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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

Commission File Number 333-73160

ARMKEL, LLC

(Exact name of registrant as specified in its certificate of formation)

Registrant’s telephone Number, including area code: (609) 683-5900

Securities registered pursuant to Section 12(b) of the Act:

None

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.    ¨

Indicated by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act)     Yes  ¨    No  x

As of March 11, 2004, all of the 10,000 outstanding membership interests in Armkel, LLC were held by affiliates.

Documents Incorporated by Reference:

None

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CAUTIONARY NOTE ON FORWARD LOOKING INFORMATION

This Annual Report contains forward-looking statements relating to, among other things, short- and long-term financial objectives, sales and earnings growth, and cash flow. These statements represent the intentions, plans, expectations and beliefs of the Company, and are subject to risk, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. The uncertainties include assumptions as to market growth and consumer demand (including the effect of political and economic events on consumer demand), raw material and energy prices, and the financial condition of major customers. With regard to the new product introductions referred to in this report, there is particular uncertainty relating to trade, competitive and consumer reactions. Other factors, which could materially affect the results, include the outcome of contingencies, including litigation, pending regulatory proceedings, environmental remediation and the divestiture of assets.

The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our filings with the U.S. Securities and Exchange Commission.

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PART I

General; Recent Developments

Armkel, LLC (the “Company”) is an equally owned joint venture formed by Church & Dwight Co., Inc. (“C&D”) and affiliates of Kelso & Company, L.P. (“Kelso”). On September 28, 2001, the Company acquired certain of the domestic consumer product assets of Carter-Wallace, primarily Trojan condoms, Nair depilatories, and First Response and Answer test kits, and the international subsidiaries of Carter-Wallace (the “Acquisition”). The remainder of Carter-Wallace, comprised of its healthcare and pharmaceuticals businesses, was merged with an unrelated third party after the completion of the Acquisition. Simultaneously with the consummation of the Acquisition, the Company sold the remainder of the consumer products businesses, Arrid antiperspirant in the U.S. and Canada and the Lambert-Kay line of pet care products, to C&D. The Company retained the Arrid antiperspirant business outside the U.S. and Canada.

C&D markets a broad range of products under various brand names including its well-recognized Arm & Hammer trademark, including personal care products such as antiperspirants, dentifrices and oral care gum and other products, such as baking soda, carpet deodorizer, air freshener and laundry detergent. C&D distributes its products through a broad distribution platform that includes mass merchandisers, food stores, drug stores, convenience stores and other channels. C&D’s senior management team has extensive experience in the branded consumer products industry with average experience of more than 20 years. C&D was founded in 1846 and its common stock is publicly traded under the symbol “CHD” and has been publicly traded for over thirty years. Kelso & Company, or Kelso, is a private investment firm founded in 1971 that specializes in acquisition transactions. Since 1980, Kelso has acquired more than 70 companies requiring total capital at closing of more than $18 billion.

In February 2003, the Company sold its Italian subsidiary, S.p.A. Italiana Laboratori Bouty, including its two subsidiaries, to a group comprised of local management and private equity investors for a price of $22.6 million. The net proceeds from the sale were used to prepay a portion of the Company’s syndicated financing loans. The Company will retain ownership of certain Italian pregnancy kit and oral care product lines with annual sales of approximately $3 million. The remainder of the Italian subsidiary’s business disposed of in the sale included a high percentage of distributor sales as well as hospital diagnostic and other products not related to the Company’s core business.

The Company is a leading marketer and manufacturer of well-recognized branded personal care consumer products. The Company’s Trojan brand occupies the number one position in the domestic condom market. The Company’s Nair brand occupies the number two position in the domestic depilatories and waxes market and the Company’s First Response brand occupies the number two position in the domestic home pregnancy and ovulation test kits market. The Company also markets value priced home pregnancy and ovulation test kits under the Answer brand name.

Similarly, the Company enjoys leading market positions in certain of its international markets. In Canada, for example, the Company’s Trojan brand is the market leader. In addition, the Company’s depilatory and wax products, marketed under the Nair and Taky brand names, have either a number one or number two market position in many of its key international markets. The Company believes its leading market positions and its well-recognized brand names are significant competitive advantages, as they typically enable it to maintain superior shelf space allocations within its retail customers’ facilities.

The Company markets its products through a well-established, diversified marketing platform that serves mass merchandisers, food stores, drug stores, convenience stores and other channels. For the period ended December 31, 2003, approximately 50% of the Company’s net sales were generated in the United States and the majority of the remainder were generated in Europe, Mexico and Canada. The Company’s products include condoms (latex, natural skin and polyurethane contraceptives), depilatories and waxes (lotion, cream and wax hair removal treatments), home pregnancy and ovulation test kits, over-the-counter (OTC) products (topical analgesics, antinauseants, nasal decongestants and vitamin supplements), oral care products (cosmetic tooth polishes and denture adhesives) skin care products (moisturizers, anti-cellulite cream and skin cleansers), and other products.

Description of Business Segments

The Company conducts its business through its domestic consumer products division and its international consumer products division.

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Neither of these segments is seasonal with the exception of the depilatories and waxes product group which performs better in the spring and summer months. Information concerning the net sales, operating income and identifiable assets of each of the segments is set forth in Note 20 to the consolidated financial statements included in Item 8 of this form 10-K.

Domestic Consumer Products. The following table sets forth the principal products of the Company’s domestic consumer products division and related data.

Condoms. The Company offers a wide variety of products under its well-recognized brand names, including: Trojan, its leading consumer brand; Naturalamb, a natural product offered at higher prices; and Class Act, a discount brand offered at lower prices.

The Company is dedicated to building its Trojan brand through advertising, trade promotions and new product development. The Company is currently the leading advertiser in the U.S. condom category based on dollars spent. The Company has increased its promotional programs and has regularly developed new and innovative product line extensions.

Condoms are recognized as highly reliable contraceptives as well as an effective means of reducing the risk of sexually transmitted diseases (STDs). The Trojan condom brand has been in use for more than 80 years. In 2003, the brand continued its share leadership in the United States behind the success of such products as Extended Pleasure and Her Pleasure, the introduction of Twisted Pleasure, the continuation of the Trojan Man advertising campaign, and its on-going comprehensive educational programs. In 2004, Armkel added two new products to the Trojan condom line, Shared Pleasure and Magnum with Warm Sensations, a unique lubricant system which warms the skin on contact for enhanced pleasure.

Depilatories and Waxes. The Company’s Nair depilatories and waxes products currently hold the number two market position. The Company believes that, as a result of its dedicated advertising and promotional programs, distinct packaging and several successful line extensions, Nair is positioned as a leader in lotion and cream depilatories. The Company’s success with female hair removal products has prompted it to broaden its product line and introduce hair removal products for men which are performing well in the marketplace. In 2003, the Company introduced Cucumber Melon lotion and Peach Melon wax. In 2004, the Company will launch its line of “No Touch” depilatory products including Nair mousse, a product designed for direct application and improved ease of use.

In 2003, the Company began shipping Lineance European Body Essentials, a line of upscale hair removal and skin care treatments. As a result of insufficient consumer demand for the products, the Company has decided to discontinue this product line in the United States in order to focus and consolidate efforts behind Nair.

Home Pregnancy and Ovulation Test Kits. First Response and Answer brand home pregnancy and ovulation test kits combined to give the Company the number two market position in each category.

The First Response home pregnancy test kit is a premium priced, branded product. In a sector with intensive advertising and promotion-based competition, First Response is well-positioned as a trusted, well-recognized brand name with high brand awareness. The Company’s Answer brand home pregnancy test kit is a value-priced product that competes with other valued-priced brands including private label products, but generally at a slightly higher price point.

The First Response 1-Step Ovulation Kit is a premium priced, branded product. The Company has introduced technology that enables the user to monitor the test while in progress. First Response appeals to customers that favor premium brand products.

Other Consumer Products. The Company’s other domestic consumer products operate in mature markets. The Company’s brands include Pearl Drops tooth-whitening products, Carter’s Little Pills, a stimulant laxative, and Rigident denture adhesive.

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International Consumer Products. The Company markets a diverse portfolio of consumer products in a broad range of international markets. The Company’s international consumer products primarily include condoms, home pregnancy and ovulation test kits, antiperspirants, skin care products, oral hygiene products and other consumer products, as well as OTC pharmaceuticals and professional diagnostic tests. The Company’s primary international markets are France, the United Kingdom “(U.K.)”, Canada, Mexico, Australia and Spain, and it has operations in each of these countries. In addition, the Company exports some of its products from the U.K. to European countries such as Germany, Belgium, Holland, Poland, Switzerland, Ireland and Greece, as well as to the Middle East. The Company’s operations in each of its primary international markets operate as independent, stand alone companies, with separate management, marketing efforts and product sourcing.

The Company believes that approximately 34% of its international net sales are attributable to brands which hold the number one or two position in their respective local markets. France accounts for 33% of the Company’s total international sales. With the exception of France, none of the countries in which the Company operates accounts for more than 23% of its total international net sales, and no brand accounts for more than 12% of its total international net sales. Certain of the Company’s international product lines are similar to its domestic product lines. For example, the Company markets depilatories and waxes, home pregnancy and ovulation test kits and oral care products in most of its international markets, as well as condoms in Canada, Mexico and the U.K.

In 2002, the Company’s Canadian subsidiary, Carter-Horner Corp., and C&D’s Canadian subsidiary, Church & Dwight Ltd./Ltee. began to provide certain services and employees to each other for the purposes of efficiently allocating management, administrative, operations and sales functions among the entities.

The following table sets forth the principal product categories of the Company’s international consumer products division.

Condoms. The Company markets condoms under the Trojan brand name in Canada, Mexico and, recently in limited distribution, in the United Kingdom. In Canada, the Company’s Trojan brand has a leading market share. The Company markets its condoms through distribution channels similar to those of its domestic condom business. These channels include pharmacies, drug stores and mass merchandisers.

Home Pregnancy and Ovulation Test Kits. The Company’s international home pregnancy and ovulation test kits consist of the First Response, Answer, Confidelle, Discover and Gravix brands. The Company sells these products in the United Kingdom, Canada, Italy, Mexico and Australia. Additionally, the Company licenses a third party to market its test kits in Germany.

Depilatories and Waxes. The Company’s international depilatories are sold under the Nair brand name and are sold in Canada, Mexico, the United Kingdom, France, Australia and Spain (marketed under the Taky brand name), as well as distributed in the Middle East and other parts of Europe.

Face and Skin Care. The Company’s face and skin care products are marketed under the Barbara Gould, Lineance, Anne French and Eudermin brand names. Barbara Gould is a range of facial and beauty skin care products that serves the French mass market. Anne French offers a traditional range of facial cleansing products that are marketed in England and

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Ireland. Lineance is an established leader in the mass market slimming, anti-cellulite category in France. Eudermin is a leading hand cream marketed in Spain.

Oral Care. The Company’s principal international oral care products are sold in Australia, Canada, France, Germany, Italy, Mexico and the United Kingdom and include: cosmetic whitening tooth polishes marketed under the Pearl Drops, Perlweiss, Nacar Blanco and Email Diamant brand names; and mouthwash and breath freshening products marketed under the Ultrafresh brand name. Pearl Drops, the Company’s leading cosmetic whitening tooth polish brand, sells at a premium price over regular toothpaste.

OTC Products. The Company’s principal OTC products are: Sterimar sea water nasal decongestant and cleansing spray, which is sold in France, Mexico and many export markets throughout the world; Gravol anti-nauseant, Atasol acetaminophen analgesic, Ovol antiflatulent and Diovol antacid, all of which are sold primarily in Canada; topical analgesics sold under Rub A-535 brand name in Canada and Dencorub brand name in Australia.

Antiperspirants. The Company’s principal antiperspirant brand is Arrid, which it manufactures and sells primarily in the United Kingdom. Arrid is manufactured and sold in United States and Canada by C&D.

Baby Care. The Company’s main baby care brands are Curash, a line of diaper rash powder, cream and wipes products sold in Australia and Poupina, a line of skin care and toiletry products sold in France.

Professional Diagnostics. The Company sells professional diagnostic tests primarily for the detection of infectious diseases in France. These comprise enzyme immuno-assay tests, which are primarily sold by the Company’s sales force to hospitals, clinics and government laboratories.

Other Consumer Products. The Company’s other international brands include the Femfresh line of feminine hygiene products sold in the United Kingdom, France and Australia and the Cossack line of men’s grooming products sold in the United Kingdom. In addition, the Company has distribution agreements with third parties to sell their products through its sales force.

Distribution

Under a management services agreement with C&D (described elsewhere in this document), the Company sells its domestic consumer products through C&D’s direct sales force. The Company also uses the independent broker currently utilized by C&D to supplement the direct sales force. C&D’s sales force makes presentations for the Company’s products at the headquarters or home offices of the Company’s customers, where applicable, as well as to individual retail outlets.

The international division sells its products through classes of trade substantially similar to the domestic division in each of the countries in which the Company operates, with some exceptions. For example, in many European countries, the pharmacy channel (high end drug stores), which is not significant to the Company’s business in the United States, is important to the distribution of certain consumer products. The Company believes its international consumer products are adequately represented by class of trade in each of the countries in which it competes.

The Company, through C&D, uses a combination of third-party distribution centers and a leased facility to ship its products in the United States. These distribution centers are located strategically to maximize the Company’s ability to service its customers.

The Company’s international distribution network is based on subsidiary capacities and cost considerations. In Canada, Mexico, Spain and Australia, finished goods are warehoused internally and shipped directly to customers through independent freight carriers. In the United Kingdom, all product distribution is subcontracted to a professional distribution company. In France, distribution of consumer products to mass markets is handled internally while distribution of OTC products to pharmacies and professional diagnostics to laboratories is handled by outside agencies.

In 2002, the Company took over distribution of the Arm & Hammer toothpaste product line in the United Kingdom and began distribution in Mexico for C&D.

Competition

For information regarding competition, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report.

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Raw Materials

The Company’s major raw materials are chemicals, plastics, latex and packaging materials.

These materials are generally available from several sources and the Company has had no significant supply problems to date. The Company generally has two or more approved suppliers for production materials. Although there are multiple providers of its raw materials, in certain instances the Company chooses to sole source certain raw materials in order to gain favorable pricing.

Trademarks, Patents and Licenses

The Company markets its products under a number of trademarks and trade names, including Trojan, Nair, First Response and Answer. The Company has registered these trademarks (identified throughout this annual report in italicized letters), or has applications pending, in the United States and in certain of the countries in which the Company sells these product lines. United States trademark registrations are for a term of 10 years, renewable every 10 years so long as the trademarks are used in the regular course of trade. The Company considers the protection of its trademarks to be important to its business. The Company maintains a portfolio of trademarks representing substantial goodwill in the businesses using the trademarks.

The Company owns or has licenses for a number of United States and foreign patents and patent applications covering certain of its products, and has an ongoing program of obtaining additional patents to protect new product developments. The Company believes that certain of these patents may provide competitive insulation and advantage. The Company does not believe that the expiration of or any other change in any of these patents or patent applications will materially affect its business. Although the Company actively develops and maintains a number of patents, no single patent is considered significant to the business as a whole.

Customers and Order Backlog

A group of five customers accounted for approximately 26% of consolidated net sales in 2003, including a single customer, Wal-Mart, who accounted for 12%. This group accounted for 27% of consolidated net sales in 2002 and 2001. The time between receipt of orders and shipment is generally short, and as a result, backlog is not significant.

New Product Development

The Company conducts the majority of its research and development (“R&D”) activities at its facility in Cranbury, New Jersey and at C&D’s facility in Princeton, NJ. C&D provides supplementary R&D services on an as needed basis. Internationally, the Company operates small satellite R&D facilities in the United Kingdom, France, Spain and Canada. The Company’s expenditures on R&D were approximately $10.4 million in the year ended December 31, 2003, $8.4 million for the twelve months ended December 31, 2002 and $1.8 million for the period from August 28, 2001 to December 31, 2001.

The primary focus of the Company’s new product development group is to design and develop new and improved products that address consumer needs. In addition, this group provides technology support to both in-house and contract manufacturing and safety and regulatory support to all of the Company’s businesses. The Company devotes significant resources and attention to product innovation and consumer research to develop differentiated products with new and distinctive features which provide increased convenience and value to its consumers. The Company’s new product development broadens its product line by creating new product line extensions and new formulations that appeal to various consumer needs.

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Quality Control

The Company places a high degree of importance on quality and product testing through its quality control department, with quality control employees in each of its manufacturing locations. Through its quality control efforts, the Company maintains rigorous standards over all of its products. In addition, the Company also tests the ingredients and packaging that comprise its product offerings. Several of the Company’s products are registered with the Food and Drug Administration (“FDA”) including condoms, home pregnancy and ovulation test kits, depilatories, oral care products and OTC product offerings. As a result, the Company is required to meet exacting standards of quality. An example of the Company’s commitment to quality control is the 100% product testing policy with respect to its condoms. Each condom is quality tested by trained and qualified employees before it is released for sale. As a result, the Company has never had to recall any of its condoms as a result of design or production flaws.

Governmental Regulation

Some of the Company’s products are subject to regulation under the Food, Drug and Cosmetic Act, which is administered by the FDA and the Fair Packaging and Labeling Act. The Company is also subject to regulation by the FTC in connection with the content of its labeling, advertising, promotion, trade practices and other matters. The Company is subject to regulation by the FDA in connection with its manufacture, labeling and sale of its condoms, home pregnancy and ovulation test kits, depilatories and certain OTC products. The Company’s relationships with certain unionized employees may be overseen by the National Labor Relations Board.

In addition, the Company’s international operations, including the production of OTC drug products, are subject to regulation in each of the foreign jurisdictions in which the Company manufactures or markets such goods.

Environmental Matters

The Company’s operations involve the use, storage and disposal of chemicals and other hazardous materials and wastes. The Company is subject to applicable federal, state, local and foreign environmental laws relating to the protection of the environment, including those governing discharges to the environment, the proper management of hazardous materials and wastes and the cleanup of contaminated sites. Some of the Company’s operations, particularly its manufacturing sites, require environmental permits and controls to prevent and reduce air, land and water pollution. These permits are subject to modification, renewal and revocation by issuing authorities.

The Company believes that its operations are currently in material compliance with applicable environmental laws, regulations and permits. While the Company does not believe that ongoing environmental operating and capital expenditures will be material, the Company could incur significant additional operating and capital expenditures in order to comply with current or future environmental laws, such as the installation of pollution control equipment at its manufacturing sites.

In addition, some environmental laws can impose liability for the cleanup of a contaminated site or for third-party claims for property damage and personal injury, regardless of whether the current owner or operator owned or operated the site at the time of the release of contaminants or the legality of the original disposal activity. With certain limited exceptions, the Company has agreed to assume environmental-related liabilities that may arise from the pre-Acquisition operation of the consumer products business and assets transferred as part of the Carter-Wallace acquisition. Many of the Company’s sites have a history of industrial operations. Some of the Company’s sites have contaminants from current and historical operations. For example, contamination has been discovered, and remediation has begun, at the Company’s Cranbury, New Jersey site. Based on the Company’s preliminary assessments, the cost of remediating such contamination is expected to be approximately $1.8 million, of which $1.5 million is remaining in the Company’s reorganization reserves at December 31, 2003. While the Company is not aware of any other material cleanup obligations or related third-party claims, the detection of additional contaminants or the imposition of additional cleanup obligations at its sites or any other properties could result in significant costs.

Geographic Areas

Approximately 50% and 55% of net sales for the years ended December 31, 2003 and 2002, respectively and 49% for the period August 28, 2001 (inception) to December 31, 2001, were to customers in the United States, and approximately 82% of long-lived assets at December 31, 2003 and 2002 were located in the U.S.

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Employees and Labor Relations

The Company’s worldwide work force consisted of approximately 1500 employees as of December 31, 2003, of whom approximately 850 were located outside the United States and approximately 650 worked in its domestic facilities.

The hourly employees at the Company’s Cranbury, New Jersey facility are represented by Paper, Allied-Industrial Chemical and Energy Workers union. In 2002, the Company shut down the Dayton facility and had substantially shut down the Cranbury facility leaving only one hourly employee to maintain the facility until its disposition. The union agreement expires on April 30, 2004. Internationally, the Company employs union representatives in France, Spain and Mexico. The Company believes that its labor relations are satisfactory.

Classes of Similar Products

Information concerning similar products marketed by the Company is set forth in Note 20 to the consolidated financial statements included in Item 8 of this Form 10-K.

Certain Risks and Uncertainties Related to the Company’s Business

The following risks and uncertainties, as well as others described in this Annual Report on Form 10-K could materially adversely affect the Company’s business results of operations and financial condition:

The Company has introduced a number of new consumer products such as Trojan Shared Pleasure, Trojan Magnum with Warm Sensations and Nair Mousse. The development and introduction of new products involves substantial research, development and marketing expenditures, which the Company may be unable to recoup if the new products do not gain widespread market acceptance. In addition, if the new products merely cause sales of existing products to decline, the Company’s financial performance could be harmed.

In addition new products carry a greater risk of supply chain interruption if product sales are significantly greater or less than expectations. Although the Company has taken steps to ensure that demand planning is done properly, interruptions in supply may occur and could affect the Company’s financial condition and operating results.

In the past, the Company has discontinued certain products and product lines, which resulted in returns from customers, asset write-offs, and shut down costs. The Company may suffer similar adverse consequences in the future to the extent it discontinues products that do not meet expectations or no longer satisfy consumer demand. Product returns, write-offs or shut down costs would reduce cash flow and earnings. Product efficacy or safety concerns could result in product recalls or declining sales which would reduce cash flow and earnings.

The Company operates in competitive consumer product markets in which performance, quality and innovation are critical to success. It holds leading market positions and possesses well recognized and respected brand names. The Company competes on the basis of name recognition, advertising, quality of products, product differentiation, promotion and price. It is either the number one or two provider of condoms, depilatories and waxes, and home pregnancy and ovulation test kits in the United States. Internationally, the Company markets a diverse portfolio of consumer products in a broad range of markets, several of which are similar to its domestic business, such as condoms, depilatories and waxes, home pregnancy and ovulation test kits and oral care products. In addition, the Company competes in a variety of other international categories including antiperspirants, skin care products and other consumer products, as well as OTC pharmaceuticals and professional diagnostic kits.

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The Company’s unit sales growth will depend on increasing usage by consumers, product innovation and capturing market share from competitors. The Company may not be able to succeed in implementing its strategies to increase revenues. To protect the Company’s existing market share or to capture increased market share, the Company may need to increase expenditures for promotions and advertising and introduce and establish new products. Increased expenditures may not prove successful in maintaining or enhancing the Company’s market share and could result in lower sales and profits.

The Company competes with SSL International and Ansell in the condom business, Pfizer and Inverness Medical Innovations in the pregnancy test kits business, Del Labs, Aussie Nads and Reckitt Benckiser in the depilatories and wax business and L’Oreal, Beiersdorf and Unilever in the skin care business. Many of the Company’s competitors are substantially larger companies with greater financial resources than the Company. These competitors have the capacity to outspend the Company in an attempt to take market share from the Company.

From time to time, the Company may need to reduce the prices for some of its products to respond to competitive and customer pressures and to maintain market share. Any reduction in prices to respond to these pressures would harm profit margins. In addition, if the Company’s sales volumes fail to grow sufficiently to offset any reduction in margins, its results of operations would suffer.

Because of the competitive environment facing retailers, many of the Company’s trade customers, particularly its high-volume retail store customers, have increasingly sought to obtain pricing concessions or better trade terms. These concessions or terms could reduce the Company’s margins. Further, if the Company is unable to maintain price or trade terms that are acceptable to its trade customers, they could reduce product purchases from the Company and increase product purchases from the Company’s competitors, which would harm the Company’s sales and profitability.

From time to time the Company’s retail customers have reduced inventory levels in managing their working capital requirements. Any reduction in inventory levels by the Company’s retail customers would harm its operating results for the financial periods affected by the reductions. In particular, continued consolidation within the retail industry could potentially reduce inventory levels maintained by the Company’s retail customers, which could adversely impact its results of operations for the financial periods affected by the reductions.

Increases in the prices of certain raw materials, such as chemicals, plastics, latex and packaging materials, or increases in energy costs could significantly impact our profit margins. If price increases were to occur we may not be able to increase the prices of our products to offset these increases. This could harm the Company’s financial condition and results of operations.

A group of five customers accounted for approximately 26% of consolidated net sales in 2003, including a single customer, Wal-Mart, who accounted for 12%. This group accounted for 27% of consolidated net sales in 2002 and 2001.

The loss or substantial decrease in the volume of purchases by Wal-Mart or any of the Company’s other top customers would harm the Company’s sales and profitability.

The Company’s distribution of condoms under the Trojan, and other trademarks is regulated by the U.S. Food and Drug Administration (FDA). Certain of the Company’s condoms contain the spermicide nonoxynol-9 (N-9). The World Health Organization and other interested groups have issued reports suggesting that N-9 should not be used rectally or for multiple daily acts of vaginal intercourse, given the ingredient’s potential to cause irritation to human membranes. The

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Company expects the FDA to issue non-binding draft guidance concerning the labeling of condoms with N-9, although the timing of such draft guidance is uncertain. The Company believes that condoms with N-9 provide an acceptable added means of contraceptive protection and it is cooperating with the FDA concerning the appropriate labeling revisions, if any. However, the Company cannot predict the outcome of the FDA review. While labeling guidance from the FDA is pending, the Company has implemented an interim label statement change cautioning against rectal use and multiple daily acts of vaginal intercourse. The Company also disseminates this cautionary statement on its product web site and in other consumer product vehicles.

In March 2003, two members of the California Assembly introduced a non-binding resolution calling on FDA to ban condoms containing N-9. The proposed resolution was not brought to a vote since legally California could not ban an FDA approved medical device from marketing. Instead, the proposed resolution was announced at a public press release and retailers were asked voluntarily not to stock any condom containing N-9. The Company had previously supplied the Assemblymen and the Assembly Speaker with information explaining why a ban would be inappropriate and outlining the interim labeling revisions and public information efforts the Company has implemented. While the resolution cannot be voted upon and passed and cannot be legally binding, making it public (as was done here) may add to activist pressure on retailers to cease carrying condoms with N-9 and could impair public perception of the product with resultant impairment of operating results of the Company.

If the FDA or state governments take action that prohibit or restrict the use of N-9 in condoms (such as new labeling requirements), the Company could incur further costs from obsolete products, packaging or raw materials and sales of condoms could decline, which, in turn, could affect the operating results of the Company.

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The Company’s headquarters are located in C&D’s global headquarters at 469 North Harrison Street, Princeton, New Jersey. The following are the Company’s principal facilities as of March 11, 2003:

The Company believes that its operating and administrative facilities are adequate and suitable for the conduct of its business. The Company also believes that its production facilities are suitable for current manufacturing requirements. In addition, the facilities possess a capacity sufficient to accommodate the Company’s estimated increases in production requirements over the next several years, based on its current product line.

On January 17, 2002, a petition for appraisal, Cede & Co., Inc. and GAMCO Investors, Inc. v. Medpointe Healthcare Inc., Civil Action No. 19354, was filed in the Court of Chancery of the State of Delaware demanding a determination of the fair value of shares of Medpointe. The action was brought by purported former shareholders of Carter-Wallace in connection with the merger on September 28, 2001 of MCC Acquisition Sub Corporation with and into Carter-Wallace. The merged entity subsequently changed its name to Medpointe. The petitioners seek an appraisal of the fair value of their shares in accordance with Section 262 of the Delaware General Corporation Law. The matter was heard on March 10 and 11, 2003, at which time the petitioners purportedly held approximately 2.3 million shares of Medpointe. An additional post-trial hearing was held on January 20, 2004 to address the valuation of the Company. No decision has yet been rendered by the court.

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Medpointe and certain former Carter-Wallace shareholders are party to an indemnification agreement pursuant to which such shareholders will be required to indemnify Medpointe from a portion of the damages, if any, suffered by Medpointe in relation to the exercise of appraisal rights by other former Carter-Wallace shareholders in the merger. Pursuant to the agreement, the shareholders have agreed to indemnify Medpointe for 40% of any Appraisal Damages (defined as the recovery greater than the per share merger price times the number of shares in the appraisal class) suffered by Medpointe in relation to the merger; provided that if the total amount of Appraisal Damages exceeds $33.3 million, then the indemnifying stockholders will indemnify Medpointe for 100% of any damages suffered in excess of that amount. The Company, in turn, is party to an agreement with Medpointe pursuant to which it has agreed to indemnify Medpointe and certain related parties against 60% of any Appraisal Damages for which Medpointe remains liable. The maximum liability to the Company pursuant to the indemnification agreement and prior to any indemnification from C&D, as described in the following sentence is $12 million. C&D is party to an agreement with the Company pursuant to which it has agreed to indemnify the Company for 17.4% of any Appraisal Damages, or up to a maximum of $2.1 million for which the Company becomes liable.

The Company, Medpointe and the indemnifying shareholders believe that the consideration offered in the merger was fair to the former Carter-Wallace shareholders and have vigorously defended the petitioner’s claim. However, the Company cannot predict the outcome of the proceedings.

On March 27, 2003, GAMCO Investors, Inc. filed another complaint in the New York Supreme Court seeking damages from MedPointe Healthcare Inc., the former directors of Carter-Wallace, and one of the former shareholders of Carter-Wallace. The complaint alleges breaches of fiduciary duty in connection with certain employment agreements with former Carter-Wallace executives, the sale of Carter Wallace’s consumer products business to the Company (some of the products acquired by the Company were subsequently sold by the Company to C&D) and the merger of MCC Acquisition Sub Corporation with and into Carter-Wallace. The complaint seeks monetary damages and equitable relief, including among other things, invalidation of the transactions. The defendants have moved to dismiss the complaint. The Company has not been named as a defendant in this action and believes it has no liability.

The Company’s distribution of condoms under the Trojan and other trademarks is regulated by the U.S. Food and Drug Administration (FDA). Certain of the Company’s condoms and similar condoms sold by the Company’s major competitors, contain the spermicide nonoxynol-9 (N-9). The World Health Organization and other interested groups have issued reports suggesting that N-9 should not be used rectally or for multiple daily acts of vaginal intercourse, given the ingredient’s potential to cause irritation to human membranes. The Company expects the FDA to issue non-binding draft guidance concerning the labeling of condoms with N-9, although the timing of such draft guidance is uncertain. The Company believes that condoms with N-9 provide an acceptable added means of contraceptive protection and is cooperating with the FDA concerning the appropriate labeling revisions, if any. However, the Company cannot predict the outcome of the FDA review. While awaiting further FDA guidance, the Company has implemented interim labeling revisions that caution against rectal use and more-than-once-a-day vaginal use of N-9-containing condoms, and has launched a public information campaign to communicate these messages to the affected communities. If the FDA or state governments promulgate rules which prohibit or restrict the use of N-9 in condoms (such as new labeling requirements), the financial condition and operating results of the Company could suffer.

In March 2003, two members of the California Assembly introduced a non-binding resolution calling on FDA to ban condoms containing N-9. The proposed resolution was not brought to a vote since legally California could not ban an FDA approved medical device from marketing. Instead, the proposed resolution was announced at a public press release and retailers were asked voluntarily not to stock any condom containing N-9. The Company had previously supplied the Assemblymen and the Assembly Speaker with information explaining why a ban would be inappropriate and outlining the interim labeling revisions and public information efforts the Company has implemented. While the resolution cannot be voted upon and passed and cannot be legally binding, making it public (as was done here) could impair public perception of the product with resultant impairment of operating results of the Company.

On August 26, 2002, the Company filed suit against Pfizer in the District Court of New Jersey to redress infringement of two Company patents directed to pregnancy diagnostic devices. The suit claimed that Pfizer’s “ept” product infringed these patents. On June 23, 2003, the Company agreed to a settlement with Pfizer resulting in a gain after attorney’s fees and costs of $12.7 million. As part of the settlement the Company granted Pfizer a fully paid-up non-exclusive worldwide license to practice and use the Company’s pregnancy diagnostic devices’ patents until July 1, 2004.

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.

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None.

PART II

At March 11, 2004, the Company had 10,000 membership interests outstanding and held by C&D (5,000 interests) and Kelso (5,000 interests). There is no established trading market for the membership interests of the Company. During 2003, the Company did not declare any dividends.

The Company believes that the foregoing issuances of equity securities to C&D and Kelso did not involve a public offering or sale of securities and were exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to the exemption from registration afforded by Section 4(2) of the Securities Act. No underwriters, brokers or finders were involved in these transactions.

ARMKEL, LLC AND SUBSIDIARIES

FIVE-YEAR FINANCIAL REVIEW (2)

(in millions)