SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.  20549


                                   FORM 10-Q


                     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES AND EXCHANGE ACT OF 1934


For the quarter ended September 30, 1994       Commission file No. 1-10585



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


           Delaware                                  13-4996950
  (State of incorporation)         (I.R.S. Employer Identification No.)


469 North Harrison Street, Princeton, N.J.            08543-5297
 (Address of principal executive office)               (Zip Code)


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




Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

        Yes     X                     No           

As of October 28, 1994, there were 19,546,835 shares of Common Stock
outstanding.


                                      1 of 10                       





                          PART I - FINANCIAL INFORMATION

                  CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
                                 (Unaudited)

Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (In thousands, except 1994 1993* 1994 1993* per share data) Net Sales $132,581 $129,183 $374,748 $383,388 Cost of sales 72,458 69,206 209,507 203,389 Gross profit 60,123 59,977 165,241 179,999 Selling, general and administrative expenses 57,422 46,677 152,357 151,500 Restructuring charge (Note 6) 5,343 - 5,343 - Income/(loss) from Operations (2,642) 13,300 7,541 28,499 Investment income 199 233 563 787 Gain on disposal of product lines 103 1,555 308 1,763 Other income/(expense) (154) 149 (40) 423 Interest expense 325 28 593 157 Equity in joint venture income 2,041 1,312 5,856 5,255 Income/(loss) before taxes and cumulative effect of changes in accounting principles (778) 16,521 13,635 36,570 Income taxes (519) 6,827 5,087 14,307 Income/(loss) before cumulative effect of changes in accounting principles (259) 9,694 8,548 22,263 Cumulative effect of changes in accounting principles (net of income tax effect): (Note 4) Accrual of postretirement benefits - - - (5,647) Accrual of postemployment benefits - - - (533) Accounting for income taxes - - - 2,980 Net Income/(loss) (259) 9,694 8,548 19,063 Retained earnings at beginning of period 174,890 157,948 170,434 152,640 174,631 167,642 178,982 171,703 Dividends paid 2,149 2,223 6,500 6,284 Retained earnings at end of period $172,482 $165,419 $172,482 $165,419 Weighted average shares outstanding 19,536 20,210 19,760 20,271 Earnings Per Share: (Note 7) Income/(loss) before cumulative effect of changes in accounting principles ($.01) $.48 $.43 $1.10 Cumulative effect of changes in accounting principles: Accrual of postretirement benefits - - - (.28) Accrual of postemployment benefits - - - (.03) Accounting for income taxes - - - .15 Net income/(loss) per share ($.01) $.48 $.43 $.94 * Restated as discussed in Notes 4 and 5. 2 of 10 CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
September 30, December 31, 1994 1993 (Dollars in thousands) (Unaudited) Assets Current Assets Cash and cash equivalents $6,122 $5,581 Short-term investments 1,000 4,000 Accounts receivable 51,232 42,340 Inventories (Note 2) 61,643 52,739 Income taxes receivable - 3,010 Deferred income taxes 10,018 11,149 Prepaid expenses 5,654 4,634 Total Current Assets 135,669 123,453 Property, Plant and Equipment (Note 3) 134,715 122,195 Note Receivable from Joint Venture 11,000 11,000 Equity Investment in Joint Venture 14,983 16,557 Long-Term Supply Contracts 4,598 4,929 Intangibles, principally Goodwill 3,556 3,607 Total Assets $304,521 $281,741 Liabilities and Stockholders' Equity Current Liabilities Short-term borrowings $24,510 $2,000 Accounts payable and accrued expenses 77,762 66,812 Income taxes payable 2,382 - Total Current Liabilities 104,654 68,812 Long-Term Debt 7,500 7,644 Deferred Income Taxes 19,201 22,530 Deferred Income 441 749 Deferred Liabilities 1,267 1,282 Nonpension Postretirement and Postemployment Benefits 12,430 11,357 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 32,774 32,100 Retained earnings 172,482 170,434 Cumulative translation adjustments (545) (494) 228,041 225,370 Less common stock in treasury, at cost - 3,788,325 shares in 1994 and 3,251,280 shares in 1993 69,013 56,003 Total Stockholders' Equity 159,028 169,367 Total Liabilities and Stockholders' Equity $304,521 $281,741
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CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)
Nine Months Ended (Dollars in thousands) September 30, October 1, 1994 1993* Cash Flow From Operating Activities Net Income $8,548 $19,063 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 8,916 8,443 Provision for postretirement benefits 1,235 920 Deferred income taxes (2,204) 1,534 Equity in joint venture income (5,856) (5,255) Cumulative effect of accounting changes - 3,200 (Gain) on asset disposals (308) (1,324) Retirement of fixed assets 1,136 - Other (250) 411 Change in assets and liabilities: (Increase) in accounts receivable (8,814) (5,812) (Increase) in inventories (8,900) (4,226) (Increase)/Decrease in prepaid expenses (1,022) 120 Increase in accounts payable 10,748 2,416 Increase/(Decrease) in income taxes payable 5,410 (7,685) Net Cash Provided By Operating Activities 8,639 11,805 Cash Flow From Investing Activities Decrease in short-term investments 3,001 4,048 Additions to property, plant and equipment (21,546) (20,416) Investment in subsidiary (625) (325) Proceeds from asset disposals - 20 Distributions from joint venture 7,430 6,706 Net Cash Used In Investing Activities (11,740) (9,967) Cash Flow From Financing Activities Proceeds from short-term borrowing 22,510 - Payment of cash dividends (6,500) (6,284) Proceeds from sale of common stock 1,595 1,935 Proceeds from stock options exercised 669 773 Purchase of treasury stock (14,632) (9,907) Net Cash Provided by (Used In) Financing Activities 3,642 (13,483) Net Change In Cash and Cash Equivalents 541 (11,645) Cash And Cash Equivalents At Beginning Of Year 5,581 14,046 Cash And Cash Equivalents At End Of Period $6,122 $2,401 * Restated as discussed in Notes 4 and 5. 4 of 10 CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The consolidated balance sheet as of September 30, 1994, the consolidated statements of income and retained earnings for the nine months ended September 30, 1994 and October 1, 1993, and the consolidated statements of cash flow for the nine months then ended have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flow at September 30, 1994 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1993 annual report to shareholders. The results of operations for the period ended September 30, 1994 are not necessarily indicative of the operating results for the full year.
2. Inventories consist of the following: September 30, December 31, 1994 1993 (in thousands) Raw materials and supplies $15,871 $12,690 Work in process 105 103 Finished goods 45,667 39,946 $61,643 $52,739
3. Property, Plant and Equipment consist of the following: September 30, December 31, 1994 1993 (in thousands) Land $3,102 $3,103 Buildings and improvements 57,384 54,125 Machinery and equipment 118,951 108,665 Office equipment and leasehold improvements 12,077 11,974 Mineral rights 5,020 3,145 196,534 181,012 Less accumulated depreciation and amortization 82,747 74,248 113,787 106,764 Construction in progress 20,928 15,431 Net Property, Plant and Equipment $134,715 $122,195
4. Accounting Changes The Company adopted three new accounting standards as of January 1, 1993. Statement of Financial Accounting Standards No. 106 (SFAS 106), "Employers' Accounting for Postretirement Benefits Other than Pensions" requires the accrual of the estimated cost of postretirement benefits. The cost of these benefits was previously expensed on a pay-as-you-go basis. Adoption of SFAS 106 resulted in an after-tax charge against earnings of $5.6 million or $.28 per share. Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," changed the method by which companies account for deferred income taxes, and its adoption resulted in an after-tax credit of $3.0 million or $.15 per share. 5 of 10
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) During the fourth quarter of 1993, the Company elected to adopt, effective as of January 1, 1993, the accounting provisions of Statement of Financial Accounting Standards No. 112 (SFAS 112), "Employers' Accounting for Postemployment Benefits". First quarter 1993 results have been restated to reflect such adoption. This standard requires that the cost of benefits provided to former or inactive employees be recognized on the accrual basis of accounting. Previously, the Company recognized postemployment benefit costs when paid. The cumulative effect of this change resulted in a charge against earnings of $.5 million or $.03 per share. The combined effect of adopting the three new accounting standards was a charge against earnings of $3.2 million, or $.16 per share. 5. Investment in Joint Venture In financial statements originally issued for periods prior to December 31, 1993, the Company had consolidated its proportionate share of each of the individual assets, liabilities, revenues and expenses of the Armand Products Company joint venture. In 1993, the Company restated its financial statements to reflect the 50 percent interest in the joint venture on the equity method of accounting for investments. This method reflects the Company's proportionate share of the joint venture net profit as a single-line item, "Equity in joint venture income," in the income statement. Similarly, the Company's investment and cumulative share of profits less distributions received from the joint venture is reflected as a single-line item, "Equity investment in joint venture," in the Company's balance sheet. This change had no effect upon stockholders' equity or the net income of the Company for any period. Summarized income statement data for Armand Products Company is as follows:
Three Months Ended Nine Months Ended September 30, October 1 September 30, October 1 (in thousands) 1994 1993 1994 1993 Net sales $11,420 $9,180 $34,244 $29,193 Gross profit 4,680 3,210 13,470 12,004 Net income 3,855 2,400 11,031 9,830 Company's share in net income 1,927 1,200 5,516 4,915 Elimination of Company's share of intercompany interest expense 114 112 340 340 Equity in joint venture income $2,041 $1,312 $5,856 $5,255
The financial information presented above is based upon the results of operation of the Armand Products Company, a joint venture partnership. Product and services are provided to the Armand Products Company by the joint venture partners at cost. As a result, the above information would not be indicative of the results of operations had the joint venture operated on a stand-alone basis. 6 of 10
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 6. On September 28, the Company announced that third quarter and full-year earnings would fall substantially short of expectations due to weakness in the sales of existing businesses and the heavy financial burden of new product introductions. As a result, management decided to trim operating costs principally through the immediate layoff of 52 employees and the elimination of a number of vacant positions that existed as of that date. These reductions amounting to $4.0 million, together with the write-off of fixed assets of $1.3 million related to discontinued products resulted in a pre-tax charge of $5.3 million in the third quarter. It is anticipated that the charge related to the work force reduction will be fully recognized through operating cash flows over the ensuing twelve months. 7. Net income per share is computed based upon the weighted average number of shares outstanding during the period. Common equivalent shares have not been included as their effect is not material. 8. Officer Loan Guarantees In accordance with a long-term compensation plan approved by the Board of Directors, 70,000 shares of Company common stock were sold to senior officers in the second quarter of 1994 at a price of $22.63 per share. In the second quarter of 1993, the Company sold 60,000 shares of common stock to senior officers at a price of $32.25 per share. The selling price in both cases was the market price on the date of sale. These transactions, amounting to $1.6 million and $1.9 million, respectively, were financed by loans to the individuals by financial institutions. These loans have been guaranteed by the Company. 7 of 10 MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations For the quarter ended September 30, 1994, the Company sustained a net loss of $.3 million or $.01 per share. This compares with net income of $9.7 million or $.48 per share for the third quarter of 1993. During this most recent quarter, the Company took a pre-tax charge against earnings of $5.3 million or the equivalent of $.16 per share relating to a restructuring charge. This involved the immediate reduction of approximately 7% of the Company work force, and the write-off of fixed assets relating to discontinued products. For the first nine months of 1994, net income was $8.5 million or $.43 per share as compared with net income of $19.1 million or $.94 per share for the first nine months of 1993. In the first quarter of 1993, the Company adopted three new accounting standards; Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" and Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits". The effect of adopting the new accounting standards was a net charge against earnings of $3.2 million or $.16 per share. Net sales in the third quarter amounted to $132.6 million, a 2.6% increase versus a year ago. Volume gains of ARM & HAMMER(registered trademark) Powder Laundry Detergent, the newly introduced ARM & HAMMER Deodorant Anti-Perspirant and international sales of ARM & HAMMER DENTAL CARE(registered trademark) were responsible for the higher sales during the quarter. These gains were partially offset by lower domestic unit volume of ARM & HAMMER DENTAL CARE, ARM & HAMMER Liquid Laundry Detergent and the reduced price strategy implemented in late 1993 on ARM & HAMMER Powder Laundry Detergent. Specialty Product sales were essentially unchanged from the same period of a year ago. Net sales for the first nine months of 1994 were $374.7 million, representing a 2.3 percent decline from a year ago. This is primarily due to lower domestic unit volume of ARM & HAMMER DENTAL CARE, ARM & HAMMER Liquid Laundry Detergent, and the price reduction on ARM & HAMMER Powder Laundry Detergent, partially offset by volume associated with ARM & HAMMER Deodorant Anti-Perspirant, ARM & HAMMER Powder Laundry Detergent, and sales of ARM & HAMMER DENTAL CARE internationally. The Specialty Products Division net sales were slightly lower than in 1993, as a result of lower unit volume of MEGALAC(registered trademark) Rumen Bypass Fat, somewhat offset by gains of performance sodium bicarbonate. The Company's gross margin was 45.3 percent in the third quarter and 44.1 percent for the first nine months of 1994. This compares with 46.4 percent and 46.9 percent in the corresponding quarter and nine months of last year. These lower margins primarily resulted from the price reduction on ARM & HAMMER Powder Laundry Detergent and lower volume of high margin ARM & HAMMER DENTAL CARE. Selling, general and administrative costs increased by $10.7 million and $.9 million in the third quarter and for the first nine months of 1994, respectively as compared with the same periods a year ago. The increase in costs during the quarter was primarily the result of introductory advertising and promotion for ARM & HAMMER Deodorant Anti-Perspirant. For the nine months, introductory marketing support for ARM & HAMMER Deodorant Anti-Perspirant and ARM & HAMMER DENTAL CARE in the U.K. were largely offset by lower advertising and promotion for ARM & HAMMER DENTAL CARE domestically and ARM & HAMMER Carpet Deodorizer. Other Income/Expense Investment income decreased in the current quarter and year-to-date as compared to the corresponding periods of last year as a result of a decrease in the amounts available for investment. Interest payments were higher in the current quarter and year-to-date as compared to the same periods of last year due to an increase in short-term borrowing. 8 of 10 MANAGEMENT'S DISCUSSION AND ANALYSIS Restructuring Charge On September 28, the Company announced that third quarter and full-year earnings would fall substantially short of expectations due to weakness in the sales of existing businesses and the heavy financial burden of new product introductions. As a result, management decided to trim operating costs principally through the immediate layoff of 52 employees and the elimination of a number of vacant positions that existed as of that date. These reductions amounting to $4.0 million, together with the write-off of fixed assets of $1.3 million related to discontinued products resulted in a pre-tax charge of $5.3 million in the third quarter. It is anticipated that the charge related to the work force reduction will be fully recognized through operating cash flows over the ensuing twelve months. Income Taxes The effective tax rate for the first nine months of 1994 was 37.3 percent, down from 39.1 percent for the same period of 1993. This is primarily due to tax benefits on foreign operating results which were recognized at higher effective rates than the Company's domestic effective tax rate, and the effect of permanent tax differences in relation to the current year's significantly lower pre-tax income. Liquidity and Capital Resources The Company considers cash and short-term investments as the principal measurement of its liquidity. At September 30, 1994, cash including cash equivalents and short-term investments totaled $7.1 million as compared to $9.6 million at December 31, 1993. During the first nine months of 1994, operating activities generated positive cash flows of $8.6 million. The Company received $7.4 million in distributions from its Armand Products joint venture, increased its short-term borrowings by $22.5 million and received $1.6 million in connection with the sale of Company stock to senior officers. Significant expenditures include additions to property, plant and equipment of $21.5 million, the purchase of 676,000 shares of Company common stock for the treasury totaling $14.6 million and the payment of cash dividends of $6.5 million. PART II - Other Information Item 6. Exhibits and Reports on Form 8-K (a) (27) Financial Data Schedule. (b) No reports on Form 8-K were filed for the three months ended September 30, 1994. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CHURCH & DWIGHT CO.,INC. (REGISTRANT) DATE: November 11, 1994 /s/Anthony P. Deasey ANTHONY P. DEASEY VICE PRESIDENT FINANCE DATE: November 11, 1994 /s/Mark L. Stolp MARK L. STOLP CONTROLLER 10 of 10
 

5 1,000 9-MOS DEC-31-1994 SEP-30-1994 6,122 1,000 52,153 921 61,643 135,669 217,462 82,747 304,521 104,654 7,500 23,330 0 0 135,698 304,521 374,748 374,748 209,507 209,507 0 170 593 13,635 5,087 8,548 0 0 0 8,548 .43 .43