Basic		62,005			60,477			61,641			60,198			63,321			61,323

Weighted average shares outstanding - Diluted		64,935			63,372			64,754			63,087			69,002			67,710

Earnings Per Share:

Net income per share - Basic	$	0.44		$	0.32		$	1.25		$	1.08		$	0.60		$	0.49

Net income per share - Diluted	$	0.42		$	0.31		$	1.19		$	1.03		$	0.56		$	0.46

Dividends Per Share	$	0.06		$	0.05		$	0.17		$	0.15
Dividends per share													$	0.06		$	0.05

See Notes to Condensed Consolidated Financial Statements.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

   Oct. 1, 2004
Dec. 31, 2003

   (Unaudited)
Assets

Current Assets

Cash and cash equivalents
   $ 145,440 $ 75,634
Accounts receivable, less allowances of $3,176 and $1,969
   198,141 107,553
Inventories
   152,666 84,176
Deferred income taxes
   10,285 14,109
Note receivable – current
   1,015 942
Net assets held for sale
   11,000 —
Prepaid expenses
   8,231 6,808


Total Current Assets
   526,778 289,222


Property, Plant and Equipment (Net)
   330,827 258,010
Note Receivable
   7,751 8,766
Equity Investment in Affiliates
   13,223 152,575
Long-term Supply Contracts
   5,078 5,668
Tradenames and Other Intangibles
   372,444 119,374
Goodwill
   565,573 259,444
Other Assets
   43,705 26,558


Total Assets
   $ 1,865,379 $ 1,119,617


Liabilities and Stockholders’ Equity

Current Liabilities

Short-term borrowings
   $ 105,210 $ 62,337
Accounts payable and accrued expenses
   249,087 148,958
Current portion of long-term debt
   6,948 3,560
Income taxes payable
   17,193 17,199


Total current liabilities
   378,438 232,054


Long-term Debt
   789,676 331,149
Deferred Income Taxes
   80,460 61,000
Deferred and Other Long Term Liabilities
   66,242 40,723
Postretirement and Postemployment Benefits
   18,571 15,900
Minority Interest
   284 297
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 69,991,482 shares
   69,991 46,661
Additional paid-in capital
   39,598 51,212
Retained earnings
   502,296 435,677
Accumulated other comprehensive (loss)
   (7,941 ) (13,962 )


   603,944 519,588
Common stock in treasury, at cost:

7,637,954 shares in 2004 and 8,812,445 shares in 2003
   (72,236 ) (81,094 )


Total Stockholders’ Equity
   531,708 438,494


Total Liabilities and Stockholders’ Equity
   $ 1,865,379 $ 1,119,617


*(Dollars in thousands, except share data)*	Apr. 1, 2005			Dec. 31, 2004
Assets
Current Assets
Cash and cash equivalents	$	101,902		$	145,540
Accounts receivable, less allowances of $1,879 and $1,171		187,944			166,203
Inventories		157,837			148,898
Deferred income taxes		5,308			7,600
Current portion of long-term note receivable		1,213			1,015
Prepaid expenses		10,741			11,240
Assets held for sale		13,300			13,300

Total Current Assets		478,245			493,796

Property, Plant and Equipment (Net)		331,212			332,204
Note Receivable		6,324			7,751
Equity Investment in Affiliates		12,590			13,255
Long-term Supply Contracts		4,684			4,881
Tradenames and Other Intangibles		472,439			474,285
Goodwill		512,941			511,643
Other Assets		42,501			40,183

Total Assets	$	1,860,936		$	1,877,998

Liabilities and Stockholders’ Equity
Current Liabilities
Short-term borrowings	$	106,538		$	98,239
Accounts payable and accrued expenses		231,196			242,024
Current portion of long-term debt		4,564			5,797
Income taxes payable		23,598			11,479

Total Current Liabilities		365,896			357,539

Long-term Debt		679,356			754,706
Deferred Income Taxes		114,338			108,216
Deferred and Other Long-term Liabilities		42,795			39,384
Pension, Nonpension Postretirement and Postemployment Benefits		57,260			57,836
Minority Interest		281			287
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 69,991,482 shares		69,991			69,991
Additional paid-in capital		50,597			47,444
Retained earnings		544,382			510,480
Accumulated other comprehensive (loss)		(1,385	)		(3,110	)

		663,585			624,805
Common stock in treasury, at cost:
6,542,719 shares in 2005 and 6,803,296 shares in 2004		(62,575	)		(64,775	)

Total Stockholders’ Equity		601,010			560,030

Total Liabilities and Stockholders’ Equity	$	1,860,936		$	1,877,998

See Notes to Condensed Consolidated Financial Statements.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)


	Nine Months Ended						Three Months Ended
*(Dollars in thousands)*	Oct 1, 2004			Sept. 26, 2003			Apr. 1, 2005			Apr. 2, 2004
Cash Flow From Operating Activities
Net Income	$	76,880		$	65,094		$	37,701		$	29,906
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		28,891			22,300			10,895			8,984
Net loss (gain) on disposal of assets								154			(346	)
Equity in earnings of affiliates		(13,759	)		(25,844	)		(1,270	)		(9,824	)
Deferred income taxes		13,209			10,120			4,118			6,099
Plant impairment charge and other asset write-offs		2,208			—
Net loss on early extinguishment of debt		7,995			—
Other		(138	)		26
Other (principally foreign exchange)								2,310			(62	)
Change in assets and liabilities:
Decrease in accounts receivable		6,725			10
(Increase) decrease in inventories		(1,527	)		5,511
(Increase) decrease in accounts receivable								(21,775	)		6,254
Increase in inventories								(8,952	)		(14,143	)
Decrease in prepaid expenses		2,183			1,615			484			233
Increase (decrease) in accounts payable		16,953			(11,947	)
Decrease in accounts payable and accrued expenses								(10,856	)		(1,013	)
Increase in income taxes payable		4,177			11,221			14,475			4,813
Decrease in other liabilities		166			752
Increase in other liabilities								3,877			210

Net Cash Provided By Operating Activities		143,963			78,858			31,161			31,111

Cash Flow From Investing Activities
Additions to property, plant and equipment		(22,364	)		(22,474	)		(7,951	)		(6,396	)
Armkel acquisition (net of cash acquired)		(194,375	)		—
Proceeds from note receivable		942			870
Distributions from affiliates		4,301			3,629			1,937			1,218
Proceeds from notes receivable								1,015			942
Proceeds from sale of fixed assets								—			916
Contingent acquisition payments		(5,068	)		(3,424	)		(561	)		(3,000	)
Other long-term assets		(1,615	)		(1,440	)
Proceeds from sale of fixed assets		1,131			—
Other								128			(240	)

Net Cash Used In Investing Activities		(217,048	)		(22,839	)		(5,432	)		(6,560	)

Cash Flow From Financing Activities
Long-term debt borrowing		540,000			100,000
Long-term debt (repayment)		(436,896	)		(208,438	)
Short-term debt borrowing		43,700			60,000
Short-term debt (repayment)		(1,689	)		(2,469	)
Repayment of long-term debt								(77,128	)		(32,643	)
Net borrowing of short-term debt								8,946			—
Proceeds from stock options exercised		10,885			7,118			2,839			2,614
Payment of cash dividends		(10,261	)		(9,258	)		(3,798	)		(3,268	)
Deferred financing costs		(3,662	)		(3,442	)		(261	)		(222	)

Net Cash Provided by (Used In) Financing Activities		142,077			(56,489	)
Net Cash Used In Financing Activities								(69,402	)		(33,519	)

Effect of exchange rate changes on cash and cash equivalents		814			864			35			—

Net Change In Cash and Cash Equivalents		69,806			394			(43,638	)		(8,968	)
Cash And Cash Equivalents At Beginning Of Year		75,634			76,302			145,540			75,634

Cash And Cash Equivalents At End Of Period	$	145,440		$	76,696		$	101,902		$	66,666

Acquisitions in which liabilities were assumed are as follows:
Fair value of assets	$	902,146		$	—
Cash paid and investment in and receivable from Armkel		416,514			—

Liabilities assumed	$	485,632		$	—

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 ~~October~~April 1, ~~2004,~~2005 and the consolidated statements of income and ~~retained earnings for the three and nine months ended October 1, 2004 and September 26, 2003 and the~~ consolidated statements of cash flow for the ~~nine~~three months ~~then ended~~ending April 1, 2005 and April 2, 2004 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 ~~October~~April 1, ~~2004~~2005 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 annual report on Form 10-K for the year ended December 31, ~~2003.~~2004. The results of operations for the period ended ~~October~~April 1, ~~2004~~2005 are not necessarily indicative of the operating results for the full year.

On May 28, 2004, the Company ~~completed the previously announced purchase of~~purchased the remaining 50% ownership interest of Armkel, LLC (“Armkel”) that it did not own from affiliates of Kelso & Company (“~~Kelso interest”~~the Armkel acquisition”) for a purchase price of ~~$253.7~~approximately $262.0 million ~~plus fees~~ and Armkel was merged into the Company. Results of operations for ~~the~~Armkel’s business are included in the Company’s consolidated financial statements from May 29, 2004. Prior to May 28, 2004, the Company accounted for its investment in Armkel under the equity method. All material intercompany transactions and profits have been eliminated in consolidation.

The Company’s fiscal year begins on January 1 of the year stated and ends on December 31. Quarterly periods are based on a ~~4-4-5~~4 weeks - 4 weeks - 5 weeks methodology. As a result, the first quarter can include a partial or expanded week in the first four week period of the quarter. Similarly, the last five week period in the fourth quarter could be a partial or expanded week.

2. Inventories consist of the following:


*(In thousands)*	Oct. 1, 2004		Dec. 31, 2003		April 1, 2005		Dec. 31, 2004
Raw materials and supplies	$	44,997	$	26,205	$	43,976	$	40,996
Work in process		7,405		204		8,155		7,310
Finished goods		100,264		57,767		105,706		100,592

	$	152,666	$	84,176	$	157,837	$	148,898

3. Property, Plant and Equipment consist of the following:

(In thousands)

   Oct. 1, 2004
   Dec. 31, 2003
Land
   $ 13,649    $ 6,165
Buildings and improvements
   132,680    109,860
Machinery and equipment
   339,098    295,255
Office equipment and other assets
   33,783    27,753
Software
   17,830    12,459
Mineral rights
   583    571
Construction in progress
   18,490    9,574


   556,113    461,637
Less accumulated depreciation, depletion and amortization
   225,286    203,627


Net Property, Plant and Equipment
   $ 330,827    $ 258,010

In the second quarter of 2004 the Company recorded a plant impairment charge of $1.5 million, which was recorded as cost of sales in the Consumer Domestic segment, as the value could not be supported by projected cash flows.

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~


*(In thousands)*	Apr. 1, 2005		Dec. 31, 2004
Land	$	13,547	$	13,594
Buildings and improvements		135,432		135,329
Machinery and equipment		351,419		350,591
Office equipment and other assets		37,394		37,255
Software		17,148		16,733
Mineral rights		997		999
Construction in progress		16,066		10,421

		572,003		564,922
Less accumulated depreciation, depletion and amortization		240,791		232,718

Net Property, Plant and Equipment	$	331,212	$	332,204

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.~~outstanding and the dilutive effect of contingently convertible debt instruments. 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		Nine Months Ended		Three Months Ended
*(In thousands)*	Oct. 1, 2004	Sept 26, 2003	Oct. 1, 2004	Sept. 26, 2003	Apr. 1 2005	Apr. 2, 2004
Basic	62,005	60,477	61,641	60,198	63,321	61,323
Dilutive effect of stock options	2,930	2,895	3,113	2,889	2,455	3,161
Dilutive effect of convertible debt					3,226	3,226

Diluted	64,935	63,372	64,754	63,087	69,002	67,710

Anti-dilutive stock options outstanding	86	842	888	1,616	20	—

On August 6, 2004 the Company announced a 3 for 2 stock split. The shares resulting from the stock split were distributed on September 1, 2004 to stockholders of record at the close of business on August 16, 2004. All share and per share information in this report reflects the impact of the stock split.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

In August 2003, the Company issued $100 million of 5.25% convertible senior debentures that may be converted into shares of the Company’s common stock prior to maturity at a conversion price of approximately $31.00 per share, subject to adjustment in certain circumstances. Because of the inclusion of a contingent convertibility feature of the debentures, the Company’s diluted net income per common share does not give effect to the dilution from the conversion of the debentures until the Company’s share price exceeds 120% of the initial conversion price or the occurrence of other specified events.

The Emerging Issues Task Force (EITF) concluded in EITF Issue 04-8: The Effect of Contingently Convertible Debt on Diluted Earnings per Share that contingently convertible debt (“Co-Cos”) be treated for diluted EPS purposes as if converted from debt to equity, beginning with the date the contingently convertible debt instrument is initially issued, even if the triggering events (such as stock price) have not yet occurred. The effective date would be reporting periods ending on or after December 15, 2004 and prior period EPS amounts presented for comparative purposes, would have to be restated.

~~The change in accounting rules for reporting Co-Cos will have an estimated $0.02 dilutive effect on earnings per share in 2004.~~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 (“APB 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”. In connection with ~~purchasing Kelso’s interest in~~the Armkel acquisition, the Company paid cash and issued options to purchase 97,500 shares of Company common stock at an exercise price of $22.88 per share to certain executives ~~under~~in accordance with the provisions of Armkel’s Equity Appreciation Rights Plan (“EAR Plan”). The unvested portion of the EAR Plan options is being amortized over a two year vesting period and is recognized as expense as vesting occurs. In ~~2004,~~2005, the amount recognized as expense for the stock options granted under the EAR Plan was ~~$0.17~~$0.3 million for the ~~third quarter and was $0.23 million for the nine months ended October 1, 2004.~~

~~During 2004, options to purchase approximately 900 thousand shares of Company common stock were granted at an average fair value of $10.58 per share.~~first quarter.

The Company’s pro forma net income and pro forma net income per share for the ~~third~~first quarter of ~~2004~~2005 and ~~2003,~~2004, determined as if the Company had adopted the fair value method of SFAS 123, are as follows:

   Three Months Ended
Nine Months Ended

(In thousands, except for per share data)

   Oct. 1, 2004
Sept. 26, 2003
Oct. 1, 2004
Sept. 26, 2003

Net Income

As reported
   $ 27,401 $ 19,522 $ 76,880 $ 65,094
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects
   172 —   229 —
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects
   (1,272 ) (1,043 ) (3,381 ) (2,862 )


Pro forma
   $ 26,301 $ 18,479 $ 73,728 $ 62,232


Net Income per Share: basic

As reported
   $ 0.44 $ 0.32 $ 1.25 $ 1.08
Pro forma
   $ 0.42 $ 0.30 $ 1.19 $ 1.03
Net Income per Share: diluted

As reported
   $ 0.42 $ 0.31 $ 1.19 $ 1.03
Pro forma
   $ 0.40 $ 0.29 $ 1.13 $ 0.98

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~


	Three Months Ended
*(In thousands, except for per share data)*	Apr. 1, 2005			Apr. 2, 2004
Net Income
As reported	$	37,701		$	29,906
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		172			—
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(1,270	)		(1,037	)

Pro forma	$	36,603		$	28,869

Net Income per Share: basic
As reported	$	0.60		$	0.49
Pro forma	$	0.58		$	0.47
Net Income per Share: diluted
As reported	$	0.56		$	0.46
Pro forma	$	0.54		$	0.44

6. Segment Information

~~As a result of purchasing the Kelso interest, the~~The Company ~~has redefined its operating~~maintains three reportable segments. These segments are based on differences in the nature of products and organizational and ownership structures. Specifically, the Company has identified the following segments: Consumer Domestic, Consumer International and Specialty Products Division (“SPD”).

Segment revenues are derived from the sale of the following products:


*Segment*		Products
Consumer Domestic		Deodorizing and cleaning, laundry, and personal care products
Consumer International		Primarily personal care products
SPD		Specialty chemical products

The ~~domestic results~~Company has 50 percent ownership interests in Armand Products Company (“Armand”) and The ArmaKleen Company (“ArmaKleen”). Since the Company does not control these entities, they are accounted for under the equity method in the consolidated financial statements of the ~~acquired~~Company. With respect to periods prior to the Armkel ~~business since May 29, 2004~~acquisition, the equity earnings of Armkel’s domestic results are included in the Consumer Domestic segment, and ~~Armkel’s former~~its international ~~subsidiaries (in addition to the Company’s existing international consumer subsidiary) comprise~~results in the Consumer International segment. ~~There has been no change to the SPD segment.~~ The ~~Company’s~~equity earnings ~~prior to its acquisition~~ of ~~Kelso’s interest in Armkel, attributable to the Company’s equity investment in Armkel’s domestic~~Armand and ~~international operations~~ArmaKleen are included in ~~Income Before Taxes and Minority Interest~~Corporate.

Some of the ~~Consumer Domestic and Consumer International segments, respectively. The Company’s earnings attributable to its equity investment in Armand Products and The Armakleen Company~~subsidiaries that are included in ~~Income Before Taxes~~Consumer International manufacture and ~~Minority Interest of~~sell personal care products to Consumer Domestic. These sales are eliminated from the ~~Corporate segment. Prior to purchasing Kelso’s interest in Armkel, the Company’s segments were: Church~~Consumer International results.

CHURCH & ~~Dwight Consumer, Armkel, Church & Dwight SPD, and Other Equity Affiliates. All prior periods have been conformed to the new segment presentation.~~DWIGHT CO., INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Segment sales and income before taxes and minority interest for the ~~third quarter~~first quarters of 2005 and ~~nine month periods of~~ 2004 ~~and 2003 and total segment assets as of October 1, 2004 and December 31, 2003~~ are as follows:

(in thousands)

   Consumer
Domestic
   Consumer
Internat’l
   SPD
   Corporate
   Total
Net Sales

Third Quarter 2004
   $ 299,285    $ 69,890    $ 51,135    —      $ 420,310
Third Quarter 2003
   208,604    9,812    47,150    —      265,566
2004 Year to Date
   794,205    107,773    155,108    —      1,057,086
2003 Year to Date
   605,223    26,961    137,943    —      770,127
Income Before Taxes and Minority Interest⁽¹⁾

Third Quarter 2004
   28,237    4,922    3,866    1,144    38,169
Third Quarter 2003
   22,305    2,760    3,642    683    29,390
2004 Year to Date
   82,365    13,865    13,063    2,983    112,276
2003 Year to Date
   72,413    9,037    11,332    2,494    95,276
Total Assets

October 1, 2004
   $ 1,368,932    $ 263,941    $ 166,621    $ 65,886    $ 1,865,380
December 31, 2003
   $ 841,036    $ 50,868    $ 166,953    $ 60,760    $ 1,119,617


*(in thousands)*	Consumer Domestic		Consumer Internat’l		SPD		Corporate		Total
Net Sales
First Quarter 2005	$	297,716	$	69,355	$	53,603	$	—	$	420,674
First Quarter 2004		236,055		9,027		50,909		—		295,991
Income Before Taxes and Minority Interest⁽¹⁾
First Quarter 2005		40,992		10,852		4,741		1,270		57,855
First Quarter 2004		33,790		4,634		5,476		742		44,642

⁽¹⁾

In determining Income Before Taxes and Minority Interest, Interest Expense, Interest Income, ~~Loss on Early Extinguishment of Debt~~ and Other Income ~~(expense)~~(Expense) were allocated to the segments based upon each ~~segments’~~segment’s relative Operating Profit. The equity earnings of Armand and ArmaKleen are included in Corporate.

~~The Company’s net sales and total assets changed significantly since December 31, 2003 as a result of the consolidation of the operations and the assets associated with the former Armkel business.~~

The following table ~~shows~~discloses product line revenues from external customers for the three ~~and nine~~ months ended ~~October~~April 1, ~~2004~~2005 and ~~September 26, 2003:~~April 2, 2004.


	Three Months Ended				Nine Months Ended				Three Months Ended
*(In thousands)*	Oct. 1, 2004		Sept 26, 2003		Oct. 1, 2004		Sept. 26, 2003		Apr. 1, 2005		Apr. 2, 2004
Deodorizing Products	$	68,824	$	61,337	$	194,489	$	175,663	$	63,759	$	61,062
Laundry Products		105,846		105,536		315,109		304,344		103,487		105,509
Personal Care Products		124,615		41,731		284,607		125,216		130,470		69,484

Total Consumer Domestic		299,285		208,604		794,205		605,223		297,716		236,055
Total Consumer International		69,890		9,812		107,773		26,961		69,355		9,027
Total SPD		51,135		47,150		155,108		137,943		53,603		50,909

Total Consolidated Net Sales	$	420,310	$	265,566	$	1,057,086	$	770,127	$	420,674	$	295,991

7. Supplemental Financial Information of Guarantor and Non-Guarantor Operations

The 6% senior subordinated notes are fully and unconditionally guaranteed by Church & Dwight Company, a Wyoming corporation, and the 9 ½% senior subordinated notes are fully and unconditionally guaranteed by several domestic subsidiaries of the Company on a joint and several basis. The guarantor financial information includes the Parent Company and an immaterial subsidiary whose total assets are approximately 1% of total guarantor assets. The following information is being presented in response to Item 3-10 of Regulation S-X, promulgated by the Securities and Exchange Commission.

Supplemental information for condensed consolidated balance sheets at April 1, 2005 and December 31, 2004, condensed consolidated income statements and statements of cash flows for the three months ended April 1, 2005 and April 2, 2004 are summarized as follows (amounts in thousands):

Statements of Income


	For The Three Months Ended April 1, 2005
	Company and Guarantor		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net sales	$	346,596	$	82,806	$	(8,728	)	$	420,674
Gross profit		124,582		35,655		—			160,237
Income before taxes		43,386		14,469		—			57,855
Net Income		27,428		10,273		—			37,701

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

~~7. Supplemental Financial Information of Guarantor and Non-Guarantor Operations~~


	For The Three Months Ended April 2, 2004
	Company and Guarantor		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net sales	$	278,562	$	22,213	$	(4,784	)	$	295,991
Gross profit		91,039		5,523		—			96,562
Income before taxes		41,425		3,217		—			44,642
Net Income		27,606		2,300		—			29,906

~~The 9~~¹/2 % senior subordinated notes due 2009 assumed by the Company as a result of Armkel’s merger into the Company are fully and unconditionally guaranteed by Church & Dwight Co., Inc. and certain domestic subsidiaries of the Company on a joint and several basis.Consolidated Balance Sheets

Supplemental information for condensed consolidated balance sheets at October 1, 2004 and December 31, 2003, condensed consolidated income statements for the three and nine months ended October 1, 2004 and September 26, 2003, and condensed consolidated statements of cash flows for the nine-month periods ended October 1, 2004 and September 26, 2003 is summarized as follows (amounts in thousands):


	April 1, 2005
	Company and Guarantor		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Total Current Assets	$	170,973	$	307,272	$	—		$	478,245
Other Assets		1,423,839		115,108		(156,256	)		1,382,691

Total Assets	$	1,594,812	$	422,380	$	(156,256	)	$	1,860,936

Liabilities and Stockholders’ Equity

Total Current Liabilities	$	168,868	$	197,028	$	—		$	365,896
Other Liabilities		857,828		114,232		(78,030	)		894,030
Total Stockholders’ Equity		568,116		111,120		(78,226	)		601,010

Total Liabilities and Stockholders’ Equity	$	1,594,812	$	422,380	$	(156,256	)	$	1,860,936

~~Statements of Income~~

For The Three Months Ended
October 1, 2004


Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations

Total
Consolidated

Net sales
   $ 346,653 $ 80,842 $ (7,185 ) $ 420,310
Cost of sales
   220,293 46,613 (7,185 ) 259,721


Gross profit
   126,360 34,229 —   160,589
Operating expenses
   81,600 25,588 —   107,188


Income from operations
   44,760 8,641 —   53,401
Equity in earnings of affiliates
   1,143 —   —   1,143
Investment earnings
   537 323 —   860
Intercompany income (expense)
   121 (121 ) —   —
Other income (expense)
   (362 ) 913 —   551
Interest expense
   (16,753 ) (1,033 ) —   (17,786 )


Income before taxes
   29,446 8,723 —   38,169
Income taxes
   8,195 2,569 —   10,764
Minority interest
   4 —   —   4


Net Income
   $ 21,247 $ 6,154 $ —   $ 27,401

~~Statements of Income~~

For The Three Months Ended
September 26, 2003


Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations
Total
Consolidated

Net sales
   $ 250,197 $ 19,836 $ (4,467 ) $ 265,566
Cost of sales
   174,455 15,036 (4,467 ) 185,024


Gross profit
   75,742 4,800 —   80,542
Operating expenses
   49,903 1,765 —   51,668


Income from operations
   25,839 3,035 —   28,874
Equity in earnings of affiliates
   5,164 —   —   5,164
Investment earnings
   208 48 —   256
Intercompany income (expense)
   (889 ) 889 —   —
Other income (expense)
   (19 ) (64 ) —   (83 )
Interest expense
   (4,240 ) (581 ) —   (4,821 )


Income before taxes
   26,063 3,327 —   29,390
Income taxes
   8,945 916 —   9,861
Minority interest
   7 —   —   7


Net Income
   $ 17,111 $ 2,411 $ —   $ 19,522


	December 31, 2004
	Company and Guarantor		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Total Current Assets	$	218,034	$	275,762	$	—		$	493,796
Other Assets		1,441,369		113,597		(170,764	)		1,384,202

Total Assets	$	1,659,403	$	389,359	$	(170,764	)	$	1,877,998

Liabilities and Stockholders’ Equity

Total Current Liabilities	$	197,139	$	160,402	$	(2	)	$	357,539
Other Liabilities		923,524		118,244		(81,339	)		960,429
Total Stockholders’ Equity		538,740		110,713		(89,423	)		560,030

Total Liabilities and Stockholders’ Equity	$	1,659,403	$	389,359	$	(170,764	)	$	1,877,998

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~- (Continued)~~

~~Statements of Income~~

For The Nine Months Ended
October 1, 2004


Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations
Total
Consolidated

Net sales
   $ 930,367 $ 144,535 $ (17,816 ) $ 1,057,086
Cost of sales
   608,775 89,300 (17,816 ) 680,259


Gross profit
   321,592 55,235 —   376,827
Operating expenses
   204,535 39,003 —   243,538


Income from operations
   117,057 16,232 —   133,289
Equity in earnings of affiliates
   13,759 —   —   13,759
Investment earnings
   1,211 488 —   1,699
Intercompany income (expense)
   (673 ) 673 —   —
Other income (expense)
   (8,007 ) 872 —   (7,135 )
Interest expense
   (27,270 ) (2,066 ) —   (29,336 )


Income before taxes
   96,077 16,199 —   112,276
Income taxes
   30,572 4,807 —   35,379
Minority interest
   17 —   —   17


Net Income
   $ 65,488 $ 11,392 $ —   $ 76,880

~~Statements of Income~~

For The Nine Months Ended
September 26, 2003


Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations
Total
Consolidated

Net sales
   $ 725,363 $ 58,410 $ (13,646 ) $ 770,127
Cost of sales
   504,176 45,648 (13,646 ) 536,178


Gross profit
   221,187 12,762 —   233,949
Operating expenses
   144,453 6,792 —   151,245


Income from operations
   76,734 5,970 —   82,704
Equity in earnings of affiliates
   25,844 —   —   25,844
Investment earnings
   845 65 —   910
Intercompany income (expense)
   (2,537 ) 2,537 —   —
Other income (expense)
   172 362 —   534
Interest expense
   (13,011 ) (1,705 ) —   (14,716 )


Income before taxes
   88,047 7,229 —   95,276
Income taxes
   28,128 2,032 —   30,160
Minority interest
   22 —   —   22


Net Income
   $ 59,897 $ 5,197 $ —   $ 65,094

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~Consolidated Balance Sheet~~

   October 1, 2004


Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations
Total
Consolidated

Current Assets

Cash and cash equivalents
   $ 93,992 $ 51,448 $ —   $ 145,440
Accounts receivable (net of allowances)
   3,335 194,806 —   198,141
Inventories
   109,037 43,629 —   152,666
Deferred income taxes
   8,410 1,875 —   10,285
Note receivable – current
   1,015 —   —   1,015
Net assets held for sale
   11,000 —   —   11,000
Prepaid expenses
   4,962 3,269 —   8,231


Total Current Assets
   231,751 295,027 —   526,778


Property, Plant and Equipment (Net)
   277,507 53,320 —   330,827
Notes Receivable
   75,019 —   (67,268 ) 7,751
Equity Investment in Affiliates
   113,640 —   (100,417 ) 13,223
Long-term Supply Contracts
   5,078 —   —   5,078
Tradenames and Other Intangibles
   337,559 34,885 —   372,444
Goodwill
   557,705 7,868 —   565,573
Other Assets
   38,464 5,241 —   43,705


Total Assets
   $ 1,636,723 $ 396,341 $ (167,685 ) $ 1,865,379


Liabilities and Stockholders’ Equity

Current Liabilities

Short-term borrowings
   $ —   $ 105,210 $ —   $ 105,210
Accounts payable and accrued expenses
   175,290 73,818 (21 ) 249,087
Intercompany accounts
   (9,698 ) 9,698 —   —
Current portion of long-term debt
   6,948 —   —   6,948
Income taxes payable
   14,986 2,207 —   17,193


Total Current Liabilities
   187,526 190,933 (21 ) 378,438


Long-term Debt
   788,737 939 —   789,676
Notes Payable
   —   79,291 (79,291 ) —
Deferred Income Taxes
   73,571 6,889 —   80,460
Deferred and Other Long-term Liabilities
   54,947 11,295 —   66,242
Postretirement and Postemployment Benefits
   16,295 2,276 —   18,571
Minority Interest
   —   284 —   284
Commitments and Contingencies
   —   —   —   —
Stockholders’ Equity

Common Stock
   46,661 66,761 (66,761 ) 46,661
Additional paid-in capital
   62,928 17,761 (17,761 ) 62,928
Retained earnings
   481,666 22,122 (1,492 ) 502,296
Accumulated other comprehensive (loss)
   (3,372 ) (2,210 ) (2,359 ) (7,941 )


   587,883 104,434 (88,373 ) 603,944
Common stock in treasury, at cost
   (72,236 ) —   —   (72,236 )


Total Stockholders’ Equity
   515,647 104,434 (88,373 ) 531,708


Total Liabilities and Stockholders’ Equity
   $ 1,636,723 $ 396,341 $ (167,685 ) $ 1,865,379

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~Consolidated Balance Sheet~~

   December 31, 2003


Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations
Total
Consolidated

Current Assets

Cash and cash equivalents
   $ 68,975 $ 6,659 $ —   $ 75,634
Accounts receivable (net of allowances)
   30,501 77,052 —   107,553
Inventories
   75,111 9,065 —   84,176
Deferred income taxes
   14,054 55 —   14,109
Note receivable – current
   942 —   —   942
Prepaid expenses
   6,115 693 —   6,808


Total Current Assets
   195,698 93,524 —   289,222


Property, Plant and Equipment (Net)
   236,520 21,490 —   258,010
Notes Receivable
   8,766 —   —   8,766
Equity Investment in Affiliates
   189,435 —   (36,860 ) 152,575
Long-term Supply Contracts
   5,668 —   —   5,668
Tradenames and Other Intangibles
   117,550 1,824 —   119,374
Goodwill
   247,702 11,742 —   259,444
Other Assets
   24,870 1,688 —   26,558


Total Assets
   $ 1,026,209 $ 130,268 $ (36,860 ) $ 1,119,617


Liabilities and Stockholders’ Equity

Current Liabilities

Short-term borrowings
   $ —   $ 62,337 $ —   $ 62,337
Accounts payable and accrued expenses
   137,751 11,207 —   148,958
Intercompany accounts
   (14,214 ) 14,214 —   —
Current portion of long-term debt
   3,560 —   —   3,560
Income taxes payable
   15,470 1,729 —   17,199


Total Current Liabilities
   142,567 89,487 —   232,054


Long-term Debt
   329,830 1,319 —   331,149
Deferred Income Taxes
   60,447 553 —   61,000
Deferred and Other Long-term Liabilities
   40,056 667 —   40,723
Postretirement and Postemployment Benefits
   15,900 —   —   15,900
Minority Interest
   —   297 —   297
Commitments and Contingencies
   —   —   —   —
Stockholders’ Equity

Common Stock
   46,661 14,701 (14,701 ) 46,661
Additional paid-in capital
   51,212 17,761 (17,761 ) 51,212
Retained earnings
   426,439 10,730 (1,492 ) 435,677
Accumulated other comprehensive (loss)
   (5,809 ) (5,247 ) (2,906 ) (13,962 )


   518,503 37,945 (36,860 ) 519,588
Common stock in treasury, at cost
   (81,094 ) —   —   (81,094 )


Total Stockholders’ Equity
   437,409 37,945 (36,860 ) 438,494


Total Liabilities and Stockholders’ Equity
   $ 1,026,209 $ 130,268 $ (36,860 ) $ 1,119,617

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -~~ (Continued)

Statements of Cash ~~Flows~~Flow

For The Nine Months Ended
October 1, 2004


Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Total
Consolidated

Cash Flow From Operating Activities:

Net Income
   $ 65,488 $ 11,392 $ 76,880
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization
   26,884 2,007 28,891
Equity in earnings of affiliates
   (13,759 ) —   (13,759 )
Deferred income taxes
   11,459 1,750 13,209
Plant Impairment charge and other net asset write-offs
   2,208 —   2,208
Net loss on early extinguishment of debt
   7,995 —   7,995
Other
   1,760 (1,898 ) (138 )
Change in assets and liabilities:

Decrease (increase) in accounts receivable
   53,184 (46,459 ) 6,725
Decrease (increase) in inventories
   407 (1,934 ) (1,527 )
Decrease in prepaid expenses
   2,041 142 2,183
Increase in accounts payable
   742 16,210 16,953
Increase (decrease) in income taxes payable
   7,843 (3,666 ) 4,177
(Decrease) increase in intercompany and other liabilities
   (4,092 ) 4,258 166


Net Cash Provided by (Used in) Operating Activities
   162,159 (18,196 ) 143,963


Cash Flow From Investing Activities:

Additions to property, plant & equipment
   (18,549 ) (3,815 ) (22,364 )
Armkel acquisition (net of cash acquired)
   (194,375 ) —   (194,375 )
Proceeds from note receivable
   942 —   942
Distributions from affiliates
   4,301 —   4,301
Contingent acquisition payments
   (5,068 ) —   (5,068 )
Other long-term assets
   (1,615 ) —   (1,615 )
Proceeds from sale of fixed assets
   —   1,131 1,131


Net Cash Used in Investing Activities
   (214,364 ) (2,684 ) (217,048 )


Cash Flow from Financing Activities:

Long-term debt borrowing
   540,000 —   540,000
Long-term debt (repayment)
   (436,136 ) (760 ) (436,896 )
Short-term debt borrowing
   43,700 —   43,700
Short-term debt (repayment)
   (36 ) (1,653 ) (1,689 )
Intercompany debt transactions
   (67,268 ) 67,268 —
Proceeds from stock options exercised
   10,885 —   10,885
Payment of cash dividends
   (10,261 ) —   (10,261 )
Deferred financing costs
   (3,662 ) —   (3,662 )


Net Cash Provided by Financing Activities
   77,222 64,855 142,077
Effect of exchange rate changes on cash and cash equivalents
   —   814 814


Net Change In Cash & Cash Equivalents
   25,017 44,789 69,806
Cash And Cash Equivalents At Beginning of Year
   68,975 6,659 75,634


Cash And Cash Equivalents At End of Period
   $ 93,992 $ 51,448 $ 145,440

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~Statements of Cash Flows~~

For The Nine Months Ended
September 26, 2003


Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Total
Consolidated

Cash Flow From Operating Activities:

Net Income
   $ 59,898 $ 5,196 $ 65,094
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization
   21,198 1,102 22,300
Equity in earnings of affiliates
   (25,844 ) —   (25,844 )
Deferred income taxes
   10,120 —   10,120
Other
   26 —   26
Change in assets and liabilities:

Decrease (increase) in accounts receivable
   108,217 (108,207 ) 10
Decrease in inventories
   4,105 1,406 5,511
Decrease (increase) in prepaid expenses
   1,967 (352 ) 1,615
Decrease in accounts payable
   (9,624 ) (2,323 ) (11,947 )
Increase in income taxes payable
   11,221 —   11,221
(Decrease) increase in intercompany and other liabilities
   (51,548 ) 52,300 752


Net Cash Provided by (Used in) Operating Activities
   129,736 (50,878 ) 78,858


Cash Flow From Investing Activities:

Additions to property, plant & equipment
   (20,286 ) (2,188 ) (22,474 )
Proceeds from note receivable
   870 —   870
Distributions from affiliates
   3,629 —   3,629
Contingent acquisition payments
   (3,424 ) —   (3,424 )
Other long-term assets
   (1,440 ) —   (1,440 )


Net Cash Used in Investing Activities
   (20,651 ) (2,188 ) (22,839 )


Cash Flow from Financing Activities:

Long-term debt borrowing
   100,000 —   100,000
Long-term debt (repayment)
   (265,721 ) 57,283 (208,438 )
Short-term debt borrowing
   60,000 —   60,000
Short-term debt (repayment)
   (2,469 ) —   (2,469 )
Proceeds from stock options exercised
   7,118 —   7,118
Payment of cash dividends
   (9,258 ) —   (9,258 )
Deferred financing costs
   (3,442 ) —   (3,442 )


Net Cash Provided by (Used in) Financing Activities
   (113,772 ) 57,283 (56,489 )


Effect of exchange rate changes on cash and cash equivalents
   —   864 864


Net Change In Cash & Cash Equivalents
   (4,687 ) 5,081 394
Cash And Cash Equivalents At Beginning of Year
   71,745 4,557 76,302


Cash And Cash Equivalents At End of Period
   $ 67,058 $ 9,638 $ 76,696

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~


	For The Three Months Ended April 1, 2005
	Company and Guarantor			Non- Guarantor Subsidiaries			Total Consolidated
Net Cash Provided by (Used in) Operating Activities	$	37,463		$	(6,302	)	$	31,161
Net Cash Used in Investing Activities		(3,836	)		(1,596	)		(5,432	)
Net Cash (Used in) Provided by Financing Activities		(76,164	)		6,762			(69,402	)
Effect of exchange rate changes on cash and cash equivalents		—			35			35

Net Change In Cash & Cash Equivalents		(42,537	)		(1,101	)		(43,638	)
Cash And Cash Equivalents At Beginning of Year		81,949			63,591			145,540

Cash And Cash Equivalents At End of Period	$	39,412		$	62,490		$	101,902


	For The Three Months Ended April 2, 2004
	Company and Guarantor			Non- Guarantor Subsidiaries			Total Consolidated
Net Cash Provided by Operating Activities	$	30,575		$	536		$	31,111
Net Cash Used in Investing Activities		(6,550	)		(10	)		(6,560	)
Net Cash (Used in) Provided by Financing Activities		(36,961	)		3,442			(33,519	)

Net Change In Cash & Cash Equivalents		(12,936	)		3,968			(8,968	)
Cash And Cash Equivalents At Beginning of Year		68,975			6,659			75,634

Cash And Cash Equivalents At End of Period	$	56,039		$	10,627		$	66,666

8. Armkel, LLC

On May 28, 2004, the Company ~~completed the previously announced purchase of~~purchased the remaining 50% of Armkel that it did not previously own from affiliates of Kelso for a purchase price of ~~$253.7 million plus fees.~~

The Armkel acquisition was funded using available cash and by obtaining new Term A and B Loans through an amendment to the Company’s existing credit agreement. In connection with the amendment, the Company, among other things, was provided with a new Term A Loan in the amount of $100 million, and a new Term B Loan in the amount of $440 million, which were used to replace the Company’s existing credit facility of approximately $194 million, to replace Armkel’s principal credit facility of approximately $136 million and to provide $210 million to fund a portion of the purchase price for the transaction. The new Term B Loan has essentially the same terms as the replaced loans, but with more favorable interest rate provisions. Results of operations for the business are included in the Company’s consolidated financial statements from May 29, 2004.$262.0 million.

Pro forma comparative net sales, net income and basic and diluted earnings per share for the ~~nine~~three months ended ~~October 1,~~April 2, 2004 ~~and September 26, 2003~~ are as follows:


	Nine Months Ended October 1, 2004				Nine Months Ended September 16, 2003				Three Months Ended April 2, 2004
*(Dollars in thousands, except per share data)*	Reported		Pro forma		Reported		Pro forma		Reported		Pro forma
Net Sales	$	1,057,086	$	1,249,111	$	770,127	$	1,178,300	$	295,991	$	409,407
Net Income		76,880		101,400		65,094		83,400	$	29,906	$	36,992
Earnings Per Share Basic		1.25		1.65		1.08		1.39	$	0.49	$	0.60
Earnings Per Share Diluted		1.19		1.57		1.03		1.32	$	0.46	$	0.56

The pro forma information gives effect to the Company’s purchase of Kelso’s interest in Armkel as if it occurred at January 1, 2003. Pro forma adjustments ~~include~~included the inventory step-up charge, equity appreciation rights, additional interest expense and the related income tax impact, as well as elimination of intercompany sales. ~~In the current quarter, the reported and pro forma results are not applicable because the acquired business is included in the Company’s results.~~

Pro forma results of operations for the three months ended April 2, 2004, the year ended December 31, 2003 and the balance sheet as of April 2, 2004 were filed by the Company on Form 8-K on June 28, 2004.

The ~~following table summarizes~~allocation of purchase price to certain intangibles has not yet been finalized since an independent appraisal is still in process. However, management does not believe that the ~~preliminary~~finalization of the purchase price allocation ~~relating to purchasing Kelso’s 50% interest in Armkel. An independent appraisal is currently in process:~~

(In thousands)


Current Assets
   $ 244,682
Property, plant and equipment
   76,917
Tradenames and patents
   250,364
Goodwill
   311,661
Other long-term assets
   18,522

Total Assets acquired
   902,146
Current liabilities
   91,123
Long-term debt
   359,522
Other long-term liabilities
   37,553

Net assets acquired
   $ 413,948

~~The following table summarizes~~will have a material impact on the consolidated financial ~~information for Armkel for the periods ending prior to May 28, 2004 during which the Company accounted for its 50% interest under the equity method.~~statements.

(In thousands)


Three Months Ended
September 26, 2003
   Five Months Ended
May 28, 2004
   Nine Months Ended
September 26, 2003
Income statement data:

Net sales
   $ 103,351    $ 192,767    $ 316,481
Gross profit
   57,602    109,915    180,613
Net income
   8,958    21,554    46,698
Equity in affiliate’s income recorded by the Company
   4,479    10,777    23,349

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes financial information for Armkel for the quarter ended April 2, 2004 during which the Company accounted for its 50% interest under the equity method.


*(In thousands)*	Three Months Ended April 2, 2004
Income statement data:
Net sales	$	113,773
Gross profit		65,685
Net income		18,163
Equity in affiliate’s income recorded by the Company		9,082

The Company invoiced Armkel ~~$10.2~~$6.6 million ~~and $19.0 million~~primarily for ~~primarily~~ administrative and management oversight services (which is included as a reduction of selling, general and administrative expenses), and purchased ~~$0.8 million and $1.4~~$0.5 million of deodorant anti-perspirant inventory produced by Armkel in the first ~~five months~~quarter of ~~2004 and the first nine months of 2003, respectively.~~2004. The Company sold Armkel ~~$0.7 million and $1.9~~$0.4 million of Arm & Hammer products to be sold in international markets in the first ~~five months~~quarter of 2004 and the first nine months of 2003, respectively. The Company had a net open receivable from Armkel at December 31, 2003 of approximately $6.7 million that primarily related to administrative services, partially offset by amounts owed for inventory.2004.

9. Short-term ~~borrowings~~Borrowings and Long-Term Debt

Short-term borrowings and long-term debt consist of the following:

(In thousands)

      Oct. 1, 2004
Dec. 31, 2003
Syndicated Financing Loan
      $ 230,000
Term A Loan
      $ 29,438
Amount due 2004
   $ 373
Amount due 2005
   2,236
Amount due 2006
   5,217
Amount due 2007
   7,452
Amount due 2008 & subsequent
   14,160
Term B Loan
      438,900
Amount due 2004
   $ 1,100
Amount due 2005
   4,400
Amount due 2006
   4,400
Amount due 2007
   4,400
Amount due 2008 & subsequent
   424,600
Convertible Debentures due on August 15, 2033
      100,000 100,000
Securitization of Accounts Receivable due on January 15, 2005
      100,000 56,300
Senior Subordinated Note (9¹/2%) due August 15, 2009
      225,000
Discount on Senior Subordinated Note
      (1,043 )
Various Debt from Brazilian Banks
$4,830 in 2004, $557 in 2005, $557 in 2006 and
$205 due in 2007
      6,149 7,356
Industrial Revenue Refunding Bond
Due in installments of $685 from 2004-2007 and $650 in 2008
      3,390 3,390


Total debt
      901,834 397,046


Less: current maturities
      112,158 65,897


Net long-term debt
      $ 789,676 $ 331,149


*(In thousands)*		Apr. 1, 2005		Dec. 31, 2004
Short-term borrowings
Securitization of Accounts Receivable due on April 13, 2005		$	100,000	$	93,700
Various borrowings due to Brazilian Banks			5,724		4,471
Other International Debt			814		68

Total short-term borrowings		$	106,538	$	98,239

Long-term debt
Term B Loan		$	323,360	$	400,337
Amount due 2005	2,437
Amount due 2006	3,249
Amount due 2007	3,249
Amount due 2008	3,249
Amount due 2009	3,249
Amount due 2010 and subsequent	307,927
Convertible Debentures due on August 15, 2033			100,000		100,000
Senior Subordinated Note (6%) due December 22, 2012			250,000		250,000
Senior Subordinated Note (9 ½%) due August 15, 2009			6,400		6,400
Premium on 9 ½% Senior Subordinated Note			128		213
Various debt due to Brazilian Banks $630 in 2005, $469 in 2006, $228 in 2007			1,327		848
Industrial Revenue Refunding Bond Due in installments of $685 from 2005-2007 and $650 in 2008			2,705		2,705

Total long-term debt			683,920		760,503
Less: current maturities			4,564		5,797

Net long-term debt		$	679,356	$	754,706

The long-term debt principal payments required to be made are as follows:


*(In thousands)*
2004	$	6,988
2005		107,878	$	3,752
2006		10,859		4,403
2007		12,742		4,162
2008		13,993		3,899
2009 and subsequent		749,374
2009				9,777
2010 and subsequent				657,927

	$	901,834	$	683,920

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

~~On May 28, 2004,~~During the first quarter of 2005, the Company entered into an amended and restated credit agreement (the “Credit Agreement”) with several banks and other financial institutions, The Bank of Nova Scotia, Fleet National Bank and National City Bank, each as a documentation agent, Citicorp North America, Inc., as syndication agent, and J.P. Morgan Chase Bank, as administrative agent. The Credit Agreement provides for (i) a five year term loan in a principal amount of $100paid approximately $77.0 million (the “Term A Loan”), (ii) a seven year term loan in a principal amount of $440 million, which term loan may be increased by up to an additional $250 million upon the satisfaction of certain conditions (the “Term B Loan,” and together with the Term A Loan, the “Term Loans”), and (iii) a five year multi-currency revolving credit and letter of credit facility in an aggregate principal amount of up to $100 million (the “Revolving Loans”). The Term Loans were used to finance the acquisition of the remaining 50% interest in Armkel not previously owned by the Company, pay amounts outstanding under Armkel’s principal credit facility of approximately $136 million and refinance the Company’s principal credit facility of approximately $194 million. The Revolving Loans, which are currently undrawn, are available for general corporate purposes. The obligations of the Company under the Credit Agreement are secured by substantially all of the assets of the Company and certain of its ~~domestic subsidiaries. Those domestic subsidiaries have also guaranteed the loan obligations under the Credit Agreement. The~~ Term ~~Loans and the Revolving Loans bear interest under one~~B Loan, of two rate options, selected by the Company, equal to either (i) a eurocurrency rate (adjusted for any reserve requirements) (“Eurocurrency Rate”) or (ii) the greater of the prime rate, the secondary market rate for three-month certificates of deposit (adjusted for any reserve requirements) plus 1%, or the federal funds effective rate plus 0.5% (“Alternate Base Rate”), plus (b) an applicable margin. The applicable margin is determined by the Company’s then current leverage ratio. At the closing date of the Credit Agreement, the applicable margin was (a) 1.75% for the Eurocurrency Rate and (b) 0.75% for the Alternate Base Rate.which $75.0 million were voluntary payments.

AsIn April 2005, the accounts receivable securitization facility was renewed with a ~~result of the purchase of the Kelso interest~~new maturity date in Armkel, LLC, the Company assumed $225 million of 9.5% subordinated notes (“Notes”) that were issued on August 28, 2001 at a discount and are due in 2009, with interest paid semi-annually on February 15 and August 15. The effective yield on the Notes is approximately 9.62%. The terms of the Notes provide for an optional prepayment of principal at a premium. The issue discount is being amortized using the effective interest method. The Notes are guaranteed by the Company and certain of the Company’s domestic subsidiaries. The Notes contain various financial and non-financial covenants. In connection with the acquisition, a fair value appraisal of the notes is currently in process.

During July 2004, as a result of purchasing Kelso’s interest in Armkel, the Company amended its Accounts Receivable Securitization Agreement to increase the capacity that can be borrowed from $60 million to $100 million. The increase in borrowing was used to fund a voluntary bank debt payment on Term A Loan on August 4, 2004.April 2006.

10. Goodwill ~~Tradenames~~ and Other Intangible Assets

The following ~~table discloses~~tables disclose the carrying value of all intangible assets:


	October 1, 2004							December 31, 2003								April 1, 2005							December 31, 2004
*(In thousands)*	Gross Carrying Amount		Accum. Amort.			Net		Gross Carrying Amount		Accum. Amort.			Net			Gross Carrying Amount		Accum. Amort.			Net		Gross Carrying Amount		Accum. Amort.			Net
Amortized intangible assets:															Amortized intangible assets:
Tradenames	$	77,258	$	(12,011	)	$	65,247	$	69,645	$	(7,839	)	$	61,806		$	77,413	$	(13,976	)	$	63,437	$	77,433	$	(12,759	)	$	64,674
Formulas		22,320		(2,450	)		19,870		6,281		(1,430	)		4,851			22,320		(3,603	)		18,717		22,320		(3,023	)		19,297
Non Compete Agreement		1,143		(321	)		822		1,143		(233	)		910			1,143		(379	)		764		1,143		(350	)		793

Total	$	100,721	$	(14,782	)	$	85,939	$	77,069	$	(9,502	)	$	67,567		$	100,876	$	(17,958	)	$	82,918	$	100,896	$	(16,132	)	$	84,764

Unamortized intangible assets - Carrying value
Unamortized intangible assets – Carrying value:															Unamortized intangible assets – Carrying value:
Tradenames	$	286,505						$	51,807							$	389,521						$	389,521

Total	$	286,505						$	51,807							$	389,521						$	389,521

Intangible amortization expense amounted to $1.8 million for the three months of 2005 and $1.5 million for the same period of 2004. The ~~increase~~Company’s estimated intangible amortization will be approximately $7.2 million in ~~tradenames as compared to~~each of the values at December 31, 2003 is primarily due to the inclusion of tradenames acquired in connection with the purchase of Armkel and the final valuation adjustments associated with the Unilever brands acquired in 2003.next five years.

The ~~Armkel tradenames~~changes in the carrying amount of goodwill for the three months ended April 1, 2005 are ~~currently valued at their book value~~ as ~~of May 28, 2004. An appraisal is currently in process.~~follows:


*(In thousands)*	Consumer Domestic			Consumer International		Specialty		Total
Balance December 31, 2004	$	468,393		$	20,662	$	22,588	$	511,643
Tradename reclassification (related to Armkel)		(2,766	)		2,766		—		—
Goodwill associated with the Armkel acquisition		1,074			—		—		1,074
Other		224			—		—		224

Balance April 1, 2005	$	466,925		$	23,428	$	22,588	$	512,941

11. Comprehensive Income

The following table discloses the Company’s comprehensive income for the three months ended April 1, 2005 and April 2, 2004:


	Three Months Ended
*(In thousands)*	Apr. 1, 2005		Apr. 2, 2004
Net Income	$	37,701	$	29,906
Other Comprehensive Income, net of tax:
Foreign exchange translation adjustments		1,725		161
Interest rate swap agreements		—		143
Company’s portion of Armkel’s accumulated other comprehensive income		—		1,511

Comprehensive Income	$	39,426	$	31,721

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

~~The changes in the carrying amount of goodwill for the nine months ended October 1, 2004 are as follows:~~

(In thousands)

   Consumer
Specialty
Total

Balance December 31, 2003
   $ 236,851 $ 22,593 $ 259,444
Tradename and fixed asset valuation adjustments
   (5,527 ) —   (5,527 )
Book value of Armkel’s goodwill on day of acquisition
   205,156 —   205,156
Additional goodwill associated with Armkel purchase
   106,505 —   106,505
Other
   —   (5 ) (5 )


Balance October 1, 2004
   $ 542,985 $ 22,588 $ 565,573

~~Intangible amortization expense amounted to $4.8 million for the nine months of 2004~~12. Pension and ~~$2.1 million for the same period of 2003. The estimated intangible amortization will be approximately $7.2 million in each of the next five years.~~

~~11. Comprehensive Income~~Postretirement Plans

The following table ~~presents the Company’s Comprehensive Income for the three and nine months ended October 1, 2004 and September 26, 2003:~~

   Three Months Ended
Nine Months Ended

(In thousands)

   Oct. 1, 2004
   Sept. 26, 2003
Oct. 1, 2004
   Sept. 26, 2003

Net Income
   $ 27,401    $ 19,522 $ 76,880    $ 65,094
Other Comprehensive Income, net of tax:

Foreign exchange translation adjustments
   1,387    (874 ) 3,584    3,500
Interest rate swap agreements
   —      822 143    1,383
Company’s portion of Armkel’s Accumulated

Other Comprehensive Income (Loss)
   —      (303 ) 2,294    (2,169 )




Comprehensive Income
   $ 28,788    $ 19,167 $ 82,901    $ 67,808

~~12. Investment in Del Labs Inc.~~

On July 2, 2004, the Company announced that it has agreed to invest $30 million in a company formed by Kelso, to acquire Del Laboratories, Inc. The Company’s investment will be substantially in the form of convertible preferred stock, and will represent about 20% of the equity financing. Kelso will provide the remaining equity, with the participation of Del’s existing management team.

As part of this transaction, the Company will have certain rights with respect to the Orajel brand, including an option to acquire the business after three years. In the event that the Company does not exercise this option, the Company will have the right, subject to certain conditions, to convert its preferred stock into a 20% interest in the common stock of the new Del company.

~~The Company expects the transaction to close in this year’s fourth quarter subject to regulatory, financing and other customary conditions and will use cash on hand to fund the transaction.~~

~~13. Pension Disclosure~~

~~The following table presents~~discloses the net periodic benefit cost for the Company’s ~~Pension Plan~~pension and ~~Post-retirement Plan~~postretirement plans for the three months ended April 1, 2005 and ~~nine months ending October 1, 2004 and September 26, 2003.~~April 2, 2004.

Pension Costs
Three Months Ended

Pension Costs
Nine Months Ended

(In thousands)

   Oct. 1, 2004
Sept. 26, 2003
Oct. 1, 2004
Sept. 26, 2003

Components of Net Periodic Benefit Cost:

Service cost
   $ 595 $ 37 $ 861 $ 111
Interest cost
   1,525 363 2,621 1,089
Expected return on plan assets
   (1,413 ) (315 ) (2,410 ) (945 )
Amortization of prior service cost
   1 1 3 3
Recognized actuarial (gain) or loss
   126 75 376 225


Net periodic benefit cost
   $ 834 $ 161 $ 1,451 $ 483

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~


	Pension Costs Three Months Ended
*(In thousands)*	Apr. 1, 2005			Apr. 2, 2004
Components of Net Periodic Benefit Cost:
Service cost	$	597		$	41
Interest cost		1,606			353
Expected return on plan assets		(1,516	)		(316	)
Amortization of prior service cost		5			1
Recognized actuarial loss		51			123

Net periodic benefit cost	$	743		$	202


	Post-retirement Costs Three Months Ended						Post-retirement Costs Nine Months Ended						Postretirement Costs Three Months Ended
*(In thousands)*	Oct. 1, 2004			Sept. 26, 2003			Oct. 1, 2004			Sept. 26, 2003			Apr. 1, 2005			April 2, 2004
Components of Net Periodic Benefit Cost:
Service cost	$	140		$	84		$	389		$	252		$	126		$	109
Interest cost		246			204			708			612			289			216
Expected return on plan assets		—			—			—			—
Amortization of prior service cost		(20	)		(20	)		(60	)		(60	)		17			(20	)
Recognized actuarial (gain) or loss		3			(22	)		6			(66	)
Recognized actuarial gain														(1	)		—

Net periodic benefit cost	$	369		$	246		$	1,043		$	738		$	431		$	305

The Company ~~estimates it will be required~~made cash contributions of approximately $1.7 million to ~~make a cash contribution to~~certain of its pension plans in the first quarter and expects to make additional contributions of ~~approximately $1.5~~$2.8 million during ~~2004. The contribution is $0.8 million higher than previously estimated due to~~ the ~~inclusion~~remainder of ~~Armkel’s pension plan.~~2005.

In January 2004, the FASB issued FASB Staff Position (FSP) No. 106-1 “Accounting and Disclosure Requirements to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (the Act). The Act introduces a prescription drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The adoption of the provisions of FSP 106-1 in this quarter did not have a significant impact to the Company’s postretirement accumulated projected benefit obligation or net periodic benefit cost.

~~14.~~13. Commitments, contingencies and guarantees

In December 1981, the Company formed a partnership with a supplier of raw materials which mines and processes sodium mineral deposits owned by each of the two partners in Wyoming. The Company purchases the majority of its sodium raw material requirements from the partnership. This agreement terminates upon two years’ written notice by either company. The Company has an annual commitment to purchase 240,000 tons, based upon market price. There are no other material transactions with the partnership or the Company’s partner.

On January 17, 2002, a petition for appraisal, Cede & Co., Inc. and GAMCO Investors, Inc. v. Medpointe Healthcare Inc., Civil Action No. 19354, was filed in the Court of Chancery of the State of Delaware demanding a determination of the fair value of shares of Medpointe. The action was brought by purported former shareholders of Carter-Wallace in connection with the merger on September 28, 2001 of MCC Acquisition Sub Corporation with and into Carter-Wallace. The merged entity subsequently changed its name to Medpointe. The petitioners sought an appraisal of the fair value of their shares in accordance with Section 262 of the Delaware General Corporation Law. The matter was heard by the court on March 10 and 11, 2003, at which time the petitioners purportedly held approximately 2.3 million shares of Medpointe. An additional post-trial hearing was held on January 20, 2004 to address the valuation of the Company. On July 30, 2004 the Court issued a letter informing the parties that it had determined that the fair value of a share of Carter-Wallace on the Merger Date to be $24.45, and that interest at the annual rate of 7.5% compounded quarterly should be added to the award.

Medpointe and certain former Carter-Wallace shareholders were party to an indemnification agreement pursuant to which such shareholders would be required to indemnify Medpointe from a portion of the damages suffered by Medpointe in relation to the exercise of appraisal rights by the former Carter-Wallace shareholders in the merger. Pursuant to the agreement, the shareholders agreed to indemnify Medpointe for 40% of any Appraisal Damages (defined as the recovery greater than the per share merger price times the number of shares in the appraisal class) suffered by Medpointe in relation to the merger; provided that if the total amount of Appraisal Damages exceeds $33.3 million, then the indemnifying stockholders will indemnify Medpointe for 100% of any damages suffered in excess of that amount. The Company, in turn, was party to an agreement with Medpointe pursuant to which it agreed to indemnify Medpointe and certain related parties against 60% of any Appraisal Damages for which Medpointe remains liable. The maximum liability to the Company pursuant to the indemnification agreement was $12 million.

On March 27, 2003, GAMCO Investors, Inc. filed another complaint in the New York Supreme Court seeking damages from MedPointe, 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 the Company and the merger of MCC Acquisition Sub Corporation with and into Carter-Wallace. The complaint sought monetary damages and equitable relief, including among other things, invalidation of the transactions. On May 21, 2004, the court dismissed certain of the plaintiffs’ claims. The Company was not named as a defendant in this action and believed it had no liability.

On October 12, 2004, Medpointe and the plaintiffs settled both of the legal actions described above. In connection with the settlement of the legal actions, the Company entered into a settlement agreement and release with Medpointe pursuant to which, in settlement of the Company’s indemnification obligations or other claims that Medpointe may have against the Company and certain persons related to the Company, the Company agreed to pay Medpointe $8.1 million, of which $4.9 million is included in interest expense in the third quarter of 2004 and $3.2 million was applied towards goodwill as of October 1, 2004. Payment was made by the Company on October 13, 2004.

~~CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

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. The Company expects the FDA to issue non-binding draft guidance concerning the labeling of condoms with N-9, although the timing of such draft guidance remains uncertain. The Company believes that condoms with N-9 provide an acceptable added means of contraceptive protection and is cooperating with the FDA concerning the appropriate labeling revisions, if any. However, the Company cannot predict the outcome of the FDA review. While awaiting further FDA guidance, the Company has implemented interim labeling revisions that caution against rectal use and more-than-once-a-day vaginal use of N-9-containing condoms, and has launched a public information campaign to communicate these messages to the affected communities. If the FDA or state governments promulgate rules which prohibit or restrict the use of N-9 in condoms (such as new labeling requirements), the financial condition and operating results of the Company could suffer.

Fleming Companies, Inc., a customer of the Company, has filed a voluntary petition for bankruptcy. Subsequently, Fleming brought legal action against the Company seeking the recovery of certain alleged preference payments and overpayments made to the Company in the amount of approximately $4.2 million. In addition, Fleming claims that it is owed approximately $1.9 million relating to a vendor agreement with the Company. The Company will vigorously defend the lawsuit but cannot predict with certainty the outcome. However, in the opinion of management, the ultimate amount of liability, if any, will not have a material adverse effect on the Company’s financial position.

e.c.

The Company has commitments to acquire approximately ~~$21~~$75.0 million of raw material and packaging supplies from its 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.

f.d.

The Company has outstanding letters of credit of approximately ~~$7.1~~$7.5 million with several banks which guarantee payment for such things as insurance claims in the event of the Company’s insolvency, a year’s worth of lease payments on a warehouse, and 200 days of interest on an Industrial Revenue Bond borrowing.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

g.e.

In connection with the acquisition of ~~the~~Unilever’s oral care brands ~~from Unilever,~~in the United States and Canada, the Company ~~will~~is required to make additional performance-based payments of a minimum of $5 million and a maximum of $12 million over the eight year period following the ~~date of~~October 2003 acquisition. All payments will be accounted for as additional purchase price. The Company has paid approximately ~~$1.9~~$3.1 million ~~in 2004 based upon 2004 half year and 2003 operating performance~~ since the acquisition.

h.f.

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.

14. Assets Held For Sale

As part of the Armkel acquisition, the Company has title to property and facilities in Cranbury, New Jersey, which includes research facilities that are in use as well as assets that are held for sale. In the third quarter of 2004, the Company entered into a contract to sell sections of the land available for development (and demolish the remaining buildings at the buyer’s expense), subject to obtaining environmental and other regulatory approvals. The Company expects to close on the sale before the end of 2005. In the first quarter of 2005, the Company entered into a contract to sell the remaining assets held for sale. The contract is subject to the buyer’s due diligence. The value expected to be received for all land at the Cranbury, NJ location (other than that related to the research facilities), net of costs to sell, is approximately $11.0 million. These assets are included in the Consumer Domestic segment.

In January 2005, the Company signed an agreement to sell its manufacturing plant in Mexico. The new owner of the plant will manufacture products for the Company. At the end of April, the Company closed on the sale of this facility and received, net of costs to sell, approximately $2.3 million, which is included in the Consumer International segment.

15. Reclassification

Certain prior year amounts have been reclassified in order to conform with the current year presentation.

~~ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS~~

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS

Results of Operations

The discussion of results of operations at the consolidated level is followed by a more detailed discussion of results of operations by segment for the ~~third~~first quarter ~~and nine month periods~~ of ~~2004~~2005 compared to the ~~third~~first quarter ~~and nine month periods of 2003.~~2004. The segment discussion also presents certain product line fluctuations. With the acquisition of the remaining 50% interest in Armkel, LLC (“Armkel”) that the Company did not previously own from affiliates of Kelso & Company (“Kelso”) on May 28, 2004, and Armkel’s subsequent merger with the Company, the results of operations of the former Armkel business are consolidated in the accompanying financial statements from the date of acquisition.

Consolidated Results

Net Sales

Net sales for the quarter increased by ~~$154.7~~$124.7 million or ~~58.2%~~42.1% to ~~$420.3~~$420.7 million, as compared to ~~$265.6~~$296.0 million in the previous year’s ~~third~~first quarter. Of the increase, ~~$114.8~~$122.6 million reflects sales of products formerly owned by Armkel, ~~and now~~which are included in ~~Company sales as a result of~~ the acquisition of Kelso’s interest in Armkel late in the second quarter and $27.6 million reflects sales resulting from the acquisition of the former Unilever oral care business in the fourth quarter of 2003. Other increases included the reversal of prior year promotion accruals of approximately $1.3 million as a result of a change in estimateCompany’s condensed consolidated results, and favorable foreign exchange rates of $0.8 ~~million (excluding the impact of the former Armkel subsidiaries). For the nine month period, net sales increased $287.0 million or 37.3% to $1,057.1~~ million. The primary reasons for the sales increase are the sales of products formerly owned by Armkel of $158.3 million and sales of $85.8 million resulting from the acquisition of the Unilever oral care business. Sales also increased due to favorable foreign exchange rates of $3.6 million, the reversal of the previously mentioned prior year promotion reserves of $4.3 million and the effect of six extra days in the first quarter of this year’s fiscal calendar.

Operating Costs

The Company’s gross margin in the current quarter increased to ~~38.2%~~38.1% from ~~30.3%~~32.6% in the prior year. The increase is in large part a result of the products formerly owned by Armkel, ~~and the oral care business acquired from Unilever as these products~~which carry on average a higher gross profit margin than ~~existing~~other Company products. ~~The margin was also impacted by~~Excluding the ~~effect on the third quarter of 2004~~impact of the former Armkel acquisition related inventory step up charge of $6.2 million, and the reversal of the previously mentioned prior year promotion reserves. In addition, efficient promotion spending, and supply chain efficiencies offset commoditybusiness, gross margin declined. This decline is due to sharp price increases for oil-based raw and packaging materials and certain commodity chemicals during the ~~quarter and new product launch costs were higher in last year’s third quarter. Gross margin for the nine month period was 35.6% as compared to 30.4% for the nine month period~~second half of ~~2003. The reasons for the improvement are consistent with those affecting the current quarter and includes a second quarter 2004 plant impairment charge of $1.5 million.~~2004.

Marketing expenses in the current quarter ~~increased by $28.1~~were $37.6 million, ~~to $51.0~~an increase of $13.5 million as compared to the same period of ~~2003~~2004 primarily as a result of ~~both~~approximately $15.0 million in expenses associated with the former Armkel ~~and Unilever oral care business acquisitions.~~products. Marketing expenses for the Company’s pre-existing product lines were ~~essentially unchanged. For the nine month period, marketing~~slightly lower than last year as a result of lower expenses ~~of $111.3 million were $45.2 million higher than in 2003~~ for ~~the same reasons as referenced above, as well as an increase in advertising expenses in support of~~ certain ~~household~~ deodorizing and ~~oral care~~cleaning products.

Selling, general and administrative (“SG&A”) expenses in the current quarter increased ~~$27.4~~$21.5 million as compared to the same period last year. This is primarily a result of costs associated with the former Armkel business of approximately ~~$18.0 million, higher broker commission~~$24.0 million. Other SG&A expenses declined due to lower deferred and performance-based compensation costs ~~of $1.6 million as a result of higher sales, higher compensation related~~and decreases in information system costs ~~of $3.9 million~~ and costs to comply with ~~certain provisions of~~ the Sarbanes-Oxley Act of 2002 and related regulations of $1.1 million. SG&A expenses for the nine month period increased $47.1 million as compared to the same period last year. This is primarily a result of costs associated with the Armkel business of approximately $25.0 million, higher broker commission costs of $4.3 million as a result of higher sales, tradename amortization expenses associated with the acquired Unilever oral care business of $1.9 million, higher compensation related costs of $6.9 million, higher information system costs of $1.8 million and costs to comply with certain provisions of the Sarbanes-Oxley Act of 2002 and related regulations of $2.3 million.legislation.

Other Income and Expenses

The decrease in equity in earnings of affiliates of ~~$4.0~~$8.6 million in the current quarter as compared to the year ago period ~~was entirely~~is due to the Company’s acquisition of Kelso’s interest in Armkel on May 28, 2004. The combined ~~results~~earnings of the Company’s other equity investments ~~Armand Products Company (“Armand”) and The Armakleen Company (“Armakleen”),~~ slightly increased. For the nine month period the decrease in equity in earnings of affiliates of $12.1 million is primarily due to the reasons noted for the third quarter. Armkel’s net income for the five months ended May 28, 2004 was reduced as a result of an international tradename impairment charge of approximately $3.2 million (net of tax). The impact to the Company was a reduction of earnings in equity of affiliates of approximately $1.6 million. Armkel’s nine month 2003 results were positively impacted by a litigation settlement, partially offset by an impairment of an asset held for sale.

~~ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued)~~

Other income and expense in 2005 includes the effect of foreign exchange remeasurement losses related to intercompany loans between the Company’s subsidiaries. The 2004 ~~results from~~amount reflects a gain on the sale of a warehouse by our Canadian ~~subsidiary and in 2003 reflect foreign exchange gains by the Company’s Brazilian~~ subsidiary.

Interest expense increased in the quarter ~~and the nine month period~~ as a result of interest associated with the ~~third quarter settlement of the former Carter-Wallace shareholder appraisal suit of $4.9 million, interest associated with the~~ assumption of Armkel’s indebtedness and the ~~$225 million principal amount of Armkel’s 9.5% Senior Subordinated Notes, the increase in debt~~Company’s additional indebtedness required to purchase Kelso’s interest in Armkel and to purchase the Unilever oral care business in late 2003, partially offset by the settlement of the Company’s remaining fixed rate interest rate swap contracts in the first quarter of 2004.

~~The loss on early extinguishment of debt pertained to existing deferred financing costs that were written off when the Company refinanced its bank debt.~~Armkel.

Taxation

The effective tax rate for the ~~nine month period~~quarter was ~~31.5%~~34.8% as compared to ~~31.7%~~33.0% for the same period of last year. Last year’s tax rate reflected the settlement of a state tax dispute, offset by a higher state tax rate and taxes associated with Armkel’s sale of its Italian subsidiary, which helped to depress the tax rate. The current year rate was impacted favorably by ~~the estimated amount of additional~~an amended prior year tax return that resulted in a benefit related to a prior year research and development tax ~~credits included in recently filed and amended income tax returns.~~credit.

Segment results

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued)

Segment revenues are derived from the sale of the following products:


Segment		Products
Consumer Domestic		Deodorizing and cleaning, laundry, and personal care products

Consumer International		Primarily personal care products

SPD		Specialty chemical products

~~The domestic results~~Some of the ~~acquired Armkel business since May 29, 2004~~subsidiaries that are included in ~~the~~ Consumer ~~Domestic segment~~International manufacture and ~~its international subsidiaries (in addition~~sell personal care products to ~~the Company’s existing international consumer subsidiary) comprise~~Consumer Domestic. These sales are eliminated from the Consumer International segment. There has been no change to the SPD segment. There are no material intersegment sales. The Company’s earnings, prior to its acquisition of Kelso’s interest in Armkel, attributable to the Company’s equity investment in Armkel’s domestic and international operations are included in Income Before Taxes and Minority Interest of the Consumer Domestic and Consumer International segments, respectively. The Company’s earnings attributable to its equity investment in Armand Products and the Armakleen Company are included in Income Before Taxes and Minority Interest of the Corporate segment. Prior to purchasing Kelso’s interest in Armkel, the Company’s segments were: Church & Dwight Consumer, Armkel, Church & Dwight SPD and Other Equity Affiliates.

~~ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued)~~results.

Segment sales and income before taxes and minority interest for the ~~third quarter~~first quarters of 2005 and ~~nine month period of~~ 2004 ~~and 2003~~ are as follows:

(in thousands)

   Consumer
Domestic
   Consumer
Internat’l
   SPD
   Corporate
   Total
Net Sales

Third Quarter 2004
   $ 299,285    $ 69,890    $ 51,135    —      $ 420,310
Third Quarter 2003
   208,604    9,812    47,150    —      265,566
2004 Year to Date
   794,205    107,773    155,108    —      1,057,086
2003 Year to Date
   605,223    26,961    137,943    —      770,127
Income Before Taxes and Minority Interest⁽¹⁾

Third Quarter 2004
   28,237    4,922    3,866    1,144    38,169
Third Quarter 2003
   22,305    2,760    3,642    683    29,390
2004 Year to Date
   82,365    13,865    13,063    2,983    112,276
2003 Year to Date
   72,413    9,037    11,332    2,494    95,276
Total Assets

October 1, 2004
   $ 1,368,932    $ 263,941    $ 166,621    $ 65,886    $ 1,865,380
December 31, 2003
   $ 841,036    $ 50,868    $ 166,953    $ 60,760    $ 1,119,617


*(in thousands)*	Consumer Domestic		Consumer Internat’l		SPD		Corporate		Total
Net Sales
First Quarter 2005	$	297,716	$	69,355	$	53,603	$	—	$	420,674
First Quarter 2004		236,055		9,027		50,909		—		295,991
Income Before Taxes and Minority Interest⁽¹⁾
First Quarter 2005		40,992		10,852		4,741		1,270		57,855
First Quarter 2004		33,790		4,634		5,476		742		44,642

⁽¹⁾

In determining Income Before Taxes and Minority Interest, Interest Expense, Interest Income, ~~Loss on Early Extinguishment of Debt~~ and Other Income (Expense) were allocated to the segments based upon each segments’ relative Operating Profit. With respect to the first quarter of 2004, which was prior to the Armkel acquisition, the equity earnings of Armkel’s domestic results are included in the Consumer Domestic segment and its international results are in the Consumer International segment. The equity earnings of Armand and ArmaKleen are included in Corporate.

Consumer Domestic

For the ~~third~~first quarter of ~~2004,~~2005, Consumer Domestic Net Sales increased ~~$90.7~~$61.7 million or ~~43.5%~~26.1% to ~~$299.3~~$297.7 million. ~~The increase includes~~Personal care products increased $61.0 million due to sales of ~~$56.0~~$62.9 million associated with the domestic results of the former Armkel ~~business, $27.2~~products. Deodorizing products increased $2.7 million ofand laundry products decreased $2.0 million. Net sales associated with the fourth quarter 2003 acquisition of the oral care brands from Unilever and the reversal of $0.9 million of prior year promotion reserves due to a change in estimate. At the product line level, sales of deodorizers were moderately higher than last year and existing personal care products were flat. Laundry consumption was also higher than last year, although shipments were flat due to the timing of promotional activities. At the brand level, sales of Arm & Hammer and Xtra liquid laundry detergent, Arm & Hammer Baking Soda and Arm & Hammer Super Scoop were all significantly higher than last year, while sales of Arm & Hammer powder laundry detergent, fabric softener and antiperspirants were lower.

~~For the nine month period of 2004, Consumer Domestic Net Sales increased $189.0 million or 31.2% to $794.2 million. The increase includes sales of $79.6 million associated with the domestic results~~ of the former Armkel business, $84.1 million of sales associated with the fourth quarter 2003 acquisition of the oral care brands from Unilever and the reversal of $3.8 million of prior year promotion reserves due to a change in estimate. At the product line level, deodorizing products and laundry products net sales were higher than last year and existing personal care products decreased. At the brand level, sales of Arm & Hammer and Xtra liquid laundry detergent, Arm & Hammer Baking Soda, Arm & Hammer toothpaste and Arm & Hammer Super Scoop were higher than last year while sales of Arm & Hammer powder laundry detergent and antiperspirants were lower. The nine month period was also affected by six extra days in the first ~~fiscal~~ quarter of ~~this year as compared to~~2004, when their sales were not consolidated with those of the ~~first fiscal quarter of 2003.~~Company, totaled approximately $58.0 million.

Consumer Domestic Income before Taxes and Minority Interest for the current quarter increased ~~$5.9~~$7.2 million to ~~$28.2 million mainly~~$41.0 million. This is due to ~~operating results associated with~~the increased contribution from the former Armkel ~~business (despite~~products, slightly lower marketing costs associated with certain deodorizing and cleaning products and lower SG&A for the ~~impact~~reasons noted above attributable to the non-Armkel portion of the ~~inventory step up charge of $4.6 million) and the contribution from the acquired Unilever brands. This increase~~business. The higher profitability was partially offset by higher ~~allocated~~oil based manufacturing and freight costs. The segment was also impacted by higher interest expense (which includes the segment’s allocation of the interest expense element of the Medpointe Settlement Agreement) and as a result of purchasing Kelso’s interest in Armkel, the elimination of earnings in equity of affiliates.

For the nine month period, Income before Taxes and Minority Interest increased $10.0 million to $82.4 million due to operating results associated with the former Armkel business (despite the impact of the inventory step up charge of $8.0 million) and the contributioncosts resulting from the acquired Unilever brands. This increase was partially offset by a plant impairment charge of $1.5 million, higher allocated interest expense (which includes the segment’s allocation of the interest expense element of the Medpointe Settlement Agreement), the segment’s allocation of the deferred financing cost write-off and as a result of purchasing Kelso’s interest in Armkel ~~a reduction of earnings in equity of affiliates.~~

The Company expects to significantly increase its marketing spending in the fourth quarter compared to the same period last year. In part, this increase is to support several personal care products introduced earlier in the year, including Arm & Hammer Enamel Care^™ ~~toothpaste, a patented product which combines the cleaning and whitening properties of baking soda with fluoride and liquid calcium to fill tooth surfaces and restore enamel luster; and Trojan~~^® ~~condoms with Warming Sensations~~^™, a unique lubricant system which warms the skin on contact for enhanced pleasure. In addition, the increase reflects new initiatives in support of the acquired oral care products, particularly Mentadent^® ~~toothpaste and toothbrushes and Close-Up~~^® toothpaste. On the household products side of the business, there will also be marketing spending to support the new cat litter product, Arm & Hammer Multi-Cat, designed for households with two or more cats.

~~ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued)~~purchase.

Consumer International

Consumer International ~~net sales~~Net Sales for the current quarter as compared to the same period of last year increased ~~$60.1~~$60.3 million to ~~$69.9~~$69.4 million. The current quarter included $59.7 million of sales attributable to the former Armkel international business and ~~for~~ the ~~nine month period~~effect of favorable foreign exchange rates. Net sales of the former Armkel subsidiaries in the first quarter of 2004, when their sales were not consolidated with those of the Company, totaled approximately $55.8 million. The increase of $3.9 million includes a favorable foreign exchange effect of $3.1 million.

Income before Taxes and Minority Interest increased ~~$80.8~~$6.2 million to ~~$107.8~~$10.9 million as a result of the inclusion of the former Armkel international business results following the acquisition, ~~and the effect of favorable foreign exchange rates.~~

Income before Taxes and Minority Interest increased $2.2 million in the current quarter to $4.9 million and increased $4.8 million to $13.9 million for the nine month period as a result of the inclusion of the former Armkel business results since the acquisition (despite the impact of the inventory step up charge of $1.6 million in the current quarter and $2.3 for the nine month period.). This increase was partially offset by ~~the~~ higher interest ~~expense and~~costs associated with the ~~segment’s allocation of the deferred financing cost write-off and the Medpointe settlement agreement.~~Armkel acquisition.

Specialty Products (SPD)

Specialty Products Net Sales grew ~~$4.0~~$2.7 million or ~~8.5%~~5.3% to ~~$51.1~~$53.6 million in the ~~current~~first quarter of 2005, as a result of higher sales of ~~Animal Nutrition and Specialty Chemical~~animal nutrition products and favorable foreign exchange rates. ~~For the nine month period, net sales increased $17.2 million or 12.4% to $155.1 million for the same reasons as are applicable to the current quarter.~~

Specialty Products Income before Taxes and Minority Interest ~~increased by $0.2~~decreased $0.7 million to ~~$3.9~~$4.7 million ~~primarily due to~~as a result of higher ~~income~~manufacturing costs for certain specialty chemicals, and an increase in allocated interest expense, partially offset by higher profit contribution associated with higher net sales, partially offset by an allocation of higher interest expense and the deferred financing write-off. For the nine month period, Income before Taxes and Minority Interest increased $1.7 million to $13.1 million. The reasons for the nine month increase are consistent with the third quarter and were also impacted by the extra shipping days in the first quarter of 2004 as compared to the first quarter of 2003.animal nutrition product sales.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued)

Liquidity and Capital Resources

The Company had outstanding total debt of ~~$901.8~~$790.5 million and cash of ~~$145.4~~$101.9 million (of which approximately ~~$48.0~~$58.4 million resides in foreign subsidiaries). This compares to total debt of ~~$397.0~~$858.7 million at December 31, ~~2003.~~2004. The ~~reason for the increase~~reduction of ~~total~~ debt since ~~December 31, 2003~~the beginning of the fiscal year is primarily due to ~~the Company’s assumption of $225 million principal amount of Armkel’s 9.5% Senior Subordinated Notes due 2009, the Company’s assumption of Armkel’s~~voluntary bank debt payments of ~~approximately $136~~$75.0 million, ~~and additional amounts borrowed in connection with the acquisition of Kelso’s interest in Armkel of approximately $254 million. The $613 million increase of debt was~~ partially offset by ~~debt repayments~~an increase of ~~approximately $108 million.~~

The Company entered into an amended and restated credit agreement (the “Credit Agreement”) with several banks and other financial institutions, The Bank of Nova Scotia, Fleet National Bank and National City Bank, each as a documentation agent, Citicorp North America, Inc., as syndication agent, and J.P. Morgan Chase Bank, as administrative agent. The Credit Agreement provides for (i) a five year term loan in a principal amount of $100$6.3 million (the “Term A Loan”), (ii) a seven year term loan in the principal amount of $440 million, which term loan may be increased by up to an additional $250 million upon the satisfaction of certain conditions (the “Term B Loan,” and togetherassociated with the ~~Term A Loan,~~Company’s accounts receivable securitization. In April 2005, the ~~“Term Loans”), and (iii)~~accounts receivable securitization facility was renewed with a five year multi-currency revolving credit and letter of credit facility in an aggregate principal amount of up to $100 million (the “Revolving Loans”). The Term Loans were used to finance the acquisition of the remaining 50% interest in Armkel not previously owned by the Company, pay amounts outstanding under Armkel’s principal credit facility of approximately $136 million and refinance the Company’s principal credit facility of approximately $194 million. The Revolving Loans, which are currently undrawn, are available for general corporate purposes. The obligations of the Company under the Credit Agreement are secured by substantially all of the assets of the Company and certain of its domestic subsidiaries. Those domestic subsidiaries have also guaranteed the loan obligations under the Credit Agreement. The Term Loans and the Revolving Loans bear interest under one of two rate options, selected by the Company, equal to either (i) a eurocurrency rate (adjusted for any reserve requirements) (“Eurocurrency Rate”) or (ii) the greater of the prime rate, the secondary market rate for three-month certificates of deposit (adjusted for any reserve requirements) plus 1%, or the federal funds effective rate plus 0.5% (“Alternate Base Rate”), plus (b) an applicable margin. The applicable margin is determined by the Company’s current leverage ratio. At the closingnew maturity date of ~~the Credit Agreement, the applicable margin was (a) 1.75% for the Eurocurrency Rate and (b) 0.75% for the Alternate Base Rate.~~

~~The principal debt payments required to be made are as follows:~~

(In thousands)


2004
   $ 6,988
2005
   107,878
2006
   10,859
2007
   12,742
2008
   13,993
2009 and subsequent
   749,374

   $ 901,834

~~ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued)~~

During July 2004, as a result of purchasing Kelso’s interest in Armkel, the Company amended its Accounts Receivable Securitization Agreement to increase the capacity that can be borrowed from $60 million to $100 million. The proceeds of the increased borrowing were used to make a voluntary Term A Loan payment on August 4, 2004.April 2006.

Adjusted EBITDA is a required component of the financial covenants contained in the Company’s primary credit facility and management believes that the presentation of Adjusted EBITDA is useful to investors as a financial indicator of the Company’s ability to service its indebtedness. Adjusted EBITDA may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to cash flows from operating activities, which is determined in accordance with accounting principles generally accepted in the United States. Financial covenants include a total debt to Adjusted 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. Adjusted EBITDA was approximately ~~$180.6~~$79.5 million for the first ~~9 months~~quarter of ~~2004.~~2005. The leverage ratio (total debt to Adjusted EBITDA) for the 12 months ended ~~October~~April 1, ~~2004~~2005 which, under the loan agreement, permits the inclusion of Armkel’s EBITDA prior to its acquisition by the Company for pro forma purposes was approximately ~~3.14~~2.74 versus the agreement’s maximum 4.25, and the interest coverage ratio (Adjusted EBITDA to total interest expense) for the twelve months ended April 1, 2005 was approximately ~~6.04~~5.44 versus the agreement’s minimum of 3.0. This credit facility is secured by the assets of the Company and certain domestic subsidiaries. The reconciliation of Net Cash Provided by Operating Activities (the most directly comparable GAAP financial measure) to Adjusted EBITDA for the three months ended April 1, 2005 is as follows (in thousands):


Net Cash Provided by Operating Activities	$	143,963		$	31.2
Interest Expense		29,336			10.6
Current Income Tax Provision		22,170			16.0
Distributions from Affiliates		4,301			1.9
Change in Working Capital and Other Liabilities		(28,677	)		22.7
Investment Income		(1,699	)		(0.8	)
Deferred Financing Write-off		7,995
Other		3,241			(2.1	)

Adjusted EBITDA (per loan agreement)	$	180,630		$	79.5

Net Cash Used in Investing Activities	$	(217,048	)	$	(5.4	)

Net Cash Provided by Financing Activities	$	142,077
Net Cash Used in Financing Activities				$	(69.4	)

During the ~~nine months~~first quarter of ~~2004,~~2005, cash flow from operating activities was ~~$144.0~~$31.2 million. Major factors affecting cash flow from operating activities included operating earnings before non-cash charges for depreciation and amortization, ~~the write-off of deferred financing costs~~ and a ~~decrease~~$22.7 million increase in working ~~capital.~~capital (excluding cash and cash equivalents) and other liabilities. Operating cash flow, together with ~~an increase in bank debt,~~ distributions from affiliates, proceeds from stock option exercises and existing cash, were used to ~~fund the purchase of Kelso’s interest in Armkel,~~make voluntary and mandatory debt repayments, additions to property, plant and equipment, and the payment of ~~dividends and debt repayments.~~

On July 2, 2004, the Company announced that it has agreed to invest $30 million in a company formed by Kelso & Company, a private equity group, to acquire Del Laboratories, Inc. The Company’s investment will be substantially in the form of convertible preferred stock, and will represent about 20% of the equity financing. Kelso & Company, New York, will provide the remaining equity, with the participation of Del’s existing management team.

~~The Company expects the transaction to close in this year’s fourth quarter subject to regulatory, financing and other customary conditions and will use cash on hand to fund the transaction.~~

The Company’s cash and cash equivalents will be used to invest in Del Labs, make voluntary debt repayments, pay cash dividends, make investments in property, plant and equipment and support operating needs.dividends.

Recent Accounting Pronouncements

In ~~August 2003,~~December 2004, the Financial Accounting Standards Board (“FASB”) issued a revised version of SFAS No. 123, “Share-Based Payment”, a revision of FASB Statement No. 123, “Accounting for Stock Based Compensation” and eliminates the alternative of using the intrinsic value method under Accounting Principles Board Opinion No. 25 (“APB 25”) which was permitted in Statement 123 as originally issued. Under APB 25, issuing stock options to employees generally resulted in recognition of no compensation cost. SFAS No. 123R requires entities to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant date fair value of those awards in their income statements. For the Company, ~~issued $100 million of 5.25% convertible senior debentures that may be converted into shares~~this Statement becomes effective January 1, 2006. As of the ~~Company’s common stock prior to maturity at an initial conversion price~~required effective date, any public company that used the fair-value method of ~~approximately $31.00 per share, subject to adjustment in certain circumstances. Because~~disclosure under Statement 123 will apply this Statement using a modified version of prospective application. Under the ~~inclusion~~transition method, compensation cost is recognized on or after the required effective date for the portion of outstanding awards for which the ~~contingent convertibility feature~~requisite service has not yet been rendered, based on the grant date fair value of the debentures, the Company’s diluted net income per common share does not give effect to the dilution from the conversion of the debentures until the Company’s share price exceeds 120% of the initial conversion pricethose awards calculated under Statement 123 for either recognition or ~~until the occurrence of certain specified events.~~pro forma disclosures.

The ~~Emerging Issues Task Force (EITF) concluded in EITF Issue 04-8:~~American Jobs Creation Act of 2004 (the “AJCA”) was enacted on October 22, 2004. The ~~Effect~~AJCA repeals an export incentive, creates a new deduction for qualified domestic manufacturing activities and includes a special one-time deduction of ~~Contingently Convertible Debt on Diluted Earnings per Share that contingently convertible debt (“Co-Cos”) be treated for diluted EPS purposes as if converted from debt~~85% of certain foreign earnings repatriated to ~~equity, beginning with~~ the date the contingently convertible debt instrument is initially issued, even if the triggering events (such as stock price) have not yet occurred. The effective date would be reporting periods ending on or after December 15, 2004 and prior period EPS amounts presented for comparative purposes, would have to be restated.

~~ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued)~~U.S.

The ~~change~~FASB issued FSP FAS 109-1, “Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004” (FSP FAS 109-1) on December 21, 2004. In accordance with FSP FAS 109-1, the Company will treat the deduction for qualified domestic manufacturing activities, which is effective for the Company beginning January 1, 2005, as a reduction of the income tax provision in ~~accounting rules for reporting Co-Cos will have an estimated $0.02 dilutive effect on earnings per share in 2004.~~future years as realized.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued)

In ~~January~~December 2004, the FASB issued ~~FASB Staff Position (FSP) No. 106-1~~FSP FAS 109-2, “Accounting and Disclosure ~~Requirements to~~Guidance for the ~~Medicare Prescription Drug, Improvement and Modernization~~Foreign Earnings Repatriation Provision within the American Jobs Creation Act of ~~2003” (the Act). The Act introduces a prescription drug benefit under Medicare (Medicare Part D) as well as a federal subsidy~~2004,” allowing companies additional time to ~~sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The adoption~~evaluate the effect of the ~~provisions~~AJCA on plans for reinvestment or repatriation of ~~FSP 106-1~~foreign earnings. The Company is in ~~this quarter did not have a significant impact to~~ the ~~Company’s postretirement accumulated projected benefit obligation or net periodic benefit cost.~~process of evaluating the effects of the repatriation provision.

~~ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK~~

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is facing higher costs for several categories of raw and packaging materials, particularly those based on energy prices. ~~The~~In response, the Company has ~~successful strategies in place to improve~~intensified its margin ~~structure,~~enhancement strategies, and ~~will intensify these strategies to counter~~is in the ~~effect~~process of ~~these cost increases. These strategies include traditional~~implementing a range of formulation, packaging, logistics and other cost reduction ~~programs designed to improve supply chain and organizational efficiency; more efficient promotion spending using recently developed analytical tools; and selective price increases.~~programs.

~~ITEM 4.CONTROLS AND PROCEDURES~~

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness the Company’s disclosure controls and procedures as of the end of the period covered by this report.Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and ~~forms. A controls system, no matter how well designed~~forms, and ~~operated, cannot provide absolute assurance that~~(ii) accumulated and communicated to our management, including the ~~objectives of the controls system are met,~~Chief Executive Officer and ~~no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.~~Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

Change in Internal Control over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the Company’s ~~third~~first fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Cautionary Note on Forward-Looking Statements

This report contains forward-looking statements relating to, among ~~others, to~~other things, short- and long-term financial objectives, sales and earnings growth, gross profit margin, earnings per share, non-cash accounting charges, ~~increased marketing and R&D spending, new product launches,~~cash flow, adoption of new accounting guidance, ~~effect of the Company’s fiscal calendar,~~financial forecasts and ~~financial forecasts.~~cost improvement programs. These statements represent the intentions, plans, expectations and beliefs of ~~Church & Dwight,~~the Company, and are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. The uncertainties include assumptions as to market growth and consumer demand (including the effect of political and economic events on consumer demand), increases in raw material, packaging and energy prices, the Company’s ability to raise prices or reduce promotion spending, the Company’s ability to implement cost reduction programs in response to commodity price increases, the financial condition of major customers, the risks of currency fluctuations, changes in foreign laws and other risks associated with our international operations and trade, and competitive and consumer reactions to the Company’s ~~products~~products. Other factors, which could materially affect the results, include the outcome of contingencies, including litigation, pending regulatory proceedings, environmental remediation and ~~other factors described in Church & Dwight’s quarterly and annual reports filed with~~ the ~~SEC.~~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~~our filings with the U.S. Securities and Exchange Commission. ~~This discussion is provided in reliance upon the Private Securities Litigation Reform Act of 1995.~~

PART II - ~~Other Information~~OTHER INFORMATION

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company’s Annual Meeting of Stockholders was held on May 5, 2005. The following nominees were elected to the Company’s Board of Directors for a term of three years:


Nominee	For	Withheld	Broker Non-Votes
James R. Craigie	58,036,269	533,637	0
Robert A. Davies, III	57,943,087	626,819	0
Rosina B. Dixon, M.D.	58,059,320	510,586	0
Robert D. LeBlanc	58,293,010	276,896	0
Lionel L. Nowell, III	58,085,319	484,587	0

The Company’s continuing directors are as follows: John D. Leggett, III, John F. Maypole, Robert A. McCabe, Burton B. Staniar, T. Rosie Albright, Robert H. Beeby, J. Richard Leaman, Jr., Dwight C. Minton, John O. Whitney.

The voting results on other matters submitted to a stockholder vote at the Annual Meeting were as follows:

Proposal for the amendment of the Restated Certificate of Incorporation of the Company to increase the Company’s authorized common stock from 100 million shares to 150 million shares:


For	Against	Abstained	Broker Non-Votes
56,320,712	2,154,527	94,667	0

Proposal for adoption of the 2005 Employee Stock Purchase Plan:


For	Against	Abstained	Broker Non-Votes
48,134,883	1,023,254	196,634	9,215,135

Ratification of the appointment of Deloitte & Touche LLP as independent auditors of the Company’s 2005 financial statements:


For	Against	Abstained	Broker Non-Votes
57,455,907	1,041,267	72,731	0

ITEM 6.

EXHIBITS


(3.1)		Certificate of Amendment of Restated Certificate of Incorporation dated May 9, 2005, as filed with the Secretary of the State of Delaware on May 10, 2005.

(3.2)		Restated Certificate of Incorporation of the Corporation, as amended through May 9, 2005.

(3.3)		By-laws of the Company as amended – incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K dated September 19, 2003.

(11)		Computation of earnings per share.

(31.1)		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act.

(31.2)		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act.

(32.1)		Certification of the Chief Executive Officer of Church & Dwight Co., Inc. pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.

(32.2)		Certification of the Chief Financial Officer of Church & Dwight Co., Inc. pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.

~~ITEM 6.EXHIBITS~~

~~Exhibits~~

~~(31.1) Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act.~~

~~(31.2) Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act.~~

~~(32.1) Certification of the Chief Executive Officer of Church & Dwight Co., Inc. pursuant to Rule 13a-14(b) under the~~

~~Exchange Act and 18 U.S.C. Section 1350.~~

~~(32.2) Certification of the Chief Financial Officer of Church & Dwight Co., Inc. pursuant to Rule 13a-14(b) under the~~

~~Exchange Act and 18 U.S.C. Section 1350.~~

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: ~~November 9, 2004~~	May 10, 2005	/s/ ~~Zvi Eiref~~ZVI EIREF
		ZVI EIREF
		VICE PRESIDENT FINANCE AND
		CHIEF FINANCIAL OFFICER

DATE:	May 10, 2005	/s/ GARY P. HALKER
		GARY P. HALKER
		VICE PRESIDENT FINANCE AND
		TREASURER

EXHIBITS


(3.1)		Certificate of Amendment of Restated Certificate of Incorporation dated May 9, 2005, as filed with the Secretary of the State of Delaware on May 10, 2005.

~~DATE: November 9, 2004~~ (3.2)		~~/s/ Gary P. Halker~~ Restated Certificate of Incorporation of the Corporation, as amended through May 9, 2005.

(3.3)		~~GARY P. HALKER~~By-laws of the Company as amended – incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K dated September 19, 2003.

(11)		~~VICE PRESIDENT FINANCE AND TREASURER~~Computation of earnings per share.

~~EXHIBITS~~


(31.1)		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act.

(31.2)		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act.

(32.1)		Certification of the Chief Executive Officer of Church & Dwight Co., Inc. pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.

(32.2)		Certification of the Chief Financial Officer of Church & Dwight Co., Inc. pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.

2921



ITEM		PAGE
	PART I

1.	Financial Statements	3
2.	Management’s Discussion and Analysis	21
3.	Quantitative and Qualitative Disclosure About Market Risk	26
4.	Controls and Procedures	26

	PART II

6.	Exhibits	27


	For The Three Months Ended October 1, 2004
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total Consolidated
Net sales	$	346,653		$	80,842		$	(7,185	)	$	420,310
Cost of sales		220,293			46,613			(7,185	)		259,721

Gross profit		126,360			34,229			—			160,589
Operating expenses		81,600			25,588			—			107,188

Income from operations		44,760			8,641			—			53,401
Equity in earnings of affiliates		1,143			—			—			1,143
Investment earnings		537			323			—			860
Intercompany income (expense)		121			(121	)		—			—
Other income (expense)		(362	)		913			—			551
Interest expense		(16,753	)		(1,033	)		—			(17,786	)

Income before taxes		29,446			8,723			—			38,169
Income taxes		8,195			2,569			—			10,764
Minority interest		4			—			—			4

Net Income	$	21,247		$	6,154		$	—		$	27,401


*(In thousands)*
Current Assets	$	244,682
Property, plant and equipment		76,917
Tradenames and patents		250,364
Goodwill		311,661
Other long-term assets		18,522

Total Assets acquired		902,146
Current liabilities		91,123
Long-term debt		359,522
Other long-term liabilities		37,553

Net assets acquired	$	413,948


*(In thousands)*	Three Months Ended September 26, 2003		Five Months Ended May 28, 2004		Nine Months Ended September 26, 2003
Income statement data:
Net sales	$	103,351	$	192,767	$	316,481
Gross profit		57,602		109,915		180,613
Net income		8,958		21,554		46,698
Equity in affiliate’s income recorded by the Company		4,479		10,777		23,349


*(In thousands)*	Consumer			Specialty			Total
Balance December 31, 2003	$	236,851		$	22,593		$	259,444
Tradename and fixed asset valuation adjustments		(5,527	)		—			(5,527	)
Book value of Armkel’s goodwill on day of acquisition		205,156			—			205,156
Additional goodwill associated with Armkel purchase		106,505			—			106,505
Other		—			(5	)		(5	)

Balance October 1, 2004	$	542,985		$	22,588		$	565,573


	Pension Costs Three Months Ended						Pension Costs Nine Months Ended
*(In thousands)*	Oct. 1, 2004			Sept. 26, 2003			Oct. 1, 2004			Sept. 26, 2003
Components of Net Periodic Benefit Cost:
Service cost	$	595		$	37		$	861		$	111
Interest cost		1,525			363			2,621			1,089
Expected return on plan assets		(1,413	)		(315	)		(2,410	)		(945	)
Amortization of prior service cost		1			1			3			3
Recognized actuarial (gain) or loss		126			75			376			225

Net periodic benefit cost	$	834		$	161		$	1,451		$	483


(in thousands)	Consumer Domestic		Consumer Internat’l		SPD		Corporate		Total
Net Sales
Third Quarter 2004	$	299,285	$	69,890	$	51,135		—	$	420,310
Third Quarter 2003		208,604		9,812		47,150		—		265,566

2004 Year to Date		794,205		107,773		155,108		—		1,057,086
2003 Year to Date		605,223		26,961		137,943		—		770,127

Income Before Taxes and Minority Interest⁽¹⁾
Third Quarter 2004		28,237		4,922		3,866		1,144		38,169
Third Quarter 2003		22,305		2,760		3,642		683		29,390

2004 Year to Date		82,365		13,865		13,063		2,983		112,276
2003 Year to Date		72,413		9,037		11,332		2,494		95,276

Total Assets
October 1, 2004	$	1,368,932	$	263,941	$	166,621	$	65,886	$	1,865,380
December 31, 2003	$	841,036	$	50,868	$	166,953	$	60,760	$	1,119,617