<PAGE>   1
================================================================================

                                  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 DECEMBER 31, 1998
                                       OR
            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                         COMMISSION FILE NUMBER 1-10585

                           --------------------------

                            CHURCH & DWIGHT CO., INC.
             (Exact name of registrant as specified in its charter)

     INCORPORATED IN DELAWARE      I.R.S. EMPLOYER IDENTIFICATION NO. 13-4996950

    469 NORTH HARRISON STREET,                    08543-5297
      PRINCETON, NEW JERSEY                       (Zip Code)
      (Address of principal
        executive offices)

       Registrant's telephone number, including area code: (609) 683-5900

                           --------------------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                     NAME OF EACH EXCHANGE
         TITLE OF EACH CLASS                          ON WHICH REGISTERED

     Common Stock, $1 par value                     New York Stock Exchange
   Preferred Stock Purchase Rights                  New York Stock Exchange

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

                           --------------------------

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 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 or any amendment to this
Form 10-K. [ ]

As of March 8, 1999, 18,767,558 shares of Common Stock held by non-affiliates
were outstanding with an aggregate market value of approximately $809 million.
The aggregate market value is based on the closing price of such stock on the
New York Stock Exchange on March 8, 1999.

As of March 8, 1999, 19,403,789 shares of Common Stock were outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

 PARTS II AND IV  Portions of registrant's 1998 Annual Report to Stockholders.


 PART III         Portions of registrant's Proxy Statement for the Annual
                  Meeting of Stockholders to be held on May 6, 1999.
================================================================================

<PAGE>   2
                                TABLE OF CONTENTS



                                     PART I


<TABLE>
<CAPTION>
ITEM                                                                       PAGE
<S>    <C>                                                                 <C>
 1.    Business                                                            - 1 -
 2.    Properties                                                          - 6 -
 3.    Legal Proceedings                                                   - 7 -
 4.    Submission of Matters to a Vote of Security Holders                 - 7 -
                                                                           
                                                                           

                                     PART II                               
                                                                           
                                                                           
 5.    Market for the Registrant's Common Equity and Related               
       Stockholder Matters                                                 - 7 -
 6.    Selected Financial Data                                             - 7 -
 7.    Management's Discussion and Analysis of Financial Condition         
       and Results of Operations                                           - 7 -
 8.    Financial Statements and Supplementary Data                         - 7 -
 9.    Changes in and Disagreements with Accountants on Accounting         
       and Financial Disclosure                                            - 7 -
                                                                           
                                                                           

                                    PART III                               
                                                                           
                                                                           
 10.   Directors and Executive Officers of the Registrant                  - 7 -
 11.   Executive Compensation                                              - 8 -
 12.   Security Ownership of Certain Beneficial Owners and Management      - 8 -
 13.   Certain Relationships and Related Transactions                      - 8 -
                                                                           
                                                                           
                                     PART IV                               
                                                                           
                                                                           
 14.   Exhibits, Financial Statement Schedule and Reports on Form 8-K      - 8 -
</TABLE>
                                                                

<PAGE>   3

                                     PART I


ITEM 1. BUSINESS.

     The Company was founded in 1846 and is the world's leading producer of
sodium bicarbonate, popularly known as baking soda, a versatile chemical which
performs a broad range of functions such as cleaning, deodorizing, leavening and
buffering. The Company specializes in sodium bicarbonate and sodium
bicarbonate-based products, along with other products which use the same raw
materials or technology or are sold into the same markets.

     The Company sells its products, primarily under the ARM & HAMMER(R)
trademark, to consumers through supermarkets, drug stores and mass
merchandisers; and to industrial customers and distributors. ARM & HAMMER is
the registered trademark for a line of consumer products which includes ARM &
HAMMER Baking Soda, ARM & HAMMER DENTAL CARE(R) Dentifrices and ARM & HAMMER
DENTAL CARE Gum, ARM & HAMMER Carpet Deodorizer, ARM & HAMMER Deodorizing Air
Freshener, ARM & HAMMER Powder and Liquid Laundry Detergent and ARM & HAMMER
Deodorant Anti-Perspirant with Baking Soda. The ARM & HAMMER trademark is also
used for a line of chemical products, the most important of which are sodium
bicarbonate, ammonium bicarbonate, sodium sesquicarbonate, ARM & HAMMER
MEGALAC(R) Rumen Bypass Fat and ARMEX(R) Blast Media. The Company also owns
BRILLO(R) Soap Pads and other consumer products. In 1998, consumer products
represented 82% and specialty products 18% of the Company's sales.
Approximately 91% of the Company's sales revenues are derived from sales in the
United States.

CONSUMER PRODUCTS

     PRINCIPAL PRODUCTS

     The Company's founders first marketed baking soda in 1846 for use in home
baking. The ARM & HAMMER trademark was adopted in 1867. Today, this product is
known for a wide variety of uses in the home, including as a refrigerator and
freezer deodorizer, scratchless cleaner and deodorizer for kitchen surfaces and
cooking appliances, bath additive, dentifrice, cat litter deodorizer, and
swimming pool pH stabilizer. The Company estimates that a majority of U.S.
households have a box of baking soda on hand. Although no longer the Company's
largest single business, ARM & HAMMER Baking Soda remains the leading brand of
baking soda in terms of consumer recognition of the brand name and its
reputation for quality and value.

     The deodorizing properties of baking soda have since led to the development
of several other household products; ARM & HAMMER Carpet Deodorizer and ARM &
HAMMER Deodorizing Air Freshener are both available in a variety of fragrances.
In 1992, the Company launched ARM & HAMMER Cat Litter Deodorizer, a scented
baking soda product targeted to cat-owning households and veterinarians. During
the fourth quarter of 1997, the Company introduced nationally ARM & HAMMER SUPER
SCOOP(R), The Baking Soda Clumping Litter, which competes in the fast-growing
clumping segment of the cat litter market.

     The Company's largest consumer business today, measured by sales volume, is
in the laundry detergent market. The ARM & HAMMER brand name has been associated
with this market since the last century when ARM & HAMMER Super Washing Soda was
first introduced as a heavy-duty laundry and household cleaning product. The
Company today makes products for use in various stages of the laundry cycle;
powdered and liquid laundry detergents, fabric softener dryer sheets and a
laundry detergent booster.

ARM & HAMMER Laundry Detergents, in both powder and liquid forms, have been
available nationally since the early 1980's. The Company markets these brands as
value products, priced at a 15 to 20 percent discount from products identified
by the Company as market leaders. In late 1996, the Company reformulated and
concentrated the product. A companion product, ARM & HAMMER Liquid Laundry
Detergent, is also available in regular and perfume and dye-free forms. In 1995
and again in 1998, this product was reformulated to improve its performance.


                                       1

<PAGE>   4
     In 1992, the Company completed the national expansion of another laundry
product, ARM & HAMMER Fabric Softener Sheets. This product stops static cling,
and softens and freshens clothes. In 1998, the Company acquired the TOSS 'N
SOFT(R) brand of dryer sheets and combined both products under the FRESH &
SOFT(TM) brand name.

     ARM & HAMMER Baking Soda has long been used as a dentifrice. Its mild
cleansing action cleans and polishes teeth, removes plaque and leaves the mouth
feeling fresh and clean. These properties have led to the development of a
complete line of sodium bicarbonate-based dentifrice products which are marketed
and sold nationally: ARM & HAMMER DENTAL CARE, The Baking Soda Tooth Powder; ARM
& HAMMER DENTAL CARE, The Baking Soda Toothpaste; ARM & HAMMER DENTAL CARE Gel;
ARM & HAMMER DENTAL CARE Tartar Control Formula; ARM & HAMMER DENTAL CARE Tartar
Control Gel; ARM & HAMMER PEROXICARE, a baking soda toothpaste containing
hydrogen peroxide; and Tartar Control PEROXICARE. In 1996, three new ARM &
HAMMER DENTAL CARE Toothpaste line extensions were introduced nationally, ARM &
HAMMER DENTAL CARE Sensitive Formula, ARM & HAMMER DENTAL CARE Extra-Whitening
and ARM & HAMMER DENTAL CARE Smooth Spearmint. In early 1998, the Company
introduced ARM & HAMMER DENTAL CARE Gum, a baking soda-based oral care product
that is available in three flavors. In early 1999, the Company introduced ARM &
HAMMER ADVANCE WHITE line of dentifrice for the whitening segment of the
toothpaste market.

     The Company markets and sells, ARM & HAMMER Deodorant Anti-Perspirant with
Baking Soda, and ARM & HAMMER Deodorant with Baking Soda. These products are
available in various scented and unscented stick, aerosol and roll-on forms,
including ARM & HAMMER Deodorant with Baking Soda in a wide solid stick and a
jumbo oval stick Deodorant Anti-Perspirant. In 1997, the Company launched
nationally ARM & HAMMER Aerosol Deodorant Anti-Perspirant.

     In 1997, the Company acquired a group of five household cleaning brands
from The Dial Corporation. The brands acquired were BRILLO(R) Soap Pads and
other steel wool products, PARSONS(R) and BO-PEEP(R) Ammonia, CAMEO(R) Metal
Polish, RAIN DROPS(R) Water Softener and SNO BOL(R) Cleaners. During the first
quarter of 1998, the Company purchased from The Dial Corporation TOSS 'N SOFT(R)
Dryer Sheets. The acquisition of these brands broadens the Company's base of
household cleaning products, and fit well within the Company's current sales,
marketing and distribution activities.

     COMPETITION

     The markets for retail consumer products are highly competitive. ARM &
HAMMER Baking Soda competes with generic and private label brands of grocery
chains. ARM & HAMMER DENTAL CARE dentifrice products, ARM & HAMMER Carpet
Deodorizer, ARM & HAMMER Deodorant Anti-Perspirant and ARM & HAMMER Deodorizing
Air Freshener compete with other nationally advertised brands, generally sold by
larger multi-national companies. ARM & HAMMER DENTAL CARE Gum, although an oral
care product, competes with other chewing gum brands which are promoted as good
for oral health.

     The Company's laundry products, ARM & HAMMER Powder Laundry Detergent, ARM
& HAMMER Liquid Laundry Detergent, ARM & HAMMER Super Washing Soda, and ARM &
HAMMER FRESH & SOFT Dryer Sheets, all have small shares in large markets
competing generally against large multi-national consumer packaged goods
companies.

     All of the Company's products are competitively priced and receive strong
support in the form of trade and/or consumer promotion. In addition, the Company
advertises certain products on national television.

     DISTRIBUTION

     The Company's consumer products are primarily marketed throughout the
United States and Canada and sold through supermarkets, mass merchandisers and
drugstores. The Company employs a sales force based regionally throughout the
United States. This sales force utilizes the services of independent food
brokers in each market. The Company's products are strategically located in
public warehouses and either picked up by customers or delivered by independent
trucking companies.


                                       2

<PAGE>   5
SPECIALTY PRODUCTS

     PRINCIPAL PRODUCTS

     The Company's specialty products business primarily consists of the
manufacture, marketing and sale of sodium bicarbonate in a range of grades and
granulations for use in industrial and agricultural markets. In industrial
markets, sodium bicarbonate is used by other manufacturing companies as a
leavening agent for commercial baked goods, as an antacid in pharmaceuticals, as
a carbon dioxide release agent in fire extinguishers, and as an alkaline agent
in swimming pool chemicals, and as an agent in kidney dialysis. A special grade
of sodium bicarbonate, as well as sodium sesquicarbonate, is sold to the animal
feed market as a feed additive for use by dairymen as a buffer, or antacid, for
dairy cattle.

     The Company markets and sells MEGALAC Rumen Bypass Fat, a nutritional
supplement made from natural oils, which allows cows to maintain energy levels
during the period of high-milk production, resulting in improved milk yields and
minimal weight loss. The product and the trademark MEGALAC are licensed under a
long-term license agreement from a British company, Volac Ltd.

     In January 1999, the Company announced it was forming a joint venture with
the Safety-Kleen Corporation called the ArmaKleen Company. This joint venture
will distribute Church & Dwight's proprietary product line of aqueous cleaners
along with the Company's Armex Blast Media line which is designed for the
removal of a wide variety of surface coatings. During the first quarter of 1999,
the Company sold the Armex blast cleaning equipment business to U.S. Filter
Surface Preparation Group, Inc., a U.S. Filter Company.

     The Company markets and sells ammonium bicarbonate and other specialty
chemicals to food and agricultural markets in Europe through its wholly-owned
British subsidiary Brotherton Speciality Products Ltd.

     The Company and Occidental Petroleum Corporation are equal partners in a
joint venture named Armand Products Company, which produces and markets
potassium carbonate and potassium bicarbonate. Potassium chemicals are sold,
among others, to the glass industry for use in TV and computer monitor screens.

     During 1997, the Company acquired a 40 percent equity interest in
QGN/Carbonor, a Brazilian bicarbonate/carbonate-related chemical company. The
agreement includes an option for the Company to increase its interest to 75
percent by March 31, 1999.

     COMPETITION

     The sodium bicarbonate industry continues to be affected by competition
from domestic sodium bicarbonate producers and imports. In agricultural markets,
sodium bicarbonate also competes with several alternative buffer products. The
competitive level is substantial as competitors employ aggressive selling
techniques in the attempt to build their respective businesses. Despite this
intense competition, the Company's business has remained essentially level.

     The Company competes primarily on the basis of its product quality, grade
availability and reliability of supply from a two-plant manufacturing system.
Pricing is a major competitive factor for animal feed and other less specialized
grades of sodium bicarbonate.

     The addition of a combined total of 75,000 tons of potassium carbonate
capacity by competitors, has intensified the competitive environment in the
potassium carbonate business, as the new entrants try to gain volume.
Additionally, a growing, worldwide over capacity in video glass production
results in extreme pressure on all raw materials sold to that industry,
including potassium carbonate.

     DISTRIBUTION

     The Company markets sodium bicarbonate and other chemicals to industrial
and agricultural customers throughout the United States and Canada. Distribution
is accomplished through regional sales offices and manufacturer's
representatives augmented by the sales personnel of independent distributors
throughout the country.


                                       3

<PAGE>   6
     RAW MATERIALS AND SOURCES OF SUPPLY

     The Company manufactures sodium bicarbonate for both of its consumer and
industrial businesses at two of its plants located at Green River, Wyoming and
Old Fort, Ohio.

     The production of sodium bicarbonate requires two basic raw materials, soda
ash and carbon dioxide. The primary source of soda ash used by the Company is
the mineral, trona, which is found in abundance in southwestern Wyoming, near
the Company's Green River plant. The Company had acquired a number of leases
allowing it to extract these trona deposits. In January 1999, the Company
announced it agreed to sell most of these leases to Solvay Minerals, Inc. The
Company will retain adequate trona reserves to support the requirements of the
sodium bicarbonate business and may acquire other leases in the future as the
need arises.

     The Company is party to a partnership agreement with General Chemical
Corporation, which mines and processes certain trona reserves owned by each of
the two companies in Wyoming. Through the partnership and related supply and
services agreements, the Company obtains a substantial amount of its soda ash
requirements, enabling the Company to achieve some of the economies of an
integrated business capable of producing sodium bicarbonate and related products
from the basic raw material. The Company also has an agreement for the supply of
soda ash from another company.

      The partnership agreement and other supply agreements between the Company
and General Chemical terminate upon two years notice by either company. The
Company believes that alternative sources of supply are available.

     The Company obtains its supply of the second basic raw material, carbon
dioxide, in Green River and Old Fort, under long-term supply contracts. The
Company believes that its sources of carbon dioxide, and other raw and packaging
materials, are adequate.

     The Company presently uses light soda ash in the manufacture of its ARM &
HAMMER Powder Laundry Detergent in its Syracuse, New York plant. Light soda ash
is obtained under a one-year supply agreement which is automatically renewable
on a year to year basis. This agreement terminates upon 90 day's written notice
by either company. At the Syracuse plant and the Green River, Wyoming plant, the
Company also produces laundry detergent powder employing a process utilizing raw
materials readily available from a number of sources. Therefore, the supply of
appropriate raw materials to manufacture this product is adequate. In January
1999, the Company announced it will concentrate all powder laundry detergent
production at Green River. This is expected to be completed by late 1999.

     During 1995, a liquid laundry detergent manufacturing line was constructed
in the Company's Syracuse, New York Plant. This line is capable of producing
virtually all of the Company's liquid laundry detergent requirements. The
Company, when necessary, will utilize a contract manufacturer to meet higher
demand. Prior to this, all of the Company's ARM & HAMMER Liquid Laundry
Detergent was contract manufactured. The BRILLO product line and the Company's
Dryer Sheets line are manufactured at the Company's London, Ohio plant, which
was acquired from The Dial Corporation. ARM & HAMMER DENTAL CARE Gum, ARM &
HAMMER Deodorizing Air Freshener, PARSONS(R) and BO-PEEP(R) Ammonia, CAMEO(R)
Metal Polish, RAIN DROPS(R) Water Softener and SNO BOL(R) Cleaners, are contract
manufactured for the Company under various agreements. Alternative sources of
supply are available in case of disruption or termination of the agreements.

     The main raw material used in the production of potassium carbonate is
liquid potassium hydroxide. Armand Products obtains its supply of liquid
potassium hydroxide under a long-term supply arrangement.

     The ArmaKleen Company's industrial liquid cleaning products are contracted
manufactured.

     PATENTS AND TRADEMARKS

     The Company's ARM & HAMMER trademark is registered with the United States
Patent and Trademark Office and also with the trademark offices of many foreign
countries. It has been used by the Company since the late 1800's, and is a
valuable asset and important to the successful operation of the Company's
business.


                                       4

<PAGE>   7
     CUSTOMERS AND ORDER BACKLOG

     A group of three consumer products customers accounted for approximately
16% of consolidated net sales in 1998 including a single customer which
accounted for approximately 11%. This group of customers accounted for
approximately 16% of consolidated net sales in 1997 and 14% in 1996.

     The time between receipt of orders and shipment is generally short, and as
a result, backlog is not significant.

     RESEARCH & DEVELOPMENT

     The Company's Research and Development Department is engaged in work on
product development, process technology and basic research. During 1998,
$16,448,000 was spent on research activities as compared to $15,841,000 in 1997
and $17,823,000 in 1996.

     ENVIRONMENT

     The Company's operations are subject to federal, state and local
regulations governing air emissions, waste and steam discharges, and solid and
hazardous waste management activities. The Company endeavors to take actions
necessary to comply with such regulations. These steps include periodic
environmental audits of each Company facility. The audits, conducted by an
independent engineering concern with expertise in the area of environmental
compliance, include site visits at each location, as well as a review of
documentary information, to determine compliance with such federal, state and
local regulations. The Company believes that its compliance with existing
environmental regulations will not have any material adverse effect with regard
to the Company's capital expenditures, earnings or competitive position. No
material capital expenditures relating to environmental control are presently
anticipated.

     EMPLOYEES

     At December 31, 1998 , the Company had 1,127 employees. The Company is
party to a labor contract with the United Steelworkers of America covering
approximately one hundred hourly employees at its Syracuse, New York plant which
contract continues until June 30, 2001; and, with the United Industrial Workers
of North America at its London, Ohio plant which contract continues until
October 1, 1999. The Company believes that its relations with both its union and
non-union employees are satisfactory.

   CLASSES OF SIMILAR PRODUCTS

   The Company's operations constitute two operating segments. The table set
forth below shows the percentage of the Company's net sales contributed by each
group of similar products marketed by the Company during the period from January
1, 1994 through December 31, 1998.


<TABLE>
<CAPTION>
                                             % of Net Sales
                                   ------------------------------------
                                   1998    1997    1996    1995    1994
                                   ----    ----    ----    ----    ----
<S>                                <C>     <C>     <C>     <C>      <C> 
           Consumer Products        82      80      79      78      80

           Specialty Products       18      20      21      22      20
</TABLE>



                                       5

<PAGE>   8

I
TEM 2. PROPERTIES.

     The Company's executive offices and research and development facilities are
owned by the Company, subject to a New Jersey Industrial Revenue Bond, and are
located on 22 acres of land in Princeton, New Jersey, with approximately 72,000
square feet of office and laboratory space. In addition, the Company leases
space in two buildings adjacent to this facility which contain approximately
90,000 square feet of office space. The Company also leases regional sales
offices in various locations throughout the United States.

     At Syracuse, New York the Company owns a 16 acre site and plant which
includes a group of connected buildings containing approximately 270,000 square
feet of floor space. This plant is used primarily for the manufacture and
packaging of laundry detergents and cat litter. As previously mentioned, the
Company announced it will concentrate all powder laundry detergent production at
Green River. This will be completed by late 1999.

The Company's plant in Green River, Wyoming is located on 112 acres of land
owned by the Company. The plant and related facilities contain approximately
273,000 square feet of floor space. The plant was constructed in 1968 and has
since been expanded to a current capacity of 200,000 tons of sodium bicarbonate
per year. This plant also manufactures powder laundry detergent and cat litter.

     The Company's plant in Old Fort, Ohio is located on 75 acres of land owned
by the Company. The plant and related facilities contain approximately 208,000
square feet of floor space. The plant was completed in 1980 and has since been
expanded to a capacity of 240,000 tons of sodium bicarbonate per year.

     In July 1998, the Company purchased from the Fluid Packaging Co., Inc., a
250,000 square foot manufacturing facility set on approximately 46 acres in
Lakewood, New Jersey. The plant currently manufactures and packages the ARM &
HAMMER Deodorant Anti-Perspirant product line and as noted below will be
manufacturing dentifrice products by late 1999.

     The Company owns an operating facility in Greenville, South Carolina, for
the manufacturing and packaging of its dentifrice products in a 117,000 square
foot building. The facility is located on 6 acres of land owned by the Company.
The Company announced in January 1999 it was planning to close the facility and
move the manufacturing and packaging equipment to its Lakewood, New Jersey,
plant.

     During 1997, the Company acquired from The Dial Corporation a manufacturing
facility in London, Ohio. This facility contains approximately 141,000 square
feet of floor space and is located on 6 acres of land. The facility manufactures
and packages BRILLO Soap Pads and ARM & HAMMER FRESH & SOFT Dryer Sheets.

     In Ontario, Canada, the Company owns a 26,000 square foot distribution
center which is used for the purpose of warehousing and distribution of products
sold into Canada. The principal office of the Canadian subsidiary is located in
leased offices in Toronto.

     Brotherton Speciality Products Ltd. owns and operates a 71,000 square foot
manufacturing facility in Wakefield, England on about 7 acres of land.

     In December 1998, the Company closed its Venezuela subsidiary, Industrias
Bicarbon De Venezuela S.A., after determining that marketing conditions could no
longer support it.

     The Armand Products partnership, in which the Company has a 50% interest,
owns and operates a potassium carbonate manufacturing plant located in Muscle
Shoals, Alabama. This facility contains approximately 53,000 square feet of
space and has a capacity of 103,000 tons of potassium carbonate per year.

     The Company believes that its manufacturing, distribution and office
facilities are adequate for the conduct of its business at the present time.


                                       6

<PAGE>   9

ITEM 3. LEGAL PROCEEDINGS.

     The Company is subject to claims and litigation in the ordinary course of
its business such as product liability claims, employment related matters and
general commercial disputes. The Company does not believe that any pending claim
or litigation will have a material adverse effect on the business.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matters were submitted to a vote of the Company's security holders
during the last quarter of the year ended December 31, 1998.



                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS.

     The Company's common stock is traded on the New York Stock Exchange
(symbol: "CHD"). Refer to Page 18 of the Annual Report which is incorporated
herein by reference. During 1998, there were no sales of unregistered
securities.


ITEM 6. SELECTED FINANCIAL DATA.

     Refer to Page 13 of the Annual Report. The portion of the table on page 13
which includes information with respect to the years 1994 through 1998 is
incorporated herein by reference.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION.

     Refer to Financial Review Pages 14-18 of the Annual Report which are
incorporated herein by reference.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     (Not applicable)


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Refer to Pages 19-34 of the Annual Report which are incorporated herein by
reference.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

     None


                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Information required by this item is incorporated by reference to the
Company's definitive proxy statement pursuant to Regulation 14A which will be
filed with the Commission not later than 120 days after the close of the fiscal
year ended December 31, 1998.


                                       7

<PAGE>   10

ITEM 11. EXECUTIVE COMPENSATION.

     Information required by this item is incorporated by reference to the
Company's definitive proxy statement pursuant to Regulation 14A which will be
filed with the Commission not later than 120 days after the close of the fiscal
year ended December 31, 1998.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Information required by this item is incorporated by reference to the
Company's definitive proxy statement pursuant to Regulation 14A which will be
filed with the Commission not later than 120 days after the close of the fiscal
year ended December 31, 1998.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Information required by this item is incorporated by reference to the
Company's definitive proxy statement pursuant to Regulation 14A which will be
filed with the Commission not later than 120 days after the close of the fiscal
year ended December 31, 1998.


                                     PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)1.     FINANCIAL STATEMENTS

     The following financial statements are incorporated herein by reference to
the Annual Report:


<TABLE>
<CAPTION>
                                                                      Page of
                                                                   Annual Report
                                                                   -------------
<S>                                                                <C>
     Consolidated Statements of Income for each of the three
     years in the period ended December 31, 1998                           19

     Consolidated Balance Sheets as of December 31, 1998 and 1997          20

     Consolidated Statements of Cash Flow for each of the three
     years in the period ended December 31, 1998                           21

     Consolidated Statements of Stockholders' Equity for each of
     the three years in the period ended December 31, 1998                 22

     Notes to Financial Statements                                      23-34

     Independent Auditors' Report                                          34
</TABLE>


(a)2.     FINANCIAL STATEMENT SCHEDULE

     Included in Part IV of this report:


          Independent Auditors' Report on Schedule

          For each of the three years in the period ended December 31, 1998:

          Schedule II - Valuation and Qualifying Accounts

Other schedules are omitted because of the absence of conditions under which
they are required or because the required information is given in the financial
statements or notes thereto.

                                       8

<PAGE>   11
(a)3.     EXHIBITS


<TABLE>
<S>       <C>    <C>
   (3)           (a) Restated Certificate of Incorporation including
                 amendments has previously been filed with the Securities
                 and Exchange Commission on the Company's Form 10-K for the
                 year ended December 31, 1989, (Commission file no.
                 1-10585) which is incorporated by reference.

          (b)    By-Laws have previously been filed with the Securities and
                 Exchange Commission on the Company's Form 10-K for the
                 year ended December 31, 1985, (Commission file no.
                 1-10585) which is incorporated herein by reference.

   (4)           The Company is party to a Loan Agreement dated May 31, 1991
                 with the New Jersey Economic Development Authority. The
                 principal amount of the loan thereunder is less than ten
                 percent of the Company's consolidated assets. The Company will
                 furnish a copy of said agreement to the Commission upon
                 request.

   (10)   (a)    Supply Agreement between Church & Dwight Co., Inc. and
                 ALCAD Partnership for supply of soda ash. This document is
                 not attached hereto but has been separately submitted to
                 the Securities and Exchange Commission which has approved
                 the Company's application under rule 24b-2 for privileged
                 and confidential treatment thereof.

                 COMPENSATION PLANS AND ARRANGEMENTS

          (b)    Indemnification Agreement for directors, and certain
                 officers, employees, agents and fiduciaries, which was
                 approved by stockholders at the Annual Meeting of
                 Stockholders on May 7, 1987, and was included in the
                 Company's definitive Proxy Statement dated April 6, 1987,
                 (Commission file no. 1-10585) which is incorporated herein by
                 reference.

          (c)    Stockholder Rights Agreement dated April 27, 1989, between
                 Church & Dwight Co., Inc. and Chase Bank, formerly
                 Chemical Bank, formerly Manufacturers Hanover Trust
                 Company, has been previously filed on April 28, 1989 with
                 the Securities and Exchange Commission on the Company's
                 Form 8-K, (Commission file no. 1-10585) which is
                 incorporated herein by reference.

          (d)    The Company's 1983 Stock Option Plan, which was approved
                 by stockholders at the Annual Meeting of Stockholders on
                 May 5, 1983, and was included in the Company's definitive

                 Proxy Statement dated April 4, 1983, (Commission file no.
                 1-10585) which is incorporated herein by reference.

          (e)    Restricted Stock Plan for Directors which was approved by
                 stockholders at the Annual Meeting of Stockholders on May
                 7, 1987, and was included in the Company's definitive
                 Proxy Statement dated April 6, 1987, (Commission file no.
                 1-10585) which is incorporated herein by reference.

          (f)    Church & Dwight Co., Inc. Executive Deferred Compensation
                 Plan, effective as of June 1, 1997, (Commission file no.
                 1-10585) which is incorporated herein by reference.

          (g)    Deferred Compensation Plan for Directors has previously
                 been filed with the Securities and Exchange Commission on
                 the Company's Form 10-K for the year ended December 31,
                 1987, (Commission file no. 1-10585) which is incorporated 
                 herein by reference.

          (h)    Employment Service Agreement with Senior Management of
                 Church & Dwight Co., Inc. has previously been filed with
                 the Securities and Exchange Commission on the Company's
                 Form 10-K for the year ended December 31, 1990,
                 (Commission file no. 1-10585) which is incorporated herein
                 by reference.
</TABLE>



                                       9

<PAGE>   12

<TABLE>
<S>       <C>    <C>
          (i)    The Stock Option Plan for Directors which was approved by
                 stockholders in May 1991, authorized the granting of
                 options to non-employee directors. The full text of the
                 Church & Dwight Co.,Inc. Stock Option Plan for Directors
                 was contained in the definitive Proxy Statement filed with
                 the Commission on April 2, 1991, (Commission file no.
                 1-10585) which is incorporated herein by reference.

          (j)    A description of the Company's Incentive Compensation Plan
                 has previously been filed with the Securities and Exchange
                 Commission on the Company's Form 10-K for the year ended
                 December 31, 1992, (Commission file no. 1-10585) which is
                 incorporated herein by reference.

          (k)    Church & Dwight Co., Inc. Executive Stock Purchase Plan
                 has previously been filed with the Securities and Exchange
                 Commission on the Company's Form 10-K for the year ended
                 December 31, 1993, (Commission file no. 1-10585) which is
                 incorporated herein by reference.

          (l)    The 1994 Incentive Stock Option Plan has previously been
                 filed with the Securities and Exchange Commission on the
                 Company's Form 10-K for the year ended December 31, 1994,
                 (Commission file no. 1-10585) which is incorporated herein by
                 reference.

          (m)    The Compensation Plan for Directors, which was approved by
                 stockholders at the Annual Meeting of Stockholders on May 9,
                 1996, and was included in the Company's definitive Proxy
                 Statement filed with the Commission on April 1, 1996,
                 (Commission file no. 1-10585) which is incorporated herein by
                 reference.

  *(11)   Computation of earnings per share.

  *(13)   1998 Annual Report to Stockholders. Except for portions of said Annual
          Report expressly incorporated by reference herein, said Annual Report
          is not deemed "filed herewith."

  *(21)   List of the Company's subsidiaries.

  *(23)   Consent of Independent Auditor.

  *(27)   Financial Data Schedule.
</TABLE>


(b)       REPORTS ON FORM 8-K

     No reports on Form 8-K were filed during the fourth quarter of the year
ended December 31,1998.

          Copies of exhibits will be made available upon request and for a
     reasonable charge.

- ---------------------------

*filed herewith


                                       10

<PAGE>   13

                                   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, on February 25, 1999.


                               CHURCH & DWIGHT CO., INC.


                               By:      /s/ Robert A. Davies, III
                                        -------------------------------------
                                        Robert A. Davies, III
                                        President and Chief Executive 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 dates indicated.


<TABLE>
<S>                          <C>                               <C> 
/s/ Robert A. Davies, III    President and                     February 25, 1999
- -------------------------    Chief Executive Officer
Robert A. Davies, III

/s/ Zvi Eiref                Vice President Finance and        February 25, 1999
- -------------------------    Chief Financial Officer      
Zvi Eiref                    (Principal Financial Officer)    

/s/ Gary P. Halker           Vice President, Controller and    February 25, 1999
- -------------------------    Chief Information Officer     
Gary P. Halker               (Principal Accounting Officer)   
</TABLE>



                                       16

<PAGE>   14
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 dates indicated.


<TABLE>
<S>                                      <C>            <C> 
/s/ Cyril C. Baldwin, Jr                 Director       February 25, 1999
- ------------------------------
Cyril C. Baldwin, Jr 

/s/ William R. Becklean                  Director       February 25, 1999
- ------------------------------
William R. Becklean

/s/ Robert H. Beeby                      Director       February 25, 1999
- ------------------------------
Robert H. Beeby

/s/ Robert A. Davies, III                Director       February 25, 1999
- ------------------------------
Robert A. Davies, III

/s/ Rosina B. Dixon, M.D                 Director       February 25, 1999
- ------------------------------
Rosina B. Dixon, M.D 

/s/ J. Richard Leaman, Jr                Director       February 25, 1999
- ------------------------------
J. Richard Leaman, Jr 

/s/ Robert D. LeBlanc                    Director       February 25, 1999
- ------------------------------
Robert D. LeBlanc

/s/ John D. Leggett, III, Ph.D           Director       February 25, 1999
- ------------------------------
John D. Leggett, III, Ph.D 

/s/ John F. Maypole                      Director       February 25, 1999
- ------------------------------
John F. Maypole

/s/ Robert A. McCabe                     Director       February 25, 1999
- ------------------------------
Robert A. McCabe

/s/ Dwight C. Minton                     Chairman       February 25, 1999
- ------------------------------
Dwight C. Minton

/s/ Dean P. Phypers                      Director       February 25, 1999
- ------------------------------
Dean P. Phypers

/s/ John O. Whitney                      Director       February 25, 1999
- ------------------------------
John O. Whitney
</TABLE>



                                       17

<PAGE>   15

INDEPENDENT AUDITORS' REPORT


To The Board of Directors and Stockholders of
Church & Dwight Co., Inc.
Princeton, New Jersey


We have audited the consolidated financial statements of Church & Dwight Co.,
Inc. and subsidiaries as of December 31, 1998 and 1997, and for each of the
three years in the period ended December 31, 1998, and have issued our report
thereon dated January 27, 1999 (which expresses an unqualified opinion and
includes an explanatory paragraph relating to the Company changing its method of
accounting for internal-use software development costs as described in Note 1).
Such consolidated financial statements and report are included in your 1998
Annual Report to Stockholders and are incorporated herein by reference. Our
audits also included the consolidated financial statement schedule of Church &
Dwight Co., Inc. and subsidiaries, listed in Item 14. This consolidated
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits. In our opinion,
such consolidated 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.




DELOITTE & TOUCHE LLP
Parsippany, New Jersey
January 27, 1999


                                       11

<PAGE>   16
                   CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (In thousands)



<TABLE>
<CAPTION>
                                                         1998     1997     1996
                                                        ------------------------
<S>                                                     <C>      <C>      <C>   
ALLOWANCE FOR DOUBTFUL ACCOUNTS:

      Balance at beginning of year                      $1,532   $1,478   $1,304
                                                        ------------------------

      Additions:
            Charged to expenses and costs                  435      200      401
                                                        ------------------------
      Deductions:
            Amounts written off                            387      145      227
            Foreign currency translation adjustments         1        1       --
                                                        ------------------------

                                                           388      146      227
                                                        ------------------------

      BALANCE AT END OF YEAR                            $1,579   $1,532   $1,478
                                                        ------------------------
</TABLE>



                                       12

<PAGE>   17

                                EXHIBIT INDEX
                                -------------

<TABLE>
<S>       <C>    <C>
   (3)           (a) Restated Certificate of Incorporation including
                 amendments has previously been filed with the Securities
                 and Exchange Commission on the Company's Form 10-K for the
                 year ended December 31, 1989, (Commission file no.
                 1-10585) which is incorporated by reference.

          (b)    By-Laws have previously been filed with the Securities and
                 Exchange Commission on the Company's Form 10-K for the
                 year ended December 31, 1985, (Commission file no.
                 1-10585) which is incorporated herein by reference.

   (4)           The Company is party to a Loan Agreement dated May 31, 1991
                 with the New Jersey Economic Development Authority. The
                 principal amount of the loan thereunder is less than ten
                 percent of the Company's consolidated assets. The Company will
                 furnish a copy of said agreement to the Commission upon
                 request.

   (10)   (a)    Supply Agreement between Church & Dwight Co., Inc. and
                 ALCAD Partnership for supply of soda ash. This document is
                 not attached hereto but has been separately submitted to
                 the Securities and Exchange Commission which has approved
                 the Company's application under rule 24b-2 for privileged
                 and confidential treatment thereof.

                 COMPENSATION PLANS AND ARRANGEMENTS

          (b)    Indemnification Agreement for directors, and certain
                 officers, employees, agents and fiduciaries, which was
                 approved by stockholders at the Annual Meeting of
                 Stockholders on May 7, 1987, and was included in the
                 Company's definitive Proxy Statement dated April 6, 1987,
                 (Commission file no. 1-10585) which is incorporated herein by
                 reference.

          (c)    Stockholder Rights Agreement dated April 27, 1989, between
                 Church & Dwight Co., Inc. and Chase Bank, formerly
                 Chemical Bank, formerly Manufacturers Hanover Trust
                 Company, has been previously filed on April 28, 1989 with
                 the Securities and Exchange Commission on the Company's
                 Form 8-K, (Commission file no. 1-10585) which is
                 incorporated herein by reference.

          (d)    The Company's 1983 Stock Option Plan, which was approved
                 by stockholders at the Annual Meeting of Stockholders on
                 May 5, 1983, and was included in the Company's definitive
                 Proxy Statement dated April 4, 1983, (Commission file no.
                 1-10585) which is incorporated herein by reference.

          (e)    Restricted Stock Plan for Directors which was approved by
                 stockholders at the Annual Meeting of Stockholders on May
                 7, 1987, and was included in the Company's definitive
                 Proxy Statement dated April 6, 1987, (Commission file no.
                 1-10585) which is incorporated herein by reference.

          (f)    Church & Dwight Co., Inc. Executive Deferred Compensation
                 Plan, effective as of June 1, 1997, (Commission file no.
                 1-10585) which is incorporated herein by reference.

          (g)    Deferred Compensation Plan for Directors has previously
                 been filed with the Securities and Exchange Commission on
                 the Company's Form 10-K for the year ended December 31,
                 1987, (Commission file no. 1-10585) which is incorporated 
                 herein by reference.

          (h)    Employment Service Agreement with Senior Management of
                 Church & Dwight Co., Inc. has previously been filed with
                 the Securities and Exchange Commission on the Company's
                 Form 10-K for the year ended December 31, 1990,
                 (Commission file no. 1-10585) which is incorporated herein
                 by reference.
</TABLE>



<PAGE>   18
                          EXHIBIT INDEX (CONTINUED)
                          -------------------------

<TABLE>
<S>       <C>    <C>
          (i)    The Stock Option Plan for Directors which was approved by
                 stockholders in May 1991, authorized the granting of
                 options to non-employee directors. The full text of the
                 Church & Dwight Co.,Inc. Stock Option Plan for Directors
                 was contained in the definitive Proxy Statement filed with
                 the Commission on April 2, 1991, (Commission file no.
                 1-10585) which is incorporated herein by reference.

          (j)    A description of the Company's Incentive Compensation Plan
                 has previously been filed with the Securities and Exchange
                 Commission on the Company's Form 10-K for the year ended
                 December 31, 1992, (Commission file no. 1-10585) which is
                 incorporated herein by reference.

          (k)    Church & Dwight Co., Inc. Executive Stock Purchase Plan
                 has previously been filed with the Securities and Exchange
                 Commission on the Company's Form 10-K for the year ended
                 December 31, 1993, (Commission file no. 1-10585) which is
                 incorporated herein by reference.

          (l)    The 1994 Incentive Stock Option Plan has previously been
                 filed with the Securities and Exchange Commission on the
                 Company's Form 10-K for the year ended December 31, 1994,
                 (Commission file no. 1-10585) which is incorporated herein by
                 reference.

          (m)    The Compensation Plan for Directors, which was approved by
                 stockholders at the Annual Meeting of Stockholders on May 9,
                 1996, and was included in the Company's definitive Proxy
                 Statement filed with the Commission on April 1, 1996,
                 (Commission file no. 1-10585) which is incorporated herein by
                 reference.

  *(11)   Computation of earnings per share.

  *(13)   1998 Annual Report to Stockholders. Except for portions of said Annual
          Report expressly incorporated by reference herein, said Annual Report
          is not deemed "filed herewith."

  *(21)   List of the Company's subsidiaries.

  *(23)   Consent of Independent Auditor.

  *(27)   Financial Data Schedule.
</TABLE>




- ---------------------------

*filed herewith








<PAGE>   1

                   CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
                 EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE
                     (In thousands except per share amounts)



<TABLE>
<CAPTION>
                                                       1998      1997      1996
                                                     ---------------------------
<S>                                                  <C>       <C>       <C>    
BASIC:
      Net Income                                     $30,289   $24,506   $21,228

Weighted average shares outstanding                   19,367    19,461    19,534

Basic earnings per share                             $  1.56   $  1.26   $  1.09

DILUTED:
      Net Income                                     $30,289   $24,506   $21,228

Weighted average shares outstanding                   19,367    19,461    19,534
      Incremental shares under stock option plans        658       510       163
                                                     ---------------------------
Adjusted weighted average shares outstanding          20,025    19,971    19,697
                                                     ---------------------------

Diluted earnings per share                           $  1.51   $  1.23   $  1.08
</TABLE>



                                       13





<PAGE>   1
[LOGO](R) CHURCH & DWIGHT CO., INC.

                               ANNUAL REPORT 1998

                                  Our sales rose a healthy 19 percent in 1998...
                                 in 1999, our focus shifts to margin improvement

                                [GRAPHIC OMITTED]


<PAGE>   2

- --------------------------------------------------------------------------------
                              FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------


<TABLE>
<CAPTION>

FINANCIAL HIGHLIGHTS                                1998       1997     Change  
(Dollars in millions, except per share data) 
<S>                                               <C>        <C>          <C>    
- --------------------------------------------------------------------------------
SALES                                             $ 684.4    $ 574.9     +19%    
- --------------------------------------------------------------------------------
INCOME FROM OPERATIONS                            $  42.5    $  30.6     +39%    
- --------------------------------------------------------------------------------
NET INCOME                                        $  30.3    $  24.5     +24%    
- --------------------------------------------------------------------------------
NET INCOME PER SHARE - DILUTED                    $  1.51    $  1.23     +23%    
- --------------------------------------------------------------------------------
DIVIDENDS PER SHARE                               $  0.48    $  0.46     + 4%    
- --------------------------------------------------------------------------------
</TABLE>

                                                              
CHURCH & DWIGHT CO., INC., FOUNDED IN 1846, IS THE WORLD'S LEADING PRODUCER OF
SODIUM BICARBONATE, POPULARLY KNOWN AS BAKING SODA, A NATURAL PRODUCT WHICH
CLEANS, DEODORIZES, LEAVENS AND BUFFERS. THE COMPANY'S FAMOUS ARM & HAMMER(R)
BRAND IS ONE OF THE NATION'S MOST TRUSTED TRADEMARKS FOR A VARIETY OF HOUSEHOLD
AND PERSONAL CARE USES. TODAY, THE CHURCH & DWIGHT PRODUCT LINE IS COMPRISED OF
A BROAD RANGE OF CONSUMER AND SPECIALTY PRODUCTS DEVELOPED FROM ITS BASE OF
BICARBONATE AND RELATED TECHNOLOGIES AND THE HERITAGE OF THE ARM & HAMMER BRAND.

CONSUMER PRODUCTS CONSIST OF ORAL AND PERSONAL CARE, LAUNDRY AND HOUSEHOLD
CLEANING, AND DEODORIZING PRODUCTS. MOST CONSUMER PRODUCTS ARE SOLD UNDER THE
ARM & HAMMER BRAND NAME AND DERIVATIVE TRADEMARKS SUCH AS ARM & HAMMER DENTAL
CARE(R), ARM & HAMMER
 SUPER SCOOP(TM) AND ARM & HAMMER FRESH `N SOFT(TM). OTHER
BRANDS INCLUDE BRILLO(R), SNO BOL(R) AND PARSONS'(R).

SPECIALTY PRODUCTS ENCOMPASS SPECIALTY CHEMICALS, ANIMAL NUTRITION, AND
SPECIALTY INDUSTRIAL CLEANING PRODUCTS. IN ADDITION TO ARM & HAMMER, SPECIALTY
PRODUCT TRADEMARKS INCLUDE MEGALAC(R), ARMAKLEEN(R) AND ARMEX(R).


<PAGE>   3

[PHOTO OMITTED]

ROBERT A. DAVIES, III
PRESIDENT & CHIEF EXECUTIVE OFFICER


[PHOTO OMITTED]

DWIGHT C. MINTON
CHAIRMAN OF THE BOARD


Dear Fellow Stockholder:

WE ARE PLEASED TO REPORT THAT 1998 WAS A POSITIVE YEAR FOR THE COMPANY WITH
SOLID GROWTH IN BOTH SALES AND EARNINGS. SALES ROSE A HEALTHY 19 PERCENT TO
$684.4 MILLION, FROM $574.9 MILLION IN THE PREVIOUS YEAR. SALES OF CONSUMER
PRODUCTS SURGED 22 PERCENT TO $560.2 MILLION, WHILE SPECIALTY PRODUCTS GREW 7
PERCENT TO $124.2 MILLION.

THE COMBINATION OF STRONG SALES AND A MODERATE INCREASE IN PROFIT MARGINS
BOOSTED OPERATING INCOME 39 PERCENT FROM $30.6 MILLION TO $42.5 MILLION. THIS
INCLUDES A ONE-TIME SALE OF R & D TECHNOLOGY FOR $3.5 MILLION AND A $2.8 MILLION
PLANT SHUTDOWN CHARGE. NET INCOME ADVANCED 24 PERCENT TO $30.3 MILLION,
EQUIVALENT TO DILUTED EARNINGS OF $1.51 PER SHARE, COMPARED TO $24.5 MILLION OR
$1.23 PER SHARE LAST YEAR.

THE ROBUST SALES GROWTH REFLECTED THE INTRODUCTION OF TWO MAJOR CONSUMER
PRODUCTS, ARM & HAMMER SUPER SCOOP, THE BAKING SODA CLUMPING LITTER IN LATE 1997
AND ARM & HAMMER DENTAL CARE, THE BAKING SODA GUM IN EARLY 1998, AS WELL AS THE
ACQUISITION OF BRILLO SOAP PADS AND CERTAIN OTHER BRANDS IN LATE 1997. IN THE
ESTABLISHED BUSINESSES, HIGHER CONSUMER SALES FOR LAUNDRY AND DEODORIZING
PRODUCTS WERE PARTIALLY OFFSET BY LOWER SALES FOR DENTIFRICES; ANIMAL NUTRITION
PRODUCTS LED SALES GROWTH OF SPECIALTY PRODUCTS.


                                                                               1

<PAGE>   4

- --------------------------------------------------------------------------------
               FINANCIAL OBJECTIVES AND SALES GROWTH INITIATIVES
- --------------------------------------------------------------------------------

FINANCIAL OBJECTIVES

In previous stockholder letters, we described two key financial objectives which
we believe will produce outstanding rewards for stockholders: first, to achieve
annual sales growth in the high single-digit or low double-digit range; second,
to raise our operating profit margin to a 10 percent level.

The Company has excellent growth opportunities through internal product
development, which means that our capital needs are lower than if our growth
were dependent on acquisitions. This efficient use of capital, combined with the
growth and margin goals, should result in a return on operating capital well in
excess of 15 percent after tax, a figure which compares favorably with that of
most of our leading competitors.

In 1998, we substantially exceeded our revenue growth objective. We also made
strides towards meeting the operating margin goal, and we will be concentrating
on this aspect of the business even more closely in 1999.

SALES GROWTH INITIATIVES Our two major consumer product introductions, ARM &
HAMMER SUPER SCOOP Cat Litter and ARM & HAMMER DENTAL CARE Gum, both enjoyed
high levels of trade and consumer acceptance. SUPER SCOOP, which addresses the
primary consumer need of odor control, has recently exceeded a 10 percent share
of the clumping litter market in food stores. ARM & HAMMER DENTAL CARE Gum, our
pioneering oral care product, has reached broad national distribution and seems
set to become an important addition to our product line.

BRILLO Soap Pads and other products acquired in late 1997 had a stable year as
we concentrated on manufacturing and quality improvements. We are now
introducing new longer lasting BRILLO Soap Pads, and expanding distribution to
West Coast markets where the product was not previously sold. Early in 1998, we
also acquired the TOSS `N SOFT(R) Fabric Softener Dryer Sheet brand, together
with a production line located at our London, Ohio, facility. The brand was
combined with our existing dryer sheet business, and relaunched in First Quarter
1999 as ARM & HAMMER FRESH `N SOFT Dryer Sheets.

Among the established consumer brands, ARM & HAMMER Liquid Laundry Detergent
benefited from a midyear reformulation using proprietary technology to improve
the product's performance. In late 1998 and early 1999, we also introduced two
major deodorizing product line extensions: ARM & HAMMER Carpet & Room Deodorizer
LASTING SCENT and ARM & HAMMER Baking Soda FRIDGE-N-FREEZER FRESHENER(TM).


2

<PAGE>   5

- --------------------------------------------------------------------------------
                         MARGIN IMPROVEMENT INITIATIVES
- --------------------------------------------------------------------------------

Another major initiative in mid-1998 was the $9 million acquisition of the plant
in Lakewood, New Jersey, which manufactures our deodorants and anti-perspirants.
This 250,000 square foot facility, with a flexible filling operation and several
packaging lines, adds significant new capacity for other personal care products.

In the toothpaste category, we suffered a major setback as larger competitors
introduced line extensions supported by record high levels of advertising and
promotion spending. To strengthen our position in the important whitening
segment of the category, we are currently introducing ARM & HAMMER ADVANCE
WHITE(TM), a new product line based on the whitening power of baking soda in
combination with other ingredients, providing increased consumer benefits.

In Specialty Products, the sales of animal nutrition products continued to grow
as we expanded the markets for rumen buffers and MEGALAC energy supplements. In
addition to these initiatives, we engaged in two important joint ventures which
are more fully described later in this report: first, an alliance with Agway,
Inc. and Compton & Associates to develop enhanced feeds made from natural
ingredients; second, an extension of our alliance with Safety-Kleen Corp. to
build a specialty cleaning products business based on our proprietary aqueous
cleaning technology and their sales and distribution organization. Both ventures
involve the development of new markets, and it will be some time before we know
how significant their contribution will be to the business.

MARGIN IMPROVEMENT INITIATIVES With 1998 sales growth clearly exceeding our
target, our focus in 1999 shifts to margins. The 1998 operating margin level of
7.2 percent, adjusted for income from the Armand Products joint venture and
excluding the plant shutdown cost, was about 1 percent higher than the margin
for the previous year but still below our 10 percent objective. Heavy marketing
spending on the two simultaneous new product launches contributed to the
shortfall.

In 1998, we undertook a number of margin improvement programs, most of which
were completed late in the year and are expected to help our margin structure in
1999:

      o     Introduction of a superior and higher-margin reformulation of our
            laundry detergent liquid

      o     Investment in more efficient manufacturing capacity for SUPER SCOOP
            Cat Litter and BRILLO Soap Pads

      o     Modernization of our Green River, Wyoming, sodium bicarbonate plant
            providing better availability of specialty grades at lower cost


                                                                               3

<PAGE>   6

- --------------------------------------------------------------------------------
                         MARGIN IMPROVEMENT INITIATIVES
- --------------------------------------------------------------------------------

      o     Closing of our sodium bicarbonate plant in Venezuela after
            determining marketing conditions could not support it. This facility
            had 1998 sales of $2.3 million and was unprofitable.

      o     Completion of a two-year $11 million overhaul of our information
            systems with the installation of a new logistics system and a new
            enterprise software package. Further work on the development of
            logistics and promotion management systems will continue during the
            year.

Early in 1999, we announced plans for additional cost reduction initiatives
affecting both Consumer and Specialty Products:

      o     The transfer of toothpaste production to our recently acquired
            Lakewood, New Jersey, facility from our Greenville, South Carolina,
            plant which will close most likely in late 1999

      o     A $6 million project to modernize and upgrade our laundry detergent
            plant at Green River, Wyoming. On completion, most likely in late
            1999, all powder laundry detergent production will move to Green
            River, ending production at the Syracuse, New York, facility. The
            Syracuse plant will continue to manufacture liquid laundry detergent
            and certain other products.

      o     The sale of the equipment portion of ARMEX Cleaning and Coating
            Removal Systems for approximately $1.5 million, which is slightly
            more than book value. The business had 1998 sales of $1.9 million
            and was unprofitable.

      o     The sale of most of our trona mineral reserves in Wyoming, which
            results in a gain of approximately $10 million. The Company retains
            adequate trona reserves to support the requirements of our sodium
            bicarbonate business and may acquire other reserves in the future as
            the need arises.

      o     The joint venture with Safety-Kleen, which will enable us to
            rationalize our selling and distribution costs for the Specialty
            Cleaning business

These 1999 cost reduction initiatives alone have the potential to generate
savings of approximately $2 million this year and even higher benefits in
succeeding years. We also expect these moves to generate a small one-time net
gain for the year; this represents the gain from the sale of the trona reserves
in the First Quarter, to be partially offset in the Second Half by plant
shutdown, relocation and other costs.


4

<PAGE>   7

- --------------------------------------------------------------------------------
                                     OUTLOOK
- --------------------------------------------------------------------------------

OUTLOOK As to profit margins, we expect meaningful margin improvement in 1999
resulting from our cost reduction programs. Because of continuing investment and
the timing of some of our initiatives, we are not likely to reach the 10 percent
goal in 1999, but we believe the Company is definitely on track to meet this
long-term objective.

Our strategy for 1999 is to expand the product line through major line
extensions and improvements to existing products. There is also the potential
for a major new product launch in late 1999 or early 2000. While our overall
sales growth will not match the exceptional growth rate for 1998, our marketing
strategies should provide good momentum for the year.

Sincerely,


/s/ R. A. Davies, III

R. A. Davies, III
President and Chief Executive Officer
January 27, 1999

THE COMPANY'S BUSINESS IS ORGANIZED INTO TWO SEGMENTS, CONSUMER PRODUCTS AND
SPECIALTY PRODUCTS. EACH SEGMENT, COMPRISED OF THREE PRODUCT LINES, SHARES
COMMON SERVICES AND IS MANAGED AS A SINGLE BUSINESS UNIT.

- --------------------------------------------------------------------------------
                                 PRODUCT CHART
- --------------------------------------------------------------------------------


================================================================================
CONSUMER PRODUCTS

- --------------------------------------------------------------------------------
ORAL AND PERSONAL CARE PRODUCTS              
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
ARM & HAMMER DENTAL CARE
Toothpaste

PEROXICARE(R) Toothpaste

ARM & HAMMER ADVANCE WHITE 
Toothpaste

ARM & HAMMER DENTAL CARE Gum

ARM & HAMMER
Deodorant Anti-Perspirant
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
DEODORIZING PRODUCTS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
ARM & HAMMER Baking Soda

ARM & HAMMER
Carpet & Room Deodorizer

ARM & HAMMER
Deodorizing Air Freshener

ARM & HAMMER SUPER SCOOP 
Clumping Litter

ARM & HAMMER
Cat Litter Deodorizer
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
LAUNDRY AND HOUSEHOLD CLEANERS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
ARM & HAMMER
Powder Laundry Detergent

ARM & HAMMER
Liquid Laundry Detergent

ARM & HAMMER Washing Soda

ARM & HAMMER FRESH `N SOFT 
Dryer Sheets

BRILLO Soap Pads

SNO BOL Toilet Bowl Cleaner
PARSONS' Ammonia
CAMEO(R) Metal Cleaner
- --------------------------------------------------------------------------------


================================================================================
SPECIALTY PRODUCTS

- --------------------------------------------------------------------------------
SPECIALTY CHEMICALS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
ARM & HAMMER
Sodium Bicarbonate

ARM & HAMMER
Ammonium Bicarbonate

ARMAND(R) Potassium Carbonate
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
ANIMAL NUTRITION
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
ARM & HAMMER
Feed Grade Sodium Bicarbonate

MEGALAC Rumen Bypass Fat

SQ-810(R) Rumen Buffer
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
SPECIALTY CLEANERS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
ARMEX Blast Media

ARMAKLEEN Aqueous Cleaner
- --------------------------------------------------------------------------------


                                                                               5

<PAGE>   8

- --------------------------------------------------------------------------------
                                CONSUMER PRODUCTS
- --------------------------------------------------------------------------------

                         ORAL AND PERSONAL CARE PRODUCTS


                          ARM & HAMMER DENTAL CARE GUM

THE FIRST GUM SOLD IN THE TOOTHPASTE AISLE IS GREAT-TASTING AND... CLINICALLY
PROVEN TO REDUCE DENTAL PLAQUE UP TO 25 PERCENT AFTER FOUR WEEKS OF DAILY
CHEWING.

                               [GRAPHIC OMITTED]


                     ARM & HAMMER ADVANCE WHITE TOOTHPASTE

WHITER TEETH WITH ONE TUBE! A BREAKTHROUGH BAKING SODA DENTIFRICE PENETRATES
TINIEST CREVICES TO CLEAN AWAY PLAQUE AND DEEP STAIN... PACKAGED WITH A SHADE
GUIDE TO PROVE IT.

                               [GRAPHIC OMITTED]


                        ARM & HAMMER ADVANCED DEODORANCY

SLEEK BLACK-CAPPED APPLICATORS DISTINGUISH ADVANCED DEODORANCY, A NEW PRODUCT
COMBINING LONGER LASTING SCENTS WITH BAKING SODA'S ABILITY TO ABSORB ODOR
INSTEAD OF COVERING IT UP.

                               [GRAPHIC OMITTED]


6

<PAGE>   9

- --------------------------------------------------------------------------------
                                CONSUMER PRODUCTS
- --------------------------------------------------------------------------------

                              DEODORIZING PRODUCTS


                      ARM & HAMMER SUPER SCOOP CAT LITTER

GREAT MEWS FOR THE LITTER BOX! BAKING SODA, THE WORLD'S MOST PROVEN DEODORIZER,
PAIRS WITH A POWERFUL HARD-AND-FAST CLUMPING SYSTEM TO LOCK IN ODORS BEFORE THEY
ESCAPE INTO THE HOME.

                               [GRAPHIC OMITTED]


                            ARM & HAMMER BAKING SODA

A REDESIGNED COOL-BLUE FRIDGE-N-FREEZER FRESHENER DOUBLES BAKING SODA EXPOSURE
TO ABSORB ODORS AND KEEP FOOD FRESH. ONCE EASY-TEAR PANELS ARE REMOVED,
FLOW-THROUGH CLOTH FILTERS PREVENT SPILLAGE.

                               [GRAPHIC OMITTED]


                     ARM & HAMMER CARPET & ROOM DEODORIZER

THE INNOVATIVE LASTING SCENT LINE, WITH TWO HIGH-QUALITY FLORAL FRAGRANCES,
HELPED RESTORE THE BRAND TO ITS RANK OF NUMBER 1 CONSUMER PREFERENCE IN THE 
CATEGORY.

                               [GRAPHIC OMITTED]


                                                                               7

<PAGE>   10

- --------------------------------------------------------------------------------
                                CONSUMER PRODUCTS
- --------------------------------------------------------------------------------

                         LAUNDRY AND HOUSEHOLD CLEANERS


                      ARM & HAMMER LIQUID LAUNDRY DETERGENT

THE POPULAR NEW 200-OUNCE JUMBO-SIZE BOTTLE OFFERS A CHOICE OF TWO SIGNIFICANTLY
IMPROVED LAUNDRY FORMULATIONS.

                               [GRAPHIC OMITTED]


                                BRILLO SOAP PADS

NEW BRILLO STEEL WOOL SOAP PADS ARE 60 PERCENT STRONGER, LOADED WITH SOAP, AND
LONGER LASTING.

                               [GRAPHIC OMITTED]


                     ARM & HAMMER FRESH 'N SOFT DRYER SHEETS

BRAND-NEW! THIS SUPERIOR PRODUCT FOR CONTROLLING STATIC CLING REPLACES TWO
ESTABLISHED FABRIC SOFTENER BRANDS, ARM & HAMMER AND TOSS 'N SOFT.

                               [GRAPHIC OMITTED]


8

<PAGE>   11

- --------------------------------------------------------------------------------
                               SPECIALTY PRODUCTS
- --------------------------------------------------------------------------------

                               SPECIALTY CHEMICALS

                         ARM & HAMMER SODIUM BICARBONATE

RECOGNIZED WORLDWIDE FOR THE PUREST SODIUM BICARBONATE FOR USE IN KIDNEY
DIALYSIS TREATMENTS, THE ARM & HAMMER BRAND ENJOYS A UNIQUE ALLIANCE WITH
MEDICAL EXPERTS, PROVIDING TRAINING AND HEALTHCARE INFORMATION TO BOTH
PROFESSIONALS AND PATIENTS.

                                [GRAPHIC OMITTED]


                                ANIMAL NUTRITION

                            MEGALAC RUMEN BYPASS FAT

DECADES OF ANIMAL NUTRITION RESEARCH HAVE LED TO SIGNIFICANT BREAKTHROUGHS IN
IMPROVING MILK PRODUCTION, SUCH AS MEGALAC RUMEN BYPASS FAT AND OTHER
VALUE-ADDED PRODUCTS. EXPERT TECHNICAL ADVICE AND EDUCATIONAL MATERIALS ARE ONLY
A PHONE CALL AWAY.

                               [GRAPHIC OMITTED]


                               SPECIALTY CLEANERS

                        ARMAKLEEN LIQUID AQUEOUS CLEANER

A STRENGTHENED JOINT VENTURE WITH SAFETY-KLEEN CORP., A WORLD LEADER IN
INDUSTRIAL CLEANING, PARTNERS THEIR EXCELLENT SALES ORGANIZATION WITH OUR
PROPRIETARY AQUEOUS CLEANING TECHNOLOGY TO BUILD AN ENVIRONMENTALLY SUPERIOR
SPECIALTY CLEANING BUSINESS, INCLUDING AQUAWORKS(TM) AND ARMAKLEEN LIQUID.

                               [GRAPHIC OMITTED]

                                                                               9

<PAGE>   12

- --------------------------------------------------------------------------------
                                 PRODUCT REVIEW
- --------------------------------------------------------------------------------

ORAL AND PERSONAL CARE PRODUCTS Our oral care innovation of the year was the
national introduction of ARM & HAMMER DENTAL CARE, The Baking Soda Gum(TM), the
first gum sold in the toothpaste aisle and a companion product to ARM & HAMMER
DENTAL CARE toothpastes. Pioneering a new oral care category, the baking
soda-based sugar-free gum is clinically proven to reduce plaque up to 25 percent
after four weeks of daily chewing, and keeps teeth white and mouth fresh between
brushings. Reaching full national distribution in Second Quarter 1998, the
premium-priced gum, available in three flavors in 12-piece sleeves and 36-piece
multi-packs, is sold in food, drug, mass and, since early 1999, in convenience
stores. The new product launch was supported by a fully integrated marketing
program which began with a professional dental campaign, followed by extensive
consumer sampling, coupons and national television advertising. Our results to
date are encouraging, and this new product materially strengthens our oral care
strategy.

Competition in the toothpaste category was extremely intense, with heavy
marketing expenditures and new line extensions by major competitors eroding the
market shares of ARM & HAMMER DENTAL CARE and other existing brands.

The foundation for ARM & HAMMER DENTAL CARE toothpaste strategy is Serious Oral
Care. New clinical studies, presented in June 1998 at a symposium at Tufts
University School of Dental Medicine, confirm that our patented high-content
baking soda formulations clean away plaque, reduce deep tooth stains and leave
teeth whiter than regular toothpastes. A major television advertising campaign
presented this new evidence to consumers in Second Half 1998.

To strengthen our position in the important and rapidly growing whitening
segment of the toothpaste market, we introduced in late 1998 ARM & HAMMER
ADVANCE WHITE, based on baking soda's natural whitening power in combination
with other ingredients. This premium-priced line, available in three forms...
baking soda and peroxide, baking soda plus Tartar Control and baking soda plus
Gel, is packaged with a Shade Guide to help consumers see the gradual change in
tooth color. A dramatic television commercial incorporating the clinical copy
points, ends with the tagline, "Whiter teeth with just one tube, guaranteed!" To
regain ground lost in category position, we will continue substantial
advertising and promotion throughout 1999.

In the deodorant anti-perspirant category, we introduced late in the year ARM &
HAMMER ADVANCED DEODORANCY(TM), a product line upgrading our stick deodorant in
three longer-lasting scents, each packaged in wide solid applicators. Television
commercials emphasize baking soda's ability to absorb and eliminate odors and
not just cover them up.

DEODORIZING PRODUCTS Our major new household product, ARM & HAMMER SUPER SCOOP,
The Baking Soda Cat Litter was launched in late 1997 to compete in the clumping
segment of the cat litter market. Now available in three package sizes ranging
from seven pounds to 21 pounds, the product is sold in food, mass and pet
specialty outlets. Heavy consumer promotion, including high-impact color inserts
in major market newspapers, coupon offers and television advertising continued
throughout 1998. A new 30-second commercial graphically illustrates baking
soda-enhanced SUPER SCOOP's superior hard-and-fast single-clump action, compared
to ordinary clumping litter.


10

<PAGE>   13

- --------------------------------------------------------------------------------
                               CONSUMER PRODUCTS
- --------------------------------------------------------------------------------

After five years of near-static sales, venerable ARM & HAMMER Baking Soda, the
Company's flagship product, is again on television channels promoting its core
use of refrigerator deodorization. In development for many months, the
redesigned blue FRIDGE-N-FREEZER FRESHENER, launched in January 1999, features
flow-through front and back panels, doubling baking soda exposure to absorb
odors and keep food tasting fresh. The new package launch will be advertised
with a "Change Your Box With The Clocks" reminder message, supplemented by
ongoing spokesperson media tours.

In mid-1998, ARM & HAMMER Carpet and Room Deodorizers regained category
leadership. A major contributor to this success is our television commercial
featuring playful puppies rolling over and sitting on carpets, delivering the
message that "if you've got pets and a carpet, you need ARM & HAMMER Super Pet
Fresh(R)." Mid-summer, we introduced LASTING SCENT, a new line appealing to
consumers who prefer stronger fragrances, which reached national distribution
early in 1999. Our focus in the year ahead will be the lasting fragrance segment
as well as our thriving base business, particularly eliminating tough pet odors.

In September 1998, we announced a licensing agreement with Florida-based
Flanders Corporation to use the ARM & HAMMER brand name for a high-end line of
residential air filters. Flanders will manufacture, market and distribute
premium-priced air filters infused with ARM & HAMMER Baking Soda in a
proprietary process proven to remove household odors for up to three months.

LAUNDRY AND HOUSEHOLD CLEANING PRODUCTS The ARM & HAMMER laundry
detergent business enjoyed an excellent year in sales growth. In the Second
Quarter, we completed the introduction of a reformulated liquid laundry
detergent with significantly improved cleaning performance as well as a new
fresh fragrance. We also introduced a new 200-ounce bottle with the improved ARM
& HAMMER Ultra formulation, followed by a second liquid detergent choice, Bleach
Alternative. ARM & HAMMER Powder Laundry Detergent currently ranks 2 on a
washload basis in food store sales. We expect to continue marketing support for
both products in 1999 with coupon offers in major newspapers, and supplementary
merchandising aid to the trade.

ARM & HAMMER FRESH 'N SOFT Dryer Sheets joined the ARM & HAMMER family of
laundry products in January 1999, and will be incorporated in store displays and
laundry detergent promotions. Available in two scents and in 20-, 40- and
100-count packages, this new product for controlling static cling replaces two
established brands in the fabric softener category, ARM & HAMMER and the TOSS 'N
SOFT brand we acquired in early 1998.

The new BRILLO Soap Pads for cleaning and shining pots and pans were launched in
First Quarter 1999. Sixty percent stronger and longer lasting, the reformulated
pads contain more soap than competitive products, are rust-resistant, and are
available with lemon scent as well as regular. A new production line at our
London, Ohio, manufacturing plant assures efficient and top quality packaging.
The redesigned BRILLO box carries the ARM & HAMMER logo and Environmental
Commitment. Television advertising, including Hispanic outlets, and newspaper
couponing are expected to increase sales as BRILLO expands nationally to western
markets.


                                                                              11

<PAGE>   14

- --------------------------------------------------------------------------------
                               SPECIALTY PRODUCTS
- --------------------------------------------------------------------------------

SPECIALTY CHEMICALS Church & Dwight has long been the world's leading supplier
of sodium bicarbonate for both consumer and industrial applications. In recent
years, the Company's focus has shifted more and more to high-value uses such as
healthcare which require exceptional purity, special granulations and a high
level of technical expertise. A major step in supporting this initiative was the
decision in 1997 to commit $7.3 million to fund the modernization of our sodium
bicarbonate plant in Green River, Wyoming, which became operational in First
Quarter 1999. In September, we announced a plan to again increase the Company's
annual sodium bicarbonate capacity, this time from 440,000 to 520,000 short tons
by the year 2000.

The Armand Products joint venture remains the worldwide leader in potassium
carbonate production. The major product use is in the manufacture of video glass
for television sets and personal computers. U.S. demand declined during the year
due to imports of finished products from the Far East.

Overseas, Brotherton Speciality Products, Ltd., our United Kingdom subsidiary,
had another successful year and expanded its product line of ammonium- and
potassium-based specialty chemicals. Our Brazilian affiliate, QGN/Carbonor, in
which we have a 40 percent interest, grew its sodium bicarbonate business in a
difficult year for the Brazilian economy.

ANIMAL NUTRITION PRODUCTS Animal nutrition products had an excellent year, led
by strong growth in MEGALAC Rumen Bypass Fat and the new value-added MEGALAC
products. Based on this increased demand, we are expanding the MEGALAC plant at
our Old Fort, Ohio, facility; additional capacity will be available in Third
Quarter 1999. In mid-1998, we also announced a joint venture with Agway, Inc., a
leading agricultural cooperative, and Compton & Associates, a consulting firm
specializing in the food business. The new enterprise, named LifeRight Foods
LLC, will use technologies owned by Church & Dwight and Agway to develop
nutritionally enhanced feeds made from natural ingredients, initially for the
dairy and poultry industries.

SPECIALTY CLEANERS Early in 1999, we sold the equipment portion of ARMEX
Cleaning and Coating Removal Systems, our environmentally superior soda blasting
business for the removal of paints and process residues, to U.S. Filter
Corporation. Under this transaction, we retain our interest in the ARMEX Soluble
Blast Media business for which U. S. Filter will become a distributor.

We also took steps to significantly extend our alliance with Safety-Kleen Corp.,
the nation's foremost industrial parts cleaning company, to build a specialty
cleaning business based on our proprietary aqueous cleaning technology and their
excellent selling and distribution capabilities. The new joint venture, named
ArmaKleen Company and headquartered in Princeton, New Jersey, will focus on
developing environmentally superior aqueous-based specialty cleaning products to
replace hydrocarbon-based solvents, which have been already banned by
legislation in some states. Our existing AquaWorks business with Safety-Kleen,
as well as ARMAKLEEN Liquid and ARMEX Soluble Blast Media product lines, will be
folded into the venture.


12

<PAGE>   15

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
Eleven-Year Financial Review
(Dollars in millions, except per share data)


<TABLE>
<CAPTION>
Operating Results                          1998          1997          1996          1995          1994          1993          1992 
====================================================================================================================================
<S>                                    <C>              <C>           <C>           <C>           <C>           <C>           <C>  
Net sales:
Consumer Products                      $  560.2         459.0         417.6         380.6         393.0         410.4         409.3
Specialty Products                        124.2         115.9         110.2         105.2          98.0          97.3          87.2
Total                                     684.4         574.9         527.8         485.8         491.0         507.7         496.5
- ------------------------------------------------------------------------------------------------------------------------------------
Marketing                              $  182.2         148.3         136.3         120.0         131.3         126.3         123.0
- ------------------------------------------------------------------------------------------------------------------------------------
Research & development                 $   16.4          15.8          17.8          18.5          20.6          21.2          17.8
- ------------------------------------------------------------------------------------------------------------------------------------
Income from operations                 $   42.5          30.6          27.3           8.4           1.5          35.6          37.7
- ------------------------------------------------------------------------------------------------------------------------------------
Net income                             $   30.3          24.5          21.2          10.2           6.1          26.3          29.5
- ------------------------------------------------------------------------------------------------------------------------------------
% of sales                                  4.4%          4.3%          4.0%          2.1%          1.2%          5.2%          5.9%
====================================================================================================================================
Net income per share - basic           $   1.56          1.26          1.09           .52           .31          1.30          1.45
====================================================================================================================================
Net income per share - diluted         $   1.51          1.23          1.08           .51           .31          1.28          1.42
====================================================================================================================================

Financial Position
====================================================================================================================================
Total assets                           $  391.4         351.0         308.0         293.2         294.5         281.7         261.0
Total debt                                 48.8          39.5           7.5          12.5          32.5           9.6           7.7
Stockholders' equity                      194.8         179.3         165.3         153.7         153.9         169.4         159.1
- ------------------------------------------------------------------------------------------------------------------------------------
Total debt as a %
    of total capitalization                  20%           18%            4%            8%           17%            5%            5%
- ------------------------------------------------------------------------------------------------------------------------------------
Working capital                        $   42.6          23.2          36.8          22.1          23.4          54.6          40.7
- ------------------------------------------------------------------------------------------------------------------------------------
Current ratio                               1.3           1.2           1.4           1.2           1.2           1.8           1.5
====================================================================================================================================

Other Data
====================================================================================================================================
Average common shares
    outstanding-basic (In thousands)     19,367        19,461        19,534        19,567        19,706        20,223        20,338
- ------------------------------------------------------------------------------------------------------------------------------------
Return on average
    stockholders' equity                   16.2%         14.2%         13.3%          6.6%          3.8%         16.0%         19.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Return on average capital                  13.1%         12.5%         12.5%          5.8%          3.3%         15.2%         18.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Cash dividends paid                    $    9.3           9.0           8.6           8.6           8.7           8.5           7.7
- ------------------------------------------------------------------------------------------------------------------------------------
Cash dividends paid
    per common share                   $    .48           .46           .44           .44           .44           .42           .38
- ------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity
    per common share                   $  10.09          9.23          8.50          7.87          7.88          8.43          7.82
- ------------------------------------------------------------------------------------------------------------------------------------
Additions to property,
    plant and equipment                $   27.1           9.9           7.1          19.7          28.4          28.8          12.5
- ------------------------------------------------------------------------------------------------------------------------------------
Depreciation and
    amortization                       $   16.5          14.2          13.6          13.1          11.7          10.6           9.8
- ------------------------------------------------------------------------------------------------------------------------------------
Employees at year-end                     1,127         1,137           937           941         1,028         1,096         1,092
Statistics per employee:
(In thousands)
    Sales                              $    607           506           563           516           478           463           455
    Operating earnings                       38            27            29             9             1            33            35
====================================================================================================================================

<CAPTION>
Operating Results                          1991          1990          1989          1988
==========================================================================================
Net sales:
Consumer Products                         386.1         331.1         295.6         249.4
Specialty Products                         80.7          80.2          75.8          82.1
Total                                     466.8         411.3         371.4         331.5
- ------------------------------------------------------------------------------------------
Marketing                                  94.9          71.3          45.9          38.7
- ------------------------------------------------------------------------------------------
Research & development                     13.4          12.3           7.9           6.3
- ------------------------------------------------------------------------------------------
Income from operations                     34.0          28.9          25.2          23.6
- ------------------------------------------------------------------------------------------
Net income                                 26.5          22.5           8.6          16.5
- ------------------------------------------------------------------------------------------
% of sales                                  5.7%          5.5%          2.3%          5.0%
==========================================================================================
Net income per share - basic               1.29          1.05           .42           .75
==========================================================================================
Net income per share - diluted             1.29          1.05           .41           .74
==========================================================================================

Financial Position
==========================================================================================
Total assets                              244.3         249.2         242.5         241.7
Total debt                                  7.8          31.0          53.6          57.0
Stockholders' equity                      139.2         118.7         111.6         112.0
- ------------------------------------------------------------------------------------------
Total debt as a %
    of total capitalization                   5%           21%           32%           34%
- ------------------------------------------------------------------------------------------
Working capital                            34.1          46.1          66.8          58.8
- ------------------------------------------------------------------------------------------
Current ratio                               1.4           1.6           2.2           2.2
==========================================================================================

Other Data
==========================================================================================
Average common shares
    outstanding-basic (In thousands)     19,831        20,455        20,728        21,985
- ------------------------------------------------------------------------------------------
Return on average
    stockholders' equity                   20.5%         19.5%          7.7%         14.4%
- ------------------------------------------------------------------------------------------
Return on average capital                  17.8%         14.3%          5.2%          9.6%
- ------------------------------------------------------------------------------------------
Cash dividends paid                         6.7           6.1           5.4           5.1
- ------------------------------------------------------------------------------------------
Cash dividends paid
    per common share                        .34           .30           .26           .23
- ------------------------------------------------------------------------------------------
Stockholders' equity
    per common share                       6.85          5.87          5.39          5.35
- ------------------------------------------------------------------------------------------
Additions to property,
    plant and equipment                    19.3          10.0          10.4          11.3
- ------------------------------------------------------------------------------------------
Depreciation and
    amortization                            9.5           8.9           8.5           8.2
- ------------------------------------------------------------------------------------------
Employees at year-end                     1,081           994         1,070         1,000
Statistics per employee:
(In thousands)
    Sales                                   432           414           347           332
    Operating earnings                       31            29            24            24
==========================================================================================
</TABLE>



13

<PAGE>   16

FINANCIAL REVIEW

The Financial Review discusses the Company's performance for 1998 and compares
it to previous years. This Review is an integral part of the Annual Report and
should be read in conjunction with all other sections.

1998 COMPARED TO 1997

Net Sales

Net sales increased 19.0% in 1998 primarily due to growth in the Consumer
Products business.

Consumer Products were up 22.0% reflecting the introduction of two new major
Consumer Products, SUPER SCOOP Cat Litter, in last year's third quarter and ARM
& HAMMER DENTAL CARE Gum, in early 1998. The acquisition of BRILLO Soap Pads and
certain other brands in late 1997 also contributed to the sales growth. In the
established consumer business, higher sales of laundry and deodorizing products
were partially offset by lower toothpaste sales.

Specialty Products were up 7.1% led by higher sales of animal nutrition
products, particularly MEGALAC Rumen Bypass Fat.

Operating Costs

The Company's gross margin decreased .5 points to 44.7%, reflecting the change
in sales mix, especially the higher laundry and lower toothpaste sales,
partially offset by lower manufacturing costs.

Advertising, consumer and trade promotion expenses increased $34.0 million to
$182.2 million. The introductory costs of advertising and promoting ARM & HAMMER
DENTAL CARE Gum were the most significant factors behind this increase. Other
factors contributing to this increase included the full-year effect of
advertising SUPER SCOOP Cat Litter, and promotion costs in support of BRILLO
Soap Pads.

Selling, general and administrative expenses were slightly higher primarily as a
result of personnel-related costs in support of new business initiatives and
brokerage commissions related to higher sales. These increases were mostly
offset by a reduction in the net cost of information systems. At the beginning
of 1998, the Company adopted a new AICPA accounting statement which requires
companies to capitalize certain costs of developing computer software for
internal use. The amount capitalized, net of amortization, was $4.7 million
which reflected an unusually high level of software spending on a major
company-wide information system implemented during 1998. If the same policy had
been in effect in the previous year, the amount capitalized that year would have
been about $4.0 million.

During the second quarter of 1998, the Company recognized a one-time gain from
the sale of research & development technology for $3.5 million.

In the final quarter of 1998, the Company closed its small sodium bicarbonate
plant in Venezuela after determining that market conditions could no longer
support it. The facility produced 1998 sales of $2.3 million and was
unprofitable. The closure involved a $2.8 million pre-tax write-off.

Other Income and Expenses

The Armand Products Company, our potassium carbonate joint venture with
Occidental Chemical Corporation, saw a 2.8% sales decline driven by an increase
in imports of finished products from the Far East as the dollar strengthened
against Asian currencies. The slightly lower profitability on the lower sales of
this joint venture, together with a break-even result from our 40% equity
interest in a Brazilian chemical company, were the primary reasons for the $.8
million decrease in equity income.

Investment income was lower than a year ago as a result of a lower amount of
average cash available for investment.

Other expenses in 1998 were largely the result of foreign exchange losses, which
include translation losses incurred by our Venezuelan subsidiary due to the
devaluation of the local currency.

Interest expense in 1998 was approximately $1.7 million higher than the previous
year and was the result of an increase of the debt incurred to finance the
purchase of new product lines in the third quarter of 1997 and the first quarter
of 1998. Furthermore, additional financing was required to fund the acquisition
of the Lakewood plant and a relatively large capital expenditure program.

Taxation

The effective tax rate for 1998 was 34.4%, compared to 36.7% in the previous
year. The lower effective rate is primarily due to the utilization of tax losses
of our Venezuelan subsidiary that could not be utilized in prior years. 


14

<PAGE>   17

Net Income and Earnings Per Share

The Company's net income for 1998 was $30.3 million, equivalent to diluted
earnings of $1.51 per share, compared to $24.5 million or $1.23 per share in
1997.

1997 COMPARED TO 1996

Net Sales

Net sales increased 8.9% in 1997 primarily due to growth in the Consumer
Products business.

Consumer Products were up 9.9% mainly on higher sales of ARM & HAMMER Laundry
Detergent products, the national introduction of SUPER SCOOP Cat Litter and the
addition of five product lines, including BRILLO, acquired in late August. Of
the major personal care product lines, ARM & HAMMER Deodorant Anti-Perspirant
sales were higher, and ARM & HAMMER DENTAL CARE toothpaste sales were lower,
than in the previous year.

Specialty Products were up 5.2% led by higher sales of animal nutrition
products, as well as continued growth of the new specialty cleaning product
line.

Operating Costs

The Company's gross margin decreased slightly to 45.2%. A major favorable factor
was the reduction in manufacturing costs resulting from cost improvement
programs, which included plant reorganization activities initiated in the latter
part of 1996, as well as the final rollout of a reformulated laundry detergent
powder in the second quarter of 1997. This margin improvement, however, was more
than offset by higher manufacturing costs of ARM & HAMMER DENTAL CARE toothpaste
related to a major buy-one-get-one-free promotion during the year.

Advertising, consumer and trade promotion expenses increased $12.0 million to
$148.3 million. This increase largely stemmed from higher introductory launch
costs of SUPER SCOOP Cat Litter and test market costs associated with ARM &
HAMMER DENTAL CARE Gum.

Selling, general and administrative expenses increased primarily as a result of
higher information systems costs related to the installation of a new logistics
system and initial spending on a new enterprise package, as well as additional
personnel costs in support of new business initiatives. Lower research &
development spending on the Xosten drug development program was partially offset
by higher research & development spending on Consumer and Specialty Products.

Other Income and Expenses

The Armand Products Company saw a 4% sales increase driven by higher export
business. The resulting profitability improvement from this joint venture
activity, along with a partial year contribution from our 40% equity interest in
a Brazilian chemical company, were the primary reasons for the $.9 million
increase in equity income.

Investment income was slightly higher than a year ago primarily as a result of
interest earned on a tax refund stemming from resolution of prior year issues.

Other income in 1997 consists mainly of a settlement from a long-standing class
action suit against the carbon dioxide supply industry and minor foreign
exchange gains. Other expenses of $.4 million in 1996 included foreign exchange
losses incurred by our Venezuelan subsidiary due to the devaluation of the local
currency.

Interest expense in 1997 was approximately $.6 million higher than in the
previous year and was the result of using short-term debt to finance the
purchase of the five brands in late August.

Taxation

The effective tax rate for 1997 was 36.7%, compared to 36.0% in the previous
year. The increase in the effective rate is primarily due to a higher effective
state tax rate.

Net Income and Earnings Per Share

The Company's net income for 1997 was $24.5 million, equivalent to diluted
earnings of $1.23 per share, compared to $21.2 million or $1.08 per share in
1996.


                                                                              15

<PAGE>   18

LIQUIDITY AND CAPITAL RESOURCES

The Company's balance sheet was strong at both the 1998 and 1997 year-end. The
net debt position, after deducting cash and short-term investments, increased to
$30.6 million at December 31, 1998 from $20.6 million at the year-end 1997.

In 1998, operating cash flow was $50.1 million. Major factors contributing to
the cash flow from operating activities included higher operating earnings
before non-cash charges for depreciation and amortization, offset by an increase
in accounts receivable related to the higher sales. Operating cash flow together
with additional net borrowings of $9.3 million were used to fund capital
expenditures associated mainly with the installation of the new enterprise
software system and related hardware additions, plant modernization and cat
litter capacity projects at Green River, and new packaging equipment in support
of the BRILLO Soap Pad line at our London, Ohio, plant. Other major uses of cash
included the expenditures related to the Lakewood plant acquisition, the early
1998 acquisition of the TOSS `N SOFT product line, and the purchase of 347,000
shares of treasury stock and cash dividends.

The Company has a total debt-to-capital ratio of approximately 20%. At December
31, 1998 the Company had $56.5 million of additional borrowing capacity
available through short-term lines of credit and another $1.5 million under a
revolving credit facility. Capital expenditures in 1999 are expected to be lower
than in 1998, but may be moderately higher than the level of depreciation and
amortization. Management believes that operating cash flow, coupled with the
Company's access to credit markets, will be more than sufficient to meet the
anticipated cash requirements for the coming year.

In 1997, operating cash flow was almost $18 million. Major factors contributing
to the cash flow from operating activities included higher operating earnings,
non-cash charges for depreciation and amortization, offset by a higher working
capital position resulting from an increase in accounts receivable on the higher
sales, and higher inventories for new and acquired products. Operating cash flow
together with short-term borrowings of $32 million were mainly used to fund the
$31 million purchase of the five brands, and to finance the $10 million
investment in a Brazilian chemical company. In addition, cash flow was used to
fund capital expenditures, pay cash dividends and acquire 116,000 shares of
treasury stock.

OTHER ITEMS

New Accounting Pronouncement

In June 1998, The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133") "Accounting for Derivative
Instruments and Hedging Activities." The Company is required to adopt the
provisions of this Statement in the 2000 year-end financial statements. This
Statement requires that all derivatives be recorded in the balance sheet as
either an asset or liability measured at fair value. The Statement requires that
changes in a derivative's fair value be recognized currently in earnings unless
specific hedge accounting criteria are met. The Company is in the process of
evaluating this Statement and has not yet determined the future impact on the
Company's consolidated financial statements.

Year 2000

Like most other companies, Church & Dwight has established a Y2K project plan
that covers both traditional computer systems and infrastructure ("IT systems")
and computer-based manufacturing and related systems ("non-IT systems"). The
general phases of the Y2K project common to both types of systems are:
inventorying Y2K items; assigning priorities to identified items; assessing the
Y2K compliance of items determined to be material to the Company; remediation
(repairing or replacing) of material items that are determined not to be Y2K
compliant; testing material items; and designing and implementing contingency
and business continuation plans.

With regard to IT systems, the Company completed and implemented a new
enterprise software package from SAP America, Inc. on April 27, 1998. The
installation of this Y2K compliant software package substantially replaced the
core transaction processing and recording capabilities of our older
non-compliant IT systems. The remaining IT systems that are material to the
effective management of the business have been inventoried, prioritized, and
assessed, and repair or replacement and testing activities are planned to be
complete by the third quarter of 1999.

Non-IT systems, which include manufacturing equipment with embedded
microprocessors, have been inventoried and priorities have been assigned to
identified items. Assessment, implementation and testing of required changes to
critical systems are expected to be complete by late 1999, but the work is
ongoing.

The Company is in contact with its major customers and is contacting vendors and
others on whom it relies to assure that their systems will be converted.
However, there can be no assurance that the systems of other companies will be
timely converted and there is no way to predict what impact, if any, this will
have on the Company's operations.

Total expenditures incurred on Y2K-related projects through the fourth quarter
of 1998 are estimated at approximately $11 million. While the costs of the
remaining required changes are not yet fully known, we expect the total
estimated costs of the Y2K-related projects to be in the $13 million to $14
million range.


16

<PAGE>   19

The failure to correct a material Y2K problem could result in an interruption
in, or failure of, certain normal business activities or operations. Such
failures could materially and adversely affect the Company's results of
operations, liquidity and financial condition. Due to the general uncertainty
inherent in the Y2K problem resulting in part from the uncertainty of the Y2K
readiness of third-party suppliers and customers, the Company is unable to
determine at this time whether the consequences of Y2K failures will have a
material impact on the Company's results of operations, liquidity or financial
condition. The Y2K Project is expected to reduce, but not necessarily eliminate,
the Company's uncertainty about the Y2K problem.

Contingency and business continuation plans to protect the Company from
Y2K-related interruptions are being developed. These plans will be completed
during 1999 and will include development of back-up procedures, identifications
of alternate suppliers and possible increases in inventory levels. The Company
believes, however, that due to the widespread nature of potential Y2K issues,
the contingency planning process is an ongoing one which will require further
modifications as the Company obtains additional information regarding its own
internal systems and equipment needs determined during the remediation and
testing phases of its Y2K project, and the status of third-party Y2K readiness.

Year 2000 Forward-Looking Statement

The preceding Y2K discussion contains various forward-looking statements which
represent the Company's beliefs or expectations regarding future events. These
statements include, without limitation, the Company's expectations as to when it
will complete the remediation and testing phases of its Y2K project plan; its
estimated cost of achieving Y2K readiness; and the Company's belief that its
internal systems and equipment will be Y2K-compliant in a timely manner. All
forward-looking statements involve a number of risks and uncertainties that
could cause the actual results to differ materially from the projected results.
Factors that may cause these differences include, but are not limited to, the
availability of qualified personnel and other information technology resources;
the ability to identify and remediate all date-sensitive lines of computer code
or to replace embedded computer chips in affected systems or equipment; and the
actions of other third parties with respect to Y2K problems. In addition,
disruptions in the economy generally resulting from the Y2K issues also could
materially and adversely affect the Company.

Competitive Environment

The Company operates in highly competitive consumer-product markets, in which
cost efficiency and innovation are critical to success.

Most of the Company's laundry and household cleaning products are sold as value
brands, which makes their cost position especially important. To stay
competitive in this category, the Company completed its rollout of a
reformulated liquid laundry detergent product in 1998, and, in early 1999, began
a $6 million project to modernize and upgrade our powder laundry detergent plant
at Green River, Wyoming. Once this project is completed in late 1999, we expect
to concentrate all powder laundry detergent production at Green River, thereby
improving upon our cost position.

The Company has been very successful in recent years in entering the oral care
and personal care and deodorizing businesses using the unique strengths of its
ARM & HAMMER trademark and baking soda technology. These are highly innovative
markets, characterized by a continuous flow of new products and line extensions,
and requiring heavy advertising and promotion.

In 1998, the Company made an important addition to the oral care product line
with the introduction of ARM & HAMMER DENTAL CARE Gum. This introduction is
considered a success but, as the category is new, it is too early to know how
successful the product will be in the long term. In the toothpaste category,
sales fell as larger competitors introduced major new line extensions supported
by historically high levels of advertising and promotion spending. To strengthen
our position in the category, the Company is introducing into the important
whitening segment of the market ARM & HAMMER ADVANCE WHITE, a new product line
based on the whitening power of baking soda in combination with other
ingredients. The Company anticipates that marketing spending levels will remain
high in 1999.

The major activity in the deodorizing product line for 1998 was the continuation
of the SUPER SCOOP Cat Litter launch, which first began in late 1997. This
introduction is also considered a success, but the product will need continued
support as distribution is expanded. In 1999, the Company is introducing two
major line extensions in the deodorizing area: ARM & HAMMER Baking Soda
FRIDGE-N-FREEZER FRESHENER and ARM & HAMMER Carpet Deodorizer LASTING SCENT.
These introductions usually involve heavy marketing costs in the year of launch,
and the eventual success of these line extensions will not be known for some
time.

In the Specialty Products business, competition within the two major product
categories, sodium bicarbonate and potassium carbonate, remained intense in
1998. Sodium bicarbonate sales have been impacted for several years by a
nahcolite-based sodium bicarbonate manufacturer which has been operating at the
lower end of the business and is 


                                                                              17

<PAGE>   20

now making an effort to enter the higher end. To strengthen its competitive
position, the Company has recently completed the modernization of its Green
River facility to provide better availability of specialized grades, and is also
increasing its R & D spending on health care, food processing and other high-end
applications. As for potassium carbonate, the Company expects imports of video
glass from the Far East to affect U.S. demand in 1999 as it did in 1998.

During the year, the Company continued to pursue opportunities to build a
specialized industrial cleaning business using our aqueous-based technology. In
early 1999, the Company extended its alliance with Safety-Kleen Corp. to build a
specialty cleaning products business based on our technology and their sales and
distribution organization. While this opportunity holds great promise, the
outcome may not be known for some time.

Cautionary Note on Forward-Looking Statements 

This Annual Report contains forward-looking statements relating, among others,
to financial objectives, sales growth and cost reduction programs. Many of these
statements depend on factors outside the Company's control, such as economic
conditions, market growth and consumer demand, competitive products and pricing,
raw material costs and other matters. With regard to new product introductions,
there is particular uncertainty related to trade, competitive and consumer
reactions. There is also significant uncertainty in 1999 relating to the Y2K
computer problem, including its effect on customers and suppliers. If the
Company's assumptions are incorrect, or there is a significant change in some of
these key factors, the Company's performance could vary materially from the
forward-looking statements in this Report.


<TABLE>
<CAPTION>
Common Stock Price Range and Dividends                         1998                                     1997
===========================================================================================================================
                                                Low            High        Dividend         Low         High       Dividend
- ---------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>             <C>            <C>           <C>          <C>         <C>      
1st Quarter                                 $   26 3/8      $  30 5/8      $   0.12      $  21 5/8    $  29       $    0.11
2nd Quarter                                     29 1/8         30 7/8          0.12         24 1/8       28 3/4        0.11
3rd Quarter                                     27 1/8         34 3/8          0.12         25 5/8       31            0.12
4th Quarter                                     27 1/2         36              0.12         26 7/8       32 3/4        0.12
- ---------------------------------------------------------------------------------------------------------------------------
Full Year                                   $   26 3/8      $  36          $   0.48      $  21 5/8    $  32 3/4   $    0.46
===========================================================================================================================
</TABLE>


Based on composite trades reported by the New York Stock Exchange.

Approximate number of holders of Church & Dwight's Common Stock as of December
31, 1998: 10,000.


18

<PAGE>   21

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in thousands, except per share data)


<TABLE>
<CAPTION>
Year ended December 31,                                             1998         1997         1996
==================================================================================================
<S>                                                            <C>          <C>          <C>      
Net Sales                                                      $ 684,393    $ 574,906    $ 527,771
Cost of sales                                                    378,604      314,821      288,295
- --------------------------------------------------------------------------------------------------
Gross Profit                                                     305,789      260,085      239,476
Advertising, consumer and trade promotion expenses               182,206      148,254      136,308
Selling, general and administrative expenses                      81,824       81,275       75,905
Sale of technology                                                (3,500)          --           --
Plant shutdown                                                     2,766           --           --
- --------------------------------------------------------------------------------------------------
Income from Operations                                            42,493       30,556       27,263
Equity in earnings of affiliates                                   5,276        6,057        5,140
Investment earnings                                                1,348        1,666        1,544
Other income (expense)                                              (278)       1,320         (424)
Interest expense                                                  (2,653)        (912)        (352)
- --------------------------------------------------------------------------------------------------
Income before taxes                                               46,186       38,687       33,171
Income taxes                                                      15,897       14,181       11,943
==================================================================================================
Net Income                                                     $  30,289    $  24,506    $  21,228
==================================================================================================
Weighted average shares outstanding (in thousands) - Basic        19,367       19,461       19,534
Weighted average shares outstanding (in thousands) - Diluted      20,025       19,971       19,697
==================================================================================================
Net Income Per Share - Basic                                   $    1.56    $    1.26    $    1.09
Net Income Per Share - Diluted                                 $    1.51    $    1.23    $    1.08
==================================================================================================
</TABLE>


See Notes to Consolidated Financial Statements 


                                                                              19

<PAGE>   22

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)


<TABLE>
<CAPTION>
==================================================================================
December 31,                                                     1998         1997
==================================================================================
<S>                                                         <C>          <C>      
Assets
==================================================================================
Current Assets
Cash and cash equivalents                                   $  16,189    $  14,949
Short-term investments                                          2,042        3,993
Accounts receivable, less allowances of $1,579 and $1,532      65,014       49,566
Inventories                                                    60,285       61,275
Current portion of notes receivable                             7,485        4,131
Deferred income taxes                                          10,535        9,802
Prepaid expenses                                                5,258        5,727
- ----------------------------------------------------------------------------------
Total Current Assets                                          166,808      149,443
- ----------------------------------------------------------------------------------
Property, Plant and Equipment (Net)                           161,712      142,343
Note Receivable from Joint Venture                              2,384        6,869
Equity Investment in Affiliates                                27,751       26,871
Long-term Supply Contracts                                      4,918        2,775
Intangibles and Other Assets                                   27,865       22,713
- ----------------------------------------------------------------------------------
Total Assets                                                $ 391,438    $ 351,014
==================================================================================

Liabilities and Stockholders' Equity
==================================================================================
Current Liabilities
Short-term borrowings                                       $  18,500    $  32,000
Accounts payable and accrued expenses                          98,069       92,090
Current portion of long-term debt                                 685          685
Income taxes payable                                            6,983        1,456
- ----------------------------------------------------------------------------------
Total Current Liabilities                                     124,237      126,231
- ----------------------------------------------------------------------------------
Long-term Debt                                                 29,630        6,815
Deferred Income Taxes                                          21,178       20,578
Deferred Liabilities                                            6,785        3,786
Nonpension Postretirement and Postemployment Benefits          14,770       14,263

Commitments and Contingencies

Stockholders' Equity
Preferred Stock-$1 par value
Authorized 2,500,000 shares, none issued                           --           --
Common Stock-$1 par value
Authorized 100,000,000 shares,
issued 23,330,494 shares                                       23,330       23,330
Additional paid-in capital                                     36,502       34,097
Retained earnings                                             218,618      197,622
Accumulated other comprehensive income (loss)                    (782)        (591)
- ----------------------------------------------------------------------------------
                                                              277,668      254,458
Common stock in treasury, at cost:
     4,019,505 shares in 1998 and
     3,893,155 shares in 1997                                 (82,281)     (74,568)
Due from officer                                                 (549)        (549)
- ----------------------------------------------------------------------------------
Total Stockholders' Equity                                    194,838      179,341
- ----------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                  $ 391,438    $ 351,014
==================================================================================
</TABLE>


See Notes to Consolidated Financial Statements 


20

<PAGE>   23

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flow
(Dollars in thousands)


<TABLE>
<CAPTION>
Year ended December 31,                                             1998         1997         1996
==================================================================================================
Cash Flow From Operating Activities
==================================================================================================
<S>                                                            <C>          <C>          <C>      
Net Income                                                     $  30,289    $  24,506    $  21,228
Adjustments to reconcile net income to net
cash provided by operating activities:
  Depreciation, depletion and amortization                        16,503       14,158       13,624
  Loss on asset disposals                                          3,554           --          255
  Equity in earnings of affiliates                                (5,276)      (6,057)      (5,140)
  Deferred income taxes                                             (133)       2,733         (272)
  Other                                                               90          155          307
Change in assets and liabilities:
  Decrease in short-term investments                               1,951        1,018           16
  (Increase) decrease in accounts receivable                     (15,545)      (7,875)       2,793
  Decrease (increase) in inventories                               2,053       (7,108)      (7,437)
  Decrease (increase) in prepaid expenses                            455         (819)         397
  Increase (decrease) in accounts payable                          6,143       (1,118)       6,412
  Increase (decrease) in income taxes payable                      6,521       (3,683)         485
  Increase in other liabilities                                    3,505        1,650        1,076
- --------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                         50,110       17,560       33,744

Cash Flow From Investing Activities
==================================================================================================
Additions to property, plant and equipment                       (27,123)      (9,918)      (7,114)
Distributions from affiliates                                      4,756        5,818        5,437
Investment in affiliate                                             (360)     (10,421)      (5,250)
Purchase of new product lines                                     (7,038)     (30,973)
Purchase of other assets                                          (1,995)        (727)          --
Proceeds from note receivable                                      4,131           --           --
Investment in note receivable                                     (3,000)          --           --
Acquisition of manufacturing facility                             (9,014)          --           --
Purchase of supply contract                                       (2,750)          --           --
Purchase of license agreement                                         --       (1,000)          --
Repayment of officer loans                                            --           --          411
- --------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                            (42,393)     (47,221)      (6,516)

Cash Flow From Financing Activities
==================================================================================================
(Repayments) proceeds from short-term borrowing                  (13,500)      32,000       (5,000)
Proceeds from stock options exercised                              3,770        1,705          887
Purchase of treasury stock                                       (10,269)      (3,044)      (2,971)
Payment of cash dividends                                         (9,293)      (8,953)      (8,597)
Long-term debt repayment                                            (685)          --           --
Long-term borrowing                                               23,500           --           --
- --------------------------------------------------------------------------------------------------
Net Cash (Used in) Provided by Financing Activities               (6,477)      21,708      (15,681)

Net Change in Cash and Cash Equivalents                            1,240       (7,953)      11,547
Cash and Cash Equivalents at Beginning of Year                    14,949       22,902       11,355
- --------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year                       $  16,189    $  14,949    $  22,902
- --------------------------------------------------------------------------------------------------
Cash paid during the year for:
  Interest (net of amounts capitalized)                        $   2,768    $     698    $     362
  Income taxes                                                     9,521       15,159       12,233
==================================================================================================
</TABLE>


See Notes to Consolidated Financial Statements 


21

<PAGE>   24

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(In thousands)


<TABLE>
<CAPTION>
Years ended December 31, 1998, 1997, 1996
==========================================================================================================================
                                                      Number of Shares                       Amounts
                                                     ====================  ===============================================
                                                                                                   Additional                      
                                                     Common      Treasury    Common    Treasury      Paid-In     Retained          
                                                      Stock       Stock      Stock       Stock       Capital     Earnings
==========================================================================================================================
<S>                                                  <C>         <C>       <C>         <C>          <C>         <C>      
January 1, 1996                                      23,330      (3,805)   $  23,330   $ (70,501)   $  33,061   $ 169,438
Net Income                                               --          --           --          --           --      21,228
Translation adjustments                                  --          --           --          --           --          -- 
Comprehensive Income                                          
Cash dividends                                           --          --           --          --           --      (8,597)
Stock option plan
  transactions including
  related income tax benefit                             --          59           --         683          229          -- 
Purchase of treasury stock                               --        (139)          --      (2,971)          --          -- 
Other stock issuances                                    --           7           --          81           74          -- 
Officers repayment                                       --          --           --          --           --          -- 
=========================================================================================================================
December 31, 1996                                    23,330      (3,878)      23,330     (72,708)      33,364     182,069
Net Income                                               --          --           --          --           --      24,506
Translation adjustments                                  --          --           --          --           --          -- 
Comprehensive Income                                       
Cash dividends                                           --          --           --          --           --      (8,953)
Stock option plan
  transactions including
  related income tax benefit                             --         101           --       1,184          733          -- 
Purchase of treasury stock                               --        (116)          --      (3,044)          --          -- 
=========================================================================================================================
December 31, 1997                                    23,330      (3,893)      23,330     (74,568)      34,097     197,622
Net Income                                               --          --           --          --           --      30,289
Translation adjustments                                  --          --           --          --           --          -- 
Comprehensive Income                                       
Cash dividends                                           --          --           --          --           --      (9,293)
Stock option plan
  transactions including
  related income tax benefit                             --         214           --       2,474        2,278          -- 
Purchase of treasury stock                               --        (347)          --     (10,269)          --          -- 
Other stock issuances                                    --           7           --          82          127          -- 
=========================================================================================================================
December 31, 1998                                    23,330      (4,019)   $  23,330   $ (82,281)   $  36,502   $ 218,618
=========================================================================================================================

<CAPTION>
                                                  Accumulated                                         
                                                     Other         Due                                 
                                                 Comprehensive    From     Comprehensive       
                                                 Income (loss)  Officers      Income
========================================================================================
<S>                                               <C>          <C>         <C>    
January 1, 1996                                   $    (686)   $    (960)         
Net Income                                                                    21,228         
Translation adjustments                                 492           --         492         
                                                                              ------        
Comprehensive Income                                                          21,720
                                                                              ------        
Cash dividends                                           --           --                     
Stock option plan                                                                            
  transactions including                                                                     
  related income tax benefit                             --           --                     
Purchase of treasury stock                               --           --                     
Other stock issuances                                    --           --                     
Officers repayment                                       --          411                     
=========================================================================                    
December 31, 1996                                      (194)        (549)                    
Net Income                                               --           --      24,506         
Translation adjustments                                (397)          --        (397)        
                                                                              ------        
Comprehensive Income                                                          24,109
                                                                              ------        
Cash dividends                                           --           --                     
Stock option plan                                                                            
  transactions including                                                                     
  related income tax benefit                             --           --                     
Purchase of treasury stock                               --           --                     
=========================================================================                    
December 31, 1997                                      (591)        (549)                    
Net Income                                               --           --      30,289         
Translation adjustments                                (191)          --        (191)        
                                                                              ------        
Comprehensive Income                                                          30,098         
                                                                              ------        
Cash dividends                                           --           --          
Stock option plan
  transactions including
  related income tax benefit                             --           --          
Purchase of treasury stock                               --           --          
Other stock issuances                                    --           --          
=========================================================================
December 31, 1998                                 $    (782)   $    (549)         
=========================================================================
</TABLE>


See Notes to Consolidated Financial Statements 


22

<PAGE>   25

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES 

Notes to Consolidated Financial Statements

1. accounting policies


Business

The Company's principal business is the manufacture and sale of sodium
carbonate-based products. It sells its products, primarily under the ARM &
HAMMER trademark, to consumers through supermarkets, drug stores and mass
merchandisers; and to industrial customers and distributors. In 1998, Consumer
Products represented 82% and Specialty Products 18% of the Company's net sales.
The Company does approximately 91% of its business in the United States.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries. The Company's 50% interest in its
Armand Products Company joint venture, its 40% interest in a Brazilian
bicarbonate/carbonate-related chemical company and its 45% interest in LifeRight
Foods LLC, a joint venture to develop enhanced feeds made from natural
ingredients, have been accounted for under the equity method of accounting. All
material intercompany transactions and profits have been eliminated in
consolidation.

Use of Estimates

The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

Foreign Currency Translation

Financial statements of foreign subsidiaries are translated into U.S. dollars in
accordance with SFAS No. 52. Gains and losses on foreign currency transactions
were not material.

Cash Equivalents

Cash equivalents consist of highly liquid short-term investments which mature
within three months of purchase.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined
primarily by using the last-in, first-out (LIFO) method.

Property, Plant and Equipment

Property, plant and equipment and additions thereto are stated at cost.
Depreciation and amortization are provided by the straight-line method over the
estimated useful lives of the respective assets.

Software

During the first quarter of 1998, the Company adopted AICPA Statement of
Position (SOP) 98-1 "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use." The SOP requires companies to capitalize certain
costs of developing computer software. Amortization is provided by the
straight-line method over the estimated useful lives of the software. The
after-tax effect was an increase in net income of approximately $2.9 million or
$0.14 per diluted share.

Long-Term Supply Contracts

Long-term supply contracts represent advance payments under multi-year contracts
with suppliers of raw materials and finished goods inventory. Such advance
payments are applied over the lives of the contracts.

Goodwill

Goodwill recorded prior to November 1, 1970, is not being amortized, as
management of the Company believes there has been no diminution in carrying
value. Goodwill, recorded in 1997 and 1998 as part of the Brillo and related
brand acquisitions and the investment in a Brazilian
bicarbonate/carbonate-related chemical company, is being amortized over 20-30
years using the straight-line method.

Selected Operating Expenses

Research & development costs in the amount of $16,448,000 in 1998, $15,841,000
in 1997 and $17,823,000 in 1996, were charged to operations as incurred.
Marketing costs in the amounts of $182,206,000 in 1998, $148,254,000 in 1997 and
$136,308,000 in 1996 were charged to operations as incurred.

Earnings Per Share

The Company calculates earnings per share in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS 128), "Earnings per Share." Under
SFAS 128, the Company has presented two earnings per share amounts. Basic EPS is
calculated based on income available to common shareholders and the
weighted-average number of shares


                                                                              23

<PAGE>   26

outstanding during the reported period. Diluted EPS includes additional dilution
from potential common stock issuable pursuant to the exercise of stock options
outstanding. There were no antidilutive stock options for 1998. Antidilutive
stock options, in the amounts of 242,900 for 1997 and 1,107,850 for 1996, have
been excluded.

Income Taxes

The Company recognizes deferred income taxes under the liability method;
accordingly, deferred income taxes are provided to reflect the future
consequences of differences between the tax bases of assets and liabilities and
their reported amounts in the financial statements.

New Accounting Pronouncements

The Company has adopted Statement of Financial Accounting Standards No. 130
"Reporting Comprehensive Income." The accumulated other comprehensive income
item is exclusively foreign exchange translation adjustments. The tax effect is
zero because of a valuation allowance.

In June 1998, The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 (SFAS 133) "Accounting for Derivative
Instruments and Hedging Activities." The Company is required to adopt the
provisions of this Statement in the 2000 year-end financial statements. This
Statement requires that all derivatives be recorded in the balance sheet as
either an asset or liability measured at fair value. The Statement requires that
changes in a derivative's fair value be recognized currently in earnings unless
specific hedge accounting criteria are met. The Company is in the process of
evaluating this Statement and has not yet determined the future impact on the
Company's consolidated financial statements.

Reclassification

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

2. fair value of financial instruments and foreign exchange risk management

The following table presents the carrying amounts and estimated fair values of
the Company's financial instruments at December 31, 1998 and 1997. Financial
Accounting Standards No. 107, "Disclosures About Fair Value of Financial
Instruments," defines the fair value of a financial instrument as the amount at
which the instrument could be exchanged in a current transaction between willing
parties.


<TABLE>
<CAPTION>
(In thousands)                                            1998                                1997
============================================================================================================
                                             Carrying            Fair             Carrying            Fair
                                              Amount             Value             Amount             Value
============================================================================================================
<S>                                         <C>                <C>               <C>                <C>     
Financial Assets:
     Short-term investments                 $    2,042         $   2,042         $   3,993          $  3,993
     Notes receivable                            9,869             9,814            11,000            11,000
     Due from officer                              549               554               549               549
Financial Liabilities:
     Short-term borrowings                      18,500            18,500            32,000            32,000
     Current portion of long-term debt             685               685               685               685
     Long-term debt                             29,630            29,630             6,815             6,815
============================================================================================================
</TABLE>


The following methods and assumptions were used to estimate the fair value of
each class of financial instruments reflected in the Consolidated Balance
Sheets:

Short-term Investments

The cost of the investments (trading securities) can be specifically identified
and its fair value is based upon quoted market prices at the reporting date. At
December 31, 1998 and 1997, both the cost and market value of the investments
approximated each other.

Notes Receivable

The notes receivable represent loans to the Company's Armand Products Company
joint venture and Fluid Packaging Co., Inc. The note to Armand Products is
secured by plant and equipment owned by the joint venture, bears interest at a
rate of 8.25% and is due in installments from January 1998 through June 2000.

The note to Fluid Packaging is secured by a pledge of and security interest in
65% of the capital stock of Allied Mexico, S.A. de C.V., a wholly-owned
subsidiary of Fluid Packaging. The note bears an interest rate of 8.0% and is
due in full no later than July 15, 1999. Fair value of both notes is determined
based on discounting cash flows using rates available on notes with similar
terms. 


24

<PAGE>   27

Due from Officer 

The note receivable approximates fair value because of its short maturity.

Short-term Borrowings

The amounts of unsecured lines of credit equal fair value because of short
maturities and variable interest rates.

Long-term Debt and Current Portion of Long-term Debt

The Company estimates that based upon the Company's financial position and the
variable interest rate, the carrying value approximates fair value.

Foreign Exchange Risk Management

The Company enters into forward exchange contracts to hedge anticipated but not
yet committed sales denominated in the Japanese yen and the English pound. The
terms of these contracts are for periods of under 12 months. The purpose of the
Company's foreign currency hedging activities is to protect the Company from the
risk that the eventual dollar net cash inflows resulting from the sale of
products to foreign customers will be adversely affected by changes in exchange
rates. The amounts outstanding at December 31, 1998 and 1997 of "sell"
contracts, translated into U.S. dollars using the rates current at the reporting
date, were $3,156,000 and $2,419,000, respectively. The Company's accounting
policy is to value these contracts at market value. At December 31, 1998, the
Company had an immaterial unrealized loss and an immaterial unrealized gain at
December 31, 1997.

3. inventories


<TABLE>
<CAPTION>
Inventories are summarized as follows:
==================================================================================
(In thousands)                                                   1998         1997
==================================================================================
<S>                                                         <C>          <C>
Raw materials and supplies                                  $  16,278    $  16,848
Work in process                                                   160           --
Finished goods                                                 43,847       44,427
- ----------------------------------------------------------------------------------
                                                            $  60,285    $  61,275
==================================================================================
</TABLE>


Inventories valued on the LIFO method totaled $53,203,000 and $53,840,000 at
December 31, 1998 and 1997, respectively, and would have been approximately
$3,656,000 and $3,075,000 higher, respectively, had they been valued using the
first-in, first-out (FIFO) method.

4. property, plant and equipment

Property, plant and equipment consist of the following:


<TABLE>
<CAPTION>
==================================================================================
(In thousands)                                                   1998         1997
==================================================================================
<S>                                                         <C>          <C>      
Land                                                        $   4,896    $   3,258
Buildings and improvements                                     73,529       68,075
Machinery and equipment                                       173,595      165,174
Office equipment and other assets                              14,347       13,355
Software                                                        5,311           --
Mineral rights                                                  5,931        5,931
Construction in progress                                       14,148        3,304
- ----------------------------------------------------------------------------------
                                                              291,757      259,097
Less accumulated depreciation, depletion and amortization     130,045      116,754
- ----------------------------------------------------------------------------------
Net property, plant and equipment                           $ 161,712    $ 142,343
==================================================================================
</TABLE>


Depreciation, depletion and amortization of property, plant and equipment have
been charged to operations in the amount of $14,646,000, $13,249,000 and
$13,085,000 in 1998, 1997 and 1996, respectively. Interest charges in the amount
of $381,000 and $109,000 were capitalized in connection with construction
projects in 1998 and 1997, respectively.


                                                                              25

<PAGE>   28

5. equity investments

The following table reflects summarized financial information for the Armand
Products Company joint venture. The Company accounts for its 50% interest in the
joint venture under the equity method. Products and services are provided to the
Armand Products Company by the joint venture partners at cost. As a result, the
information below would not be indicative of the financial position or results
of operation had the joint venture operated on a stand-alone basis.


<TABLE>
<CAPTION>
(In thousands)                                                                1998        1997        1996
==========================================================================================================
<S>                                                                      <C>         <C>         <C>      
Income Statement Data:
     Net sales                                                           $  39,746   $  40,870   $  39,246
     Gross profit                                                           13,346      14,050      12,963
     Net income                                                             10,250      10,702       9,372
     Company's share in net income                                           5,125       5,351       4,686
     Elimination of Company's share of intercompany interest expense           377         454         454
- ----------------------------------------------------------------------------------------------------------
Equity in joint venture income                                           $   5,502   $   5,805   $   5,140
==========================================================================================================
</TABLE>



<TABLE>
<CAPTION>
(In thousands)                                                   1998         1997
==================================================================================
<S>                                                         <C>          <C>      
Balance Sheet Data:
    Current assets                                          $   8,307    $  10,563
    Noncurrent assets                                          35,182       36,057
    Current liabilities                                         2,734        3,224
    Current portion of notes payable                            4,485        4,131
    Notes payable-Church & Dwight Co., Inc.                     2,384        6,869
    Partnership capital                                        33,886       32,396
==================================================================================
</TABLE>


In 1997, the Company acquired a 40% interest in a Brazilian
bicarbonate/carbonate-related chemical company.

The investment, costing approximately $10,400,000, was financed internally and
includes goodwill of approximately $4,500,000. The agreement includes an option
for the Company to increase its interest to 75% by March 31, 1999.

6. acquisitions

On January 26, 1998, the Company's Brotherton Speciality Products subsidiary
purchased Kingston Chemical Ltd., a supplier of specialty chemicals, for
approximately $1.7 million, which was allocated to intangible assets.

On January 29, 1998, the Company closed on its previously announced acquisition
of TOSS 'N SOFT Dryer Sheets from The Dial Corporation for approximately $5.3
million.

On July 15, 1998, the Company purchased from Fluid Packaging Co., Inc., a
manufacturing facility and machinery located in Lakewood, New Jersey, for
approximately $9.0 million. As noted earlier, the Company loaned to Fluid
Packaging $3.0 million at an interest rate of 8.0%, payable no later than July
15, 1999.

7. accounts payable and accrued expenses

Accounts payable and accrued expenses consist of the following:


<TABLE>
<CAPTION>
================================================================================
(In thousands)                                                1998          1997
================================================================================
<S>                                                        <C>           <C>    
Trade accounts payable                                     $40,194       $31,700
Accrued marketing and promotion costs                       40,622        45,097
Accrued wages and related costs                              8,467         6,580
Accrued pension and profit-sharing                           5,230         4,534
Other accrued current liabilities                            3,556         4,179
- --------------------------------------------------------------------------------
                                                           $98,069       $92,090
================================================================================
</TABLE>



26

<PAGE>   29

8. short-term borrowings and long-term debt

The Company has available short-term unsecured lines of credit with major U.S.
banks in the amount of $75 million, of which $18.5 million was utilized as of
December 31, 1998; and $25 million of a revolving credit agreement, of which
$23.5 million was utilized at December 31, 1998. The weighted average interest
rate on these borrowings at December 31,1998 was approximately 5.6%.

Long-term debt and current portion of long-term debt consists of the following:


<TABLE>
<CAPTION>
===================================================================================
(In thousands)                                                     1998        1997
===================================================================================
<S>                                                             <C>       <C>      
Three-Year Unsecured Revolving Credit Loan due June 6, 2001     $23,500   $      --
Industrial Revenue Refunding Bond
  due in installments of $685 from 1999-2007 and $650 in 2008     6,815       7,500
- -----------------------------------------------------------------------------------
                                                                $30,315   $   7,500
===================================================================================
</TABLE>


The Industrial Revenue Refunding Bond carries a variable rate of interest
determined weekly, based upon current market conditions for short-term
tax-exempt financing. The average rate of interest charged in 1998 and 1997 was
3.0% and 3.5%, respectively. The interest rate associated with the revolving
credit loan is tied to the Libor rate and may be adjusted based on the Company's
financial performance. The average interest rate charged in 1998 was 5.6%.

9. pension and nonpension postretirement benefits

The Company has adopted Statement of Financial Accounting Standards No. 132
"Employers' Disclosure about Pensions and Other Postretirement Benefits."

The Company has defined benefit pension plans covering certain hourly employees.
Pension benefits to retired employees are based upon their length of service and
a percentage of qualifying compensation during the final years of employment.
The Company's funding policy, which is consistent with federal funding
requirements, is intended to provide not only for benefits attributed to service
to date, but also for those expected to be earned in the future.

The Company maintains unfunded plans which provide medical benefits for eligible
domestic retirees and their dependents. The Company accounts for these benefits
in accordance with Statement of Financial Accounting Standards No. 106 (SFAS
106), "Employers' Accounting for Postretirement Benefits Other than Pensions."
This standard requires the cost of such benefits to be recognized during the
employee's active working career.

The following table provides information on the status of the plans at December
31:


<TABLE>
<CAPTION>
==================================================================================================
                                                                                    Nonpension
                                                                                  Postretirement
                                                            Pension Plans          Benefit Plans
==================================================================================================
(In thousands)                                            1998        1997        1998        1997
==================================================================================================
<S>                                                   <C>         <C>         <C>         <C>     
Change in Benefit Obligation:
  Benefit obligation at beginning of year             $ 13,301    $ 12,255    $  7,871    $  7,107
  Service cost                                             396         348         446         371
  Interest cost                                            977         891         592         530
  Actuarial loss                                         1,387         520         880         306
  Benefits paid                                           (658)       (713)       (241)       (443)
- --------------------------------------------------------------------------------------------------
Benefit obligation at end of year                     $ 15,403    $ 13,301    $  9,548    $  7,871
==================================================================================================
Change in Plan Assets:
  Fair value of plan assets at beginning of year       $14,347    $ 12,956    $     --    $     --
  Actual return on plan assets (net of expenses)         2,100       2,104
  Employer contributions                                    --          --         241         443
  Benefits paid                                           (658)       (713)       (241)       (443)
- --------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year              $ 15,789    $ 14,347    $      0    $      0
==================================================================================================
</TABLE>



                                                                              27

<PAGE>   30


<TABLE>
<CAPTION>
                                                                                 Nonpension
                                                                               Postretirement
                                                        Pension Plans          Benefit Plans
==================================================================================================
(In thousands)                                        1998        1997        1998        1997
==================================================================================================
<S>                                                   <C>         <C>         <C>         <C>     
Reconciliation of the Funded Status:
  Funded status                                   $    386     $  1,046     $ (9,548)    $ (7,871)
  Unrecognized transition obligation                    10            8           --           -- 
  Unrecognized prior service cost                      184          213       (1,160)      (1,265)
  Unrecognized actuarial gain                         (990)      (1,558)      (3,174)      (4,269)
  Loss due to currency fluctuations                     56           38           --           --
- --------------------------------------------------------------------------------------------------
Net amount recognized at end of year              $   (354)    $   (253)    $(13,882)    $(13,405)
==================================================================================================
Amounts recognized in the statement of
financial position consist of:
  Prepaid benefit cost                            $    562     $    508           --           --
  Accrued benefit liability                           (916)        (761)     (13,882)     (13,405)
- --------------------------------------------------------------------------------------------------
Net amount recognized at end of year              $   (354)    $   (253)    $(13,882)    $(13,405)
==================================================================================================

Weighted-average assumptions as of December 31:
Discount rate                                         6.75%        7.25%        6.75%        7.25%
Rate of compensation increase                         5.00%        5.00%          --           --
Expected return on plan assets                        9.25%        9.25%          --           --
==================================================================================================
</TABLE>


Net Pension and Net Postretirement Benefit Costs consisted of the following
components:


<TABLE>
<CAPTION>
=========================================================================================================
                                                    Pension Costs                 Postretirement Costs
=========================================================================================================
(In thousands)                                1998       1997       1996       1998       1997       1996
=========================================================================================================
<S>                                        <C>        <C>        <C>        <C>        <C>        <C>    
Components of Net Periodic Benefit Cost:
   Service cost                            $   396    $   348    $   355    $   446    $   371    $   350
   Interest cost                               977        891        852        592        530        482
   Expected return on plan assets           (1,291)    (1,167)    (1,077)        --         --         --
   Amortization of transition obligation         4          2          1         --         --         --
   Amortization of prior service cost           28         28         28       (105)       (96)       (79)
Recognized actuarial (gain) or loss            (13)       (31)         4       (215)      (301)      (310)
- ---------------------------------------------------------------------------------------------------------
Net periodic benefit cost                  $   101    $    71    $   163    $   718    $   504    $   443
=========================================================================================================
</TABLE>


The pension plan assets primarily consist of equity mutual funds, fixed income
funds and a guaranteed investment contract fund.

The accumulated postretirement benefit obligation has been determined by
application of the provisions of the Company's medical plans including
established maximums and sharing of costs, relevant actuarial assumptions and
health-care cost trend rates projected at 6% in 1999, and ranging to 5.4% for
years 2000 and beyond. During 1996, the Company changed the eligibility
requirements of the plan and established a maximum annual benefit based on years
of service for those over 65 years of age.


<TABLE>
<CAPTION>
====================================================================================
(In thousands)                                                     1998        1997
====================================================================================
<S>                                                             <C>       <C>      
Effect of 1% increase in health-care cost trend rates on:
   Postretirement benefit obligation                            $   737   $     477
   Total of service cost and interest cost component                 90          80
Effect of 1% decrease in health-care cost trend rates on:
   Postretirement benefit obligation                               (646)       (450)
Total of service cost and interest cost component                   (77)        (74)
====================================================================================
</TABLE>


The Company also maintains a defined contribution profit-sharing plan for
salaried and certain hourly employees. Contributions to the profit-sharing plan
charged to earnings amounted to $4,340,000, $4,100,000 and $3,700,000 in 1998,
1997 and 1996, respectively.

The Company also has an employee savings plan. The Company matches 50% of each
employee's contribution up to a maximum of 6% of the employee's earnings. The
Company's matching contributions to the savings plan were $1,097,000, $963,000
and $940,000 in 1998, 1997 and 1996, respectively.


28

<PAGE>   31

10. income taxes

The components of income before taxes are as follows:


<TABLE>
<CAPTION>
===================================================================================================
(In thousands)                                                      1998         1997         1996
===================================================================================================
<S>                                                             <C>          <C>          <C>     
Domestic                                                        $ 43,197     $ 36,099     $ 30,353
Foreign                                                            2,989        2,588        2,818
- ---------------------------------------------------------------------------------------------------
Total                                                           $ 46,186     $ 38,687     $ 33,171
===================================================================================================
</TABLE>


The following table summarizes the provision for U.S. federal, state and foreign
income taxes:


<TABLE>
<CAPTION>
===================================================================================================
(In thousands)                                                      1998         1997         1996
===================================================================================================
<S>                                                             <C>          <C>          <C>     
Current:
    U.S. federal                                                $ 12,214     $  9,180     $  9,383
    State                                                          2,754        1,794        1,971
    Foreign                                                        1,062          474          861
- ---------------------------------------------------------------------------------------------------
                                                                $ 16,030     $ 11,448     $ 12,215
===================================================================================================
Deferred:
    U.S. federal                                                $    274     $  2,243     $   (240)
    State                                                           (424)         439          (30)
    Foreign                                                           17           51           (2)
- ---------------------------------------------------------------------------------------------------
                                                                $   (133)    $  2,733     $   (272)
- ---------------------------------------------------------------------------------------------------
Total provision                                                 $ 15,897     $ 14,181     $ 11,943
===================================================================================================
</TABLE>


Deferred tax liabilities/(assets) consist of the following at December 31:


<TABLE>
<CAPTION>
====================================================================================
(In thousands)                                                     1998        1997
====================================================================================
<S>                                                            <C>         <C>      
Current deferred tax assets:
       Marketing expenses, principally coupons                 $ (7,198)   $ (6,953)
       Reserves and other liabilities                            (1,329)     (1,464)
       Accounts receivable                                       (1,294)     (1,272)
       Other                                                       (714)       (113)
- ------------------------------------------------------------------------------------
       Total current deferred tax assets                        (10,535)     (9,802)
- ------------------------------------------------------------------------------------
Noncurrent deferred tax liabilities/(assets):
       Nonpension postretirement and postemployment benefits     (5,746)     (5,645)
       Capitalization of items expensed                          (3,117)     (1,977)
       Foreign exchange translation adjustment                     (305)       (230)
       Valuation allowance                                          305         230
       Depreciation and amortization                             29,443      27,354
       Other                                                        598         846
- ------------------------------------------------------------------------------------
     Net noncurrent deferred tax liabilities                     21,178      20,578
- ------------------------------------------------------------------------------------
Net deferred tax liability                                     $ 10,643    $ 10,776
====================================================================================
</TABLE>


The difference between tax expense and the "expected" tax which would result
from the use of the federal statutory rate is as follows:


<TABLE>
<CAPTION>
===================================================================================================
(In thousands)                                                      1998         1997         1996
===================================================================================================
<S>                                                             <C>          <C>          <C>     
Statutory rate                                                        35%          35%          35%
Tax which would result from use of the federal statutory rate   $ 16,165     $ 13,540     $ 11,610
- ---------------------------------------------------------------------------------------------------
Depletion                                                           (490)        (473)        (481)
Research & development credit                                       (200)        (200)          --
State and local income tax, net of federal effect                  1,515        1,451          662
Varying tax rates of foreign affiliates                              142          151          (34)
Non-recognition of foreign affiliate loss                             --          193          133
Recognition of foreign affiliate losses                             (996)        (416)        (253)
Other                                                               (239)         (65)         306
- ---------------------------------------------------------------------------------------------------
                                                                    (268)         641          333
- ---------------------------------------------------------------------------------------------------
Recorded tax expense                                            $ 15,897     $ 14,181     $ 11,943
- ---------------------------------------------------------------------------------------------------
Effective tax rate                                                  34.4%        36.7%        36.0%
===================================================================================================
</TABLE>



                                                                              29

<PAGE>   32

11. stock option plans

The Company has options outstanding under three plans. Under the 1983 Stock
Option Plan and the 1994 Incentive Stock Option Plan, the Company may grant
options to key management employees. The Stock Option Plan for Directors
authorizes the granting of options to non-employee directors. Options
outstanding under the plans are issued at market value, are exercisable on the
third anniversary of the date of grant, and must be exercised within ten years
of the date of grant. In early 1998, the Company made a special option award to
31 executives and key managers. This award, amounting to approximately 222,000
shares, vests at various prices ranging from $36 to $50 a share. In the event
the stock price does not achieve these levels, the options vest in seven years.
A grand total of 3,500,000 shares of the Company's common stock is authorized
for issuance for the exercise of stock options.


<TABLE>
<CAPTION>
Stock option transactions for the three years                              Number of              Weighted Avg.
ended December 31, 1998 were as follows:                                    Shares               Exercise Price
===============================================================================================================
<S>                                                                        <C>                      <C>   
Outstanding at January 1, 1996                                             1,596,032                $20.90
       Grants                                                                846,150                 21.15
       Exercised                                                              58,500                 15.29
       Cancelled                                                              99,000                 22.73
- ---------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1996                                           2,284,682                 21.06
       Grants                                                                 57,773                 25.15
       Exercised                                                             101,400                 16.80
       Cancelled                                                              49,600                 20.78
- ---------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1997                                           2,191,455                 21.37
       Grants                                                                573,700                 27.51
       Exercised                                                             214,000                 17.63
       Cancelled                                                              32,950                 25.98
- ---------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1998                                           2,518,205                 23.04
</TABLE>


At December 31, 1998, 1997 and 1996, 1,128,432 options, 1,240,532 options and
711,532 options were exercisable.

The table below summarizes information relating to options outstanding and
exercisable at December 31, 1998.


<TABLE>
<CAPTION>
                     Options Outstanding                                                        Options Exercisable
================================================================================        ===================================
                                              Weighted                                                             Weighted
                                               Average           Weighted Avg.                                      Average
   Exercise               Options             Exercise             Remaining              Options                  Exercise
    Prices              Outstanding             Price          Contractural Life        Exerciseable                 Price
================================================================================        ===================================
<S>                         <C>                 <C>                 <C>                      <C>                    <C>   
$13.00 - $15.00             51,400              $13.00                .5 years               51,400                 $13.00
$15.01 - $20.00            450,332               17.51               4.7                    450,332                  17.51
$20.01 - $25.00          1,080,873               21.54               7.0                    270,100                  22.32
$25.01 - $30.00            770,200               27.17               7.2                    222,900                  26.89
$30.01 - $32.25            165,400               31.81               5.3                    133,700                  32.11
================================================================================        ===================================
</TABLE>


The fair-value of options granted in 1998, 1997 and 1996 is $4,658,000,
$372,000, and $4,706,000, respectively and the weighted average fair-value per
share of options granted in 1998, 1997 and 1996 is $8.12, $6.44 and $5.56,
respectively.

The fair-value of options granted in 1998, 1997 and 1996 is estimated on the
date the options are granted based on the Black Scholes option-pricing model
with the following weighted-average assumptions:


<TABLE>
<CAPTION>
                                    1998               1997            1996
===============================================================================
<S>                               <C>                <C>             <C>  
Risk-free interest rate            5.7%               6.5%            6.3%
Expected life                      6.1 years          4.5 years       6.0 years
Expected volatility               25.6%              23.1%           22.7%
Dividend yield                     1.8%               1.7%            2.1%
</TABLE>



30

<PAGE>   33

The Company accounts for costs of stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," rather than the fair-value based method in Statement of Financial
Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation." No compensation cost has been recognized for the Company's stock
option plans. Had compensation cost been determined based on the fair values of
the stock options at the date of grant in accordance with SFAS 123, the Company
would have recognized additional compensation expense, net of taxes, of
$1,831,000, $1,113,000 and $488,000 for 1998, 1997 and 1996, respectively. The
Company's pro forma net income and pro forma net income per share for 1998, 1997
and 1996 would have been as follows:

(In thousands, except for per share data)


<TABLE>
<CAPTION>
======================================================================================
Net Income                                  1998               1997               1996
======================================================================================
<S>                                      <C>                <C>                <C>    
As reported                              $30,289            $24,506            $21,228
Pro forma                                 28,458             23,393             20,740

Net Income per Share: basic
======================================================================================
As reported                              $  1.56            $  1.26            $  1.09
Pro forma                                   1.47               1.20               1.06

Net Income per Share: diluted
======================================================================================
As reported                              $  1.51            $  1.23            $  1.08
Pro forma                                   1.42               1.17               1.05
</TABLE>


Since compensation expense associated with option grants is recognized over the
vesting period, the initial impact of applying SFAS No. 123 on pro forma
disclosure is not representative of the potential impact on pro forma net income
for future years, when the effect of the recognition of a portion of
compensation expense from multiple awards would be reflected.


12. plant shutdown

During the 4th quarter of 1998, the Company ceased operation of its sodium
bicarbonate facility in Venezuela. The write-off, consisting primarily of
property, plant, equipment and inventory, amounted to a pre-tax charge of
$2,766,000. This charge also includes approximately $200,000 of severance and
related costs, and the ending liability at December 31, 1998 was insignificant.
Partially offsetting this were related tax loss benefits, which reduced the net
charge to approximately $600,000 or $0.03 per diluted share.


13. subsequent events

In January 1999, the Company announced:

a.    The sale of most of the Company's trona mineral leases in Wyoming, for an
      amount which results in a gain of approximately $11,000,000. The Company
      retains adequate trona reserves to support the sodium bicarbonate business
      and may acquire other reserves in the future as the need arises.

b.    The sale of the equipment portion of ARMEX Cleaning and Coating Removal
      Systems for approximately $1.5 million, which is slightly more than book
      value.

c.    The formation of a joint venture with the Safety-Kleen Corp. called the
      ArmaKleen Company. This venture, in which the Company has a 50% interest,
      will distribute the Company's proprietary product line of aqueous
      cleaners.

d.    The relocation of the Company's dentifrice manufacturing and packaging
      equipment from its Greenville, South Carolina, facility to its Lakewood,
      New Jersey, facility. The Greenville plant will close most likely in late
      1999.

e.    A plan to invest approximately $6,000,000 to modernize and upgrade the
      powder laundry detergent facility at Green River, Wyoming. Once complete,
      most likely in late 1999, all powder detergent production will occur at
      Green River.

The Company expects these moves to be cash positive and to generate a one-time
gain in 1999. This represents the gain from the sale of the trona reserves, to
be partially offset by plant shutdown, relocation and other costs.


                                                                              31

<PAGE>   34

14. common stock voting rights and rights agreement

Effective February 19, 1986, the Company's Restated Certificate of Incorporation
was amended to provide that every share of Company common stock is entitled to
four votes per share if it has been beneficially owned continuously by the same
holder (1) for a period of 48 consecutive months preceding the record date for
the Stockholders' Meeting; or (2) since February 19, 1986. All other shares
carry one vote. Specific provisions for the determination of beneficial
ownership and the voting of rights of the Company's common stock are contained
in the Company's Notice of Annual Meeting of Stockholders and Proxy Statement.

On April 26, 1989, the Board of Directors declared a dividend of one right for
each share of outstanding common stock to be issued to stockholders of record on
May 17, 1989, which will expire in ten years subject to earlier redemption by
the Company. Under certain circumstances, the registered holder of each right
would be entitled to purchase one one-hundredth of a share of the Junior
Participating Cumulative Preferred Stock of the Company, or in certain
circumstances either Company common stock or common stock of an acquiring
company at one-half the market price.


15. commitments and contingencies

a.    Rent expense amounted to $2,821,000 in 1998, $2,890,000 in 1997 and
      $3,066,000 in 1996. The Company is obligated for minimum annual rentals
      under non-cancellable long-term operating leases as follows:

(In thousands)


<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S>                                                 <C>               <C>       
                                                    1999              $    2,850
                                                    2000                   2,246
                                                    2001                   1,935
                                                    2002                   1,233
                                                    2003                      60
- --------------------------------------------------------------------------------
Total future minimum lease commitments                                $    8,324
- --------------------------------------------------------------------------------
</TABLE>


b.    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 companies in Wyoming. The partnership supplies the Company with
      the majority of its sodium raw material requirements. This agreement
      terminates upon two years' written notice by either company.

c.    The Company, in the ordinary course of its business, is the subject of, or
      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 or results of
      operation.

16. segments

Segment Information

The Company has adopted Statement of Financial Accounting Standards No. 131
"Disclosure about Segments of an Enterprise and Related Information."

The Company has two operating segments: Consumer Products and Specialty
Products. The Consumer Products segment comprises packaged goods primarily sold
to retailers. The Specialty Products segment includes chemicals sold primarily
to industrial and agricultural markets. The Armand Products Company is part of
the Specialty Products segment.

Measurement of Segment Results and Assets 

The accounting policies of the segments are generally the same as those
described in the summary of significant accounting policies with the exception
of:

a.    The Company's portion of the Armand Products joint venture is consolidated
      into the Specialty Products segment results and assets. Furthermore, it is
      not accounted for by the equity method.

b.    The administrative costs of the production planning and logistics
      functions are included in segment SG&A expenses, but are elements of cost
      of goods sold in the Company's Consolidated Statement of Income.

The Company evaluates performance based on operating profit. There are no
intersegment sales.


32

<PAGE>   35

Factors used to Identify Segments

The Company's segments are strategic business units with distinct differences in
product application and customer base. They are managed by separate sales and
marketing organizations.


<TABLE>
<CAPTION>
================================================================================================================
                                                    Armand            (3) (4)                (5)
             Consumer            Specialty        Products          Corporate        Adjustments          Total
================================================================================================================
<S>            <C>                 <C>              <C>                 <C>             <C>               <C>   
Net Sales
1998         $560,201            $144,065         $(19,873)               --                --          $684,393
1997          458,978             136,363          (20,435)               --                --           574,906
1996          417,605             129,789          (19,623)               --                --           527,771
- -----------------------------------------------------------------------------------------------------------------
Gross Profit
1998          266,685              52,695           (6,673)               --            (6,918)          305,789
1997          222,068              51,263           (7,025)               --            (6,221)          260,085
1996          203,826              46,898           (6,481)               --            (4,767)          239,476
- -----------------------------------------------------------------------------------------------------------------
Advertising, Consumer and Trade Promotion Expenses
1998          179,173               3,098              (65)               --                --           182,206
1997          145,065               3,270              (81)               --                --           148,254
1996          133,323               3,065              (80)               --                --           136,308
- -----------------------------------------------------------------------------------------------------------------
Selling, General and Administrative Expenses
1998           60,495              29,292           (1,188)              143            (6,918)           81,824
1997           55,445              31,782           (1,258)            1,527            (6,221)           81,275
1996           47,152              29,651           (1,321)            5,190            (4,767)           75,905
- -----------------------------------------------------------------------------------------------------------------
Operating Profit 
1998           30,517(1)           20,305           (5,420)             (143)           (2,766)           42,493
1997           21,558              16,211           (5,686)           (1,527)               --            30,556
1996           23,351              14,182           (5,080)           (5,190)               --            27,263
- -----------------------------------------------------------------------------------------------------------------
Identifiable Assets (2)
1998          251,528             117,239           (1,367)           24,038                --           391,438
1997          214,570             114,874           (1,612)           23,182                --           351,014
1996          168,400             106,484           (1,496)           34,583                --           307,971
- -----------------------------------------------------------------------------------------------------------------
Capital Expenditures
1998           27,010              10,247           (1,120)               --                --            36,137
1997            6,829               3,773             (684)               --                --             9,918
1996            4,478               3,212             (594)               18                --             7,114
- -----------------------------------------------------------------------------------------------------------------
Depreciation and Amortization
1998           10,919               7,138           (1,557)                3                --            16,503
1997            9,157               6,468           (1,470)                3                --            14,158
1996            8,528               6,886           (1,790)               --                --            13,624
=================================================================================================================
</TABLE>


(1) Included in the 1998 operating profit of the Consumer Products segment is a
one-time gain of $3,500,000 relating to the sale of technology. (2) The
Specialty Products segment's identifiable assets include equity of investments
in affiliates in the amounts of $27,751,000, $26,871,000 and $16,211,000 for
1998, 1997 and 1996, respectively. (3) Corporate selling, general and
administrative expenses include certain research & development and general and
administrative costs that are not allocated to segments. (4) Corporate assets
include excess cash and investments not used for segment operating needs and
deferred income taxes. (5) Adjustments reflect reclassification of production
planning and logistics administrative costs between gross profit and SG&A
expenses; and in 1998, the plant shutdown charge.

Product line net sales data is as follows:


<TABLE>
<CAPTION>
=========================================================================================================================
            Laundry and
             Household        Oral and                        Specialty         Animal        Specialty
             Cleaners       Personal Care    Deodorizing      Chemicals        Nutrition       Cleaners            Total
=========================================================================================================================
<S>           <C>              <C>             <C>              <C>              <C>             <C>              <C>    
1998          262,329          157,248         140,624          61,145           50,793          12,254           684,393
1997          214,588          141,770         102,620          61,021           43,332          11,575           574,906 
1996          174,385          144,335          98,885          63,023           37,484           9,659           527,771
=========================================================================================================================
</TABLE>


Geographic Information

For the years 1998, 1997 and 1996, approximately 91% of the Company's net sales
were to customers in the United States, and approximately 95% of long-lived
assets were located in the U.S.

Customers

A group of three Consumer Products customers accounted for approximately 16% of
consolidated net sales in 1998, including a single customer which accounted for
approximately 11%. This group of customers accounted for approximately 16% of
consolidated net sales in 1997 and 14% in 1996.


                                                                              33

<PAGE>   36

17. unaudited quarterly financial information

(In thousands, except for per share data)


<TABLE>
<CAPTION>
====================================================================================================================================
                                                              First          Second          Third           Fourth          Full
                                                             Quarter         Quarter         Quarter         Quarter         Year
====================================================================================================================================
<S>                                                         <C>             <C>             <C>             <C>             <C>     
1998
Net sales                                                   $152,011        $173,534        $176,827        $182,021        $684,393
Gross profit                                                  67,618          78,590          79,163          80,418         305,789
Income from operations                                         8,454          11,337          12,021          10,681          42,493
Equity in earnings of affiliates                               1,224           1,739           1,207           1,106           5,276
Net income                                                     5,896           7,873           7,834           8,686          30,289
Net income per share - basic                                $    .30        $    .41        $    .40        $    .45        $   1.56
Net income per share - diluted                              $    .30        $    .39        $    .39        $    .43        $   1.51
====================================================================================================================================
1997
Net sales                                                   $129,621        $141,850        $146,328        $157,107        $574,906
Gross profit                                                  58,248          64,851          66,669          70,317         260,085
Income from operations                                         6,180           8,550           9,303           6,523          30,556
Equity in earnings of affiliates                               1,416           1,594           1,242           1,805           6,057
Net income                                                     5,227           7,280           6,427           5,572          24,506
Net income per share - basic                                $    .27        $    .37        $    .33        $    .29        $   1.26
Net income per share - diluted                              $    .26        $    .37        $    .32        $    .28        $   1.23
====================================================================================================================================
1996
Net sales                                                   $121,548        $134,627        $137,090        $134,506        $527,771
Gross profit                                                  55,502          61,891          62,984          59,099         239,476
Income from operations                                         4,730           8,484           7,030           7,019          27,263
Equity in earnings of affiliates                               1,272           1,310           1,061           1,497           5,140
Net income                                                     3,848           6,131           5,198           6,051          21,228
Net income per share - basic                                $    .20        $    .31        $    .27        $    .31        $   1.09
Net income per share - diluted                              $    .20        $    .31        $    .26        $    .31        $   1.08
====================================================================================================================================
</TABLE>


independent auditors' report
- --------------------------------------------------------------------------------


To the Stockholders and Board of Directors of
Church & Dwight Co., Inc.
Princeton, New Jersey

We have audited the accompanying consolidated balance sheets of Church & Dwight
Co., Inc., and subsidiaries (the Company) as of December 31, 1998 and 1997, and
the related consolidated statements of income, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company at December 31, 1998
and 1997, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1998 in conformity with generally
accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, in 1998 the
Company changed its method of accounting for internal-use software development
costs to conform with Statement of Position 98-1.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Parsippany, New Jersey
January 27, 1999



34

<PAGE>   37

D I R E C T O R S

Cyril C. Baldwin, Jr.
Chairman of the Board
Cambrex Corporation
Director since 1983

William R. Becklean
Senior Vice President
Tucker Anthony, Inc.
Director since 1980

Robert H. Beeby
Retired President and
Chief Executive Officer
Frito-Lay, Inc.
Director since 1992

Robert A. Davies, III
President and
Chief Executive Officer
Church & Dwight Co., Inc.
Director since 1995

Rosina B. Dixon, M.D.
Physician and Consultant
Director since 1979

J. Richard Leaman, Jr.
Retired President and
Chief Executive Officer
S. D. Warren Company
Director since 1985

Robert D. LeBlanc
President and
Chief Executive Officer
Handy & Harman
Director since 1998

John D. Leggett III, Ph.D.
President
Sensor Instruments Co., Inc.
Director since 1979

John F. Maypole
Managing Partner
Peach State Real Estate
Holding Co.
Director since 1999

Robert A. McCabe
Chairman
Pilot Capital Corporation
Director since 1987

Dwight C. Minton
Chairman of the Board
Church & Dwight Co., Inc.
Director since 1965

Dean P. Phypers
Retired Senior Vice President
International Business
Machines Corporation
Director since 1974

John O. Whitney
Professor and Executive Director
The Deming Center for Quality  Management
Columbia Business School
Director since 1992


E L E C T E D  O F F I C E R S

Robert A. Davies, III
President and
Chief Executive Officer

Raymond L. Bendure, Ph.D.
Vice President
Research & Development

Mark A. Bilawsky
Vice President,
General Counsel and Secretary

Mark G. Conish
Vice President
Manufacturing and Distribution

James P. Crilly
Senior Vice President
Arm & Hammer Division

Zvi Eiref
Vice President Finance and
Chief Financial Officer

Dennis M. Moore
Vice President
Corporate Business Development/
Arm & Hammer International

Eugene F. Wilcauskas
President and
Chief Operating Officer
Specialty Products Division


Principal Accounting
Officers

Gary P. Halker
Vice President, Controller and
Chief Information Officer

Steven J. Katz
Assistant Controller


I N V E S T O R
I N F O R M A T I O N

Corporate Headquarters
Church & Dwight Co., Inc.
469 North Harrison Street
Princeton, NJ 08543-5297
(609) 683-5900


Independent Auditors
Deloitte & Touche LLP
2 Hilton Court
Parsippany, NJ 07054

Transfer Agent and Registrar
ChaseMellon
Shareholder Services, LLC
85 Challenger Road
Ridgefield Park, NJ 07660
www.chasemellon.com

The Annual Meeting of Stockholders will be held at:
11:00 a.m. Thursday,
May 6, 1999

The Asia Society
725 Park Avenue
New York City.

Stock Listing
Church & Dwight Co., Inc.
shares are listed on the
New York Stock Exchange.
The symbol is CHD.

10-K Report
Stockholders may obtain a copy of the Company's Form 10-K Annual Report to the
Securities and Exchange Commission, for the year ended December 31, 1998 by
writing to the Vice President Finance at Corporate Headquarters.

Quarterly Reports
Church & Dwight Co., Inc. mails quarterly reports to stockholders of record and
to other persons who request copies. If your shares are not registered in your
name but are held at a broker, bank or other intermediary, you can receive
quarterly reports if you send a written request and provide your name and
address to:

Church & Dwight Co., Inc.
c/o ChaseMellon
Shareholder Services, LLC
P.O. Box 3316
South Hackensack, NJ 07606

Stockholder Inquiries
Communications concerning stockholder records, stock transfer, changes of
ownership, account consolidations, dividends and change of address should be
directed to:

Church & Dwight Co., Inc.
c/o ChaseMellon
Shareholder Services, LLC
P.O. Box 3315
South Hackensack, NJ 07606
1-800-851-9677

Dividend Reinvestment Plan
Church & Dwight Co., Inc. offers an automatic Dividend Reinvestment Plan for our
Common Stockholders. The Plan provides a convenient and economical method for
stockholders of record to reinvest their dividends automatically or make
optional cash payments toward the purchase of additional shares without paying
brokerage commissions or bank service charges.

For details, contact:
Church & Dwight Co., Inc.
Dividend Reinvestment Plan
c/o ChaseMellon
Shareholder Services, LLC
P.O. Box 3338
South Hackensack, NJ 07606
1-800-851-9677

On the Internet
Church & Dwight financial
news releases are accessible at
www.businesswire.com
Consumer Products information:  
www.armhammer.com
Specialty Products information:
www.ahspecialty.com

A corporate webpage, www.churchdwight.com will soon be available for investor
relations.

Cautionary Note on Forward-Looking Statements
This Annual Report contains forward-looking statements relating, among others,
to financial objectives, sales growth and cost reduction programs. Many of these
statements depend on factors outside the Company's control, such as economic
conditions, market growth and consumer demand, competitive products and pricing,
raw material costs and other matters. With regard to new product introductions,
there is particular uncertainty related to trade, competitive and consumer
reactions. There is also significant uncertainty in 1999 relating to the Y2K
computer problem, including its effect on customers and suppliers. If the
Company's assumptions are incorrect, or there is a significant change in some of
these key factors, the Company's performance could vary materially from the
forward-looking statements in this Report.

Church & Dwight Co., Inc. is an equal opportunity employer. The Company conducts
its business without regard to race, color, age, religion, sex, national origin
or handicap.

(R) Church & Dwight Co., Inc. 1999

[LOGO] Recycled Paper Design: De Plano Group, New York Product Photography:
Bob Cato


<PAGE>   38

                                             CHURCH & DWIGHT CO., INC. [LOGO](R)
                                             469 NORTH HARRISON STREET
                                              PRINCETON, NJ 08543-5297





<PAGE>   1

                   CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
                                   EXHIBIT 21
                       LIST OF THE COMPANY'S SUBSIDIARIES



<TABLE>
<S>  <C>
1)   Church & Dwight Ltd./Ltee
     Incorporated in Canada

2)   C & D Chemical Products, Inc.
     Incorporated in the State of Delaware,
     D/B/A Armand Products Company, a Partnership

3)   DeWitt International Corporation
     Incorporated in the State of Delaware

4)   Brotherton Speciality Products Ltd.
     Incorporated in the United Kingdom

5)   Industrias Bicarbon De Venezuela, S.A. - Ceased operation December 1998

6)   Quimica Geral do Nordeste S.A. (QGN)
     Incorporated in Brazil (40% Interest)
</TABLE>



     The Company's remaining subsidiaries, if considered in the aggregate as a
single subsidiary, would not constitute a significant subsidiary as of December
31, 1998.


                                       14





<PAGE>   1

INDEPENDENT AUDITORS' CONSENT


We consent to the incorporation by reference in Registration Statements No.
33-60149, 33-60147, 33-24553, 33-6150 and 33-44881 on Form S-8 of our reports
dated January 27, 1999 (which express an unqualified opinion and which report on
the financial statements includes an explanatory paragraph relating to the
Company changing its method of accounting for internal-use software development
costs as described in Note 1) included or incorporated by reference in the
Annual Report on Form 10-K of Church & Dwight Co., Inc. for the year ended
December 31, 1998.



Deloitte & Touche LLP
Parsippany, New Jersey
March 26, 1999


                                       15





<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-START>                             JAN-01-1998
<PERIOD-END>                               DEC-31-1998
<CASH>                                          16,189
<SECURITIES>                                     2,042
<RECEIVABLES>                                   74,078
<ALLOWANCES>                                     1,579
<INVENTORY>                                     60,285
<CURRENT-ASSETS>                               166,808
<PP&E>                                         291,757
<DEPRECIATION>                                 130,045
<TOTAL-ASSETS>                                 391,438
<CURRENT-LIABILITIES>                          124,237
<BONDS>                                         29,630
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        23,330
<OTHER-SE>                                     171,508
<TOTAL-LIABILITY-AND-EQUITY>                   391,438
<SALES>                                        684,393
<TOTAL-REVENUES>                               684,393
<CGS>                                          378,604
<TOTAL-COSTS>                                  378,604
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                   435
<INTEREST-EXPENSE>                               2,653
<INCOME-PRETAX>                                 46,186
<INCOME-TAX>                                    15,897
<INCOME-CONTINUING>                             30,289
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    30,289
<EPS-PRIMARY>                                     1.56
<EPS-DILUTED>                                     1.51
        

</TABLE>