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future growth, are forward-looking statements based on
management's estimates, assumptions and projections. In
addition, from time to time, the Company may make forward-looking
statements relating to such matters as anticipated financial
performance, business prospects, new products, research and
development activities, plans for international expansion,
acquisitions, and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms
of the safe harbor, the Company notes that a variety of factors
could cause the Company's actual results and experience to
differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking
statements. These forward-looking statements are uncertain.
The risks and uncertainties that may affect operations,
performance, product development, and results of the Company's
business, some of which may be beyond the control of the
Company, include those discussed elsewhere in this Form 10-K,
marketplace conditions and events, and the following:
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS COULD ADVERSELY
AFFECT STOCK PRICE. The Company cannot be sure that its
quarter-to-quarter operating results will improve, or that
if any improvement is shown, the degree of improvement will
meet expectations of investors. In addition, sales volume
growth, whether due to acquisitions or to internal growth,
can place burdens on the Company's management resources and
financial controls that, in turn, can have a negative impact
on operating results. To some extent, the Company sets its
expense levels in anticipation of future revenues. If actual
revenue falls short of these expectations, operating results
are likely to be adversely affected. Because of all of these
factors, the Company believes that quarter-to-quarter
comparisons of its results of operations should not be relied
upon as indications of future performance.
The price of the Company's common stock could fluctuate
substantially and decrease as a result of several factors,
including:
* future announcements concerning the Company or its
competitors;
* quarterly variations in operating results;
* the introduction of new products and line extensions
by the Company or its competitors;
* changes in product pricing policies by the Company
or its competitors;
* acquisition costs and restructuring and other charges
associated with acquisitions;
* changes in earnings estimates by analysts;
* changes in accounting policies; or
* the impact of general economic conditions in the United
States and in other countries in which the Company
currently does business.
In addition, stock markets have experienced price and volume
volatility and such volatility in the future could have an
adverse impact on the Company's market price.
INTERNATIONAL OPERATIONS EXPOSE THE COMPANY TO UNCERTAIN
CONDITIONS IN OVERSEAS MARKETS. The Company believes that
its international sales, which were 18% of net sales in fiscal
year 1999, are likely to increase as a percentage of its total
sales, because of both internal expansion and the addition of
First Brands international operations. As a result, the Company
will increasingly face the risks created by having foreign
operations, including:
* economic or political instability in its overseas markets; and
* fluctuations in foreign currency exchange rates that may
make the Company's products more expensive in its foreign
markets or negatively impact its sales or earnings.
All of these risks could have a significant impact on the Company's
ability to sell its products on a timely and competitive basis
in foreign markets and may have a material adverse effect on
the Company's results of operations or financial position.
The Company seeks to limit its foreign currency exchange risks
through the use of foreign currency forward contracts when
practical, but cannot be sure that this strategy will be
successful. In addition, the Company's international operations
are subject to the risk of new and different legal and
regulatory requirements in local jurisdictions, potential
difficulties in staffing and managing local operations, credit
risk of local customers and distributors, and potentially
adverse tax consequences.
INTEGRATION OF ACQUISITIONS AND MERGERS MAY NOT BE SUCCESSFUL.
One of the Company's strategies is to increase its sales volumes,
earnings and the markets it serves through the acquisition of,
or merger with, other businesses in the United States and
internationally. There can be no assurance that the Company
will be able to identify, acquire, or profitably manage
additional companies or operations or successfully integrate
recent or future acquisitions or mergers, including the First
Brands businesses, into its operations. In addition, there
can be no assurance that companies or operations acquired will
be profitable at the time of their acquisition or will achieve
sales levels and profitability that justify the investment made,
including the investment in First Brands.
FINANCIAL PERFORMANCE DEPENDS ON CONTINUOUS AND SUCCESSFUL NEW
PRODUCT INTRODUCTIONS. In most categories in which the Company
competes, there are frequent introductions of new products and
line extensions. An important factor in the Company's future
performance will be its ability to identify emerging consumer
and technological trends and to maintain and improve the
competitiveness of its products. The Company cannot be sure
that it will successfully achieve those goals. Continued product
development and marketing efforts have all the risks inherent
in the development of new products and line extensions, including
development delays, the failure of new products and line extensions
to achieve anticipated levels of market acceptance, and the cost
of failed product introductions.
GOVERNMENT REGULATIONS COULD IMPOSE MATERIAL COSTS. The
manufacture, packaging, storage, distribution and labeling of the
Company's products and the Company's business operations generally
all must comply with extensive federal, state, and foreign laws
and regulations. For example, in the United States, many of the
Company's products are regulated by the Environmental Protection
Agency, the Food and Drug Administration, and the Consumer Product
Safety Commission. Most states have agencies that regulate in
parallel to these federal agencies. The failure to comply
with applicable laws and regulations in these or other areas,
including taxes, could subject the Company to civil remedies,
including fines, injunctions, recalls or asset seizures, as
well as potential criminal sanctions, any of which could
have a material adverse effect on the Company. Loss of or
failure to obtain necessary permits and registrations could
delay or prevent the Company from introducing new products,
building new facilities or acquiring new businesses and could
adversely affect operating results.
ENVIRONMENTAL MATTERS CREATE POTENTIAL LIABILITY RISKS. The
Company must comply with various environmental laws and
regulations in the jurisdictions in which it operates, including
those relating to air emissions, water discharges, the handling
and disposal of solid and hazardous wastes, and the remediation
of contamination associated with the use and disposal of
hazardous substances. The Company has incurred, and will
continue to incur, capital and operating expenditures and
other costs in complying with those laws and regulations in
the United States and internationally. The Company is
currently involved in or has potential liability with respect
to the remediation of past contamination in the operation of
some of its presently and formerly owned and leased facilities.
In addition, some of the Company's present and former facilities
have been or had been in operation for many years, and over
that time, some of these facilities may have used substances
or generated and disposed of wastes that are or may be considered
hazardous. It is possible that those sites, as well as disposal
sites owned by third parties to which the Company has sent waste,
may in the future be identified and become the subject of
remediation. It is possible that the Company could become
subject to additional environmental liabilities in the future
that could result in a material adverse effect on the Company's
results of operations or financial condition.
FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY COULD IMPACT OUR
COMPETITIVENESS. The Company relies on trademark, trade secret,
patent and copyright laws to protect its intellectual property.
The Company cannot be sure that these intellectual property
rights can be successfully asserted in the future or will not be
invalidated, circumvented or challenged. In addition, laws of
some of the foreign countries in which the Company's products
are or may be sold do not protect the Company's intellectual
property rights to the same extent as the laws of the United
States. The failure of the Company to protect its proprietary
information and any successful intellectual property challenges
or infringement proceedings against the Company could make it
less competitive and could have a material adverse effect on
the Company's business, operating results and financial condition.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
AND EXPORT SALES.
Net sales, pretax earnings and identifiable assets related to
foreign operations (including Puerto Rico and exports) for
each of the last three fiscal years is included in the
International segment information in Note 19 - Segment
Information of the Notes to the Consolidated Financial
Statements, which appears on pages B-28 and B-29 of Appendix B
of the Proxy Statement, incorporated herein by reference.
ITEM 2. PROPERTIES
PRODUCTION FACILITIES. The Company operates production and
major warehouse facilities for its operations in 29 locations
throughout the United States, and its subsidiaries operate
production facilities in 24 locations internationally. Most
of the space is owned. Some space, mainly for warehousing, is
leased. The Company also leases six domestic regional
distribution centers for the Company's products which are
operated by service providers. None of the Company's facilities
were closed during fiscal year 1999, and one former production
facility, in Kansas City, Missouri, was sold. The Company
acquired property adjacent to its production facility in
Fairfield, California, for warehousing space during fiscal year
1999. The Company considers its manufacturing and warehousing
facilities to be adequate to support its business.
OFFICES AND R&D FACILITIES. The Company owns its general office
building located in Oakland, California. The Company also owns
its Technical Center and Data Center located in Pleasanton,
California. The Company leases its research and development
center and its engineering research facility for Glad and
GladWare products, which are located in Willowbrook, Illinois,
and Kennesauw, Georgia, respectively. The Company also leases
its research and development center for STP products located in
Brookfield, Connecticut. The Company plans to close the leased
First Brands general office building and to sublease such space
in the near future. Leased sales and other office facilities
are located at a number of manufacturing and other locations.
ENCUMBRANCES. None of the Company's owned facilities are encumbered
to secure debt owed by the Company, except that the manufacturing
facility in Belle, Missouri, secures industrial revenue bond
indebtedness incurred in relation to the construction or upgrade
thereof.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and current positions of the executive officers of
the Company are set forth below:
Name (Age) and Year Elected to Current Position Title and Current Position(s)
- -
G. C. Sullivan (59) 1992 Chairman of the Board and Chief Executive Officer
G. E. Johnston (52) 1999 President and Chief Operating Officer
R. T. Conti (44) 1999 Group Vice President
P. N. Louras, Jr. (49) 1992 Group Vice President
L. S. Peiros (44) 1999 Group Vice President
K. M. Rose (51) 1997 Group Vice President - Chief Financial Officer
P. D. Bewley (53) 1998 Senior Vice President - General Counsel and Secretary
A. W. Biebl (50) 1999 Senior Vice President - Product Supply
F. A. Tataseo (45) l999 Senior Vice President - Sales
J. M. Brady (45) 1993 Vice President - Human Resources
C. M. Couric (53) 1995 Vice President - General Manager, Brita Products
W. L. Delker (45) 1999 Vice President - Research & Development
S. D. House (38) 1999 Vice President - General Manager, Latin America
R. C. Klaus (54) 1995 Vice President - Corporate Administration
D. G. Matz (37) 1999 Vice President - General Manager, Home Care
H. J. Salvo, Jr. (51) 1991 Vice President - Controller
G. R. Savage (42) 1999 Vice President - General Manager, Glad Products
S. S. Silberblatt (47) 1999 Vice President - Corporate Communications and
Public Affairs
D. G. Simpson (45) 1997 Vice President - Strategy and Planning
K. R. Tandowsky (42) 1998 Vice President - Information Services
S. R. Vogel (38) 1999 Vice President - General Manager, Laundry Additives
S. A. Weiss (43) 1999 Vice President - General Manager, Food &
Professional Products
There is no family relationship between any of the above named
persons, or between any of such persons and any of the directors
of the Company or any persons nominated for election as a
director of the Company. See Item 10 of Part III of this
Form 10-K.
G. C. Sullivan, P. N. Louras, Jr., J. M. Brady and H. J. Salvo
have been employed by the Company for at least the past five
years in the same respective positions as listed above. The
other executive officers have held the respective positions
described below for at least the past five years:
G. E. Johnston joined the Company in July 1981 as Regional
Sales Manager - Special Markets. Prior to his election as
President and Chief Operating Officer effective January 20, 1999,
he was Group Vice President from July 1, 1996 through January 19,
1999, Vice President - Kingsford Products from November 17, 1993
through June 1996, and Vice President - Corporate Development
from June 1992 through November 16, 1993.
R. T. Conti joined the Company in 1982 as Associate Region Sales
Manager, Household Products. Prior to his election as Group Vice
President effective September 1, 1999, he was Vice President -
General Manager from July 1999 through August 1999, Vice President -
Kingsford Products from July 1996 through June 1999, and Vice
President - International from June 1992 through June 1996.
L. S. Peiros joined the Company in 1982. He was elected Group Vice
President effective January 20, 1999. Prior to that, he served as
Vice President - Household Products from June 1, 1998 through
January 19, 1999, Vice President - Food Products from July 1995
through June 1998, and Vice President - Corporate Marketing Services
from September 1993 until July 1995.
K. M. Rose joined the Company in 1978 as a Financial Analyst. Prior
to her election as Group Vice President - Finance and Chief Financial
Officer effective December 1, 1997, she was Vice President - Treasurer
from July 1992 through November 1997.
P. D. Bewley joined the Company in February 1998 as Senior Vice
President - General Counsel and Secretary. From 1994 through January
1998, he was employed by Nova Care, Inc., as Senior Vice President -
General Counsel and Secretary, and prior to that was employed by
Johnson & Johnson as Associate General Counsel.
A.W. Biebl joined the Company in January 1981 as Director of
Manufacturing for the Food Service Products Division. Prior to
his election as Senior Vice President - Product Supply effective
September 1, 1999, he was Vice President - Product Supply from
May 1992 through August 1999.
F. A. Tataseo joined the Company in October 1994 as Vice
President - Sales and was elected as Senior Vice President
Sales effective September 1, 1999. Previously, he was employed
by The Pillsbury Company (Division of Grand Metropolitan Inc.)
as Vice President, Sales (March - September 1994), and as Vice
President, Direct Sales Force (June 1993 - February 1994); and
also held various positions at The Procter & Gamble Company
prior to that.
C. M. Couric joined the Company in 1973 as a brand assistant in
the Household Products marketing organization. Prior to his
election in July 1995 as Vice President - General Manager, Brita
Products, he had served as Director, Brita Operations since 1988.
W. L. Delker joined the Company as Vice President - Research &
Development in August 1999. Prior to that, he was General Manager
of Six Sigma Quality for GE Silicones, a division of GE Plastic,
from February 1998 through July 1999, and General Manager of
Technology for GE Silicones from January 1994 through January 1998.
S. D. House joined the Company in 1983 as a staff accountant. Prior
to his election as Vice President - General Manager, Latin America
effective July 1, 1999, he was Vice President - Treasurer from December 1,
1997 through June 1999, and prior to that he had served as a Director
of Finance for the international business and also had held various
positions in auditing, financial analysis and forecasting.
R. C. Klaus joined the Company in 1977 as Regional Sales Manager
(Baltimore) for Household Products. Prior to his election as Vice
President - Corporate Administration in November 1995, he was Vice
President - Clorox Professional Products from March 1994 through
October 1995, and Vice President - Food Service Products from May 1990
through March 1994.
D. G. Matz joined the Company in 1986 as a brand assistant in the
Company's Household Products marketing organization. Prior to
his election as Vice President - General Manager, Home Care
effective September 1, 1999, he was Category General Manager - Home
Care from February 1999 through August 1999, Director of Marketing - Home
Care from December 1997 through August 1999, Director of Marketing -
Food Products and Auto Care from August 1995 through November 1997,
and Group Marketing Manager - Laundry Care Additives from January 1994
through July 1995.
G. R. Savage joined the Company in 1983 as an Associate Marketing
Manager. He was elected Vice President - General Manager, Glad
Products effective January 20, 1999. Prior to that, he served as
Vice President - Food Products from December 1, 1997 through January 19,
1999, and Director of Marketing for the Household Products business
from 1993.
S. S. Silberblatt joined the Company in 1980 in the marketing department
for Kingsford products. Prior to his election as Vice President-
Corporate Communications and Public Affairs in February 1999, he was
Director of Business Development.
D. G. Simpson joined the Company in 1979 in the brand management
function. He was elected Vice President - Strategy and Planning
effective December 1, 1997. Prior to that, he had served as head of
corporate strategic planning.
K. R. Tandowsky joined the Company in 1981 as a Staff Accountant.
He was elected Vice President - Information Services effective February 7,
1998. Prior to that, he had served as Director of Finance for the
Kingsford products business from 1994 and Director of Corporate Finance,
Treasury from 1992.
S. R. Vogel joined the Company in 1988 as a brand assistant in the
marketing organization. Prior to his election as Vice President- General
Manager, Laundry Additives effective September 1, 1999, he was Category
General Manager - Laundry Cleaning Additives from February 1999 through
August 1999, Marketing Director - Laundry Cleaning Additives from 1997
through January 1999, Group Marketing Manager - Laundry Cleaning Additives
from 1995 through 1996, and Group Marketing Manager Home Cleaning from
1994 to 1995.
S. A. Weiss joined the Company in 1994 as an area general manager
for the Pacific Rim business. He was elected Vice President -
General Manager, Food & Professional Products effective February 1,
1999. Prior to that, he was Vice President - Asia Middle East from June 1998
through January 1999 and he held the position of Area General
Manager Asia-Middle East from 1994 until his election as an officer.
Before joining the Company, he had been employed by Bristol Myers
Squibb in international and domestic marketing assignments.