UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
(X) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended MARCH 31, 1997
Commission File Number 1-5910
CARTER-WALLACE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-4986583
(State or other jurisdiction of I.R.S. Employer Identification No.)
incorporation or organization)
1345 AVENUE OF THE AMERICAS, NEW YORK, NY 10105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-339-5000
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock
Par value $1.00 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Class B Common Stock, par value $1.00 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K of any amendment to this
Form 10-K. (X)
The number of shares of the registrant's Common Stock and Class B Common Stock
outstanding at June 2, 1997 was 33,951,256 and 12,389,361, respectively.
The aggregate market value of voting stock held by non-affiliates of the
registrant as of June 2, 1997 was approximately $370,068,000.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Stockholders for the fiscal
year ended March 31, 1997 Parts I & II
Proxy Statement for the Annual Meeting of
Stockholders to be held July 15, 1997 Parts III & IV
PART I
ITEM 1. BUSINESS
Carter-Wallace, Inc. (the "Company") is engaged in the manufacture and sale of a
diversified line of products in the Consumer Products and Health Care segments.
Additional information is presented on page 11 "Description of Business
Segments" of the 1997 Annual Report to Stockholders and is herein expressly
incorporated by reference.
BUSINESS SEGMENTS AND GEOGRAPHIC DATA
Financial information about the Company's business segments and geographic areas
for the three years ended March 31, 1997 is presented on page 8 under the
caption "Net Sales and Earnings" and also on pages 25 and 26, note 14, "Business
Segments" of the Notes to Consolidated Financial Statements, both included in
the 1997 Annual Report to Stockholders and herein expressly incorporated by
reference.
FOREIGN OPERATIONS
Foreign operations are generally subject to certain political and economic risks
that are not present in domestic operations. Such risks may include
expropriation of assets, restrictions on earnings remittances and fluctuating
exchange rates. Changes in foreign exchange rates had the effect of decreasing
sales by $1,900,000 in the fiscal year ended March 31, 1997 in comparison to the
prior year. Additional information is presented on page 18, note 4, "Foreign
Operations" of the Notes to Consolidated Financial Statements of the 1997 Annual
Report to Stockholders and is herein expressly incorporated by reference.
COMPETITION
Both business segments in which the Company operates are extremely competitive
and include larger corporations with greater resources for research, product
development and promotion. The Company competes on the basis of price,
advertising, promotion, quality of product and other methods relevant to the
business. In fiscal 1997, the Company's "Arrid" line of anti-perspirants and
deodorants is believed to have accounted for an estimated 7.2% share of the
domestic anti-perspirant and deodorant market. The "Trojan", "Class Act" and
"Naturalamb" condom brands are estimated to have accounted for well over 60% of
total domestic retail condom sales. The Company's worldwide condom sales were
approximately $95,400,000, $98,700,000 and $91,900,000 in the fiscal years ended
March 31, 1997, 1996 and 1995, respectively. Additional information is presented
on page 8 under the caption "Net Sales and Earnings" in the 1997 Annual Report
to Stockholders and is herein expressly incorporated by reference.
1
RAW MATERIALS
The Company's major raw materials are chemicals, plastics, latex, steel cans and
packaging materials. These materials are generally available from several
sources and the Company has had no significant supply problems to date. The
Company generally has two or more approved suppliers for production materials
and issues purchase commitments to provide its suppliers with adequate lead
time.
PATENTS AND LICENSES
The Company owns or is licensed under a number of patents and patent
applications covering several of its products. The expiration or any other
change in any of these patents or patent applications will not materially affect
the Company's business. Royalty income does not constitute a material portion of
total revenue.
RESTRUCTURING OF OPERATIONS AND FACILITIES
Information regarding the Company's restructuring of operations and facilities
is presented on page 9 under the caption "Restructuring of Operations and
Facilities" and on page 24 in note 13, "Restructuring of Operations and
Facilities" of the Notes to Consolidated Financial Statements, both included in
the 1997 Annual Report to Stockholders and herein expressly incorporated by
reference.
FELBATOL (FELBAMATE)
Information regarding the effect of "Felbatol" matters on the Company's business
is presented on page 9 under the caption "Felbatol (Felbamate)" and on page 28
in note 17, "Felbatol (Felbamate)" of the Notes to Consolidated Financial
Statements, both included in the 1997 Annual Report to Stockholders and herein
expressly incorporated by reference.
ENVIRONMENTAL MATTERS
Information regarding environmental matters is presented on pages 28 and 29 in
note 19, "Litigation Including Environmental Matters" of the Notes to
Consolidated Financial Statements, included in the 1997 Annual Report to
Stockholders and herein
expressly incorporated by reference.
2
RESEARCH AND DEVELOPMENT
Expenditures for research and development totaled $27,284,000 in 1997,
$26,494,000 in 1996 and $41,315,000 in 1995. Research and development expenses
in 1997 increased $790,000 or 3.0% as a result of higher spending in the
Consumer Products segment. Research and development expense in the Health Care
segment was lower than the prior year. In 1996 research and development expenses
decreased by $14,821,000 or 36% from the prior year primarily due to lower
spending for "Felbatol" (felbamate) as well as the completion of the "Astelin"
(azelastine) clinical trials.
Since October 1994, research and development of "Astelin" Nasal Spray for
rhinitis and "Taurolin" (taurolidine), an antitoxin for the treatment of sepsis
has continued through independent research facilities managed by internal
supervisory personnel.
Research is also continuing on "Felbatol" (felbamate).
The "Astelin" Nasal Spray New Drug Application ("NDA") was approved on November
4, 1996 and launched on March 10, 1997. The "Astelin" (azelastine) tablet NDA
for rhinitis is pending at the FDA. The Company has not yet decided whether to
seek final approval for this NDA. The "Astelin" (azelastine) tablet NDA for
asthma will be withdrawn as soon as it is no longer needed to support the other
two NDAs.
A large scale, multi-centered clinical efficacy trial for "Taurolin"
(taurolidine) is ongoing.
Approximately 160 employees are employed in research and development activities.
EMPLOYEES
The Company, together with its subsidiaries, employed approximately 3,460 people
worldwide at March 31, 1997.
DISCONTINUATION OF THE ORGANIDIN (IODINATED GLYCEROL) PRODUCT LINE
Information regarding the effect of discontinuing the "Organidin" (iodinated
glycerol) product line is presented on pages 9 and 10 under the caption
"Discontinuance of the Organidin (Iodinated Glycerol) Product Line" and on page
28 in note 18, "Discontinuance of the Organidin (Iodinated Glycerol) Product
Line" of the Notes to Consolidated Financial Statements, both included in the
1997 Annual Report to Stockholders and herein expressly incorporated by
reference.
ACQUISITIONS
Information regarding acquisitions is presented on page 24 in note 10,
"Acquisitions" of the Notes to Consolidated Financial Statements, included in
the 1997 Annual Report to Stockholders and is herein expressly incorporated by
reference.
3
ITEM 2. PROPERTIES
The executive offices of the Company are located at 1345 Avenue of the Americas,
New York, New York, in space leased until May, 2011. A portion of this space has
been subleased. The following are the other principal facilities of the Company:
AREA
LOCATION PRODUCTS MANUFACTURED (SQ. FEET)
OWNED IN FEE:
MANUFACTURING FACILITIES
AND OFFICES:
Cranbury, New Jersey Pharmaceuticals, toiletries
and pet products 734,000
Colonial Heights,
Virginia Condoms 200,000
Decatur, Illinois Pharmaceuticals 108,000
Winsted, Connecticut Pet products 45,000
Montreal, Canada Pharmaceuticals 162,000
Folkestone, England Toiletries 76,000
Milan, Italy Pharmaceuticals and diagnostics 52,000
Pisa, Italy Toiletries, adhesive tapes
and bandages 49,000
Mexico City, Mexico Pharmaceuticals and diagnostics 63,000
New Plymouth, New Zealand Condom processing 31,000
WAREHOUSE AND OFFICES:
Toronto, Canada 52,000
LEASED:
MANUFACTURING FACILITIES AND OFFICES:
Santa Ana, California Toiletries 10,400
Mexico City, Mexico Toiletries 56,000
Barcelona, Spain Toiletries 58,600
Milan, Italy Diagnostics 21,000
WAREHOUSE AND OFFICES:
Dayton, New Jersey 200,000
Momence, Illinois 43,000
Plainsboro, New Jersey * 23,300
Sydney, Australia 19,000
Folkestone, England 40,000
Clichy, France * 11,800
Revel, France 36,000
* OFFICES ONLY
4
The Company has agreements with several agents throughout the world for the
manufacture of certain products to its specifications. The Company has several
other short-term leases for manufacturing plants, warehousing space and sales
offices. In April, 1997, the Company reopened its New Plymouth, New Zealand
facility. In addition, the Company consolidated its two Canadian operations and
has discontinued manufacturing operations at its Toronto, Canada facility. With
minor exceptions, all other facilities are operating at normal capacity.
Maintenance and Repairs were $6,061,000 in 1997, $6,189,000 in 1996 and
$6,950,000 in 1995.
ITEM 3. LEGAL PROCEEDINGS
Information regarding Legal Proceedings involving the Company is presented on
pages 28 through 31 in note 19, "Litigation Including Environmental Matters" of
the Notes to Consolidated Financial Statements, included in the 1997 Annual
Report to Stockholders and herein expressly incorporated by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
5
EXECUTIVE OFFICERS OF THE REGISTRANT *
Executive Officers of the Registrant are as follows:
HELD PRESENT
NAME AGE OFFICE OFFICE SINCE
Henry H. Hoyt, Jr. 69 Chairman of the Board and
Chief Executive Officer 1974
Ralph Levine 61 President and Chief Operating Officer 1997
Paul A. Veteri 55 Executive Vice President, Finance
and Chief Financial Officer 1997
T. Rosie Albright 50 Vice President, Consumer Products, U.S. 1995
John Bridgen, Ph.D. 50 Vice President, Diagnostics, U.S. 1984
Robert A. Cuthbert 70 Vice President, Pet Products, U.S. 1983
Donald R. Daoust,Ph.D. 61 Vice President, Quality Control 1978
Peter J. Griffin 54 Vice President and Controller 1983
Adrian J. L. Huns 49 Vice President, International 1996
Michael J. Kopec 57 Vice President, Manufacturing 1978
Stephen R. Lang 62 Vice President, Secretary and
General Counsel 1997
Thomas B. Moorhead 63 Vice President, Human Resources 1987
George H. Ohye 61 Vice President, Compliance and
Regulatory 1994
Herbert Sosman 64 Vice President, Pharmaceuticals, U.S. 1984
C. Richard Stafford 61 Vice President, Corporate Development 1977
James L. Wagar 62 Vice President and Treasurer 1981
Mark Wertlieb 41 Vice President, Taxes 1996
Each officer holds office until the first meeting of the Board of Directors
following each Annual Meeting of the Stockholders and until his successor has
been duly elected and qualified (except that the Board of Directors may at any
meeting elect additional officers), unless his term is earlier terminated
through death, resignation, removal or otherwise. The next Annual Meeting of the
Stockholders is scheduled to be held July 15, 1997.
* All executive officers have held their present office for the last five years
except those noted on the following page.
6
EXECUTIVE OFFICERS OF THE REGISTRANT (CONT'D)
Ralph Levine was appointed President and Chief Operating Officer in April,
1997. Mr. Levine was previously Vice President, Secretary and General Counsel
since prior to 1992 until April, 1997.
Paul A. Veteri was appointed Executive Vice President and Chief Financial
Officer, in April, 1997. Mr. Veteri was previously Vice President and Chief
Financial Officer since prior to 1992 until April, 1997.
Stephen R. Lang was appointed Corporate Vice President in March, 1997 and
Secretary and General Counsel in April, 1997. Mr. Lang was previously a Partner
and Chairman of the Litigation Department of Whitman, Breed, Abbott & Morgan
since prior to 1992 until March, 1997.
Mark Wertlieb was appointed Corporate Vice President, Taxes in August,
1996. Mr. Wertlieb was previously a Tax Partner at KPMG Peat Marwick LLP since
prior to 1992 until August, 1996.
T. Rosie Albright was appointed Corporate Vice President, Consumer
Products, U.S. and President, Carter Products Division, in December, 1995. Ms.
Albright was previously General Manager and Executive Vice President, Beauty
Care with Revlon, Inc. since 1993. She was Executive Vice President of the
Carter Products Division of Carter-Wallace, Inc. from 1992 to 1993.
Adrian J. L. Huns was appointed Corporate Vice President, International and
President, International Division in May, 1996. Mr. Huns was Managing Director
of Carter-Wallace Ltd., a subsidiary of Carter-Wallace, Inc., since prior to
1992 until May, 1996.
George H. Ohye was appointed Vice President, Compliance and Regulatory in
April, 1994. Mr. Ohye was previously Senior Vice President, Regulatory Affairs
with Johnson & Johnson's R.W. Johnson Pharmaceutical Research Institute since
prior to 1992 until April, 1994. He held the concomitant position of Member,
Board of Directors of the Ortho-McNeil Pharmaceutical Division of Johnson &
Johnson.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK-
HOLDER MATTERS
Information required by this item is presented on pages 1 and 7 of the 1997
Annual Report to Stockholders and is herein expressly incorporated by reference.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this item is incorporated herein by reference to page 7
of the 1997 Annual Report to Stockholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Information required by this item is incorporated herein by reference to pages 8
through 10 of the 1997 Annual Report to Stockholders.
7
PART III
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item is incorporated herein by reference to pages
12 through 32 of the 1997 Annual Report to Stockholders.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to Directors of the Company is incorporated by
reference to the Company's Proxy Statement, dated June 16, 1997, for the Annual
Meeting of Stockholders to be held July 15, 1997, under the captions "Stock
Ownership", "Election of Directors" and "Board of Directors and Committees".
Information with respect to Executive Officers of the Registrant is set forth
under the heading "Executive Officers of the Registrant" in Part I on pages 6
and 7 of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is incorporated herein by reference to the
Company's Proxy Statement, dated June 16, 1997, for the Annual Meeting of
Stockholders to be held July 15, 1997, under the caption "Executive Compensation
and Other Information".
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information pertaining to the security ownership of certain beneficial owners
and management is incorporated herein by reference to the Company's Proxy
Statement, dated June 16, 1997, for the Annual Meeting of Stockholders to be
held July 15, 1997, under the captions "Voting Rights" and "Stock Ownership".
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item is incorporated herein by reference to the
Company's Proxy Statement, dated June 16, 1997, for the Annual Meeting of
Stockholders to be held July 15, 1997, under the caption "Election of
Directors".
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(A)(1),(A)(2) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
The financial statements and financial statement schedule filed as part of this
report are listed or incorporated by reference in the "Index of Financial
Statements and Financial Statement Schedule" on page 14 of this Form.
8
(A) (3) EXHIBITS
3.1 Certificate of Incorporation, as amended, of the Company
(incorporated herein by reference to Exhibit 3.1 of the
Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1992).
3.2 By-Laws of the Company, as amended (incorporated herein by
reference to Exhibit 3.2 of the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 1993).
10.2 1977 Restricted Stock Award Plan, as amended (incorporated herein
by reference to Exhibit 10.2 of the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1990).
10.3 Employees' Retirement Plan, as amended (incorporated herein by
reference to Exhibit 10.3 of the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 1993).
10.4 Profit Sharing Plan (incorporated herein by reference to the
description of such plan set forth in the Company's Proxy
Statement dated June 18, 1993, for the Annual Meeting of
Stockholders to be held July 20, 1993, under the caption
"Executive Compensation and Other Information").
10.5 Executives' Additional Compensation Plan (incorporated herein by
reference to the description of such plan set forth in the
Company's Proxy Statement dated June 18, 1993, for the Annual
Meeting of Stockholders to be held July 20, 1993, under the
caption "Executive Compensation and Other Information").
10.6 Employment Agreement, dated April 1, 1997, between the Company
and Ralph Levine.
10.7 Employment Agreement, dated April 1, 1997, between the Company
and Paul A. Veteri.
10.8 Employment Agreement, dated April 15, 1997 and effective October
31, 1997, between the Company and Herbert Sosman.
10.9 Employment Agreement, dated November 14, 1991, between the
Company and Herbert Sosman (incorporated herein by reference to
Exhibit 10.10 of the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1992).
10.10 Supplemental Death Benefit Agreement, as amended (incorporated
herein by reference to Exhibit 10.10 of the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1993).
(CONTINUED)
9
(A) (3) EXHIBITS (CONT'D)
10.11 Lease Agreement, dated December 2, 1988, between the Company and
Fisher - Sixth Avenue Company and Hawaiian Sixth Avenue
Corporation (incorporated herein by reference to Exhibit 10.10 of
the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1989).
10.12 Corporate Officer Medical Expense Reimbursement Plan
(incorporated herein by reference to Exhibit 10.12 of the
Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1993).
10.13 Executive Medical Expense Reimbursement Plan, as amended
(incorporated herein by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1993).
10.14 Executive Pension Benefits Plan, as amended (incorporated herein
by reference to Exhibit 10.14 of the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1995).
10.15 Executive Savings Plan (incorporated herein by reference to
Exhibit 10.15 of the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1994).
10.16 Amendment to Revolving Credit Agreement, dated as of October 1,
1995 (incorporated herein by reference to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1995).
10.17 Note Agreement, dated as of December 1, 1995 (incorporated herein
by reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended December 31, 1995).
10.18 1996 Long-Term Incentive Plan (incorporated herein by reference
to the description of such plan set forth in the Company's
Consent Solicitation Statement, furnished to its Stockholders on
January 22, 1996, under the caption "Carter- Wallace, Inc. 1996
Long-Term Incentive Plan").
10.19 Employment Agreement, dated September 11, 1996, between the
Company and T. Rosie Albright.
10.20 Consulting Agreement, dated July 15,1996, between the Company
and Daniel J. Black.
13 Annual Report to Stockholders for the fiscal year ended March 31,
1997.
10
EXHIBITS (CONT'D)
21 Subsidiaries.
23 KPMG Peat Marwick LLP Accountants' Consent
27 Financial Data Schedule (EDGAR filing only)
(B) REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the quarter ended March
31, 1997.
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CARTER-WALLACE, INC.
(Registrant)
DATED: June 16, 1997 BY: /s/Ralph Levine
------------- ---------------
Ralph Levine
President and Chief
Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the respective dates indicated:
SIGNATURE TITLE DATE
/s/Henry H. Hoyt, Jr. Chairman of the Board and June 16, 1997
- --------------------------
Henry H. Hoyt, Jr. Chief Executive Officer,
Director (Principal Execu-
tive Officer)
/s/Daniel J. Black Director June 16, 1997
- --------------------------
Daniel J. Black
/s/David M. Baldwin Director June 16, 1997
- --------------------------
David M. Baldwin
/s/Dr. Richard L. Cruess Director June 16, 1997
- --------------------------
Dr. Richard L. Cruess
/s/Suzanne H. Garcia Director June 16, 1997
- --------------------------
Suzanne H. Garcia
12
SIGNATURE TITLE DATE
/s/Scott C. Hoyt Director June 16, 1997
- --------------------------
Scott C. Hoyt
/s/Ralph Levine President and Chief June 16, 1997
- --------------------------
Ralph Levine Operating Officer,
Director
/s/Herbert M. Rinaldi Director June 16, 1997
- --------------------------
Herbert M. Rinaldi
/s/Paul A. Veteri Executive Vice President, June 16, 1997
- --------------------------
Paul A. Veteri Finance, Director (Principal
Financial Officer)
/s/Peter J. Griffin Vice President and June 16, 1997
- --------------------------
Peter J. Griffin Controller (Principal
Accounting Officer)
13
CARTER-WALLACE, INC. AND SUBSIDIARIES
INDEX OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
The consolidated financial statements and the related report of KPMG Peat
Marwick LLP dated May 27, 1997 appearing on pages 12 through 32 of the 1997
Annual Report to Stockholders are incorporated herein by reference in this Form
10-K Annual Report.
The following are set forth in this Annual Report on Form 10-K:
PAGE
INDEPENDENT AUDITORS' REPORT ON SUPPORTING FINANCIAL
STATEMENT SCHEDULE 15
SCHEDULE II - Valuation and qualifying accounts for each
of the three years ended March 31, 1997 16
All other financial statement schedules are omitted because they are not
applicable or not required or because the information is included in the
consolidated financial statements or related notes.
14
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Carter-Wallace, Inc.:
Under date of May 27, 1997, we reported on the consolidated balance sheets of
Carter-Wallace, Inc. and subsidiaries as of March 31, 1997 and 1996, and the
related consolidated statements of earnings and retained earnings and cash flows
for each of the years in the three-year period ended March 31, 1997, as
contained in the 1997 annual report to stockholders. These consolidated
financial statements and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year 1997. In connection with our audits of
the aforementioned consolidated financial statements, we also have audited the
related financial statement schedule as listed in the accompanying index. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
KPMG PEAT MARWICK LLP
New York, New York
May 27, 1997
15
SCHEDULE II
CARTER-WALLACE, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
Three Years Ended March 31, 1997
(in thousands of dollars)
Balance at Charged to Charged Balance
beginning costs and to other at end
Description of period expenses accounts Deductions of period
YEAR ENDED MARCH 31, 1997:
Deducted from assets to which they apply:
Allowance for
doubtful accounts $ 5,358 $ 1,182 (c) $ - $ 1,226 (a)(c) $ 5,314
Allowance for cash
discounts 1,358 8,048 - 7,990 (b) 1,416
------- ------- ------ ------- -------
$ 6,716 $ 9,230 $ - $ 9,216 $ 6,730
------- ------- ------ ------- -------
YEAR ENDED MARCH 31, 1996:
Deducted from assets to which they apply:
Allowance for
doubtful accounts $ 4,827 $ 1,090 $ - $ 559 (a) $ 5,358
Allowance for cash
discounts 1,517 8,381 - 8,540 (b) 1,358
------- ------- ------ ------- -------
$ 6,344 $ 9,471 $ - $ 9,099 $ 6,716
------- ------- ------ ------- -------
Reserve for Property
Plant and Equipment $14,308 $16,026 $ - $30,334 (d) $ -
------- ------- ------ ------- ------
YEAR ENDED MARCH 31, 1995:
Deducted from assets to which they apply:
Allowance for
doubtful accounts $ 4,284 $ 2,043 (e) $ - $ 1,500 (a)(e) $ 4,827
Allowance for cash
discounts 1,671 8,127 - 8,281 (b) 1,517
------- ------- ------ ------- -------
$ 5,955 $10,170 $ - $ 9,781 $ 6,344
------- ------- ------ ------- -------
Reserve for Property
Plant and Equipment $ - $18,028 $ - $ 3,720 (d) $14,308
------- ------- ------ ------- -------
<FN>
NOTES:
(A) Accounts written off and recovered.
(B) Net discounts allowed to customers.
(C) Includes $508 related to trade receivables from a wholesaler who filed for
bankruptcy.
(D) Reserves applied against related assets.
(E) Includes $529 related to trade receivables from a drug wholesaler who filed
for bankruptcy.
16