Edgar Filing: PLAYTEX PRODUCTS INC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 29, 2001

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NO. 1-12620

PLAYTEX PRODUCTS, INC.
(Exact name of registrant as specified in its charter)

Delaware 51-0312772
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

300 Nyala Farms Road
Westport, Connecticut 06880
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(Address of principal executive offices)

Telephone Number: (203) 341-4000
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(Registrant's telephone number, including area code)

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

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
-------------------------------------------- -----------------------------
Common Stock, par value $.01 per share New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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FORM 10-K
(FACING SHEET CONTINUATION)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

Yes |X| No |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K [X].

The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 25, 2002 was $304,963,243 (based on the closing sale
price of $10.56 on March 25, 2002 as reported by the New York Stock
Exchange-Composite Transactions). For this computation, the registrant has
excluded the market value of all shares of its Common Stock reported as
beneficially owned by named executive officers and directors of the registrant;
such exclusion shall not be deemed to constitute an admission that any such
person is an "affiliate" of the registrant.

At March 25, 2002, 61,061,165 shares of Playtex Products, Inc. common
stock, par value $.01 per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

DOCUMENT PART OF FORM 10-K
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Portions of our definitive Proxy Statement (the "Proxy
Statement") for our 2002 Annual Meeting of Stockholders,
which will be filed with the Securities and Exchange
Commission within 120 days after the end of our fiscal
year ended December 29, 2001 pursuant to Regulation
14A..................................................... III

TABLE OF CONTENTS

PAGE
----

PART I

Item 1. Business......................................................... 5
Risk Factors..................................................... 17
Item 2. Properties....................................................... 21
Item 3. Legal Proceedings................................................ 21
Item 4. Submission of Matters to a Vote of Security Holders.............. 22

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters....................................................... 23
Item 6. Selected Financial Data.......................................... 23
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................... 23
Item 7A. Quantitative and Qualitative Disclosure about Market Risk........ 23
Item 8. Financial Statements and Supplementary Data...................... 24
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.......................................... 24

PART III

Item 10. Directors and Executive Officers of the Registrant............... 24
Item 11. Executive Compensation........................................... 24
Item 12. Security Ownership of Certain Beneficial Owners and Management... 24
Item 13. Certain Relationships and Related Transactions................... 24

PART IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K... 25

Signatures....................................................... 27

PART I

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

This document includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future results. When we use words in this document such as "anticipates,"
"intends," "plans," "believes," "estimates," "expects," and similar expressions
we do so to identify forward-looking statements. Our actual results may differ
materially from those anticipated in these forward-looking statements. These
forward-looking statements are affected by risks, uncertainties, and assumptions
that we make, including, among other things, the Risk Factors that are listed in
Part 1, Item I. of this Annual Report on Form 10-K, and:

o price and product changes, o impact of weather
o promotional activity by conditions, especially on
competitors, Sun Care product sales,
o the loss or bankruptcy of a o our level of debt,
significant customer, o interest rate fluctuations,
o capacity limitations, o future cash flows,
o the difficulties of o dependence on key employees,
integrating acquisitions, and
o raw material and o highly competitive nature of
manufacturing costs, consumer products business.
o adverse publicity and
product liability claims,

You should keep in mind that any forward-looking statement made by us in
this document, or elsewhere, speaks only as of the date on which we make it. New
risks and uncertainties come up from time to time, and it's impossible for us to
predict these events or how they may affect us. In light of these risks and
uncertainties, you should keep in mind that any forward-looking statements made
in this report or elsewhere might not occur. In addition, the preparation of
financial statements in accordance with generally accepted accounting principles
requires us to make estimates and assumptions. These estimates and assumptions
affect:

o the reported amounts and timing of revenue and expenses,
o the reported amounts and classification of assets and liabilities,
and
o the disclosure of contingent liabilities.

Actual results could vary from our estimates and assumptions. These estimates
and assumptions are based on historical results, assumptions that we make as
well as assumptions by third parties. The level of reserves for Sun Care product
returns, bad debts and advertising and promotional costs are three areas of
which you should be aware (see Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations-Critical Accounting Policies of
this Annual Report on Form 10-K).

TRADEMARKS

We have proprietary rights to a number of trademarks important to our
business, such as: ACTIVE SPORT, BABY MAGIC, BANANA BOAT, BINACA, BLASTERS, BIG
SIPSTER, COOL COLORZ, COOLSTRAW, DIAPER GENIE, DENTAX, DROP-INS, FAST BLAST,
GENTLE GLIDE, GET ON THE BOAT, GRIPSTER, HANDSAVER, HEAVY TRAFFIC, INSULATOR,
LIPPOPS, MOST LIKE MOTHER, MR. BUBBLE, NATURAL ACTION, OGILVIE, POWER SHOT,
PRECISELY RIGHT, QUICKSTRAW, QUIK BLOK, SAFE'N SURE, SILK GLIDE, SIPEASE,
SLIMFITS, SOOTH-A-CAINE, TUB MATE, TEK, TUSSY, VENTAIRE, VITASKIN, and WET ONES.
We also own a royalty free license in perpetuity to the PLAYTEX and LIVING
trademarks, and to the WOOLITE trademark for rug and upholstery cleaning
products in the United States and Canada.

consumption data from Walmart. We do not believe there were any meaningful
changes in market share trends or comparatives as a result of the elimination of
data from Walmart.

ITEM 1. BUSINESS

A. HISTORY

Our business was founded in 1932 under the name International Latex
Company and operated for many years prior to 1986 under the name International
Playtex, Inc. In the mid-1950's, using latex technology developed for the
manufacture of girdles, we began to market household gloves. This was the first
of many products to constitute our consumer products division. Through the
marketing of gloves, the addition of disposable infant feeding products in the
mid-1960's and the acquisition in 1967 and the expansion of our tampon
manufacturing business, we established a major presence in the drug store,
supermarket and mass merchandise channels of distribution.

In 1986, we were taken private in a management led leveraged buyout and,
in 1988, we were reorganized by certain management investors and others. In the
reorganization, Playtex Apparel, Inc. ("Apparel"), which manufactures women's
intimate apparel, was spun-off to the management of that business. Today, we no
longer have any corporate relationship with Apparel, except that we each own 50%
of the stock of Playtex Marketing Corporation ("Playtex Marketing"), which owns
the PLAYTEX and LIVING trademarks. Playtex Marketing licenses the PLAYTEX and
LIVING trademarks to us on a royalty-free perpetual basis. In 1994, we completed
an initial public offering of our common stock. Our common stock trades on the
New York Stock Exchange under the symbol "PYX".

In 1995, a group of investors associated with Haas Wheat & Partners
Incorporated ("Haas Wheat") purchased 20 million shares of our common stock at a
price of $9 per share. The Haas Wheat shares represented approximately 40% of
our outstanding common stock at the time of the investment and individuals
associated with Haas Wheat were elected by our stockholders as a simple majority
of our Board of Directors.

Since 1992, we have acquired a number of leading consumer products brands
and companies, including:

o In December 1992, we acquired 22% of the company that made BANANA
BOAT sun and skin care products. Subsequently, in October 1995, we
acquired the remaining 78% of the company, giving us 100% ownership
of this business. This brand has grown to become the number two
brand in the sun care category.

o In February 1995, we acquired the WOOLITE rug and upholstery
cleaning products business, the number two brand in this category.
We purchased the rights for the United States and Canada.

o In January 1998, we acquired Personal Care Holdings, Inc. ("PCH"),
Carewell Industries, Inc. ("Carewell"), and the BINKY pacifier
business ("BINKY"). We added, as a result of these acquisitions, a
number of leading consumer product brands, including:

o WET ONES-pre-moistened towelettes, the number one brand in the
hands and face towelettes category,

o OGILVIE-home permanent products, the number one brand in the
home permanents category,

o BINACA-breath freshener products, the number one brand in the
spray and drops breath fresheners category,

o MR. BUBBLE-children's bubble bath products, the number two
brand in the bath additives category,

o CHUBS-baby wipes,

o DIAPARENE-infant care products,

o TUSSY-deodorants,

o DOROTHY GRAY-skin care products,

o BETTER OFF-depilatories,

o DENTAX-oral care products, and

o BINKY-pacifiers.

o In January 1999, we acquired the DIAPER GENIE business. DIAPER
GENIE is the market leading diaper disposal system.

o In June 1999, we acquired the BABY MAGIC brand of infant
toiletries. BABY MAGIC is the number two brand in this
category. We purchased the rights for the United States and
Canada.

B. EXECUTIVE OFFICERS OF REGISTRANT

Listed below are our executive officers and a short description of their
prior work experiences. There are no family relationships or arrangements
between any of them pursuant to which they were hired or promoted by the
Company. Ages and positions are shown as of March 15, 2002.

NAME AGE POSITION
---- --- --------

Michael R. Gallagher 56 Chief Executive Officer and Director
Glenn A. Forbes 51 Executive Vice President, Chief Financial Officer and Director
Kevin M. Dunn 49 President, Consumer Products Division
John D. Leahy 48 President, International/Corporate Sales Division
Richard G. Powers 56 President, Personal Products Division
James S. Cook 50 Senior Vice President, Operations
Paul A. Siracusa, Ph.D. 45 Senior Vice President, Research and Development
Paul E. Yestrumskas 50 Vice President, General Counsel and Secretary

MICHAEL R. GALLAGHER has been Chief Executive Officer and a Director since
1995. Prior to joining the Company, Mr. Gallagher was Chief Executive Officer of
North America for Reckitt & Colman PLC ("R&C") (a consumer products company)
from 1994 to 1995. Mr. Gallagher was President and Chief Executive Officer of
Eastman Kodak's L&F Products subsidiary from 1988 until the subsidiary was sold
to R&C in 1994. From 1984 to 1988, Mr. Gallagher held various executive
positions with the Lehn & Fink Group of Sterling Drug. From 1982 to 1984, he was
Corporate Vice President and General Manager of the Household Products Division
of the Clorox Company ("Clorox"). Prior to that, Mr. Gallagher had various
marketing and general management assignments with Clorox and with the Procter &
Gamble Company ("P&G"). Presently he serves as a director of Allergan, Inc., AMN
Healthcare Services, Inc., the Association of Sales and Marketing Companies, the
Grocery Manufacturers Association, and the Haas School of Business UC Berkley.

GLENN A. FORBES has been Executive Vice President, Chief Financial Officer
and a Director since 2000. He has served the Company for the past 30 years in
various finance and accounting positions, including Vice President, Finance from
1988 to 2000.

KEVIN M. DUNN has been President, Consumer Products Division since 2000.
Prior to joining us, Mr. Dunn was President of R&C's North American Household
Products Division from 1998 to 2000 and President, Food Products Division -
North America from 1994 to 1997. He also held various executive positions with
Eastman Kodak's L&F Products subsidiary from 1988 until the subsidiary was sold
to R&C in 1994.

JOHN D. LEAHY has been president of the International/Corporate Sales
Division since 2000 and Senior Vice President, International/Corporate Sales
from 1998 to 2000. He was Vice President of International/Corporate Sales from
1996 to 1998 and our Vice President of Sales from 1993 to 1996. From 1982 to
1993, Mr. Leahy held various sales positions with us.

RICHARD G. POWERS has been President, Personal Products Division since
1996. Prior to joining us, Mr. Powers was President of R&C's North American
Personal Products Division. From 1992 to 1995, he was Vice President of Sales
for R&C, and from 1990 to 1992 he was Vice President of Marketing for R&C's
Durkee-French Foods Division. From 1973 to 1990, Mr. Powers held various
positions in marketing and general management at General Foods Corp.

JAMES S. COOK has been Senior Vice President, Operations since 1991. From
1990 to 1991, he was our Vice President of Dover Operations. From 1988 to 1990,
he was our Vice President of Distribution, Logistics & Management Information
Systems. From 1982 to 1988, Mr. Cook held various senior level positions in
manufacturing and distribution with us. From 1974 to 1982, he held various
manufacturing and engineering positions at P&G.

PAUL A. SIRACUSA, PH.D. has been Senior Vice President, Research and
Development since 2000. From 1997 to 2000, he was Senior Vice President Research
and Development for R&C. From 1995 to 1997, he was Divisional Vice President of
Research & Development, North America for R&C. From 1992 to 1995, he was
Director of Technology for the Lehn & Fink Group of Sterling Drug. Prior to
that, he held various Research and Development positions with Henkel
Corporation, International Flavors and Fragrances, and Union Carbide
Corporation.

PAUL E. YESTRUMSKAS has been Vice President, General Counsel and Secretary
since December 1995. Prior to joining us, Mr. Yestrumskas was Senior Counsel of
Rhone-Poulenc, Inc. from 1991 to 1995. Prior to 1991, Mr. Yestrumskas held
various positions in legal and government relations at Timex, Hubbell, Inc. and
General Motors.

C. GENERAL

We are a leading manufacturer and marketer of a diversified portfolio of
well-recognized branded consumer and personal products, including:

o PLAYTEX Infant Care o WOOLITE rug and upholstery
products, cleaning products,
o PLAYTEX DIAPER GENIE, o PLAYTEX Gloves,
o WET ONES pre-moistened o OGILVIE home permanent
towelettes, products, and
o PLAYTEX Feminine Care o BINACA breath freshener
products, products.
o BANANA BOAT Sun Care
products,

In fiscal 2001, approximately 95% of our sales came from products in which
we held the number one or two market share position. Products in which we held
the number one market share position for fiscal 2001 and their dollar market
share in their respective categories were:

o DIAPER GENIE diaper pails o PLAYTEX cups and mealtime
(93.2%), products (52.7%),
o PLAYTEX disposable liners o BINACA breath freshener
(84.7%), products (47.6%), and
o OGILVIE home permanent o PLAYTEX gloves (32.8%).
products (70.2%),
o WET ONES pre-moistened
towelettes (60.3%),

Products in which we held the number two market share position for fiscal 2001
and their dollar market share in their respective categories were:

o PLAYTEX tampons (29.9%), o WOOLITE rug and upholstery
o MR. BUBBLE children's bubble cleaning products (20.5%),
bath (22.7%), and
o BANANA BOAT sun care o BABY MAGIC baby toiletries
products (21.1%), (8.7%).

Our net sales for each of the past three fiscal years 2001, 2000, and 1999
are provided based on our divisional structure. The results for 1999 include the
results of the DIAPER GENIE and BABY MAGIC businesses since the date of their
acquisition by us. We acquired the DIAPER GENIE business on January 29, 1999 and
the BABY MAGIC business on June 30, 1999 (dollars in millions):

TWELVE MONTHS ENDED
------------------------------------------
DEC. 29, DEC. 30, DEC. 25,
PRODUCT LINE 2001 PRINCIPAL BRAND NAMES 2001 2000 1999
------------ ----------------------------------- --------- --------- ---------

Personal Products Division:
Infant Care................................. PLAYTEX, WET ONES, MR. BUBBLE,
DIAPER GENIE, and BABY MAGIC $ 260.5 $ 272.2 $ 255.1
Feminine Care............................... PLAYTEX 218.2 214.3 201.8
-------- ------- --------
Total Personal Products Division.......... 478.7 486.5 456.9
Consumer Products Division:
Sun Care.................................... BANANA BOAT 107.3 110.3 96.9
Household Products.......................... PLAYTEX, WOOLITE 55.5 52.2 51.0
Personal Grooming........................... OGILVIE, BINACA, TUSSY, TEK,
and DENTAX 42.9 43.1 47.6
-------- ------- --------
Total Consumer Products Division.......... 205.7 205.6 195.5
International/Corporate Sales Division......... 145.6 139.2 135.3
-------- ------- --------
Total .................................. $ 830.0 $ 831.3 $ 787.7
======== ======= ========

D. BUSINESS SEGMENTS AND PRODUCT LINES

We are organized in three divisions, which allows us to focus more
effectively on individual product lines, category management initiatives,
certain specialty classes of trade, and the efficient integration of acquired
brands. Our two largest divisions, the Personal Products Division and the
Consumer Products Division, constituted approximately 82% of our consolidated
net sales in fiscal 2001 compared to 83% in fiscal 2000 and fiscal 1999.

PERSONAL PRODUCTS DIVISION--The Personal Products Division accounted for
approximately 58% of our consolidated net sales for our last three fiscal years.
This Division includes Infant Care and Feminine Care products sold in the United
States primarily to mass merchandisers, grocery and drug classes of trade. The
Infant Care product category includes:

INFANT FEEDING PRODUCTS OTHER INFANT CARE PRODUCTS
----------------------- --------------------------

o PLAYTEX disposable nurser o DIAPER GENIE diaper disposal
system, system,
o PLAYTEX cups and mealtime o WET ONES hand and face
products, towelettes,
o PLAYTEX reusable hard o BABY MAGIC baby toiletries,
bottles, o BABY MAGIC/CHUBS baby wipes,
o PLAYTEX pacifiers, and
o MR. BUBBLE children's bubble
bath.

The Feminine Care product category includes a wide range of plastic and
cardboard applicator tampons marketed under such brand names as PLAYTEX: GENTLE
GLIDE, SILK GLIDE and SLIMFITS. In addition, the Feminine Care product category
includes a personal cleansing wipe for use in feminine hygiene. This product was
introduced in the first quarter of 2001.

INFANT CARE--Infant Care accounted for approximately 54% of Personal
Products net sales in fiscal 2001 compared to 56% in fiscal 2000 and fiscal
1999.

Our largest Infant Care business is infant feeding products, in which we
held a market leading 39% dollar market share in 2001. We are particularly
strong in both the disposable feeding and the infant cup categories with 2001
dollar market shares of 85% and 53%, respectively. We are also strong in the
diaper pail category with our 93% dollar market share leading DIAPER GENIE
brand. Our MR. BUBBLE brand held a 23% dollar market share of the bath additives
category and is gaining on the market share leader. BABY MAGIC held a 9% dollar
market share of the infant toiletries category and is strong in the bath and
lotions segment with 16% and 19% dollar market shares of those segments. In
pre-moistened towelettes, our WET ONES brand held a 60% dollar market share of
the hand and face segment, while our baby wipe brand held a 3% dollar market
share in 2001.

The PLAYTEX disposable feeding system, introduced in 1960, was the first
disposable system on the market. Since that time, we have provided innovative
product improvements as a healthy alternative to breast feeding. In 1996, we
introduced a new disposable liner for use with our disposable feeding system,
DROP-INS. Since its introduction, DROP-INS has steadily increased its market
share in the disposable feeding category and represented 40% of the category in
2001 compared to 35% in 2000. In disposable liners, the largest component of the
category, DROP-INS represented 62% of all disposable liners used by consumers
compared to 56% in 2000.

In 1994, we introduced the first Spill-Proof cup. Sales of our popular
Spill-Proof cups have increased our dollar market share in the infant cup
category to 53% in 2001 from 29% in 1994. Prior to our introduction of the
Spill-Proof cup, there was really no distinct market segment for children's
cups. Over the last few years we expanded our cup offerings. In 1996, we
introduced the QUICKSTRAW cup, and in 1997 introduced an insulated version of
the QUICKSTRAW cup, the COOLSTRAW cup. In 1999, we added a six-color version of
our popular Spill-Proof cup and the BIG SIPSTER, a cup targeted at older
children. In late 2000, we extended our line of Spill-Proof cups with THE
GRIPSTER, made to fit small hands, and the DRINKUP, a cup for older children
ready to make the transition from infant cups to regular drinking. In 2002, we
will begin shipping the PLAYTEX INSULATOR, which is an insulated Spill-Proof cup
designed to keep the contents of the cup cooler and fresher longer than
non-insulated cups. As the market share leader, we continue to explore
innovative opportunities in the cup category to drive category growth. The cups
category, based on total dollar volume of cups purchased by consumers, grew 4%
in 2001 and our retail consumption decreased 8%. The cups category has become
especially price sensitive, with an influx of several lower priced Spill-Proof
cup offerings from competitors.

In 1999, we acquired the DIAPER GENIE business and the BABY MAGIC brand,
which added two premium brands to our Infant Care category. DIAPER GENIE leads
the diaper disposal market with a 93% dollar market share in 2001. The DIAPER
GENIE business is comprised of two segments:

o DIAPER GENIE diaper pail unit, and
o DIAPER GENIE liner refills, the largest component of the business.

The diaper pail unit individually seals diapers in an odor-proof,
germ-proof chain. The unit uses our proprietary refill liners. A supply of
liners lasts approximately one month. In 2001, we improved both the diaper pail
unit and introduced a new liner. We improved the cutter cap system, which makes
the unit easier to use and we introduced a toddler film refill to the market for
older age children, which should extend the usage period. A large percentage of
the diaper pail units are given to expectant mothers as gifts. This provides a
unique opportunity to begin cross-marketing our entire line of infant care
products before the baby arrives.

BABY MAGIC occupies the number two position among the branded products in
the U.S. baby toiletries category (defined as lotions, shampoos, powders, bath
products, oils and gift packs), with a 9% dollar market share in 2001. BABY
MAGIC has a strong position in the bath and lotion segments. Our 2001 dollar
market share is down approximately 2 percentage points from 2000 as a result of
new products introduced into these segments by the market share leader. To
address the competitive threat, we introduced a number of new products in the
fourth quarter of 2001, including a foaming hair and body wash and foaming
shampoo. In addition, we revised our packaging graphics and product-dispensing
applications in order to enhance consumer awareness and improve ease of use.

We entered the pre-moistened towelette business in early 1998 with the
acquisition of WET ONES, the market share leader in the hands and face segment
of the market with a 60% dollar market share in 2001. WET ONES are used by
parents in applications other than diaper changing, such as cleaning up after
meals or traveling away from home. This category experienced 34% retail
consumption growth in 2001 as competitors entered the category and invested
heavily in advertising and promotion to generate trial of their product. To
capitalize on the recent consumer attention in pre-moistened towelettes, we are
expanding our offerings. We introduced ULTRA WET ONES early in 2001 and in the
first quarter of 2002 we started shipping WET ONES FLUSHABLES a new product for
use in the bathroom.

We also entered the children's bubble bath and baby wipe categories in
early 1998 with the acquisition of the MR. BUBBLE, CHUBS and DIAPARENE brands.
Our MR. BUBBLE children's bubble bath brand is a widely recognized brand name
among consumers and holds a strong number two position in the bath additives
category with a 23% dollar market share in 2001. Our dollar market share in the
baby wipes category was 2.5% in 2001, down 0.5 percentage point versus 2000. In
fiscal 2000, we decided to market our domestic baby wipes under the BABY MAGIC
name as market research indicated the BABY MAGIC trade name was more
recognizable to consumers. We continue to market CHUBS internationally.

We are committed to offering the best and most innovative infant care
products to the market. In fiscal 2000, some of our internal testing indicated
that latex used in the manufacture of two of our latex pacifier products may
cause the pacifier nipple to age at an accelerated rate. Even though the
pacifiers passed all Federal test requirements and there were no reported
incidents requiring medical attention, we voluntarily recalled the product. This
negatively impacted our net sales and dollar market shares in 2001 and 2000. We
re-launched a new latex pacifier in the second quarter of 2001.

Our carefully designed message of quality, health and convenience for our
infant care products is delivered in a variety of ways including a professional
sampling and advertising program targeting pediatricians and pediatric nurses.
Programs directed to new mothers include distribution of millions of samples and
coupons prenatally via childbirth instructors and postnatally in hospitals and
at home.

FEMININE CARE--PLAYTEX tampons accounted for approximately 46% of Personal
Products net sales in fiscal 2001 compared to 44% in fiscal 2000 and fiscal
1999. For over 20 years, our tampons have been the second largest selling tampon
brand in the United States, and the leader in the plastic applicator and
deodorant segments.

We have two tampon lines in the Feminine Care category: plastic applicator
tampons and cardboard applicator tampons. In addition, we introduced a new
personal cleansing wipe for use in feminine hygiene early in 2001.

The plastic applicator tampon business represented approximately 87% of
our branded domestic tampon business in 2001 and is comprised of two primary
product offerings:

o GENTLE GLIDE, our original plastic applicator tampon, and
o SLIMFITS, marketed to first-time tampon users.

The SILK GLIDE brand is our line of cardboard applicator tampons. This
product line features a rounded-tip cardboard applicator and a unique surface
coating that provides the consumer with a quality product in the cardboard
applicator segment of the tampon market.

We introduced PLAYTEX Personal Cleansing Cloths in the first quarter of
2001. The cloths are soft and smooth pre-moistened wipes that are formulated
with vitamin E and aloe to soothe as they clean and refresh. They are available
in a discrete dispenser, a resealable refill, and a convenient travel pack.

Our long-term strategy in the Feminine Care category has centered on
product innovation, a successful consumer-driven brand-building marketing
strategy and category building initiatives. Since the end of 1996, we introduced
three innovative tampon products to the market.

We introduced SLIMFITS to the category in 1996. SLIMFITS were developed to
appeal to a key segment of the tampon market: young teens. SLIMFITS have a
softer and more narrow plastic applicator providing for greater comfort. We

believe that SLIMFITS will continue to build our business by encouraging young
women to use tampons rather than pads at an earlier age, and by developing brand
loyalty for our tampons at a time when lifelong preferences are being formed.

We introduced GENTLE GLIDE Odor Absorbing tampons in 1997 and SILK GLIDE
Odor Absorbing tampons in 1998. These tampons include an all natural material
that absorbs odors without the use of a fragrance or deodorant. These products
are designed to appeal to a large group of women who are concerned with odor
protection yet reluctant to use a fragranced tampon.

Our consumer marketing strategy uses traditional advertising such as
television, radio and print to build consumer awareness of the PLAYTEX feminine
care franchise. We have also reached out to consumers through new means such as
the internet. Consumers can learn about our feminine care offerings through one
of our web sites WWW.PLAYTEXTAMPONS.COM . This site includes an interactive
section for young teens ("AJ's World") where they can hear straight talk about
their menstrual cycle in an informative and casual way. Our consumer marketing
strategy centers around attracting young first time users, converting feminine
protection pad users to tampon users or dual users (i.e. women who use pads and
tampons), and general education concerning tampon usage.

We believe these strategies will benefit the tampon category and result in
higher sales for our Feminine Care business.

CONSUMER PRODUCTS DIVISION--The Consumer Products Division accounted for
approximately 25% of our consolidated net sales for our last three fiscal years.
This division includes Sun Care, Household Products, and Personal Grooming
products sold in the United States, primarily to mass merchandisers, grocery and
drug classes of trade. The Sun Care business consists of an extensive line of
sun care products marketed under the BANANA BOAT trade name.

SUN CARE--Our Sun Care product lines accounted for approximately 52% of
Consumer Products net sales in fiscal 2001, 54% in fiscal 2000, and 50% in
fiscal 1999. Our offerings consist of an extensive line of sun care products
designed for specific uses, such as sun protection with sun protection factors
("SPFs") from 4 to 50, waterproof and sweat proof formulas and infant and
children's products. We also sell a variety of BANANA BOAT skin care products,
including sunless tanning lotion and after-sun moisturizers containing
additional ingredients such as vitamin E and aloe vera. In 2002, we will extend
our BANANA BOAT franchise into the indoor tanning market. Our Sun Care products
are a strong number two in the U.S. sun care category with a 21% dollar market
share in 2001.

Retail consumption of our Sun Care products grew 8.8% in 2001, slightly
below the Sun Care category, which grew 9.2% in dollar terms versus 2000. The
high growth in the category was driven by the "sunless" and indoor tanning
segments, which grew more rapidly early in the Sun Care season due to weather.
We did not have any indoor tanning products, at this time, and while we did have
sunless products, they had not been an area of focus for our business. We
believe the growth prospects for the sun care market are favorable as a result
of increasing consumer awareness of the need for sunscreen protection and
consumers' desire for sun care products targeted towards their specific age and
needs.

For the 2002 season, we believe we have an exceptionally strong array of
new products including the highest SPF available in a spray for the general
protection market, the kids market and the sport market. For the 2002 season, we
are introducing a new BANANA BOAT line, VITASKIN Advanced Sun Protection.
VITASKIN combines the benefits of sun protection with a quality skin care
product designed for everyday use. In addition, we are entering the indoor
tanning segment for the first time and for the after sun market, we are
introducing a new clear aloe gel and a new Sooth-A-Caine spray gel with
lidocaine to provide fast acting, long lasting burn relief.

We focus on a number of different distribution outlets to deliver our Sun
Care products to consumers including mass merchandisers, grocery stores, drug
stores, convenience stores, and specialty stores. We also use direct sales
people to call on key outlets in the southern and coastal areas of the country.
They keep BANANA BOAT inventory in their vans, which ensures product
availability and selection in the key locations during the prime sun care buying
season. They manage product inventory at the store level, invoice customers and
transmit key marketing data to us through a network of hand-held computers. We
believe this direct sales approach provides us with a competitive advantage over
our smaller competitors.

Industry convention and the seasonal nature of the sun care business
require that manufacturers of Sun Care products provide retailers with the
opportunity to return unsold products at the end of the season. To better
reflect the impact of potential returns, we provide for estimated returns in our
reported operating results as sales are made throughout the year. The level of
returns may fluctuate from our estimates due to several factors including
weather conditions, customer inventory levels, and competitive conditions (see
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations-Critical Accounting Policies of this Annual Report on Form 10-K).

HOUSEHOLD PRODUCTS--We compete in two product lines of the Household
Products category: rug and upholstery cleaning products and household gloves.
These products accounted for approximately 27% of Consumer Products net sales in
fiscal 2001, 25% in fiscal 2000, and 26% in fiscal 1999. Household Products net
sales in fiscal 2001 were aided by market share gains and consumption growth in
our WOOLITE rug and upholstery cleaning business.

WOOLITE is the number two rug and upholstery cleaning product in the
United States with a 21% dollar market share in 2001. Since acquiring the brand
in 1995, we have introduced a number of new products and product enhancements,
including:

o an improved pet stain spray o a spot and stain wipe
in 1996, product in early 2001 and
o a new foam carpet cleaner in o INSTANT POWER SHOT a deep
early 1997, penetrating carpet cleaner
introduced in late 2001.

PLAYTEX gloves have held the number one market share position since we
introduced the first household latex glove in the U.S. in 1954. We believe our
nationally recognized brand name, based upon our reputation for nearly 50 years
of superior quality, durability and protection, provides a strong competitive
advantage in this category.

PERSONAL GROOMING--Personal Grooming contributed approximately 21% of
Consumer Products net sales in fiscal 2001 and 2000, and 24% in fiscal 1999. Our
Personal Grooming portfolio consists of:

o OGILVIE at-home permanents, o DOROTHY GRAY skin care
o BINACA breath spray and drops, products,
o DENTAX oral care products, o TUSSY deodorants,
o TEK toothbrushes, o BETTER OFF depilatories, and
o JHIRMACK hair care products
(through May 12, 1999).

On May 12, 1999, we sold the U.S. JHIRMACK hair care products business to a
third party.

Our OGILVIE brand is the market leader of the at-home permanents and
straighteners category, with a 70% dollar market share in 2001. Retail
consumption of at-home permanent products has been declining due to the tendency
of consumers to get their hair permed in professional beauty salons. Our
strategy is to grow our market leadership position by repositioning the brand to
younger consumers and, as category leader to positively impact the growth of the
category as a whole. Since our acquisition of the OGILVIE brand we have
successfully launched OGILVIE Straightener. OGILVIE Straightener removes the
curl from permed hair, controls the curl from naturally curly hair, and delivers
smooth texture to hair. This product is targeted to younger consumers.

Our BINACA brand of breath fresheners is also a well known brand. It is
the leader in the spray & drops segment of the breath fresheners market with a
48% dollar market share in 2001. Our research indicates that BINACA has the
highest brand awareness among breath freshener users. Since our acquisition of
BINACA in January 1998, we have expanded front-end store placements and launched
new products. In 1999, we launched FAST BLAST a non-aerosol spray product and in
2001 we developed BINACA POWER BLASTS a sugar free mint product. We believe
these initiatives resulted in improved dollar market share for BINACA, up two
percentage points in 2001.

We also compete in the value-priced end of the toothbrush business with
our TEK and DENTAX brands of toothbrushes and in certain skin care categories
with our TUSSY deodorants, BETTER OFF depilatories, and DOROTHY GRAY skin care
products.

INTERNATIONAL/CORPORATE SALES DIVISION--The International/Corporate Sales
Division constituted approximately 17% of our consolidated net sales in our last
three fiscal years. The International/Corporate Sales Division includes:

o Sales to specialty classes o export sales,
of trade in the United o sales in Puerto Rico,
States including wholesale o results from our Canadian and
clubs, military, convenience Australian subsidiaries,
stores, specialty stores o and sales of private label
and telemarketing, tampons.

The International/Corporate Sales Division sells the same products as are
available to our U.S. customers. Sales to specialty classes of trade represented
50% of the total division's net sales in fiscal 2001, 49% in fiscal 2000, and
48% in fiscal 1999.

E. MARKETING

We allocate a significant portion of our revenues to the advertising and
promotion of our products. Our advertising and promotion expenditures for the
past three years were (in thousands):

TWELVE MONTHS ENDED
---------------------------------------------
DEC. 29, DEC. 30, DEC. 25,
2001 2000 1999
---------- ---------- ----------

Total advertising and promotion............... $ 189,362 $ 186,596 $ 168,878
As a % of net sales........................ 22.8% 22.4% 21.4%

These expenditures are primarily for television, radio and print
advertising and production as well as consumer and trade incentives such as
coupons and other price promotional activity. We believe these expenditures
support our brand building activities and are an investment in the long-term
longevity of our brands.

As a result of two new accounting rules, which become effective for us in
the first quarter of 2002, we will restate certain advertising, promotional and
cooperative spending costs (see Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations-Recently Issued Accounting
Standards of this Annual Report on Form 10-K). These accounting rule changes
address the recognition, measurement, and income statement classification for
certain advertising, promotional and cooperative spending costs. These rule
changes will require restatement of our net sales and certain advertising and
promotion expenses and will reduce both our net sales and advertising and
promotion expenses by equal and offsetting amounts. They will not have any
impact on our reported operating earnings, net income, or earnings per share.
They will, however, lower our reported gross margins and advertising and sales
promotion expenses as a percent of net sales, while increasing our operating
earnings margin. When we reclassify our statements of earnings in fiscal 2002,
as a result of these rules, both reported net sales and advertising and sales
promotional expenses will be reduced by $106.5 million, $98.0 million, and $92.2
million for fiscal 2001, 2000, and 1999, respectively.

F. COMPETITION

The markets for our products are highly competitive and they are
characterized by the frequent introduction of new products, often accompanied by
major advertising and promotional programs. We compete primarily on the basis of
product quality, product differentiation and brand name recognition supported by
advertising and promotional programs.

Our competitors consist of a large number of domestic and foreign
companies, many of which have significantly greater financial resources and less
debt than we do. We believe that the market for consumer-packaged goods is very
competitive and may intensify in the future. Competitive pressures on our
products may result from:

o new competitors, o higher spending for
o new product initiatives by advertising and promotion,
competitors, and
o continued activity in the
private label sector.

Our infant care segment has been extremely competitive over the last two
fiscal years. Our Cups business was challenged by competitors offering less
expensive products and new competitors entered the disposable feeding, baby
toiletries and pre-moistened towelettes categories. Other categories that have
recently seen an increase in competitive activities include feminine care and
gloves.

G. REGULATION

Government regulation has not materially restricted or impeded our
operations. Certain of our products are subject to regulation under the Federal
Food, Drug and Cosmetic Act and the Fair Packaging and Labeling Act. We are also
subject to regulation by the Federal Trade Commission with respect to the
content of our advertising, our trade practices and other matters. We are
subject to regulation by the United States Food and Drug Administration in
connection with our manufacture and sale of tampons.

H. DISTRIBUTION

We sell our products using approximately 170 direct sales personnel,
independent food brokers and exclusive distributors. Independent brokers
supplement the direct sales force in the food class of trade, by providing more
effective coverage at the store level. For the twelve months ended December 29,
2001 and December 30, 2000, our net sales in the U.S. were distributed to the
following classes of trade:

DEC. 29, DEC. 30,
CLASS OF TRADE 2001 2000
-------------- --------- ---------

Mass merchandisers......................... 44% 44%
Supermarkets............................... 31% 32%
Drug stores................................ 17% 16%
Specialty.................................. 8% 8%
--- ---
Total.................................. 100% 100%
=== ===

Our field sales force makes sales presentations at the headquarters or
home offices of our customers, where applicable, as well as to individual retail
outlets. The sales representatives focus their efforts on selling our products,
providing services to our customers and executing programs to ensure sales to
the ultimate consumer. Consumer-directed programs include arranging for on-shelf
and separate displays and coordinating cooperative advertising participation.

We use four third-party distribution centers to ship the majority of our
products to customers. These distribution centers are geographically located to
maximize our ability to service our customers.

I. RESEARCH AND DEVELOPMENT

In March 1999, we moved our research and development group into a new
state-of-the-art technical center in Allendale, New Jersey. Prior to March 1999,
we maintained our research and development program in Paramus, New Jersey.
Approximately 70 employees are engaged in these programs, for which expenditures
were $13.9 million in fiscal 2001, $11.6 million in fiscal 2000 and $10.1
million in fiscal 1999, respectively.

The primary focus of our research and development group is to design and
develop new and improved products that address our customers' wants and needs.
In addition, our research and development group provides technology support to
both in-house and contract manufacturing and safety and regulatory support to
all of our businesses.

J. TRADEMARKS AND PATENTS

We have proprietary rights to a number of trademarks important to our
businesses, such as: ACTIVE SPORT, BABY MAGIC, BANANA BOAT, BINACA, BLASTERS,
BIG SIPSTER, COOL COLORZ, COOLSTRAW, DIAPER GENIE, DENTAX, DROP-INS, FAST BLAST,
GENTLE GLIDE, GET ON THE BOAT, GRIPSTER, HANDSAVER, HEAVY TRAFFIC, INSULATOR,
LIPPOPS, MOST LIKE MOTHER, MR. BUBBLE, NATURAL ACTION, OGILVIE, POWER SHOT,
PRECISELY RIGHT, QUICKSTRAW, QUIK BLOK, SAFE'N SURE, SILK GLIDE, SIPEASE,
SLIMFITS, SOOTH-A-CAINE, TUB MATE, TEK, TUSSY, VENTAIRE, VITASKIN, and WET ONES.
The PLAYTEX and LIVING trademarks in the United States and Canada are owned by
Playtex Marketing. Playtex Marketing is responsible for protecting, exercising
quality control over and enforcing the trademarks. Along with Apparel, we have a
license from Playtex Marketing for the use of such trademarks in the United
States and Canada on a perpetual, royalty-free basis. Apparel's license is for
apparel and apparel-related products, and our license is for all other products.
In all other countries, Apparel retains title to the PLAYTEX and LIVING
trademarks. We have a perpetual, royalty-free license to use such trademarks for
all products other than apparel products in all other countries. We also own a
royalty-free license in perpetuity to use the WOOLITE trademark for rug and
upholstery cleaning products in the United States and Canada.

We also own various patents related to certain products and their method
of manufacture, including patents for: cardboard and plastic applicators for
tampons, special over-wrap for tampons, baby bottles and nipples, disposable
liners and plastic holders for the nurser systems, children's drinking cups,
pacifiers, sunscreen formulation, carpet cleaning compositions, various
containers for liquid and moist wipes products, including special containers for
children's bubble bath.

The patents expire at varying times, ranging from 2002 to 2020. We also
have pending patent applications for various products and methods of manufacture
relating to our tampons, infant feeding and sun care businesses. While we
consider our patents to be important to our business, we believe that the
success of our products is more dependent upon the quality of these products and
the effectiveness of our marketing programs. No single patent is material to our
business.

K. RAW MATERIALS AND SUPPLIERS

The principal raw materials used in the manufacture of our products are
synthetic fibers, resin-based plastics and other chemicals and certain natural
materials, all of which are normally readily available. While all raw materials
are purchased from outside sources, we are not dependent upon a single supplier
in any of our operations for any material essential to our business or not
otherwise commercially available to us. We have been able to obtain an adequate
supply of raw materials, and no shortage of any materials is currently
anticipated.

L. CUSTOMERS AND BACKLOG

No single customer or affiliated group of customers, except Walmart,
accounted for over 10% of our net sales in fiscal 2001, fiscal 2000, and fiscal
1999. Our next three largest customers represented in total approximately 18% of
our total consolidated net sales in fiscal 2001 and fiscal 2000 and 15% in
fiscal 1999 (see Note 16 of Notes to Consolidated Financial Statements included
in Item 8. of this Annual Report on Form 10-K). In accordance with industry
practice, we grant credit to our customers at the time of purchase. In addition,
we may grant extended payment terms to new customers and for the initial sales
of introductory products and product line extensions. We also may grant extended
terms on our Sun Care products due to industry convention and the seasonal
nature of this business.

Our practice is not to accept returned goods unless authorized by
management of the sales organization. Returns result primarily from damage and
shipping discrepancies. Exceptions to this policy include our Sun Care seasonal
returns. We allow customers to return Sun Care products that have not been sold
by the end of the Sun Care season, which is normal practice in the sun care
industry. They are required to pay for the Sun Care product purchased during the
season under the required terms. In instances where extended terms are granted
on initial Sun Care orders, the terms require a substantial payment be made in
the June time frame. We generally receive returns of our Sun Care products from
September through March following the summer season. We reduce our Sun Care
sales and increase accrued liabilities for these returns throughout the year
based on management's estimates of these returns as a percent of Sun Care
products sold.

Refunds made to our customers for returned Sun Care products subsequently reduce
accrued liabilities (see Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations-Critical Accounting Policies of
this Annual Report on Form 10-K for a more complete discussion on our policies
regarding Sun Care product returns).

Because of the short period between order and shipment dates (generally
less than one month) for most of our orders, the dollar amount of current
backlog is not considered to be a reliable indication of future sales volume.

M. EMPLOYEES AND LABOR RELATIONS

Our worldwide workforce consisted of approximately 2,100 employees as of
December 29, 2001, of whom approximately 185 were located outside the United
States, primarily in Canada. Of the United States facilities, only the operation
at Watervliet, New York has union representation; it is organized by The Brush
Workers Union Local No. 20468 I.U.E. A.F.L.-C.I.O. The collective bargaining
agreement covered approximately 140 workers at December 29, 2001 and expires on
June 28, 2003. We believe that our labor relations are satisfactory and no
material labor cost increases are anticipated in the near future.

N. ENVIRONMENTAL

We believe that we are in substantial compliance with federal, state and
local provisions enacted or adopted regulating the discharge of materials
hazardous to the environment. There are no significant environmental
expenditures anticipated for the current year.

RISK FACTORS

Our business is subject to certain risks, and we want you to review these
risks while you are evaluating our business and our historical results. Please
keep in mind, that any of the following risks discussed below and elsewhere in
this Annual Report could materially and adversely affect us, our operating
results, our financial condition and our projections and beliefs as to our
future performance. As such, our results could differ materially from those
projected in our forward-looking statements. In addition, the preparation of
financial statements in accordance with generally accepted accounting principles
requires us to make estimates and assumptions. These estimates and assumptions
affect:

o the reported amounts and timing of revenue and expenses,
o the reported amounts and classification of assets and liabilities,
and
o the disclosure of contingent liabilities.

Actual results could vary from our estimates and assumptions. These estimates
and assumptions are based on historical results, assumptions that we make as
well as assumptions by third parties. The level of reserves for Sun Care product
returns, bad debts and advertising and promotional costs are three areas that
you should be aware of (see Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations-Critical Accounting Policies of
this Annual Report on Form 10-K).

WE HAVE SUBSTANTIAL DEBT AND THERE IS RISK OF PRINCIPAL REPAYMENT.

On May 22, 2001, we refinanced most of our indebtedness. We repaid our
$360.0 million 9% Senior Subordinated Notes due 2003 (the "9% Notes"), our
$150.0 million 8 7/8% Senior Notes due 2004 (the "8 7/8% Notes") and all of our
outstanding borrowings under our then existing credit agreement. We did not
pay-off the 6% Convertible Subordinated Notes due 2004. We issued new debt
securities and established a new credit agreement in the amount of:

o $350.0 million principal amount of 9 3/8% Senior Subordinated Notes
due June 1, 2011 (the "9 3/8% Notes").
o A new senior secured credit facility (the "Senior Secured Credit
Facility") consisting of:

> a new six-year $100.0 million term A loan facility (the
"'07-Term A Loan"),
> a new eight-year $400.0 million term B loan facility (the
"'09-Term B Loan"), and
> a new six-year $125.0 million revolving credit facility (the
"Revolving Credit Facility").

We believe that we will generate sufficient cash flow from operations for
our working capital needs, capital expenditures, interest payments, and
scheduled principal payments on all of our debt obligations due prior to fiscal
2008. However, we do not expect to generate sufficient cash flow from operations
to make the scheduled principle payments on the '09-Term B loan due in fiscal
2008 and 2009, which collectively total $390.9 million. In addition, we do not
expect to generate sufficient cash flow from operations to make the $350.0
million scheduled principle payment on the 9 3/8% Notes due in fiscal 2011.
Accordingly, we will have to either refinance our obligations, sell assets or
raise equity capital to repay the principal amounts of these obligations.
Historically, our cash flows from operations and refinancing activities have
enabled us to meet all of our obligations. However, we can not guarantee that
our operating results will continue to be sufficient or that future borrowing
facilities will be available for the payment or refinancing of our debt on
economically attractive terms.

Our high level of debt could have adverse consequences to us, including, but not
limited to:

o Our ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, general corporate purposes or
other purposes could be impaired.

o A significant portion of our cash flow from operations must be dedicated
to the payment of principal and interest on our debt, which reduces the
funds available to our operations.

o Some of our debt, $488.8 million at December 29, 2001, is at variable
rates of interest, which may result in higher interest expense in the
event of increases in interest rates.

o Our indebtedness contains certain financial and restrictive covenants
including:

o incurrence of additional o use of proceeds from sales
indebtedness, of assets and subsidiary
o dividends and restricted stock,
payments, o certain mergers,
o creation of certain liens, consolidations and transfers
o transactions with of all or substantially all
affiliates, of our assets, and
o sale and leaseback o the use of excess cash flow.
transactions,

Our failure to comply with our financial and restrictive covenants could result
in an event of default, which, if not rectified, could materially and adversely
affect our operating results and our financial condition.

WE MAY INCUR HIGHER INTEREST RATES IN THE EVENT OF NEGATIVE CHANGES TO OUR
PUBLIC DEBT RATINGS.

Our Senior Secured Credit Facility is rated by third party rating
agencies, such as, Moody's Investor Service, Inc., ("Moody's"), and Standard &
Poors Ratings Group ("S&P"). At December 29, 2001 our Senior Secured Credit
Facility was rated Ba3 by Moody's and BB- by S&P. These rating agencies provide
insight and guidance regarding our ability to pay both interest and principal on
our debt balances. The rates of interest we pay on our variable rate debt
include a spread over the underlying rate, such as the Prime Rate or LIBOR,
based, in part, on the ratings determined by these third parties. A negative
change in our rating may require us to pay an additional 0.25% in interest on
our outstanding variable rate debt. Based on our debt portfolio outstanding at
December 29, 2001, this change would result in an increase of our interest
expense of approximately $1.2 million.

In addition, the Receivables Facility may be terminated if our
indebtedness under the Senior Secured Credit Facility is not rated at least B-
by S&P and B3 by Moody's. This event would require us to find an alternative
financing source that may include use of our existing revolving credit facility
which may result in higher interest costs.

WE MAY INCUR GOODWILL AND OTHER INTANGIBLE ASSET IMPAIRMENT CHARGES.

Acquisitions recorded as purchases for accounting purposes have resulted,
and in the future may result, in the recognition of significant amounts of
goodwill and other intangible assets. At December 29, 2001, we had $494.2
million of goodwill and $159.5 million of other intangible assets consisting of
trademarks and patents. We review these intangible assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. If events or changes in circumstances indicate
that the carrying amount of an

asset may not be recoverable, we estimate the undiscounted future cash flows to
result from the use of the asset and its ultimate disposition. If the sum of the
undiscounted cash flows is less than the carrying value, we recognize a non-cash
impairment loss, measured as the amount by which the carrying value exceeds the
fair value of the asset. Statement of Financial Accounting Standards ("SFAS")
No. 142, Goodwill and Other Intangible Assets, eliminates the amortization for
goodwill and for other indefinite-lived intangible assets, such as trademarks,
and initiates an annual review for impairment of these items. Identifiable
intangible assets, like patents, with a definite useful life will continue to be
amortized. We adopted SFAS No. 142 effective December 30, 2001, the start of our
fiscal year 2002. Following adoption, we have ceased the amortization of: (a)
all of our remaining net goodwill balance and (b) trademarks that are determined
to have indefinite lives. We will perform impairment tests on our goodwill and
indefinite-lived intangible assets based on a fair value concept within the
prescribed time lines of SFAS No. 142. In addition, changes in the fair value of
our businesses caused by various factors, some of which may be out of our
control, may cause us to take an impairment charges in the future.

WE FACE SIGNIFICANT COMPETITION FROM OTHER CONSUMER PRODUCTS COMPANIES.

The markets for our products are highly competitive and are characterized
by the frequent introduction of new products, often accompanied by major
advertising and promotional programs. We believe that the market for consumer
packaged goods will continue to be highly competitive and that the level of
competition may intensify in the future. Our competitors consist of a large
number of domestic and foreign companies, a number of which have significantly
greater financial resources than we do and are not as highly leveraged as we
are. If we are unable to continue to introduce new and innovative products that
are attractive to consumers, or are unable to allocate sufficient resources to
effectively market and advertise our products so that they achieve widespread
market acceptance, we may not be able to compete effectively and our operating
results and financial condition will be adversely affected.

WE RELY ON A FEW LARGE CUSTOMERS FOR A SIGNIFICANT PORTION OF OUR SALES.

A few of our customers are material to our business and operations. In
fiscal 2001, Walmart our largest customer, represented approximately 23% of our
consolidated net sales. Aggregate consolidated net sales to our next three
largest customers represented approximately 18% of our total consolidated net
sales in fiscal 2001. The loss of sales to a large customer could materially and
adversely affect us, our operating results, our financial condition and our
projections and beliefs as to our future performance.

WE MAY BE ADVERSELY AFFECTED BY THE TREND TOWARDS RETAIL TRADE CONSOLIDATION.

With the growing trend towards retail trade consolidation, we are
increasingly dependent upon key retailers whose bargaining strength is growing.
We may be negatively affected by changes in the policies of our retail trade
customers, such as inventory destocking, limitations on access to shelf space
and other conditions.

SALES OF SOME OF OUR PRODUCTS MAY SUFFER BECAUSE OF UNFAVORABLE WEATHER
CONDITIONS.

Our businesses, especially Sun Care, may be negatively impacted by
unfavorable weather conditions. In accordance with industry practice, we allow
customers to return unsold Sun Care products at the end of the summer and these
product returns may be higher in years when the weather is poor. This could
adversely affect our business and operating results. In addition, consumption of
our Feminine Care and WET ONES products may be affected by unfavorable weather,
although to a lesser extent than the Sun Care business, due primarily to reduced
levels of outdoor activities.

OUR ACQUISITION STRATEGY IS SUBJECT TO RISKS AND MAY NOT BE SUCCESSFUL.

We consider the acquisition of other companies engaged in the manufacture
and sale of consumer products. At any given time, we may be in various stages of
looking at these opportunities. Acquisitions are subject to the negotiation of
definitive agreements and to other matters typical in acquisition transactions.
There can be no assurance that we will be able to identify desirable acquisition
candidates or will be successful in entering into definitive agreements relating
to them. Even if definitive agreements are entered into, we can not assure you
that any future acquisition will be completed or that anticipated benefits of
the acquisition will be realized. The process of integrating acquired operations
into our operations

may result in unforeseen operating difficulties, may absorb significant
management attention and may require significant financial resources that would
otherwise be available for the ongoing development or expansion of our existing
operations. Future acquisitions by us could result in the incurrence of
additional debt and contingent liabilities, which may have a negative effect on
our operating results.

HAAS WHEAT CONTROLS A MAJORITY OF OUR BOARD OF DIRECTORS AND ITS INTERESTS MAY
CONFLICT WITH YOURS.

Haas Wheat & Partners, L.P. and its affiliates together hold approximately
33% of the outstanding shares of our common stock and will likely continue to
exercise control over our business by virtue of their voting power with respect
to the election of directors. In addition, under our by-laws and agreements
among our stockholders, Haas Wheat and its affiliates have the right to approve
a majority of the nominations to our board of directors. Haas Wheat and its
affiliates may authorize actions that are not in your best interests, and in
general, their interests may not be fully aligned with yours.

ITEM 2. PROPERTIES

Our principal executive office is located at 300 Nyala Farms Road,
Westport, Connecticut 06880 and is occupied pursuant to a lease, which expires
in 2005. Our principal manufacturing and distribution facilities are located in:

o Dover, Delaware, o Watervliet, New York, and
o Sidney and Streetsboro, Ohio, o Arnprior and Malton, Canada.

We maintain a research and development facility in Allendale, New Jersey. This
facility is leased for a term of 15 years with two five-year renewal options. We
operate two facilities in Canada. We own the Arnprior facility, which is
primarily a warehouse and assembly operation, and we lease the Malton facility,
which is a warehouse and office site. This lease expires in 2004. The lease on
the Montvale, NJ facility, expiring in 2002, was acquired by us in the PCH
acquisition and a substantial portion of the facility has been subleased, for
the duration of the lease term, to third parties. For 2001, our average
utilization rate of manufacturing capacity was an estimated 70%.

The following table lists our principal properties as of December 29,
2001, which are located in seven states, Puerto Rico and Canada. The facilities
in Arnprior and Malton, Canada and Guaynabo, Puerto Rico are used specifically
by the International/Corporate Sales Division. All of the other facilities are
shared amongst our three segments.

NUMBER ESTIMATED
OF SQUARE
FACILITIES OWNED FACILITIES FOOTAGE
---------------- ---------- ---------

MANUFACTURING/OFFICE/DISTRIBUTION/WAREHOUSE
Dover, DE.................................................. 3 710,000
Streetsboro, OH............................................ 1 176,700
Watervliet, NY............................................. 1 159,600
Arnprior, Canada........................................... 1 91,800
Sidney, OH................................................. 1 54,400

FACILITIES LEASED
-----------------

OFFICE/DISTRIBUTION/WAREHOUSE
Dover, DE.................................................. 3 268,906
Sidney, OH................................................. 2 216,800
Malton, Canada............................................. 1 72,800
Westport, CT............................................... 1 63,100
Allendale, NJ.............................................. 1 43,500
Montvale, NJ............................................... 1 19,500
Guaynabo, PR............................................... 1 15,700
Orlando, FL................................................ 1 10,400
Spokane, WA................................................ 1 8,400

ITEM 3. LEGAL PROCEEDINGS

Beginning in 1980, published studies reported a statistical association
between tampon use and Toxic Shock Syndrome ("TSS"), a rare, but potentially
serious illness. Since these studies, numerous claims have been filed against
all tampon manufacturers, a small percentage of which have been litigated to
conclusion. The number of TSS claims relating to our tampons has declined
substantially over the years. During the mid-1980s, there were approximately 200
pending claims at any one time relating to our tampons. As of the end of
February 2002, there were approximately 7 pending claims. Additional claims,
however, may be asserted in the future. For TSS claims filed from October 1,
1985 until November 30, 1995, we are self-insured and bear the costs of
defending those claims, including settlements and trials. Effective December 1,
1995, we obtained insurance coverage with certain limits in excess of the
self-insured retention of $1.0 million per occurrence / $4.0 million in total,
for claims occurring on or after December 1, 1995.

The incidence rate of menstrually associated TSS has declined
significantly over the years. The number of confirmed menstrually-related TSS
cases peaked in 1980 at 814, with 38 deaths. At that time, the United States
Center for Disease Control found that 71% of women who developed the condition
had been using a new brand of tampons. That brand of product was removed from
the market and The Food and Drug Administration proposed regulations, which
required all tampon manufacturers to provide TSS warnings on their labeling. In
1981, the incidence of menstrually-related TSS was reported to be 470, with 13
deaths. It has continued to fall since then. Compared with the 814 menstrual TSS
cases in 1980, there were only three confirmed cases in 1998 and six in 1997.

We believe that there are no claims or litigation pending against us,
including the TSS cases, which, individually or in the aggregate, would have a
material effect on us. This assessment is based on:

o our experience with TSS o the federally mandated
cases, warnings about TSS on and in
o our evaluation of the 7 our tampon packages, and
pending claims, o development of case law
o the reported decline in the upholding the adequacy of
incidence of Menstrually tampon warnings that comply
associated TSS, with federally mandated TSS
warnings.

We have joined a group of potentially responsible parties with respect to
the Kent County Landfill Site in Houston, Delaware, which has been designated a
"Superfund" site by the State of Delaware. Based on the information currently
available to us, the nature and quantity of material deposited by us and the
number of other entities in the group, which are expected to share in the costs
and expenses, we do not believe that our costs will be material. We will share
equally with Apparel all expenses and costs associated with our involvement with
this site.

We are a defendant in various other legal proceedings, claims and
investigations that arise in the normal course of business. In our opinion, the
ultimate disposition of these matters, including those described above, will not
have a material adverse effect on our consolidated financial position, results
of operations or cash flows.

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

Not applicable

PART II

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

We have two classes of authorized stock:

o Common Stock, par value $.01 per share, 273 holders of record,
authorized 100,000,000 shares, issued and outstanding 61,061,165
shares at March 25, 2002, and

o Preferred stock, par value $.01 per share, authorized 50,000,000
shares, none issued or outstanding as of March 25, 2002.

Our common stock is traded on the New York Stock Exchange under the symbol
"PYX". No cash dividends have ever been paid on our stock, and we are restricted
from paying dividends by the terms of our debt agreements (see Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources and Note 7 of Notes to Consolidated
Financial Statements included in Item 8. of this Annual Report on Form 10-K).

The following table lists the high and low sale price per share of our
stock during fiscal 2001 and fiscal 2000 as reported by the New York Stock
Exchange-Composite Transactions:

First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------

FISCAL 2001
-----------
High........................... $ 10.35 $ 11.20 $ 10.80 $ 10.46
Low............................ $ 7.93 $ 8.55 $ 9.60 $ 9.30

FISCAL 2000
-----------
High........................... $ 15.50 $ 14.00 $ 12.88 $ 11.94
Low........................... $ 10.25 $ 10.12 $ 10.37 $ 8.62

ITEM 6. SELECTED FINANCIAL DATA

The information required by this item appears on page F-3 of this Form
10-K.

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

The information required by this item appears on pages F-4 to F-18 of this
Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We periodically use financial instruments, such as derivatives, to manage
the impact of interest rate changes on our variable rate debt and its effect on
our earnings and cash flows. Our policies prohibit the use of derivative
instruments for the sole purpose of trading for profit on price fluctuations or
to enter into contracts, which intentionally increase our underlying interest
rate exposure. At December 29, 2001, our total indebtedness consisted of $400.0
million in fixed rate debt and $488.8 million in variable rate debt. We
currently are not a party to any financial instruments, such as derivatives, to
manage the impact of interest rate changes on our variable rate debt. Based on
our interest rate exposure at December 29, 2001, a 1% increase in interest rates
would result in an estimated $4.9 million of additional interest expense on an
annualized basis (see Note 7 of Notes to Consolidated Financial Statements
included in Item 8. of this Annual Report on Form 10-K).

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements and related Notes to Consolidated
Financial Statements are filed as part of this Form 10-K and can be found on
pages F-19 to F-51. The Independent Auditors' Report, dated January 28, 2002,
except as to Note 20, which is as of March 25, 2002 is filed as part of this
Form 10-K and can be found on page F-52. The Report of Management, dated January
28, 2002, is filed as part of this 10-K and can be found on page F-53.

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

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for by these items (except for the information
regarding our executive officers) is incorporated by reference to our Proxy
Statement for the 2002 Annual Meeting of Stockholders. The information regarding
our executive officers called for by Item 401 of Regulation S-K can be found in
Item I(b) on pages 7 to 8 of this Form 10-K.

PART IV

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

(a) FINANCIAL STATEMENTS

(1) Our Consolidated Financial Statements and related Notes to
Consolidated Financial Statements are filed as part of this Form 10-K and can be
found on pages F-19 to F-51. The Independent Auditors' Report, dated January 28,
2002, except as to Note 20, which is as of March 25, 2002, is on page F-52 of
this Form 10-K.

(2) FINANCIAL STATEMENT SCHEDULE

The following financial statement schedule-Schedule II-Valuation and
Qualifying Accounts, is filed as part of this Form 10-K and is on page 26.

All other schedules are omitted as the required information is not
applicable to us or the information is already presented in our Consolidated
Financial Statements or related Notes to Consolidated Financial Statements.

(3) EXHIBITS

Please see our Exhibit Index on Pages X-1 to X-6 of this Form 10-K.

(b) REPORTS ON FORM 8-K

None

PLAYTEX PRODUCTS, INC.

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
TWELVE MONTHS ENDED DECEMBER 29, 2001, DECEMBER 30, 2000, AND DECEMBER 25, 1999
(In thousands)

BALANCE AT ADDITIONS NET ADDITIONS BALANCE
BEGINNING CHARGED TO RESULTING FROM AT END
DESCRIPTION OF PERIOD INCOME ACQUISITIONS DEDUCTIONS(1) OF PERIOD
----------- ------------ ----------- -------------- ---------- ---------

December 25, 1999
Allowance for doubtful accounts......... $ (2,095) $ (675) $ (167) $ 645 $ (2,292)

December 30, 2000
Allowance for doubtful accounts......... $ (2,292) $ (346) $ -- $ 401 $ (2,237)

December 29, 2001
Allowance for doubtful accounts......... $ (2,237) $ (1,771) $ -- $ 2,732 $ (1,276)

----------

(1) In 2001, the allowance for doubtful accounts includes a deduction of $789
related to the sale of receivables at fair market value in connection with
the Receivables Facility. Amounts written-off include $1,943 in fiscal
2001, $401 in fiscal 2000, and $645 in fiscal 1999.

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.

PLAYTEX PRODUCTS, INC.

By: /s/ Michael R. Gallagher
------------------------------
Michael R. Gallagher
CHIEF EXECUTIVE OFFICER

March 27, 2002

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 indicated this 27th day of March, 2002.

SIGNATURES TITLE
------------------------------ ------------------------------

/s/ Robert B. Haas
------------------------------
Robert B. Haas Chairman of the Board and Director

/s/ Michael R. Gallagher
------------------------------
Michael R. Gallagher Chief Executive Officer and Director (Principal
Executive Officer)

/s/ Glenn A. Forbes
------------------------------
Glenn A. Forbes Executive Vice President, Chief Financial Officer and
Director (Principal Financial and Accounting Officer)

/s/ Richard C. Blum
------------------------------
Richard C. Blum Director

/s/ Michael R. Eisenson
------------------------------
Michael R. Eisenson Director

------------------------------
R. Jeffrey Harris Director

/s/ C. Ann Merrifield
------------------------------
C. Ann Merrifield Director

/s/ Susan R. Nowakowski
------------------------------
Susan R. Nowakowski Director

/s/ John C. Walker
------------------------------
John C. Walker Director

/s/ Wyche H. Walton
------------------------------
Wyche H. Walton Director

/s/ Douglas D. Wheat
------------------------------
Douglas D. Wheat Director

PLAYTEX PRODUCTS, INC.

2001 ANNUAL REPORT TO STOCKHOLDERS

PLAYTEX PRODUCTS, INC.
2001 ANNUAL REPORT TO STOCKHOLDERS

INDEX

PAGE(S)
-------

PART I--FINANCIAL INFORMATION

Selected Financial Data............................................ F-3

Management's Discussion and Analysis of Financial Condition and
Results of Operations.............................................. F-4 to F-18

Consolidated Financial Statements.................................. F-19 to F-22

Notes to Consolidated Financial Statements......................... F-23 to F-51

PART II--OTHER INFORMATION

Independent Auditors' Report....................................... F-52

Report of Management............................................... F-53

Other Information.................................................. F-54 to F-55

F-2

PLAYTEX PRODUCTS, INC.

SELECTED FINANCIAL DATA

(IN THOUSANDS, EXCEPT PER SHARE DATA)

TWELVE MONTHS ENDED(1)
-----------------------------------------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25, DECEMBER 26, DECEMBER 27,
2001 2000 1999 1998 1997
------------ ------------- ------------ ------------ ------------

EARNINGS STATEMENT DATA:
Net sales ............................ $ 830,048 $ 831,343 $ 787,711 $ 669,613 $ 500,632
Gross profit ......................... 474,654 479,169 456,469 392,058 304,652
Operating expenses, excluding
amortization of intangibles ....... 318,603 308,882 280,176 243,288 192,056
Amortization of intangibles .......... 22,060 22,350 21,064 17,336 12,894
Operating earnings ................... 133,991 147,937 155,229 131,434 99,702
Interest expense, net ................ 75,861 84,884 78,961 71,518 64,470
Net earnings ......................... $ 11,545(2) $ 35,544 $ 44,071 $ 34,230 $ 14,653(3)
Net earnings per share:
Basic ............................. $ .19 $ .58 $ .73 $ .58 $ .29
Diluted ........................... $ .19 $ .58 $ .72 $ .57 $ .29
Net earnings before extraordinary loss $ 30,881 $ 35,544 $ 44,071 $ 34,230 $ 18,731
Net earnings per share before
extraordinary loss:
Basic ............................. $ .51 $ .58 $ .73 $ .58 $ .37
Diluted ........................... $ .51 $ .58 $ .72 $ .57 $ .37
Weighted average common shares and
equivalent common shares outstanding:
Basic ............................. 61,007 60,824 60,481 59,486 50,923
Diluted ........................... 61,115 62,585 62,553 60,411 51,006

BALANCE SHEET DATA (AT PERIOD END):

Working capital ...................... $ 107,780 $ 74,233 $ 92,006 $ 78,548 $ 56,402
Total assets ......................... 1,105,172 1,139,384 1,148,652 899,221 652,558
Total long-term debt, excluding due to
related party ..................... 888,800 931,563 987,876 811,750 737,800
Stockholders' equity (deficit) ....... $ (44,570) $ (56,063) $ (94,868) $(140,975) $(268,063)

----------

(1) Our fiscal year end is on the last Saturday in December nearest to
December 31 and, as a result, a fifty-third week is added every 6 or 7
years. Fiscal 2000 was a fifty-three week year. All other years presented
are fifty-two week years.

(2) Includes an extraordinary loss of $19.3 million (net of $12.8 million of
income tax benefit) as a result of the refinancing of our senior
indebtedness (see Note 7 and 9 of Notes to Consolidated Financial
Statements).

(3) Includes an extraordinary loss of $4.1 million (net of $2.3 million of
income tax benefit) as a result of the early retirement of debt in
connection with our debt refinancing in 1997.

F-3

PLAYTEX PRODUCTS, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and
results of operations should be read together with our audited consolidated
financial statements and notes, presented on pages F-19 through F-51.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

o price and product changes, o impact of weather
o promotional activity by conditions, especially on
competitors, Sun Care product sales,
o the loss or bankruptcy of a o our level of debt,
significant customer, o interest rate fluctuations,
o capacity limitations, o future cash flows,
o the difficulties of o dependence on key employees,
integrating acquisitions, and
o raw material and o highly competitive nature of
manufacturing costs, the consumer products
o adverse publicity and business.
product liability claims,

o the reported amounts and timing of revenue and expenses,
o the reported amounts and classification of assets and liabilities,
and
o the disclosure of contingent liabilities.

Actual results could vary from our estimates and assumptions. These estimates
and assumptions are based on historical results, assumptions that we make as
well as assumptions by third parties. The level of reserves for Sun Care product
returns, bad debts and advertising and promotional costs are three areas of
which you should be aware (see Management's Discussion and Analysis-Critical
Accounting Policies).

F-4

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

GENERAL

BASIS OF MANAGEMENT'S DISCUSSION AND ANALYSIS

We are organized in three divisions, which are categorized as business
segments in accordance with generally accepted accounting principles.

Our PERSONAL PRODUCTS DIVISION accounted for 58% of our 2001 consolidated
net sales. Our Personal Products Division includes Infant Care and Feminine Care
products sold in the United States primarily to mass merchandisers, grocery and
drug classes of trade. The Infant Care product category includes the following
brands:

INFANT FEEDING PRODUCTS OTHER INFANT CARE PRODUCTS
----------------------- --------------------------

o PLAYTEX disposable nurser o DIAPER GENIE diaper disposal
system system
o PLAYTEX cups and mealtime o WET ONES hand and face
products towelettes
o PLAYTEX reusable hard o BABY MAGIC infant toiletries
bottles o BABY MAGIC baby wipes, and
o PLAYTEX pacifiers o MR. BUBBLE children's bubble
bath

Our CONSUMER PRODUCTS DIVISION accounted for 25% of our 2001 consolidated
net sales. Our Consumer Products Division includes Sun Care, Household Products,
and Personal Grooming products sold in the United States primarily to mass
merchandisers, grocery and drug classes of trade. The Consumer Products Division
includes the following brands:

SUN CARE HOUSEHOLD PRODUCTS
-------- ------------------

o BANANA BOAT o PLAYTEX gloves
o WOOLITE rug and upholstery
cleaning products

PERSONAL GROOMING
-----------------

o OGILVIE home permanent o DENTAX oral care products
products o TEK toothbrushes
o BINACA breath freshener o DOROTHY GRAY skin care
products products, and
o TUSSY deodorants o BETTER OFF depilatories

In May 1999, we sold our U.S. JHIRMACK business.

Our INTERNATIONAL/CORPORATE SALES DIVISION accounted for 17% of our 2001
consolidated net sales and includes:

o Sales to specialty classes o export sales
of trade in the United o sales in Puerto Rico
States including: warehouse o results from our Canadian
clubs, military, convenience and Australian subsidiaries,
stores, specialty stores, and
and telemarketing o sales of private label
tampons

F-5

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

The International/Corporate Sales Division sells the same products as are
available to our U.S. customers. Sales to the specialty classes of trade in the
United States represented 50% of the division's consolidated net sales in fiscal
2001, up from 49% in fiscal 2000 and 47% in fiscal 1999.

RESULTS OF OPERATIONS

Our net sales for each of the past three fiscal years 2001, 2000, and 1999
are provided based on our divisional structure. We acquired the DIAPER GENIE
business on January 29, 1999 and the BABY MAGIC business on June 30, 1999. The
results for 1999 include the results of the DIAPER GENIE and BABY MAGIC
businesses since the date of their acquisition by us (dollars in millions):

TWELVE MONTHS ENDED
---------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
PRODUCT LINE 2001 PRINCIPAL BRAND NAMES 2001 2000 1999
------------ -------------------------- ------------ ----------- -----------

Personal Products Division:
Infant Care................................. PLAYTEX, WET ONES, BINKY,
MR. BUBBLE, DIAPER GENIE,
and BABY MAGIC $ 260.5 $ 272.2 $ 255.1
Feminine Care............................... PLAYTEX 218.2 214.3 201.8
--------- -------- ---------
Total Personal Products Division.......... 478.7 486.5 456.9
Consumer Products Division:
Sun Care.................................... BANANA BOAT 107.3 110.3 96.9
Household Products.......................... PLAYTEX, WOOLITE 55.5 52.2 51.0
Personal Grooming........................... OGILVIE, BINACA, TUSSY, TEK,
and DENTAX 42.9 43.1 47.6
--------- -------- ---------
Total Consumer Products Division.......... 205.7 205.6 195.5
International/Corporate Sales Division......... 145.6 139.2 135.3
--------- -------- ---------
Total .................................. $ 830.0 $ 831.3 $ 787.7
========= ======== =========

We evaluate division performance based on their product contribution
excluding general corporate allocations. Product contribution is defined as
gross profit less advertising and sales promotion expenses. All other operating
expenses are managed at a corporate level and are not used by us to evaluate
division results. We do not segregate assets, amortization, capital
expenditures, certain corporate and administrative costs, and interest income
and interest expense when evaluating division performance.

The following discussion presents a consolidated view of our results and,
where appropriate, also provides insight to key indicators of division
performance. Our results for the years ended December 29, 2001 and December 25,
1999 are for fifty-two week periods and our results for the year ended December
30, 2000 are for a fifty-three week period. Our fiscal year end is on the last
Saturday in December nearest to December 31 and, as a result, a fifty-third week
is added every 6 or 7 years.

All references to market share and market share data are for comparable 52
week periods and represent our percentage of the total U.S. dollar volume of
products purchased by consumers in the applicable category (dollar market share,
or retail consumption). This information is provided to us from the ACNielsen
Company ("ACNielsen") and is subject to revisions. During 2001, Wal-Mart Stores,
Inc. ("Walmart"), ceased providing scanner/consumption data to third parties. As
a result, ACNielsen restated consumption data for fiscals 2001 and 2000 to
exclude Walmart consumption data. ACNielsen could not adjust consumption data
for fiscal 1999. As a result, references to market share data for the twelve
months ended December 29, 2001 compared to the twelve months ended December 30,
2000 do not include consumption data from Walmart. But, references to market
share data for the twelve months ended December 30, 2000 compared to the twelve
months ended December 25, 1999 do include consumption data from Walmart. We do
not believe there were any meaningful changes in market share trends or
comparatives as a result of the elimination of data from Walmart.

F-6

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

TWELVE MONTHS ENDED DECEMBER 29, 2001 COMPARED TO TWELVE MONTHS ENDED DECEMBER
30, 2000

CONSOLIDATED NET SALES--Our consolidated net sales decreased $1.3 million, to
$830.0 million in 2001. Fiscal 2001 was a challenging year for us, as a
difficult economic environment and competitive issues, primarily in Infant Care,
negatively impacted our results. In the fourth quarter of 2001, our net sales
increased by $7.5 million compared to the fourth quarter of 2000.

PERSONAL PRODUCTS DIVISION--Net sales decreased $7.8 million, or 2%, to
$478.7 million in 2001.

Net sales of INFANT CARE products decreased $11.7 million, or
4%, to $260.5 million in 2001. During the past two years, the Infant
Care segment has become increasingly competitive. New competition
entered most of our Infant Care categories, often with lower priced
products supported by extensive advertising and promotional
activities. We believe all of our Infant Care categories will remain
highly competitive in the future. As a result, we will continue to
introduce new products and defend our market share positions with
targeted advertising and promotional activity.

In INFANT FEEDING, our dollar market share was 38.5% in
2001, a decrease of 2.5 percentage points compared to 2000.
The dollar market share decline was primarily the result of
increased competitive activity in Cups.

In CUPS, our dollar market share was 52.7% in
2001, a decrease of 6.3 percentage points compared to
2000. The cups category, based on total dollar volume of
cups purchased by consumers, grew 4% in 2001 and our
retail consumption decreased 8%. The Cups category has
become especially price sensitive, with an influx of
several lower priced spill-proof cup offerings from
competitors. We are introducing a new product to the
category in the first quarter of 2002, the PLAYTEX
INSULATOR, which will keep the contents of the cup
cooler and fresher longer than non-insulated cups.

In DISPOSABLE FEEDING, our dollar market share was
84.7% in 2001, an increase of 2.2 percentage points
compared to 2000. Retail consumption in the category
declined 6% in 2001 and our consumption declined 4%. We
believe retail consumption in the category has declined
primarily due to growth in the reusable hard bottle
segment.

In REUSABLE HARD BOTTLES, our dollar market share
was 16.7% in 2001, an increase of 1.6 percentage points
compared to 2000. Retail consumption of our reusable
bottles increased 14% while the category grew 4%. We
believe the current economic environment is bringing
more consumers back to hard bottles, as they are
generally less costly than their disposable feeding
counterparts. Our VENTAIRE hard bottle is an example of
innovation leading to marketplace success. VENTAIRE is a
premium hard bottle that limits the amount of air that
can mix with liquids in the bottle due to a unique,
patented bubble free vent on the bottom of the bottle.
VENTAIRE'S dollar market share grew to 11.0% of the
category in fiscal 2001 behind double-digit consumption
growth.

In PACIFIERS, our dollar market share was 6.8% in
2001, a decrease of 4.2 percentage points compared to
2000. Retail consumption of our pacifiers decreased 12%
while the category grew 6%. Our pacifiers were
negatively impacted by a voluntary product recall of two
of our latex pacifier products in 2000. We re-launched
the recalled pacifier products in mid 2001.

F-7

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

In DIAPER PAILS, our dollar market share of our DIAPER
GENIE diaper disposal system was 93.2%, an increase of 0.3
percentage points compared to 2000. Retail consumption in the
category increased 7.2% and our consumption increased 7.5%. We
have recently made improvements to our DIAPER GENIE diaper
disposal unit by improving the cutter cap system, which makes
the unit easier to use. In addition, in the first quarter of
2002 we introduced a toddler film refill to the market for
older age children, which should extend the usage period. We
believe recent favorable consumption trends of the DIAPER
GENIE unit bode well for future growth of refill liners.

In PRE-MOISTENED TOWELETTES (hands and face), our dollar
market share was 60.3% in 2001, a decrease of 10.9 percentage
points compared to 2000. Retail consumption of our WET ONES
brand increased 14% in 2001 while the category grew 34%. There
has been a steady influx of new competitors to the category
since the beginning of 2000. The new competitors are making
significant investments in advertising and promotion to
generate trial of their product. This is negatively impacting
our market share levels but favorably impacting our
consumption levels as more consumers enter the hands and face
segment. We believe the influx of new consumers to the
category will be beneficial to us, despite lower market share.
To capitalize on the recent consumer attention in
pre-moistened towelettes, we are expanding our offerings. We
introduced ULTRA WET ONES early in 2001 and in the first
quarter of 2002 we started shipping WET ONES FLUSHABLES, a new
product for use in the bathroom.

In INFANT TOILETRIES, our dollar market share was 8.7%
in 2001, a decrease of 2.3 percentage points compared to 2000.
Retail consumption of our BABY MAGIC brand decreased 18% while
the category grew 5%. This market share decline was the result
of new products introduced by the market share leader. To
address the competitive threat, we introduced a number of new
products in the fourth quarter of 2001, including a foaming
hair and body wash and foaming shampoo. In addition, we
revised our packaging graphics and product-dispensing
applications in order to enhance consumer awareness and
improve ease of use.

In BATH ADDITIVES, our dollar market share of our MR.
BUBBLE brand was 22.7% in 2001, an increase of 1.7 percentage
points compared to 2000. Retail consumption of MR. BUBBLE
declined 1% while the category declined 8%. The decline in the
category was primarily in character bottles and gifts sets and
our results benefited from MR. BUBBLE Body Wash, a new product
introduced in 2001.

In BABY WIPES, our dollar market share was 2.5% in 2001,
a decrease of 0.5 percentage points compared to 2000. Retail
consumption of our baby wipes declined 13% while the category
grew 6%. Our market share and consumption declines were
primarily in the refills segment of the market.

Net sales of FEMININE CARE products increased $3.9 million, or
2%, to $218.2 million in 2001 driven by a 5% price increase across a
large portion of our product offerings in 2001. Our share of the
U.S. tampon category was essentially flat at 29.9% in 2001 compared
to 30.0% in 2000. Our retail consumption grew 1.5%, in dollars,
while the category grew 2.1%. The tampon category experienced an
increase in price promotional activity in the plastic applicator
segment and some private label impact in the cardboard applicator
segment, beginning early in 2001. We believe the category is not
impacted materially by price promotional activity over time due to
the consumer loyalty historically found in this category. During
2001, we launched PLAYTEX Personal Cleansing Cloths for use in
feminine hygiene.

F-8

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

CONSUMER PRODUCTS DIVISION--Net sales were essentially flat at $205.7
million in 2001.

Net sales of SUN CARE products decreased $3.0 million, or 3%,
to $107.3 million in 2001, due primarily to lower sales of remnant
product to customers that specialize in close-outs. Our dollar
market share of the Sun Care category was unchanged at 21.1% for
both of the comparable periods. Retail consumption of our Sun Care
products increased 8.8%, in dollars, and the category grew 9.2%.
While our market share was flat in fiscal 2001, our market share of
the "In Sun/After Sun" segment was 24.1% for the 2001 season versus
22.9% in 2000. This is the segment of the business that we have
emphasized. The early season weather resulted in a higher growth
rate in the indoor tanning and sunless segments compared to the "In
Sun/After Sun" segment. We did not have an indoor tanning product in
2001 and while we do have sunless products, they have not been an
area of focus for our business. We have a large array of new
products for the 2002 season including an indoor tanning product and
VITASKIN Advanced Sun Protection, a product line that combines the
benefits of sun protection with a quality skin care product designed
for everyday use. While the fourth quarter is a low consumption
period, we are encouraged by early market share and consumption data
from VITASKIN and our new indoor tanning product.

Net sales of HOUSEHOLD PRODUCTS increased $3.3 million, or 6%,
to $55.5 million in 2001. The increase was due primarily to our
WOOLITE rug and upholstery cleaning business, which grew its dollar
market share to 20.5% in 2001, an increase of 1.2 percentage points
compared to 2000. Retail consumption of WOOLITE increased 6.3%,
while the category was essentially flat. Early in 2001, we
introduced WOOLITE Spot & Stain Wipes, an innovative new entry in
the rug and upholstery cleaning category. This introduction coupled
with improved sales versus 2000 for our Heavy Traffic and Pet Stain
products accounted for the growth. In Gloves, our dollar market
share decreased 3.0 percentage points in 2001, to 32.8%, from 35.8%
in 2000. Retail consumption of our gloves products decreased 5.7%,
while the category grew 2.8%. The decreases in market share and
consumption was due to competitive activities.

Net sales of PERSONAL GROOMING products decreased $0.2 million
to $42.9 million in 2001. Our largest Personal Grooming brand,
OGILVIE increased its dollar market share to 70.2% of the home
perms/straighteners category, which was a gain of 4.2 percentage
points compared to 2000. Retail consumption of OGILVIE was
essentially flat, while the category decreased 6.3%. Our 2001
results benefited from a full year of sales of OGILVIE temporary
perms, which was introduced in mid 2000. BINACA increased its dollar
market share to 47.6% of the breath freshener (spray and drops)
category, which was a gain of 2.3 percentage points compared to
2000. For our non-core businesses, net sales of our toothbrushes
declined 23% and our skin care brands declined 4% compared to 2000.

INTERNATIONAL/CORPORATE SALES DIVISION--Net sales increased $6.4 million,
or 5%, to $145.6 million in 2001. The increase was due primarily to higher
net sales in the specialty classes of trade. Net sales in the U.S.
specialty classes of trade were $73.4 million in 2001, an increase of 9%
compared to 2000. We believe this growth was due primarily to the
increased focus on these distribution channels. Our international net
sales including our Canadian subsidiary and Puerto Rico were $72.2 million
in 2001, up $0.5 million compared to 2000.

CONSOLIDATED GROSS PROFIT--Our consolidated gross profit decreased $4.5 million,
or 1%, to $474.7 million in 2001. As a percent of net sales, gross profit
decreased 0.4 percentage points, to 57.2% in 2001. The decrease in gross profit
and gross profit as a percent of net sales was due primarily to: our lower net
sales, lower pension income and higher bad debt provisions.

CONSOLIDATED PRODUCT CONTRIBUTION--Our consolidated product contribution
decreased $7.3 million, or 2%, to $285.3 million in 2001. As a percent of net
sales, product contribution decreased 0.8 percentage points to 34.4% in 2001.
The decrease in product contribution and product contribution as a percent of
net sales was due primarily to lower gross margins and higher overall
advertising and sales promotion expenses.

F-9

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

PERSONAL PRODUCTS DIVISION--Product contribution decreased $0.2 million to
$183.6 million in 2001. The decrease was due to our lower net sales. As a
percent of net sales, product contribution increased 0.6 percentage points
to 38.4% in 2001. The increase was primarily the result of lower overall
advertising and sales promotion expenses as a percentage of net sales.

CONSUMER PRODUCTS DIVISION--Product contribution decreased $4.2 million,
or 7%, to $52.9 million in 2001. As a percent of net sales, product
contribution decreased 2.1 percentage points to 25.7% in 2001. The
decrease in product contribution and product contribution as a percent of
net sales was due primarily to higher advertising and sales promotion
expenses in our Sun Care and WOOLITE businesses, higher expenses
associated with Sun Care returns and, to a lesser extent, the mix of
products sold.

INTERNATIONAL/CORPORATE SALES DIVISION--Product contribution increased
$1.8 million, or 3%, to $56.9 million in 2001. The increase in product
contribution was due primarily to higher net sales. As a percent of net
sales, product contribution decreased 0.5 percentage points to 39.1% in
2001. The decrease was due primarily to higher advertising and sales
promotion expenses as a percent of net sales.

CONSOLIDATED OPERATING EARNINGS--Our consolidated operating earnings decreased
$13.9 million, or 9%, to $134.0 million in 2001. The decrease in operating
earnings was the result of lower consolidated net sales, gross profit, and
product contribution as discussed and higher selling, distribution, research and
administrative expenses reflecting normal salary increases and support of new
product initiatives.

CONSOLIDATED INTEREST EXPENSE--Our consolidated interest expense decreased $9.0
million, or 11%, to $75.9 million in 2001. The decrease in interest expense was
due to the combined impact of:

o Lower average debt balances. Our average debt for 2001 was less than
the prior year by $54.5 million, or 6%, due primarily to the
establishment of a receivables facility (see Note 8) and the
prepayment of $21.0 million of scheduled principal payments on our
new term A loan and $3.5 million of scheduled principal payments on
our new term B loan;
o Lower interest rates when compared to the prior year. Our weighted
average variable interest rate in 2001 was 6.85% compared to 7.76%
in 2000; and
o A change in our debt portfolio, resulting in a higher ratio of
variable rate debt to fixed rate debt, which created additional
savings due to the favorable short-term interest rate environment in
fiscal 2001.

CONSOLIDATED OTHER EXPENSES--Our consolidated other expenses were $2.1 million
in 2001. During the second quarter of 2001, we entered into a receivables
purchase agreement with a third party as part of the refinancing transaction
(see Notes 7 and 8). The amount charged to other expenses represents the
discount offered to the third party on the sale of receivables and the
amortization of deferred financing costs associated with the formation of the
receivables facility.

CONSOLIDATED INCOME TAXES--Our consolidated income taxes decreased $2.4 million,
or 9%, to $25.1 million in 2001. As a percent of pre-tax earnings, our effective
tax rate before extraordinary loss increased 1.3 percentage points to 44.9% of
pre-tax earnings in 2001. Our effective tax rate increases as the portion of
goodwill amortization that is non-deductible for tax purposes becomes a larger
portion of operating earnings. See Management's Discussion and Analysis-Recently
Issued Accounting Standards of this report, for a discussion of the change in
accounting rules governing goodwill/intangible amortization commencing in fiscal
2002.

CONSOLIDATED EXTRAORDINARY LOSS--In the second quarter of 2001, we recorded an
extraordinary loss of $19.3 million, net of income tax benefits, as a result of
the refinancing of our senior indebtedness (see Note 9). The extraordinary loss
included cash provisions for call premiums on our 9% Senior Subordinated Notes
due 2003 (the "9% Notes") and our 8 7/8% Senior Notes due 2004 (the "8 7/8%
Notes"), termination fees for two interest rate swap agreements related to our
prior credit

F-10

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

facility, and duplicative net interest expense during the period between
extinguishment and redemption of the 9% Notes and 8 7/8% Notes. The
extraordinary loss also contained a non-cash provision for the write-off of
unamortized deferred financing costs related to the 9% Notes, 8 7/8% Notes and
the prior credit agreement.

TWELVE MONTHS ENDED DECEMBER 30, 2000 COMPARED TO TWELVE MONTHS ENDED DECEMBER
25, 1999

CONSOLIDATED NET SALES--Our consolidated net sales increased $43.6 million, or
6%, to $831.3 million in 2000. Excluding the impact of the 1999 acquisitions and
the divested portion of our JHIRMACK business, our consolidated net sales grew
by $15.9 million in 2000, or 2%, compared to 1999.

PERSONAL PRODUCTS DIVISION--Net sales increased $29.6 million, or 6%, to
$486.5 million in 2000. Excluding the impact of the 1999 acquisitions, the
net sales of the division grew by $2.2 million, or 1%, compared to 1999.

Net sales of INFANT CARE products increased $17.1 million, or
7%, to $272.2 million in 2000. Excluding the impact of the 1999
acquisitions, our Infant Care net sales decreased $10.3 million, or
5%, compared to 1999. During 2000, we experienced a high level of
competitive activity across many areas of our key Infant Care
businesses. Competitors launched new products that were supported by
extensive advertising and promotional activities that, we believe
impacted the growth rates in our Infant Care businesses. In
addition, we instituted a voluntary recall of two of our latex
pacifier products in May 2000. This impacted our net sales by an
estimated $3.0 million. We believe this will remain a highly
competitive category in the future. As a result, we continue to
aggressively defend our market share positions through product
innovation, the introduction of new products and targeted
advertising and promotional activity.

In INFANT FEEDING, our dollar market share was 39.3% in
2000, a decrease of 2.6 percentage points compared to 1999. We
remained the market leader in the infant feeding category with
a dollar market share almost double that of our nearest
competitor. The dollar market share decline was the result of
increased competitive activity in our Cups and Disposable
Feeding businesses and, to a lesser extent, our recall of two
pacifier products.

In CUPS, our dollar market share was 54.9% in
2000, a decrease of 5.6 percentage points compared to
1999. The cups category, based on total dollar volume of
cups purchased by consumers, grew 13% in 2000 and our
retail consumption increased 2%. We have been the market
leader in the infant cup segment since our development
and introduction of the first Spill-Proof cup. This
innovation led to significant growth in the infant cup
market, attracting a number of new competitors. Our
closest competitor in the infant cup segment had a
dollar market share of less than 20% in 2000. We
continue to aggressively defend our leadership position,
introducing two innovative new products to the category
in 2000 including: THE GRIPSTER, designed for small
hands and the DRINKUP, a Spill-Proof cup for older
children transitioning to adult cups.

In DISPOSABLE FEEDING, our dollar market share was
82.5% in 2000, a decrease of 1.5 percentage points
compared to 1999. Retail consumption in the category
declined 2% in 2000 and our consumption declined 3%. Our
dollar market share decline was due to a new competitive
offering that was heavily supported with promotional
spending. Recent market share data indicates that our
dollar market share of the disposable feeding category
has returned to the level held prior to the introduction
of the new competitive offering. We believe, the decline
in the category experienced in 2000 was the result of
innovative new products in the reusable hard bottle
segment.

In REUSABLE HARD BOTTLES, our dollar market share
was 13.6% in 2000, an increase of 2.2 percentage points
compared to 1999. Retail consumption of our reusable
bottles increased 24%

F-11

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

while the category grew 4%. This success was the result
of our introduction of two new innovative hard bottles.

As mentioned previously, our PACIFIER business was
negatively impacted in 2000 by a voluntary recall of two
of our latex pacifier products. These pacifiers passed
all federal testing requirements and there were no
reported incidents requiring medical attention. However,
we were concerned about the aging properties of the
latex used in the pacifiers. A new latex pacifier was
re-launched in 2001.

In DIAPER PAILS, we continued to lead the category with
our DIAPER GENIE diaper disposal system. Our dollar market
share was 89.8% in 2000, which was down 3.7 percentage points
compared to 1999. Retail consumption in the category increased
5% and our consumption increased 1%. A competitor launched a
new product that made some in-roads in the mass distribution
channel, which negatively impacted our dollar market share and
consumption levels.

In PRE-MOISTENED TOWELETTES (hands and face), our dollar
market share was 75.7% in 2000, a decrease of 2.8 percentage
points compared to 1999. Retail consumption of our WET ONES
brand increased 14% in 2000 while the category grew 18%. The
category had a number of new competitive entries in 2000,
which negatively impacted our dollar market share, but
significantly contributed to consumption gains in the category
and in WET ONES. In 2000, we introduced Ultra WET ONES, a
larger pre-moistened wipe to expand our offerings in the
pre-moistened towelette category.

In INFANT TOILETRIES, our dollar market share was 12.6%
in 2000, a decrease of 2.1 percentage points compared to 1999.
Retail consumption of our BABY MAGIC brand decreased 9% while
the category grew 7%. A new competitor in the category
introduced a full line of toiletries supported with an
aggressive advertising campaign. Despite our dollar market
share loss, we maintained our position as the number two
branded offering in the category.

In BABY WIPES, our dollar market share was 2.9% in 2000,
a decrease of 1.0 percentage point compared to 1999. In the
fourth quarter of 2000, we re-launched our baby wipes product
under the BABY MAGIC brand name in the United States.

Net sales of FEMININE CARE products increased $12.5 million,
or 6%, to $214.3 million in 2000. Our share of the U.S. tampon
category grew to 30.7% in 2000, which was a gain of 1.1 percentage
points compared to 1999. Our retail consumption grew 4.6%, in
dollars, outpacing the category, which grew at 1.0%. We believe our
continued success in the tampon category is attributable to:

o targeted advertising and consumer sampling programs,
o product innovation, and
o our category building skills.

Our targeted advertising focuses on key product attributes
important for today's active lifestyles. We use a number of methods
to introduce our products to potential users, including sampling
programs and educational materials for young teens. Our history of
product innovation has attracted new, younger consumers to the
market with such products as SLIMFITS marketed to young teens and
GENTLE GLIDE and SILK GLIDE Odor Absorbing tampons. We believe we
are contributing to the growth of the tampon category by educating
consumers, attracting young first time users, and converting
feminine protection pad users to tampon users.

F-12

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

CONSUMER PRODUCTS DIVISION--Net sales increased $10.1 million, or 5%, to $205.6
million in 2000. Excluding the impact of the divested portion of our JHIRMACK
business, net sales of the division grew by $12.4 million, or 6%, compared to
1999.

Net sales of SUN CARE products increased $13.4 million, or
14%, to $110.3 million in 2000. Our dollar market share of the sun
care category grew to 21.6% in 2000 an increase of 1.4 percentage
points compared to 1999. The retail consumption of our Sun Care
products increased 9.4%, in dollars, surpassing the category, which
grew 2.5%. While dollar market share and retail consumption growth
for our products was strong in 2000, we believe our net sales were
negatively impacted by weather during the summer months. We believe
our market share and retail consumption growth is attributable to a
number of factors including increased consumer awareness of the need
for sun care products, our array of new products and strong sales
and market execution skills, including strategic shelf placement and
displays. Our BANANA BOAT line offers a full spectrum of sunblock,
sunless tanning and after-sun products. BANANA BOAT is the second
largest brand in the sun care market and the number one brand in
after-sun care.

Net sales of HOUSEHOLD PRODUCTS increased $1.2 million, or 2%,
to $52.2 million in 2000. The increase was due primarily to our
gloves business, which grew its dollar market share to 36.8% in
2000, an increase of 3.2 percentage points compared to 1999. Retail
consumption of our gloves increased 9.9%, as opposed to category
growth of 0.4% during the same period. This growth was driven by
retail consumption growth of 41% in our disposable gloves segment
associated with distribution gains during the year. Our WOOLITE
brands' dollar market share for fiscal 2000 was 19.0% of the rug and
upholstery cleaning category which is a decline of 0.7 percentage
points compared to 1999. The rug and upholstery cleaning category
decreased 0.6% in 2000 and the retail consumption of WOOLITE
decreased 4.4%, due primarily to competitive activity.

Net sales of PERSONAL GROOMING products decreased $4.5
million, or 9%, to $43.1 million in 2000. Personal Grooming net
sales excluding the divested U.S. JHIRMACK line decreased $2.1
million, or 5%, compared to 1999. Our two largest Personal Grooming
brands OGILVIE and BINACA each experienced growth in market share
and retail consumption. OGILVIE increased its dollar market share to
66.2% of the home perms/straighteners category, which was a gain of
8.5 percentage points compared to 1999. The introduction of OGILVIE
Straightener and 7-Day Curls helped increase our retail consumption
12.8% in 2000 and slowed the declining trend experienced in the
category. BINACA increased its dollar market share to 46.7% of the
breath freshener (spray and drops) category, which was a gain of 5.7
percentage points compared to 1999. The successful introduction of
FAST BLAST and more front-end store placements helped increase our
retail consumption 5.4% despite a 7.4% decline in the category.
While our dollar market share and consumption growth for OGILVIE and
BINACA were strong in 2000, we believe net sales were negatively
impacted by a reduction in trade inventories.

INTERNATIONAL/CORPORATE SALES DIVISION--Net sales increased $3.9 million,
or 3%, to $139.2 million in 2000. The increase was due primarily to higher
net sales in the specialty classes of trade. Net sales in the U.S.
specialty classes of trade were $67.5 million in 2000, an increase of 5.9%
compared to 1999. We believe this growth was due primarily to the
increased focus on these distribution channels. Our international net
sales including our Canadian subsidiary were $65.6 million in 2000, down
1.6% compared to 1999. The decrease was due primarily to a 1.7% decline in
our Canadian subsidiary's net sales due to competitive pressures in Infant
Care.

CONSOLIDATED GROSS PROFIT--Our consolidated gross profit increased $22.7
million, or 5%, to $479.2 million in 2000. As a percent of net sales, gross
profit decreased 0.3 percentage points, to 57.6% in 2000. The dollar increase in
gross profit was due primarily to our higher net sales and the lower gross
margins were due primarily to costs associated with capacity constraints in
Feminine Care, higher expenses related to Sun Care returns, costs associated
with the pacifier

F-13

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

recall and, to a lesser extent, product mix. Gross profit was positively
impacted by 0.3 percentage points related to favorable pension income in 2000.

CONSOLIDATED PRODUCT CONTRIBUTION--Our consolidated product contribution
increased $5.0 million, or 2%, to $292.6 million in 2000. The increase was due
to our higher net sales. As a percent of net sales, product contribution
decreased 1.3 percentage points to 35.2% in 2000. The decrease was primarily the
result of higher overall advertising and sales promotion expenses as a
percentage of net sales as we defended against an unusually high level of
competitive activity and, to a lesser extent, lower gross margins.

PERSONAL PRODUCTS DIVISION--Product contribution increased $2.1 million,
or 1%, to $183.8 million in 2000. The increase was due primarily to higher
net sales. As a percent of net sales, product contribution decreased 2.0
percentage points to 37.8% in 2000. The decrease was primarily the result
of costs associated with capacity constraints in our Feminine Care
business, lower gross margins in our Infant Care businesses due primarily
to the impact of costs associated with the pacifier recall, and higher
overall advertising and sales promotion expenses as a percentage of net
sales.

CONSUMER PRODUCTS DIVISION--Product contribution decreased $3.6 million,
or 6%, to $57.1 million in 2000. As a percent of net sales, product
contribution decreased 3.2 percentage points to 27.8% in 2000. The
decreases were due primarily to higher advertising and sales promotion
expenses as a percent of net sales in our Sun Care and WOOLITE businesses,
higher expenses associated with Sun Care returns and, to a lesser extent,
product mix.

INTERNATIONAL/CORPORATE SALES DIVISION--Product contribution increased
$1.7 million, or 3%, to $55.1 million in 2000. The increase in product
contribution was due primarily to higher net sales. As a percent of net
sales, product contribution increased 0.1 percentage points to 39.6% in
2000. The increase was due primarily to higher net sales in our corporate
sales channel, which generally has better margins than the other channels
of distribution included in this division.

CONSOLIDATED OPERATING EARNINGS--Our consolidated operating earnings decreased
$7.3 million, or 5%, to $147.9 million in 2000. The decrease in operating
earnings was the result of lower consolidated product contribution as discussed
and higher selling, distribution, research and administrative expenses
reflecting normal inflationary increases and the full year impact of the 1999
acquisitions.

CONSOLIDATED INTEREST EXPENSE--Our consolidated interest expense increased $5.9
million, or 7%, to $84.9 million in 2000. Average debt for 2000 exceeded the
prior year by approximately $14.6 million, or 2%, due primarily to the purchases
of the DIAPER GENIE business in January 1999 and the BABY MAGIC business in June
1999. The impact of the additional debt was compounded by higher weighted
average interest rates in 2000 compared to 1999. Our weighted average variable
interest rate in 2000 was 7.76% compared to 6.75% in 1999.

CONSOLIDATED INCOME TAXES--Our consolidated income taxes decreased $4.7 million,
or 15%, to $27.5 million in 2000. As a percent of pre-tax earnings, our
effective tax rate increased 1.4 percentage points to 43.6% of pre-tax earnings
in 2000. Our effective tax rate increases as the portion of goodwill
amortization that is non-deductible for tax purposes becomes a larger portion of
operating earnings.

F-14

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

On May 22, 2001, we completed a refinancing of our senior indebtedness
(the "Refinancing Transaction"). We issued $350.0 million principal amount of 9
3/8% Senior Subordinated Notes due 2011 (the "9 3/8% Notes"), entered into a new
senior secured credit facility consisting of a new six-year $100.0 million term
A loan facility (the "'07-Term A Loan"), a new eight-year $400.0 million term B
loan facility (the "'09-Term B Loan"), and a new six-year $125.0 million
revolving credit facility. In addition, we entered into a receivables purchase
agreement (the "Receivables Facility") with a third party through a newly
formed, wholly owned, special purpose bankruptcy remote subsidiary, Playtex A/R
LLC. The total amount available to us under the Receivables Facility is up to
$100.0 million, depending on: the amount of receivables generated by us and sold
to Playtex A/R LLC, the rate of collection on those receivables, and other
characteristics of the receivables pool which affects their eligibility (see
Note 8). The net proceeds from the Refinancing Transaction and the Receivables
Facility, were used to pay-off all outstanding balances under our prior credit
agreement and costs associated with the Refinancing Transaction. In addition, we
extinguished our 9% Notes and our 8 7/8% Notes.

At December 29, 2001, our working capital (current assets net of current
liabilities) increased $33.6 million to $107.8 million compared to $74.2 million
at December 30, 2000.

o Total current assets decreased $26.5 million at December 29, 2001
compared to December 30, 2000. The decrease was primarily the result
of the sale of an undivided fractional share of all eligible
accounts receivable as part of the Receivables Facility. Our
receivables decreased $98.5 million, primarily as a result of the
sale of receivables to Playtex A/R LLC in conjunction with our
Receivables Facility. This was offset by a $51.2 million retained
interest in receivables, which represents our interest in the
receivables portfolio net of the undivided fractional interest that
was sold to a third party. Cash balances increased by $23.7 million
at December 29, 2001 compared to December 30, 2000 and all other
current assets decreased by $2.9 million compared to December 30,
2000.

o Total current liabilities decreased $60.0 million at December 29,
2001 compared to December 30, 2000. The decrease was primarily the
result of reductions in our current maturities of long-term debt. We
reduced our current maturities of long-term debt by $45.1 million at
December 29, 2001 compared to December 30, 2000 as a result of the
Refinancing Transaction and prepayment of certain debt balances
under the new credit agreement. In addition, we reduced accounts
payable by $7.9 million, accrued expenses by $4.4 million, and
income taxes payable by $2.6 million compared to December 30, 2000.

Our net cash flows from operations increased $48.2 million, or 61%, to
$126.9 million in fiscal 2001. The growth in cash generated from operations was
primarily due to the establishment of the Receivables Facility and the
subsequent sale of an undivided fractional interest in receivables to a third
party. At December 29, 2001, the undivided fractional interest in receivables
sold to a third party was $56.5 million. The Receivables Facility favorably
impacted our net cash flows from operations, as we were able to turn accounts
receivables into cash at a faster rate than in prior years. We believe our net
cash flows from operations will return to levels comparable to 2000 and 1999
depending on operating results and the use of the Receivables Facility in a
manner similar to fiscal 2001.

Capital expenditures for equipment and facility improvements were $20.0
million for the twelve months ended December 29, 2001. These expenditures were
used primarily to support new products, expand capacity in key product areas,
upgrade production equipment, invest in new technologies, and improve our
facilities. Capital expenditures for 2002 are expected to be in the range of
$20.0 to $23.0 million, in line with recent expenditure levels.

At December 29, 2001, long-term debt (including current portion but
excluding obligations due to related party) was $888.8 million compared to
$931.6 million at December 30, 2000. This debt reduction was primarily the
result of the establishment of the Receivables Facility and the prepayment of
principal resulting from cash generated from operations. This was partially
offset by borrowings associated with the payment of fees and expenses associated
with the debt refinancing. Since the Refinancing Transaction, we have prepaid
$21.0 million of scheduled principal payments on the

F-15

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

'07-Term A Loan and $3.5 million of scheduled principal payments on the '09-Term
B Loan. Our fixed principal debt repayment obligations at December 29, 2001 are
(excluding balances outstanding under the Revolving Credit Facility and due to
related party):

o $67.7 million in 2004, o $13.4 million in 2007,
o $24.4 million in 2005, o $195.8 million in 2008, and
o $25.4 million in 2006, o $545.1 million thereafter.

We do not have any debt obligations due prior to fiscal 2004. However,
commencing with our fiscal 2002 year end, we may be required to make mandatory
principal repayments in accordance with the excess cash flow calculation as
defined in our credit agreement.

We intend to fund our operating cash, capital expenditures and debt
service requirements through cash flow generated from operations, proceeds from
the Receivables Facility, and borrowings under the Revolving Credit Facility
through fiscal 2007. However, we do not expect to generate sufficient cash flow
from operations to make the scheduled principle payments on the '09-Term B Loan
due in fiscal 2008 and 2009, which collectively total $390.9 million. In
addition, we do not expect to generate sufficient cash flow from operations to
make the $350.0 million scheduled principal payment on the 9 3/8% Notes due in
fiscal 2011. Accordingly, we will have to either refinance our obligations, sell
assets or raise equity capital to repay the principal amounts of these
obligations. Historically, our cash flows from operations and refinancing
activities have enabled us to meet all of our obligations. However, we can not
guarantee that our operating results will continue to be sufficient or that
future borrowing facilities will be available for the payment or refinancing of
our debt on economically attractive terms.

The Revolving Credit Facility provides for borrowings of up to $125.0
million and matures on May 22, 2007. At December 29, 2001, we had $105.8 million
available to borrow under the Revolving Credit Facility. At December 29, 2001,
the undivided fractional interest sold by Playtex A/R LLC to a third party
commercial paper conduit under the Receivables Facility was $56.5 million.

Terms of the new senior secured credit facility require us to meet certain
financial tests and also include conditions or restrictions on:

o new indebtedness and liens, o dividends and other
o major acquisitions or distributions, and
mergers, o the application of excess
o capital expenditures and cash flow.
asset sales,

The terms of the 9 3/8% Notes contain similar restrictions.

Since the beginning of 1998, we have made a number of acquisitions and
financed them by borrowing additional money, issuing a convertible note and
shares of our Common Stock. We will continue to consider acquisitions of other
companies or businesses that may require us to seek additional debt or equity
financing. As we cannot assure you that such financing will be available to us,
our ability to expand our operations through acquisitions may be restricted.

Inflation in the United States and Canada has not had a significant effect
on our operations during recent periods.

F-16

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in accordance with generally
accepted accounting principles requires us to make estimates and assumptions.
These estimates and assumptions affect:

o the reported amounts and timing of revenue and expenses,
o the reported amounts and classification of assets and liabilities,
and
o the disclosure of contingent liabilities.

Actual results could vary from our estimates and assumptions. These estimates
and assumptions are based on historical results, assumptions that we make as
well as assumptions by third parties.

The level of reserves for Sun Care product returns, bad debts and advertising
and promotional costs are three areas that you should be aware of.

o In accordance with industry practice, we allow our customers to
return unsold Sun Care products at the end of the sun care season.
We record sales at the time the products are shipped and title
transfers. Simultaneously, we reduce sales and cost of sales, and
reserve amounts on our balance sheet for anticipated returns based
upon an estimated return level, in accordance with generally
accepted accounting principles. The level of returns may fluctuate
from our estimates due to several factors including weather
conditions, customer inventory levels, and competitive conditions.
There are, however, a number of uncertainties associated with Sun
Care returns as noted above. Based on our 2001 Sun Care results, a 1
% change in our return rates would have impacted our reported net
sales by $1.3 million and our reported operating earnings by $1.1
million.

o The extension of trade credit carries with it the chance that the
customer may not pay for the goods when payment is due. We review
our receivables portfolio and provide reserves for potential bad
debts including those we know about and those that have not been
identified but may exist due to the risk associated with the
granting of credit. The estimated reserves required to cover
potential losses, which are unknown as of the balance sheet date,
are developed using historical experience. The adequacy of the
estimated reserve may be impacted by the deterioration of a large
customer and/or significant weakness in the economic environment
resulting in a higher level of customer bankruptcy filings. See
Schedule II-Valuation and Qualifying Accounts in the fiscal 2001
Annual Report on Form 10-K for information regarding actual bad debt
write-offs.

o The nature of our advertising and promotional activities requires
the use of estimates to record certain expenses and liabilities.
These expenditures are primarily for television, radio and print
advertising and production as well as consumer and trade incentives
such as coupons and other price promotional activities. Actual costs
associated with the redemption of coupons and other price
promotional activities are not always known as of the balance sheet
date and are estimated based on historical statistics and
experience.

RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2000, the Emerging Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") reached a consensus on Issue No. 00-14,
"Accounting for Certain Sales Incentives." In April of 2001, the EITF of the
FASB reached a consensus on Issue No. 00-25, "Vendor Income Statement
Characterization of Consideration from a Vendor to a Reseller." Both of these
Issues became effective for us in the first quarter of 2002. These issues
address the recognition, measurement, and income statement classification for
certain advertising, promotional and cooperative spending activities. These
issues will require reclassification of our net sales and certain advertising
and promotion expenses. These reclassifications will reduce both our net sales
and advertising and promotion expenses by equal and offsetting amounts. This
will not have any impact on our reported operating earnings, net income, or
earnings per share. They will, however, lower our reported gross margins and
advertising and sales promotion expenses as a percent of net sales, while
increasing

F-17

PLAYTEX PRODUCTS, INC.
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

our operating earnings margin. When we reclassify our statements of earnings in
fiscal 2002, as a result of these rules, both reported net sales and advertising
and sales promotional expenses will be reduced by $106.5 million, $98.0 million,
and $92.2 million for fiscal 2001, 2000, and 1999, respectively.

In July 2001, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 141 applies to all business combinations with a
closing date after June 30, 2001. This statement eliminates the
pooling-of-interests method of accounting and further clarifies the criteria for
recognition of intangible assets separately from goodwill.

SFAS No. 142 eliminates the amortization for goodwill and for other
indefinite-lived intangible assets, such as trademarks, and initiates an annual
review for impairment of these items. Identifiable intangible assets, like
patents, with a definite useful life will continue to be amortized. We adopted
SFAS No. 142 effective December 30, 2001, the start of our fiscal year 2002.
Upon adoption, we ceased the amortization of: (a) all of our remaining net
goodwill balance and (b) trademarks that are determined to have indefinite
lives. We will perform impairment tests on our goodwill and indefinite-lived
intangible assets based on a fair value concept within the prescribed time lines
of SFAS No. 142. Since we will no longer amortize goodwill or other intangible
assets with indefinite lives, we anticipate our amortization expense will be
reduced from $22 million in 2001 to approximately $1 million in 2002. This
change will favorably impact our earnings per share by approximately $0.28 in
2002 based on the diluted shares outstanding at December 29, 2001. As of
December 29, 2001, we had net unamortized goodwill of $494.2 million and net
unamortized trademarks and patents of $159.5 million. For fiscal 2001, we had
goodwill amortization expense of $16.8 million and trademark and patent
amortization expense of $5.3 million.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," which supersedes both SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of Operations--Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions," for the disposal of a segment of a business
(as previously defined in that Opinion). SFAS No. 144 retains the fundamental
provisions in SFAS No. 121 for recognizing and measuring impairment losses on
long-lived assets held for use and long-lived assets to be disposed of by sale,
while also resolving significant implementation issues associated with SFAS No.
121. We adopted the provisions of SFAS No. 144 during the first quarter of 2002.
We are currently evaluating this new Statement and have not determined whether
its provisions will have any impact on our financial statements.

F-18

PLAYTEX PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

TWELVE MONTHS ENDED
-----------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ------------- ------------

Net sales......................................................................... $ 830,048 $ 831,343 $ 787,711
Cost of sales..................................................................... 355,394 352,174 331,242
---------- ---------- ----------
Gross profit.................................................................. 474,654 479,169 456,469
---------- ---------- ----------
Operating expenses:
Advertising and sales promotion............................................... 189,362 186,596 168,878
Selling, distribution and research............................................ 96,695 92,420 83,915
Administrative................................................................ 32,546 29,866 27,383
Amortization of intangibles................................................... 22,060 22,350 21,064
---------- ---------- ----------
Total operating expenses................................................... 340,663 331,232 301,240
---------- ---------- ----------
Operating earnings...................................................... 133,991 147,937 155,229
Interest expense including related party interest expense of $12,150, net of
related party interest income of $12,003 for all periods presented............ 75,861 84,884 78,961
Other expenses.................................................................... 2,103 -- --
---------- ---------- ----------
Earnings before income taxes............................................ 56,027 63,053 76,268
Income taxes...................................................................... 25,146 27,509 32,197
---------- ---------- ----------
Earnings before extraordinary loss...................................... 30,881 35,544 44,071
---------- ---------- ----------
Extraordinary loss on early extinguishment of debt, net of $12,829 tax benefit.... (19,336) -- --
---------- ---------- ----------
Net earnings............................................................ $ 11,545 $ 35,544 $ 44,071
========== ========== ==========

Earnings per share before extraordinary loss:
Basic......................................................................... $ .51 $ .58 $ .73
Diluted....................................................................... $ .51 $ .58 $ .72

Earnings per share:
Basic......................................................................... $ .19 $ .58 $ .73
Diluted....................................................................... $ .19 $ .58 $ .72

Weighted average common shares and equivalent common shares outstanding:
Basic......................................................................... 61,007 60,824 60,481
Diluted....................................................................... 61,115 62,585 62,553

See the accompanying notes to consolidated financial statements.

F-19

PLAYTEX PRODUCTS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 29, DECEMBER 30,
ASSETS 2001 2000
------------- ------------

Current assets:
Cash........................................................................................... $ 34,006 $ 10,282
Receivables, less allowance for doubtful accounts.............................................. 32,491 130,970
Retained interest in receivables............................................................... 51,238 --
Inventories.................................................................................... 82,193 85,326
Deferred income taxes, net..................................................................... 12,097 13,321
Other current assets........................................................................... 6,793 5,416
------------- ------------
Total current assets..................................................................... 218,818 245,315
Net property, plant and equipment.................................................................. 124,761 118,155
Intangible assets, net:
Goodwill....................................................................................... 494,187 510,995
Trademarks, patents and other.................................................................. 159,516 164,268
Deferred financing costs........................................................................... 17,931 12,334
Due from related party............................................................................. 80,017 80,017
Other noncurrent assets............................................................................ 9,942 8,300
------------- ------------
Total assets............................................................................. $ 1,105,172 $ 1,139,384
============= ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................................................... $ 43,603 $ 51,535
Accrued expenses............................................................................... 65,376 69,800
Income taxes payable........................................................................... 2,059 4,622
Current maturities of long-term debt........................................................... -- 45,125
------------- ------------
Total current liabilities................................................................ 111,038 171,082
Long-term debt..................................................................................... 888,800 886,438
Due to related party............................................................................... 78,386 78,386
Other noncurrent liabilities....................................................................... 13,146 12,814
Deferred income taxes, net......................................................................... 58,372 46,727
------------- ------------
Total liabilities........................................................................ 1,149,742 1,195,447
------------- ------------
Stockholders' equity:
Common stock, $0.01 par value, authorized 100,000,000 shares, issued and
outstanding 61,044,199 shares at December 29, 2001
and 60,970,899 shares at December 30, 2000.................................................. 610 609
Additional paid-in capital..................................................................... 524,384 523,706
Retained earnings (deficit).................................................................... (565,675) (577,220)
Accumulated other comprehensive earnings....................................................... (3,889) (3,158)
------------- ------------
Total stockholders' equity............................................................... (44,570) (56,063)
------------- ------------
Total liabilities and stockholders' equity............................................... $ 1,105,172 $ 1,139,384
============= ============

See the accompanying notes to consolidated financial statements.

F-20

PLAYTEX PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

AND ACCUMULATED OTHER COMPREHENSIVE EARNINGS

(IN THOUSANDS)

ACCUMULATED
COMMON ADDITIONAL RETAINED OTHER
SHARES COMMON PAID-IN EARNINGS COMPREHENSIVE
OUTSTANDING STOCK CAPITAL (DEFICIT) EARNINGS TOTAL
------------ --------- ----------- ------------ ------------- ----------

Balance, December 26, 1998................ 60,402 $ 604 $ 518,179 $ (656,835) $(2,923) $ (140,975)
Net earnings.............................. -- -- -- 44,071 -- 44,071
Other comprehensive earnings........... -- -- -- -- 403 403
----------
Comprehensive earnings.............. 44,474
Stock issued to employees exercising
stock options.......................... 160 1 1,632 -- -- 1,633
------ ----- ---------- ----------- ------- ----------
Balance, December 25, 1999.......... 60,562 605 519,811 (612,764) (2,520) (94,868)
Net earnings.............................. -- -- -- 35,544 -- 35,544
Other comprehensive earnings........... -- -- -- -- (638) (638)
----------
Comprehensive earnings.............. 34,906
Stock issued to employees exercising
stock options.......................... 409 4 3,895 -- -- 3,899
------ ----- ---------- ----------- ------- ----------
Balance, December 30, 2000.......... 60,971 609 523,706 (577,220) (3,158) (56,063)
Net earnings.............................. -- -- -- 11,545 -- 11,545
Other comprehensive earnings........... -- -- -- -- (731) (731)
----------
Comprehensive earnings.............. 10,814
Stock issued to employees exercising
stock options.......................... 73 1 678 -- -- 679
------ ----- ---------- ----------- ------- ----------
Balance, December 29, 2001.......... 61,044 $ 610 $ 524,384 $ (565,675) $(3,889) $ (44,570)
====== ===== ========== =========== ======= ==========

See the accompanying notes to consolidated financial statements.

F-21

PLAYTEX PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

TWELVE MONTHS ENDED
-----------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ------------- ------------

Cash flows from operations:
Net earnings.................................................................. $ 11,545 $ 35,544 $ 44,071
Non-cash items included in earnings:
Extraordinary loss, net of tax benefits.................................... 19,336 -- --
Amortization of intangibles................................................ 22,060 22,350 21,064
Amortization of deferred financing costs................................... 2,923 3,750 3,398
Depreciation............................................................... 13,140 11,547 9,847
Deferred income taxes...................................................... 12,902 11,383 9,070
Other, net................................................................. (1,016) (3,214) (113)
Changes in working capital items, net of effects of business acquisitions
and divestitures:
Decrease (increase) in receivables and retained interests................ 47,241 (714) (20,220)
Decrease (increase) in inventories....................................... 3,133 170 (23,568)
(Increase) decrease in other current assets.............................. (1,377) 223 207
(Decrease) increase in accounts payable.................................. (7,932) 6,428 4,365
Increase (decrease) in income taxes payable, net of impact of the
extraordinary loss.................................................. 10,292 (3,911) 602
(Decrease) increase in accrued expenses and other liabilities............ (5,312) (4,830) 7,564
---------- ----------- ----------

Net cash flows from operations......................................... 126,935 78,726 56,287
Cash flows used for investing activities:
Purchases of property, plant and equipment.................................... (19,950) (22,724) (20,802)
Businesses and intangible assets acquired, net................................ (500) (279) (210,109)
--------- ----------- --------
Net cash flows used for investing activities........................... (20,450) (23,003) (230,911)
Cash flows (used for) provided by financing activities:
Net borrowings (repayments) under working capital credit facilities........... 17,000 (32,500) 32,500
Long-term debt borrowings..................................................... 850,000 -- 150,000
Long-term debt repayments..................................................... (909,763) (23,813) (6,374)
Payment of debt extinguishment fees and related expenses...................... (21,177) -- --
Payment of financing costs.................................................... (19,500) (553) (2,480)
Issuance of shares of common stock............................................ 679 3,899 1,633
--------- ---------- ----------
Net cash flows (used for) provided by financing activities............. (82,761) (52,967) 175,279
Increase in cash.................................................................. 23,724 2,756 655
Cash at beginning of period....................................................... 10,282 7,526 6,871
--------- ---------- ----------
Cash at end of period............................................................. $ 34,006 $ 10,282 $ 7,526
========= ========== ==========

Supplemental disclosures of cash flow information
Cash paid during the periods for:
Interest.................................................................... $ 77,773 $ 80,979 $ 73,538
Income taxes, net of refunds................................................ $ 1,926 $ 20,039 $ 22,316

See the accompanying notes to consolidated financial statements.

F-22

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION--Our consolidated financial statements include
the accounts of Playtex Products, Inc. and all of our subsidiaries ("Playtex
Products, Inc."). All significant intercompany balances have been eliminated.

REVENUE RECOGNITION--Revenues are recognized when we ship our products to
customers and title transfers. In accordance with industry practice, we allow
customers to return unused Sun Care products after the summer season. We record
sales at the time the products are shipped and title transfers. Simultaneously,
we reduce sales and cost of sales and reserve amounts on our balance sheet for
anticipated returns based upon an estimated return level, in accordance with
generally accepted accounting principles.

ADVERTISING AND SALES PROMOTION COSTS--Costs incurred for producing and
communicating advertising, coupon and cooperative advertising programs are
expensed when incurred.

SHIPPING AND HANDLING COSTS--Freight costs are included in cost of goods
sold in the Consolidated Statements of Earnings.

INVENTORIES--Inventories are stated at the lower of cost (first-in,
first-out basis) or market. Inventory costs include material, labor and
manufacturing overhead.

NET PROPERTY, PLANT AND EQUIPMENT--Property, plant and equipment are
stated at cost and depreciated on the straight-line method over the estimated
useful life of the asset. Our estimated useful life for significant fixed asset
classes is as follows:

o land improvements range from o machinery and equipment range
15 to 40 years, from 4 to 15 years, and
o building and improvements o furniture and fixtures range
range from 20 to 40 years, from 5 to 10 years.

INTANGIBLE AND LONG-LIVED ASSETS--Long-lived assets including fixed
assets, goodwill, trademarks and patents are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. If events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable, we estimate the undiscounted
future cash flows to result from the use of the asset and its ultimate
disposition. If the sum of the undiscounted cash flows is less than the carrying
value, we recognize an impairment loss, measured as the amount by which the
carrying value exceeds the fair value of the asset. Upon adoption of Statement
of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other
Intangible Assets, we will cease the amortization of our remaining goodwill
balance and trademarks that are determined to have indefinite lives. We will
perform impairment tests on our indefinite-lived intangible assets based on a
fair value concept.

DEFERRED FINANCING COST--Expenses incurred to issue long-term debt have
been capitalized and are being amortized on a straight line basis which
approximates the effective yield method over the life of the related debt
agreements and are included as a component of interest expense in the
Consolidated Statements of Earnings. These deferred costs, net of accumulated
amortization, amounted to $17.9 million and $12.3 million at December 29, 2001
and December 30, 2000, respectively.

F-23

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES-- Deferred tax assets and liabilities are provided using the
asset and liability method for temporary differences between financial and tax
reporting bases using the enacted tax rates in effect for the period in which
the differences are expected to reverse. Valuation allowances are established,
when necessary, to reduce deferred tax assets to amounts that we expect to
recover.

FOREIGN CURRENCY TRANSLATION--Assets and liabilities of our foreign
subsidiaries have been translated into U.S. dollars at year-end exchange rates.
Revenues and expenses have been translated at average exchange rates for the
year. Net foreign translation gains or losses are accumulated in a separate
section of stockholders' equity titled "Accumulated Other Comprehensive
Earnings."

INTEREST RATE PROTECTION AGREEMENTS--We selectively enter into interest
rate protection agreements to reduce our financial risk associated with changing
interest rates. We've used two types of interest rate protection agreements in
the past:

o Swaps, which are derivative financial instruments that involve
trading of variable rate for fixed rate interest payments, and

o Caps, which are derivative financial contracts that limit interest
expense in the event interest rates rise above a predetermined rate.

We do not utilize derivative financial instruments for trading or other
speculative purposes. We currently are not a party to any interest rate
protection agreements.

FISCAL YEAR--Our fiscal year end is on the last Saturday in December
nearest to December 31 and, as a result, a fifty-third week is added every 6 or
7 years. Fiscal 2000 was a fifty-three week year. References to fiscal years
2001 and 1999 are for a fifty-two week period.

USE OF ESTIMATES--The preparation of financial statements in accordance
with generally accepted accounting principles requires us to make estimates and
assumptions. These estimates and assumptions affect:

o the reported amounts and timing of revenue and expenses,
o the reported amounts and classification of assets and liabilities,
and
o the disclosure of contingent liabilities.

Actual results could vary from our estimates and assumptions. We consider our
critical management estimates to be related to Sun Care returns, bad debt
provisions, and advertising and promotion expenses (see Management's Discussion
and Analysis-Critical Accounting Policies). During 2001, we recorded additional
reserves to cover higher than expected Sun Care returns from the 2000 season.
Also, we reduced our reserves for certain advertising and sales promotion
programs conducted prior to 2001 based on the actual costs of these programs
versus our original estimates. The aggregate impact of the adjustments to the
Sun Care and the advertising and sales promotion reserves was immaterial to 2001
reported operating earnings.

F-24

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. 1999 ACQUISITIONS AND DIVESTITURES

We made two acquisitions in 1999. We acquired the DIAPER GENIE business on
January 29, 1999, for $72.0 million in cash and $50.0 million of 6% Convertible
Subordinated Notes due 2004 (the "Convertible Notes") and we acquired the BABY
MAGIC brand of infant-related toiletries for $90.0 million in cash on June 30,
1999. We borrowed the cash portion of the deals from our prior credit facility
and issued Convertible Notes, which have an interest rate of 6% and are
convertible, at the holders' option, into approximately 2.6 million shares of
our common stock. The conversion price is approximately $19.15 per share. The
notes will mature in 2004 and are currently callable by us.

The following pro forma results of operations for the twelve months ended
December 25, 1999, assumes the acquisitions of DIAPER GENIE and BABY MAGIC had
occurred on December 27, 1998. We did not adjust for any consolidation savings
or other changes in revenues or expenses that we feel occurred as a result of
our acquiring these businesses. As a result, the following pro forma financial
information may not represent our operating results if we had acquired these
businesses on December 27, 1998.

TWELVE MONTHS
ENDED
DECEMBER 25,
(unaudited, in thousands, except per share data) 1999
---------------

Net sales ................................................. $817,310
Net earnings .............................................. $ 45,985

Earnings per share:
Basic ................................................ $ .76
Diluted .............................................. $ .75

Weighted average shares outstanding:
Basic ................................................ 60,481
Diluted .............................................. 62,553

Our results for the twelve months ended December 29, 2001 and December 30, 2000
include the operating results of the DIAPER GENIE and BABY MAGIC acquisitions.

1999 DIVESTITURE

On May 12, 1999, we sold, on a break-even basis, for cash and future guaranteed
minimum royalty payments, our U.S. and International JHIRMACK hair care
business. We retained the Canadian JHIRMACK business.

F-25

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. COMPREHENSIVE EARNINGS

Foreign currency translation adjustment is the only reconciling item
between net earnings and comprehensive earnings. For all of the periods
presented, there were no material differences between net earnings and
comprehensive earnings. Our comprehensive earnings for the last three fiscal
years were (in thousands):

TWELVE MONTHS ENDED
----------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ------------ ------------

Net earnings ............................ $ 11,545 $ 35,544 $ 44,071
Foreign currency translation adjustment . (731) (638) 403
-------- -------- --------
Comprehensive earnings ............. $ 10,814 $ 34,906 $ 44,474
======== ======== ========

4. BUSINESS SEGMENTS AND GEOGRAPHIC AREA INFORMATION

BUSINESS SEGMENTS

We are organized in three divisions, which are categorized as business
segments in accordance with generally accepted accounting principles.

Our PERSONAL PRODUCTS DIVISION includes Infant Care and Feminine Care
products sold in the United States primarily to mass merchandisers, grocery and
drug classes of trade. The Infant Care product category includes the following
brands:

Infant Feeding Products Other Infant Care Products
----------------------- --------------------------

o PLAYTEX disposable nurser o DIAPER GENIE diaper
system disposal system
o PLAYTEX cups and mealtime o WET ONES hand and face
products towelettes
o PLAYTEX reusable hard o BABY MAGIC infant
bottles toiletries
o PLAYTEX pacifiers o BABY MAGIC baby wipes, and
o MR. BUBBLE children's
bubble bath

Our CONSUMER PRODUCTS DIVISION includes Sun Care, Household Products, and
Personal Grooming products sold in the United States primarily to mass
merchandisers, grocery and drug classes of trade.

Sun Care Household Products
-------- ------------------
o BANANA BOAT o PLAYTEX gloves
o WOOLITE rug and upholstery
cleaning products

Personal Grooming
-----------------
o OGILVIE home permanent o DENTAX oral care products
products o TEK toothbrushes
o BINACA breath freshener o DOROTHY GRAY skin care
products products, and
o TUSSY deodorants o BETTER OFF depilatories

In May 1999, we sold our U.S. JHIRMACK business.

F-26

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. BUSINESS SEGMENTS AND GEOGRAPHIC AREA INFORMATION (CONTINUED)

Our INTERNATIONAL/CORPORATE SALES DIVISION includes:

o Sales to specialty classes o export sales
of trade in the United o sales in Puerto Rico
States including: warehouse o results from our Canadian
clubs, military, and Australian
convenience stores, subsidiaries, and
specialty stores, and o sales of private label
telemarketing tampons

The International/Corporate Sales Division sells the same products as available
to our U.S. customers. In May 1999, we sold our International JHIRMACK business,
excluding the Canadian business.

We evaluate division performance based on their product contribution
excluding general corporate allocations. Product contribution is defined as
gross profit less advertising and sales promotion expenses. All other operating
expenses are managed at a corporate level and are not used by us to evaluate
division results. We do not segregate assets, amortization, capital
expenditures, or interest income and interest expense to divisions.

TWELVE MONTHS ENDED
----------------------------------------------------------------------------------------------
DECEMBER 29, 2001 DECEMBER 30, 2000 DECEMBER 25, 1999
-------------------------- -------------------------- --------------------------
NET PRODUCT NET PRODUCT NET PRODUCT
SALES CONTRIBUTION SALES CONTRIBUTION SALES CONTRIBUTION
---------- ------------ ---------- ------------ ---------- ------------

Personal Products.................. $ 478,757 $ 183,604 $ 486,524 $ 183,790 $ 456,920 $ 181,647
Consumer Products.................. 205,699 52,875 205,599 57,111 195,494 60,698
International/Corporate Sales...... 145,592 56,911 139,220 55,146 135,297 53,418
Unallocated charges (1)............ -- (8,098) -- (3,474) -- (8,172)
---------- ---------- ---------- ---------- ---------- ----------
Total consolidated............. $ 830,048 285,292 $ 831,343 292,573 $ 787,711 287,591
========== ========== ==========
RECONCILIATION TO
-----------------
OPERATING EARNINGS:
-------------------
Selling, distribution
and research................... 96,695 92,420 83,915
Administrative..................... 32,546 29,866 27,383
Amortization of intangibles........ 22,060 22,350 21,064
---------- ---------- ----------
Operating earnings............. $ 133,991 $ 147,937 $ 155,229
========== ========== ==========

-----------

(1) Certain unallocated corporate charges such as business license taxes,
pension expense/income and product liability insurance are included in
consolidated gross margin, but not included in the evaluation of division
performance. We recorded pension income of $1.7 million in fiscal 2001,
$4.3 million in fiscal 2000 and $0.7 in 1999 (see Note 15).

F-27

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. BUSINESS SEGMENTS AND GEOGRAPHIC AREA INFORMATION (CONTINUED)

The amount of depreciation allocated to the divisions is as follows (dollars in
thousands):

TWELVE MONTHS ENDED
---------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ------------ ------------

Personal Products............................................. $ 7,165 $ 6,332 $ 5,459
Consumer Products............................................. 1,601 1,369 1,193
International/Corporate Sales................................. 1,006 834 732
--------- --------- ---------
Depreciation included in product contribution............. 9,772 8,535 7,384
Depreciation not allocated to divisions....................... 3,368 3,012 2,463
--------- --------- ---------
Consolidated depreciation................................. $ 13,140 $ 11,547 $ 9,847
========= ========= =========

GEOGRAPHIC AREA INFORMATION

Net sales and product contribution represents sales to unaffiliated
customers only. Intergeographic sales and transfers between geographic areas are
minimal and are not disclosed separately. Net sales and product contribution
within the United States includes all 50 states and its territories. Corporate
charges that are not allocated to divisions (see preceding table) are included
in product contribution for the United States. International net sales and
product contribution represents business activity outside of the United States
and its territories.

United States...................... $ 764,771 $ 265,568 $ 765,779 $ 271,238 $ 721,061 $ 265,988
International...................... 65,277 19,724 65,564 21,335 66,650 21,603
---------- ---------- ---------- ---------- ---------- ----------
Total.......................... $ 830,048 $ 285,292 $ 831,343 $ 292,573 $ 787,711 $ 287,591
========== ========== ========== ========== ========== ==========

Identifiable assets by geographic area represent those assets that are
used in our operations in each area.

DECEMBER 29, DECEMBER 30,
Identifiable Assets 2001 2000
------------------- ------------ -----------

United States..................................................................................... $ 1,085,029 $ 1,121,592
International..................................................................................... 20,143 17,792
------------ ------------
Total......................................................................................... $ 1,105,172 $ 1,139,384
============ ============

F-28

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. BALANCE SHEET COMPONENTS

The components of certain balance sheet accounts are as follows (in
thousands):

DECEMBER 29, DECEMBER 30,
2001 2000
-------------- -------------

Cash............................................. $ 27,103 $ 10,282
Cash--lock box (1)............................... 6,903 --
---------- ----------
Net........................................ $ 34,006 $ 10,282
========== ==========
-----------

(1) Cash held in lock box pending weekly settlement procedure for Receivables
Facility (see Note 8).

Receivables...................................... $ 33,767 $ 133,207
Less allowance for doubtful accounts............. (1,276) (2,237)
---------- ----------
Net........................................ $ 32,491 $ 130,970
========== ==========

Inventories:
Raw materials................................ $ 23,715 $ 25,140
Work in process.............................. 1,934 1,747
Finished goods............................... 56,544 58,439
---------- ----------
Total...................................... $ 82,193 $ 85,326
========== ==========

Net property, plant and equipment:
Land......................................... $ 2,376 $ 2,376
Buildings.................................... 41,047 38,601
Machinery and equipment...................... 186,557 173,226
---------- ----------
229,980 214,203
Less accumulated depreciation................ (105,219) (96,048)
---------- ----------
Net........................................ $ 124,761 $ 118,155
========== ==========

Goodwill......................................... $ 667,031 $ 667,031
Less accumulated amortization.................... (172,844) (156,036)
---------- ----------
Net........................................ $ 494,187 $ 510,995
========== ==========

Trademarks, patents, and other................... $ 182,714 $ 182,214
Less accumulated amortization.................... (23,198) (17,946)
---------- ----------
Net........................................ $ 159,516 $ 164,268
========== ==========

Deferred financing costs......................... $ 19,500 $ 26,076
Less accumulated amortization.................... (1,569) (13,742)
---------- ----------
Net........................................ $ 17,931 $ 12,334
========== ==========

Accrued expenses:
Advertising and sales promotion.............. $ 20,687 $ 23,519
Employee compensation and benefits........... 14,743 13,912
Interest..................................... 6,398 11,233
Insurance.................................... 3,238 3,200
Other........................................ 20,310 17,936
---------- ----------
Total...................................... $ 65,376 $ 69,800
========== ==========

F-29

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. DUE FROM RELATED PARTY

Our business is unrelated to the business of Playtex Apparel, Inc.
("Apparel"), which was spun-off from us in 1988 in a reorganization of the
Company. Two of our former directors and senior executive officers are general
partners of the investor group (the "Apparel Partnership"), which controlled
Apparel until they were later sold. Playtex Investment Corp., one of our
wholly-owned subsidiaries, is the holder of 15% debentures issued by the Apparel
Partnership due December 15, 2003. Interest on the debentures is payable
annually in cash or additional debentures. The Apparel Partnership decided to
make their debenture payments in additional debentures through their December
15, 1993 payment and have paid in cash since then. The obligations of the
Apparel Partnership are nonrecourse to the partners of the Apparel Partnership.
The unaudited assets of the Apparel Partnership are Sara Lee Corporation common
stock with a market value at December 29, 2001 and December 30, 2000 of
approximately $5.9 million and $6.5 million, cash of approximately $1.1 million
and $0.8 million and our 15 1/2% subordinated notes held by them (see Note 10).
We believe their debentures, which we hold, represent their only material
liability.

7. LONG-TERM DEBT

Long-term debt, excluding amounts due to related party, consists of the
following (in thousands):

DECEMBER 29, DECEMBER 30,
2001 2000
------------ ------------

Variable rate indebtedness:
'07-Term A Loan................................................. $ 76,000 $ --
'09-Term B Loan................................................. 395,800 --
Revolving Credit Facility....................................... 17,000 --
Term A Loan..................................................... -- 129,813
Term Loan....................................................... -- 241,750

Fixed rate indebtedness:
9 3/8% Senior Subordinated Notes due 2011....................... 350,000 --
6% Convertible Subordinated Notes due 2004...................... 50,000 50,000
8 7/8% Senior Notes due 2004.................................... -- 150,000
9% Senior Subordinated Notes due 2003........................... -- 360,000
---------- ----------
888,800 931,563
Less current maturities......................................... -- (45,125)
---------- ----------
Total long-term debt......................................... $ 888,800 $ 886,438
========== ==========

On May 22, 2001, we completed a refinancing of our senior indebtedness
(the "Refinancing Transaction"). As part of the Refinancing Transaction we
issued:

o $350.0 million principal amount of 9 3/8% Senior Subordinated Notes
due June 1, 2011 (the "9 3/8% Notes").

o A new senior secured credit facility (the "Senior Secured Credit
Facility") consisting of:

In addition, we entered into a receivables purchase agreement (the "Receivables
Facility") with a third party through a newly formed wholly-owned consolidated
special purpose bankruptcy remote subsidiary of ours, Playtex A/R LLC. The total
amount available to us under the Receivables Facility is up to $100.0 million,
depending primarily on the amount of receivables generated by us, the rate of
collection on those receivables, and other characteristics of the receivables
pool which affects their eligibility (see Note 8).

F-30

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. LONG-TERM DEBT (CONTINUED)

The net proceeds from the Refinancing Transaction and the Receivables
Facility were used to pay-off all of our outstanding indebtedness, except, for
the Convertible Notes. The result of these transactions enabled us to
significantly extend our near term principal debt repayment obligations.

Our indebtedness at December 29, 2001 consists of $400.0 million in fixed
rate debt and $488.8 million of variable rate debt. Our fixed rate debt consists
of the 9 3/8% Notes and the Convertible Notes and our variable rate debt
consists of the amounts borrowed under the '07-Term A Loan, '09-Term B Loan, and
the Revolving Credit Facility.

We pay interest on the 9 3/8% Notes semi-annually on June 1 and December 1
of each year. At any time prior to June 1, 2004, we may redeem up to 35% of the
principal amount of the 9 3/8% Notes with the proceeds of one or more equity
offerings at a redemption price of 109.375% of the principal amount, plus
accrued and unpaid interest to the redemption date. We do not have the option to
redeem the 9 3/8% Notes from June 1, 2004 through May 31, 2006. At our option,
we may redeem the notes on or after June 1, 2006 at the redemption prices
(expressed as a percentage of principal amount) listed below plus accrued and
unpaid interest to the redemption date.

Year Percentage
---- ----------

2006............................................... 104.688

2007............................................... 103.125

2008............................................... 101.563

2009 and thereafter................................ 100.000

The Convertible Notes are currently redeemable by us, in whole or in part,
at our option at a redemption price equal to 100% of the principal amount,
together with accrued and unpaid interest to the redemption date. The
Convertible Notes are convertible into approximately 2.6 million shares of our
common stock. The conversion price is approximately $19.15 per common share. The
Convertible Notes mature on January 31, 2004.

The '07-Term A Loan matures on May 31, 2007. We prepaid $21.0 million of
scheduled semi-annual principal payments on the '07-Term A Loan during fiscal
2001. Our next scheduled semi-annual principal payment on the '07-Term A Loan is
the May 31, 2004 payment. The remaining scheduled semi-annual payments amount
to: $17.0 million in 2004, $23.0 million in 2005, $24.0 million in 2006, and
$12.0 million in 2007.

The '09-Term B Loan matures on May 31, 2009. We prepaid $3.5 million of
scheduled semi-annual principal payments on the '09-Term B Loan during fiscal
2001. Our next scheduled semi-annual principal payment on the '09-Term B Loan is
the November 30, 2004 payment. The remaining scheduled semi-annual payments
amount to $0.7 million in 2004, $1.4 million in 2005, $1.4 million in 2006, $1.4
million in 2007, $195.8 million in 2008, and $195.1 million in 2009.

Loans made under the Revolving Credit Facility will mature on May 22,
2007. At December 29, 2001, we had $105.8 million of unused borrowings available
to us under the Revolving Credit Facility.

We periodically use financial instruments, such as derivatives, to manage
the impact of interest rate changes on our variable rate debt. In connection
with the Refinancing Transaction, our interest rate swap agreements related to
our prior credit agreement were terminated. At December 29, 2001, we were not a
party to any derivative or other type of financial instrument that hedged the
impact of interest rate changes on our variable rate debt. Based on our interest
rate exposure at December 29, 2001, a 1% increase in interest rates would result
in an estimated $4.9 million of additional interest expense on an annualized
basis.

F-31

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. LONG-TERM DEBT (CONTINUED)

The rates of interest we pay on our variable rate debt are, at our option,
a function of various alternative short term borrowing rates.

o Our weighted average variable interest rate for fiscal 2001, 2000,
and 1999 was: 6.85%, 7.76% and 6.75%.
o At December 29, 2001, our variable interest rate was 5.19% compared
to 8.16% at December 30, 2000.

The provisions of the credit agreement for our Senior Secured Credit
Facility (the "Credit Agreement") require us to meet certain financial covenants
and ratios and include limitations and restrictions, including:

o indebtedness and liens, o certain dividends and
o major acquisitions or other distributions,
mergers, o the application of excess
o capital expenditures and cash flow, and
asset sales, o prepayment and
modification of all
indebtedness or equity
capitalization.

The 9 3/8% Notes also contain certain restrictions and requirements. Under the
terms of each of these agreements, payment of cash dividends on our common stock
is restricted. Certain of our wholly owned subsidiaries are guarantors of the
9 3/8% Notes (see Note 19).

Our required principal repayments are (excluding balances outstanding under the
Revolving Credit Facility and due to related party):

o $67.7 million in 2004, o $13.4 million in 2007,
o $24.4 million in 2005, o $195.8 million in 2008, and
o $25.4 million in 2006, o $545.1 million thereafter.

We do not have any debt obligations due prior to fiscal 2004. However commencing
with our fiscal 2002 year end, we may be required to make mandatory principal
repayments on the '07-Term A Loan and '09-Term B Loan per the excess cash flow
calculation as defined in our Credit Agreement.

8. RECEIVABLES FACILITY

On May 22, 2001, we entered into the Receivables Facility through a
wholly-owned, newly formed, special purpose bankruptcy remote subsidiary of
ours; Playtex A/R LLC. Through the Receivables Facility, we sell on a continuous
basis to Playtex A/R LLC substantially all of our domestic customers' trade
invoices that we generate. Playtex A/R LLC sells to a third-party commercial
paper conduit (the "Conduit") an undivided fractional ownership interest in
these trade accounts receivable. The Conduit issues short-term commercial paper
to finance the purchase of the undivided fractional interest in the receivables.
The total funding available to us on a revolving basis under the Receivables
Facility is up to $100.0 million, depending primarily on: the amount of
receivables generated by us and sold to Playtex A/R LLC, the rate of collection
on those receivables, and other characteristics of the receivables pool which
affects their eligibility. Our Retained Interest in Receivables represents our
subordinated fractional undivided interest in receivables sold to Playtex A/R
LLC and the net unamortized deferred financing costs incurred by Playtex A/R
LLC.

F-32

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. RECEIVABLES FACILITY (CONTINUED)

We have agreed to continue servicing the sold receivables at market rates;
accordingly, no servicing asset or liability has been recorded. Playtex A/R LLC
shares credit risk with the Conduit as the undivided fractional interest in the
receivables are sold without recourse. We believe, however, that Playtex A/R LLC
has most of the credit risk associated with customers that do not pay, as the
Conduit has preferential treatment with regard to cash settlement procedures and
other conditions that limit their credit exposure. Our retained interest in
receivables will be negatively impacted if Playtex A/R LLC writes-off any
receivable balances. We believe the Receivables Facility is beneficial to us as:
(1) we convert trade receivables to cash faster, and (2) although we sell our
invoices to Playtex A/R LLC at a discount and pay fees to the Conduit, these
expenses are lower than our borrowing costs under our Credit Agreement.

At December 29, 2001, Playtex A/R LLC had approximately $107.5 million of
receivables, of which $56.5 million of undivided fractional interest therein was
sold to the Conduit. Since May 22, 2001, we sold in aggregate approximately
$569.0 million of accounts receivable to Playtex A/R LLC. In return, we've
received from Playtex A/R LLC approximately $516.8 million of cash.

We sell receivables at a discount, which is included in Other Expenses in
the Consolidated Statements of Earnings. This discount, which was $2.1 million
in fiscal 2001, reflects the estimated fees required by the Conduit to purchase
a fractional undivided interest in the receivables. The fees are based on the
payment characteristics of the receivables, most notably their average life,
interest rates in the commercial paper market and historical credit losses. Also
included in Other Expenses is the impact of the amortization of deferred
financing costs incurred by Playtex A/R LLC to establish the Receivables
Facility.

We account for the sale of accounts receivable to Playtex A/R LLC and
related transactions with the Conduit in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 140, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities." At the time the
receivables are sold, the balances are removed from our balance sheet. Playtex
A/R LLC pays fees on the value of the undivided interest of the receivables sold
to the conduit equal to the 30 day LIBOR rate, which is reset weekly. In
addition, Playtex A/R LLC pays a 0.25% per annum fee on the utilized portion of
the Receivables Facility and a 0.45% per annum liquidity fee on the entire
committed amount of the Receivables Facility. Because of the short-term nature,
generally less than 60 days, of our trade accounts receivable sold to Playtex
A/R LLC and the historically low credit risk associated with these receivables,
the carrying value of our Retained Interest in Receivables approximates the fair
value.

Commitments under the Receivables Facility have terms of 364 days, which
may be renewed annually at the option of the Conduit for up to three years upon
satisfaction of certain conditions. The Receivables Facility may be terminated
prior to its term in the event of:

o nonpayment of fees or other o bankruptcy events,
amounts when due, o material judgments,
o violation of covenants, o defaults under the
o failure of any Receivables Facility,
representation or warranty o a servicing default, and
to be true in all material o a downgrade in the Senior
respects when made, Secured Credit Facility to
less than B- by S&P and less
than B3 by Moody's.

F-33

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. EXTRAORDINARY LOSS

We recorded an extraordinary loss during fiscal 2001 of $19.3 million,
net of income tax benefits of $12.8 million, as a result of the Refinancing
Transaction (see Note 7). The extraordinary loss was the result of:

o call premiums payable upon the extinguishment of the 9% Senior
Subordinated Notes due 2003 (the "9% Notes") and the 8 7/8% Senior
Notes due 2004 (the "8 7/8% Notes"),
o write-off of unamortized deferred financing costs from early
extinguishment of debt,
o fees paid upon the termination of two interest rate swap agreements
related to our prior credit facility, and
o duplicate net interest expense between extinguishment and redemption
of the 9% Notes and the 8 7/8% Notes.

10. DUE TO RELATED PARTY

Due to related party consists of 15 1/2% subordinated notes issued by us
and held by the Apparel Partnership. The subordinated notes are due on December
15, 2003 and interest on them is payable annually in cash or additional 15 1/2%
subordinated notes. We decided to make our interest payments on the subordinated
notes in additional subordinated notes through our December 15, 1993 payment and
have paid in cash since then (see Note 6).

11. INCOME TAXES

The provision for income taxes is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities. Deferred income tax assets and liabilities are calculated for
differences between the financial statement and tax bases of assets and
liabilities. These differences will result in taxable or deductible amounts in
the future. Valuation allowances are established, when necessary, to reduce
deferred tax assets to amounts we expect to use.

Earnings before income taxes and extraordinary loss are as follows (in
thousands):

TWELVE MONTHS ENDED
-----------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ----------- -----------

U.S...................................... $ 53,719 $ 59,519 $ 74,135
Foreign.................................. 2,308 3,534 2,133
--------- --------- ---------
Total.............................. $ 56,027 $ 63,053 $ 76,268
========= ========= =========

F-34

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. INCOME TAXES (CONTINUED)

Our provision for income taxes for the twelve months ended December 29,
2001, December 30, 2000, and December 25, 1999 is as follows (in thousands):

TWELVE MONTHS ENDED
-----------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ------------- ------------

Current:
Federal..................................... $ 11,281 $ 13,580 $ 20,647
State and local............................. 40 982 1,415
Foreign..................................... 923 1,564 1,065
--------- --------- ---------
12,244 16,126 23,127
Deferred:
Federal..................................... 11,871 10,292 8,595
State and local............................. 1,003 1,091 544
Foreign..................................... 28 -- (69)
--------- --------- ---------
12,902 11,383 9,070
--------- --------- ---------
Total..................................... $ 25,146 $ 27,509 $ 32,197
========= ========= =========

In addition, a tax benefit of $12,829 was recognized as a result of the
extraordinary loss on the early extinguishment of debt.

Taxable and deductible temporary differences and tax credit carryforwards
which give rise to our deferred tax assets and liabilities at December 29, 2001
and December 30, 2000 are as follows (in thousands):

DECEMBER 29, DECEMBER 30,
2001 2000
------------- ------------

Deferred tax assets:
Allowances and reserves not currently deductible.............. $ 12,069 $ 13,539
Postretirement benefits reserve............................... 4,790 4,315
Net operating loss carryforwards.............................. 2,462 3,429
Other......................................................... 1,376 1,406
--------- ---------
Total....................................................... $ 20,697 $ 22,689
========= =========

Deferred tax liabilities:
Property, plant and equipment................................ $ 25,125 $ 20,516
Trademarks................................................... 23,056 18,421
Deferred gain on sale of business............................ 14,298 14,298
Undistributed earnings of foreign subsidiary................. 2,515 2,515
Other........................................................ 1,978 345
--------- ---------
Total...................................................... $ 66,972 $ 56,095
========= =========

Undistributed earnings of our Canadian and Australian subsidiaries for
which U.S. income taxes have not been provided were approximately $8.7 million
at December 29, 2001. Such undistributed earnings are expected to be permanently
reinvested in the Canadian and Australian subsidiaries.

We have available net operating loss carryforwards ("NOLs") of $6.9
million at December 29, 2001 that expire in years 2009 through 2012. These NOLs
relate primarily to operations of Banana Boat Holdings and Carewell prior to our
acquisition of them. We can utilize these NOLs, with certain limitations, on our
federal, state and local tax returns. We expect to utilize these NOLs prior to
their expiration. The current benefit realized from these NOLs was $1.0 million
for fiscal 2001 and fiscal 2000 and $3.0 million for fiscal 1999.

F-35

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. INCOME TAXES (CONTINUED)

Our tax provision before extraordinary loss differed from the amount
computed using the federal statutory rate of 35% as follows (in thousands):

TWELVE MONTHS ENDED
-----------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ------------- ------------

Expected federal income tax at statutory rates.................. $ 19,609 $ 22,069 $ 26,694
Amortization of intangible assets............................... 4,496 4,496 4,487
State and local income taxes.................................... 678 1,347 1,273
Other, net...................................................... 363 (403) (257)
--------- -------- ---------
Total tax provision......................................... $ 25,146 $ 27,509 $ 32,197
========= ======== =========

12. STOCK-BASED COMPENSATION

During 1994, we established a long-term incentive plan under which awards
of stock options are granted. Options granted under the plan must:

o have an exercise price equal to or greater than the price of the
stock on the date of grant and
o have an expiration date no more than ten years from the grant date.

Except for formula grants to certain non-employee directors, which vest over a
five-year period, options vest over a period determined by the Compensation and
Stock Option Committee. We have 1,784,293 shares reserved to grant as options
and 8,140,623 shares authorized but unissued under the plan at December 29,
2001.

We account for stock-based compensation in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." As permitted by SFAS No. 123, we follow the intrinsic value
approach of Accounting Principles Board Opinion No. 25 for determining
compensation expense related to the issuance of stock options. If we determined
compensation expense under the alternate fair value approach permitted by SFAS
No. 123, our earnings and earnings per share would have been reduced to the pro
forma amounts listed below (in thousands, except per share data):

TWELVE MONTHS ENDED
------------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ------------ ------------

Net earnings:
As reported............................................. $ 11,545 $ 35,544 $ 44,071
Pro forma............................................... $ 6,875 $ 32,024 $ 39,414
Earnings per share:
As reported
Basic................................................ $ .19 $ .58 $ .73
Diluted.............................................. $ .19 $ .58 $ .72
Pro forma
Basic................................................ $ .11 $ .53 $ .65
Diluted.............................................. $ .11 $ .53 $ .65
Weighted average common shares and
common equivalent shares outstanding:
Basic................................................... 61,007 60,824 60,481
Diluted................................................. 61,115 62,585 62,553

F-36

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. STOCK-BASED COMPENSATION (CONTINUED)

The fair value of each stock option grant was estimated on the date of
grant using the Black-Scholes option-pricing model with the following
assumptions:

o weighted average risk-free interest rates of 5.54%, 6.51%, and 5.68%
for fiscal 2001, 2000, and 1999;
o no dividend yield;
o expected option life of 7 years before exercise or cancellation; and
o volatility of 35%.

The following table summarizes our stock option activity over the past
three fiscal years:

2001 2000 1999
------------------------ ---------------------- -----------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- --------- ---------- --------- ---------- ---------

Outstanding at beginning of year.......... 5,191,129 $ 11.59 4,581,326 $ 11.86 4,093,260 $ 11.11
Granted................................... 1,517,000 9.90 1,732,500 10.85 788,000 15.50
Exercised................................. (73,300) 8.73 (436,572) 8.79 (160,505) 8.83
Forfeited................................. (278,499) 12.59 (686,125) 13.35 (139,429) 13.70
--------- --------- ---------
Outstanding at end of year................ 6,356,330 11.17 5,191,129 11.59 4,581,326 11.86
========= ========= =========
Options exercisable at year-end........... 3,689,976 11.57 2,832,780 11.12 2,669,878 10.18
Weighted-average fair value
of options granted during the year..... $ 4.75 $ 5.43 $ 7.48

The following table summarizes information about our stock options
outstanding at December 29, 2001:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------- -----------------------------
NUMBER WEIGHTED NUMBER
OUTSTANDING AVERAGE WEIGHTED EXERCISABLE WEIGHTED
AT REMAINING AVERAGE AT AVERAGE
DECEMBER 29, CONTRACTUAL EXERCISE DECEMBER 29, EXERCISE
RANGE OF EXERCISE PRICES 2001 LIFE PRICES 2001 PRICES
------------------------ ------------- ----------- ---------- ------------ ----------

$7.00 to 8.00............................. 381,833 3.64 $ 7.8750 381,833 $ 7.8750
$8.00 to 9.00............................. 53,500 4.58 8.0572 53,500 8.0572
$9.00 to 10.00............................ 1,930,832 6.04 9.6497 1,220,038 9.7121
$10.00 to 11.00........................... 2,294,665 8.54 10.4925 595,723 10.5796
$11.00 to 13.00........................... 72,500 8.38 12.2888 25,835 12.2460
$13.00 to 14.00........................... 156,000 4.53 13.2163 120,002 13.0938
$14.00 to 15.00........................... 485,000 6.40 14.2992 483,000 14.2989
$15.00 to 16.00........................... 982,000 7.19 15.2627 810,045 15.2124
--------- ---------
$7.00 to 16.00............................ 6,356,330 6.98 11.1735 3,689,976 11.5736
========= =========

F-37

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. EARNINGS PER SHARE

The following table explains how our basic and diluted Earnings Per Share
("EPS") were calculated for the last three fiscal years (in thousands, except
per share data):

TWELVE MONTHS ENDED
--------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
2001 2000 1999
------------ ------------ ------------

Numerator:
Earnings before extraordinary loss .................................. $ 30,881 $ 35,544 $ 44,071
======== ======== ========

Net earnings--Basic ................................................. $ 11,545 $ 35,544 $ 44,071
Adjustment for interest on Convertible Notes, net of tax ............ -- 946 788
-------- -------- --------
Net earnings--Diluted ............................................... $ 11,545 $ 36,490 $ 44,859
======== ======== ========

Denominator:
Weighted average common shares outstanding--Basic ................... 61,007 60,824 60,481
Adjustment for dilutive effect of employee stock options ............ 108 456 1,003
Adjustment for dilutive effect of Convertible Notes, net of tax ..... -- 1,305 1,069
-------- -------- --------
Weighted average common shares outstanding--Diluted ................. 61,115 62,585 62,553
======== ======== ========

Earnings per share before extraordinary loss:
Basic ............................................................... $ 0.51 $ 0.58 $ 0.73
Diluted ............................................................. $ 0.51 $ 0.58 $ 0.72

Earnings per share:
Basic ............................................................... $ 0.19 $ 0.58 $ 0.73
Diluted ............................................................. $ 0.19 $ 0.58 $ 0.72

Basic EPS excludes all potentially dilutive securities. Basic EPS is
computed by dividing net earnings by the weighted average number of common
shares outstanding for the period. Diluted EPS includes all potentially dilutive
securities. Diluted EPS is computed by dividing net earnings, adjusted by the
if-converted method for convertible securities, by the weighted average number
of common shares outstanding for the period plus the number of additional common
shares that would have been outstanding if the dilutive securities were issued.
In the event the dilutive securities are anti-dilutive (has the affect of
increasing EPS), the impact of the dilutive securities is not included in the
computation.

14. LEASES

Our leases are primarily for buildings, manufacturing equipment, company
cars and information technology equipment. Future minimum payments under
non-cancelable operating leases for fiscal years ending after December 29, 2001
are as follows: $10.3 million in 2002, $8.9 million in 2003, $6.8 million in
2004, $3.9 million in 2005, $2.7 million in 2006 and $4.3 million in later
years.

Rent expense for operating leases amounted to $12.4 million, $10.8
million, and $9.5 million for fiscal 2001, 2000 and 1999.

F-38

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. PENSION AND OTHER POSTRETIREMENT BENEFITS

Defined Benefit Pension Plans--Substantially all of our U.S. hourly and
most of our Canadian employees participate in pension plans. At December 29,
2001, approximately 1,395 participants were covered by these plans and
approximately 300 of them were receiving benefits.

Changes in pension benefits, which are retroactive to previous service of
employees, and gains and losses on pension assets, that occur because actual
experience differs from assumptions, is amortized over the estimated average
future service period of employees. Actuarial assumptions for the plans include:

o expected long-term rate of return on plan assets of 9.75% at
December 29, 2001 and December 30, 2000,
o discount rate of 7.25% at December 29, 2001 and 7.50% at December
30, 2000 used in calculating the projected benefit obligation, and
o the rate of average future increases in compensation levels was
4.00% at December 29, 2001 and 3.25% at December 30, 2000.

The pension plans assets are invested primarily in equity and fixed income
mutual funds, marketable equity securities, insurance contracts, and cash and
cash equivalents.

Net pension benefit for fiscal 2001, 2000 and 1999 is included in cost of
goods sold in the Consolidated Statements of Earnings and includes the following
components (in thousands):

TWELVE MONTHS ENDED
---------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
NET PENSION EXPENSE 2001 2000 1999
------------------- ------------ ------------- ------------

Service cost--benefits earned during the period.... $ 1,244 $ 1,068 $ 1,094
Interest cost on projected benefit obligation...... 2,744 2,535 2,334
Expected return on plan assets..................... (5,237) (6,020) (3,958)
Amortization of prior service cost................. 81 95 84
Amortization of unrecognized net gain.............. (567) (1,958) (234)
Amortization of transition gain.................... 28 (40) (41)
--------- -------- ---------
Net pension benefit............................ $ (1,707) $ (4,320) $ (721)
========= ======== =========

Reconciliations of the change in benefit obligation, change in plan
assets, and the funded status of the plans for fiscal 2001 and 2000 are as
follows (in thousands):

DECEMBER 29, DECEMBER 30,
CHANGE IN BENEFIT OBLIGATION 2001 2000
---------------------------- ------------- -------------

Benefit obligation at beginning of year.................. $ 36,601 $ 32,645
Service cost............................................. 1,244 1,068
Interest cost............................................ 2,744 2,535
Actuarial loss........................................... 2,439 1,883
Benefits paid............................................ (1,737) (1,471)
Foreign currency exchange rate changes................... (136) (59)
-------- ---------
Benefit obligation at end of year.................... $ 41,155 $ 36,601
======== =========

F-39

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. PENSION AND OTHER POSTRETIREMENT BENEFITS (CONTINUED)

DECEMBER 29, DECEMBER 30,
CHANGE IN PLAN ASSETS 2001 2000
--------------------- ------------- ------------

Fair value of plan assets at beginning of year.................... $ 55,117 $ 62,785
Actual return on plan assets...................................... (2,229) (6,111)
Benefits paid..................................................... (1,737) (1,471)
Foreign currency exchange rate changes............................ (293) (86)
-------- ---------
Fair value of plan assets at end of year...................... $ 50,858 $ 55,117
======== =========

RECONCILIATION OF THE FUNDED STATUS
-----------------------------------

Funded status..................................................... $ 9,703 $ 18,516
Unrecognized transition asset..................................... 404 (200)
Unrecognized prior service cost................................... 445 527
Unrecognized actuarial gain....................................... (1,725) (11,638)
-------- ---------
Prepaid benefit cost.......................................... $ 8,827 $ 7,205
======== =========

Postretirement Benefits Other than Pensions--We provide postretirement
health care and life insurance benefits to certain U.S. retirees. These plans
require employees to share in the costs. Approximately 92% of all U.S. personnel
would become eligible for these postretirement health care and life insurance
benefits if they were to retire from the Company.

The components of the postretirement net periodic expense, which is
included in operating earning in the Consolidated Statements of Earnings for
fiscal 2001, 2000, and 1999, are as follows (in thousands):

TWELVE MONTHS ENDED
-----------------------------------------------
DECEMBER 29, DECEMBER 30, DECEMBER 25,
NET PERIODIC POSTRETIREMENT EXPENSE 2001 2000 1999
----------------------------------- ------------ ------------- ------------

Service cost--benefits earned during the period..................... $ 580 $ 504 $ 424
Interest cost on accumulated benefit obligation.................... 1,129 1,013 858
Amortization of prior service cost................................. (95) 217 217
Recognized actuarial loss.......................................... 269 73 69
--------- -------- ---------
Net periodic postretirement expense............................ $ 1,883 $ 1,807 $ 1,568
========= ======== =========

F-40

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. PENSION AND OTHER POSTRETIREMENT BENEFITS (CONTINUED)

Reconciliations of the change in benefit obligation, change in plan
assets, and the funded status of the plan for fiscal 2001 and 2000 are as
follows (in thousands):

DECEMBER 29, DECEMBER 30,
CHANGE IN BENEFIT OBLIGATION 2001 2000
---------------------------- ------------ ------------

Benefit obligation at beginning of year ............... $ 14,755 $ 11,992
Service cost .......................................... 580 504
Interest cost ......................................... 1,129 1,013
Employee contributions ................................ 182 168
Actuarial loss ........................................ 1,198 1,880
Benefits paid ......................................... (844) (802)
-------- --------
Benefit obligation at end of year ................. $ 17,000 $ 14,755
======== ========

CHANGE IN PLAN ASSETS
---------------------

Fair value of plan assets at beginning of year ........ $ -- $ --
Employer contributions ................................ 662 634
Employee contributions ................................ 182 168
Expected benefits paid ................................ (844) (802)
-------- --------
Fair value of plan assets at end of year .......... $ -- $ --
======== ========

RECONCILIATION OF THE FUNDED STATUS
-----------------------------------

Funded status ......................................... $(17,000) $(14,755)
Unrecognized prior service (gain) cost ................ (806) 1,034
Unrecognized actuarial loss ........................... 5,711 2,847
-------- --------
Net amount accrued at year-end .................... $(12,095) $(10,874)
======== ========

The assumed health care cost trend rate and discount rate was 9.5% and
7.50% in 2001 compared to 7.5% and 7.75% in 2000. The assumed health care cost
trend rate is anticipated to trend down until the final trend rate of 5.0% is
reached in 2010. A one percentage point increase in the assumed health care
costs trend rate increases the sum of the service and interest costs components
of the fiscal 2001 net periodic postretirement benefit expense by 18%, and the
accumulated postretirement benefit obligation as of December 29, 2001 by 15%. A
one percentage point decrease in the assumed health care costs trend rate
decreases the sum of the service and interest costs components of the fiscal
2001 net periodic postretirement benefit expense by 14% and the accumulated
postretirement benefit obligation by 12%.

Defined Contribution Benefit Plans--We also provide three defined
contribution plans covering various employee groups, two of which have
non-contributory features. The amounts charged to earnings for the defined
contribution plans totaled $5.8 million, $5.9 million and $4.9 million for our
last three fiscal years ended 2001, 2000, and 1999.

F-41

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. BUSINESS AND CREDIT CONCENTRATIONS

Most of our customers are dispersed throughout the United States and
Canada. No single customer accounted for more than 10% of our consolidated net
sales in fiscal 2001, 2000, or 1999 with the exception of our largest customer
(approximately 23% in 2001, 23% in 2000, and 21% in 1999). Outstanding trade
accounts receivable, including balances sold to Playtex A/R LLC, related to
transactions with our largest customer were $29.4 million at December 29, 2001
and $29.8 million at December 30, 2000. Outstanding trade accounts receivable,
including balances sold to Playtex A/R LLC, related to transactions with our
customers ranked second through tenth in net sales, ranged from $9.2 million to
$3.9 million at December 29, 2001. Sales to these customers were made primarily
from our two largest business segments.

17. DISCLOSURE ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

CASH, RECEIVABLES, RETAINED INTEREST IN RECEIVABLES, ACCOUNTS PAYABLE,
INCOME TAXES and ACCRUED EXPENSES--The carrying amounts approximate fair value
because of the short-term maturity of these instruments.

VARIABLE RATE DEBT--The carrying amounts approximate fair value because
the rate of interest on borrowings under the credit agreement is, at our option,
a function of various alternative short-term borrowing rates.

LONG-TERM DEBT, INTEREST RATE DERIVATIVES, and OTHER FINANCIAL
INSTRUMENTS--The fair value of the following financial instruments was estimated
at December 29, 2001 and December 30, 2000 as follows (in thousands):

DECEMBER 29, 2001 DECEMBER 30, 2000
------------------------ -----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
---------- ----------- ---------- -----------

9 3/8% Senior Subordinated Notes (a)................................... $ 350,000 $ 369,250 $ -- $ --
9% Senior Subordinated Notes (a)....................................... -- -- 360,000 347,400
8 7/8% Senior Notes (a)................................................ -- -- 150,000 142,500
6% Convertible Subordinated Notes due 2004 (b)......................... 50,000 50,880 50,000 47,284
15% Notes due from Playtex Apparel Partners, L.P. (c).................. 80,017 80,017 80,017 80,017
15 1/2% Subordinated Notes due to Playtex Apparel
Partners, L.P. (c).................................................. 78,386 78,386 78,386 78,386
Other noncurrent assets (d)............................................ 9,942 9,914 8,300 8,265
Noncurrent liabilities (d)............................................. 13,146 13,115 12,814 12,756
Interest Rate Swap termination date of August 30, 2001 (e)............. -- -- -- (1,063)
Interest Rate Swap termination date of December 4, 2001 (e)............ -- -- -- (625)

-----------

(a) The estimated fair values were based on the average range of bid/ask
quotes provided by independent securities dealers. The 9% Notes and the
8 7/8% Notes were extinguished during fiscal 2001 (see Notes 7 and 9).

(b) The estimated fair value was based on the net present value of the
interest and principal payments.

(c) The estimated fair values were based on the amount of future cash flows
associated with these instruments, discounted using an appropriate
interest rate.

(d) The estimated fair values were based on a combination of actual cost
associated with recent purchases or the amount of future cash flows
discounted using our borrowing rate for similar instruments.

(e) The estimated fair value was based upon quoted market price (mark to
market). These instruments were terminated during fiscal 2001 (see Notes 7
and 9).

F-42

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. QUARTERLY DATA (UNAUDITED)

The following is a summary of our quarterly results of operations and
market price data for our common stock for fiscal 2001 and 2000 (in thousands,
except per share data):

FIRST SECOND THIRD FOURTH
FISCAL 2001 QUARTER QUARTER QUARTER QUARTER
----------- ----------- ----------- ----------- -----------

Net sales........................................................ $ 220,776 $ 224,101 $ 187,590 $ 197,581
Gross profit..................................................... 126,067 130,450 107,581 110,556
Operating earnings............................................... 43,384 42,261 23,699 24,647
Earnings before extraordinary loss............................... 12,844 12,129 2,356 3,552
Net earnings (loss).............................................. 12,844 (7,207) 2,356 3,552
Earnings per share before extraordinary loss (a):
Basic........................................................ $ .21 $ .20 $ .04 $ .06
Diluted...................................................... $ .21 $ .20 $ .04 $ .06
Earnings per share (a):
Basic........................................................ $ .21 $ (.12) $ .04 $ .06
Diluted...................................................... $ .21 $ (.11) $ .04 $ .06

Stock market price
High......................................................... $ 10.35 $ 11.20 $ 10.80 $ 10.46
Low.......................................................... $ 7.93 $ 8.55 $ 9.60 $ 9.30

FIRST SECOND THIRD FOURTH
FISCAL 2000 QUARTER QUARTER QUARTER QUARTER
----------- ----------- ----------- ----------- -----------

Net sales........................................................ $ 223,507 $ 229,589 $ 188,143 $ 190,104
Gross profit..................................................... 129,702 131,622 109,346 108,499
Operating earnings............................................... 48,232 45,266 30,038 24,401
Net earnings..................................................... 15,269 14,040 4,460 1,775
Earnings per share (a):
Basic........................................................ $ .25 $ .23 $ .07 $ .03
Diluted...................................................... $ .25 $ .23 $ .07 $ .03

Stock market price
High......................................................... $ 15.50 $ 14.00 $ 12.88 $ 11.94
Low.......................................................... $ 10.25 $ 10.12 $ 10.37 $ 8.62

-----------

(a) Earnings per share data are computed independently for each of the periods
presented; therefore, the sum of the earnings per share amounts for the
quarters may not equal the total for the year.

F-43

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

9 3/8% SENIOR SUBORDINATED NOTES DUE 2011

The 9 3/8% Notes are guaranteed by the following wholly-owned
subsidiaries:

o Playtex Sales & Services, Inc. ("PSSI"). PSSI provides sales
solicitation, management and administrative services to us and our
U.S. affiliates.
o Playtex Manufacturing, Inc. ("PMI"). PMI is a contract manufacturer
and contract research and development services provider for our U.S.
affiliates.
o Playtex Investment Corp. ("PIC"). PIC is an investment holding
company, which holds the Apparel Debentures (see Note 6).
o Playtex International Corp. ("PINTL"). PINTL is the sole shareholder
of Playtex Limited, a manufacturer and distributor of Playtex
products in Canada.
o TH Marketing Corp. ("THMC"). THMC is the sole shareholder of Playtex
Foreign Sales Corporation.
o SmileTote, Inc. ("STI"). STI owns certain intangible assets
associated with our infant feeding business.
o Sun Pharmaceuticals Corp. ("Sun"). Sun owns the BANANA BOAT trade
name and certain other intangible assets associated with the BANANA
BOAT business. Sun distributes its products outside the U.S. and
Puerto Rico and to certain U.S. distributors excluding the Company.
o Personal Care Group, Inc. ("PCG"). PCG is the owner of various
personal care related intangible assets.
o Personal Care Holdings, Inc. ("PCH"). PCH is the sole shareholder of
PCG.
o Carewell Industries, Inc. ("Carewell"). Carewell is the owner of
certain dental care related intangible assets.

The guarantors are joint and several guarantors of the 9 3/8% Notes. Such
guarantees are irrevocable, full and unconditional. The guarantees are senior
subordinated obligations and are subordinated to all senior obligations
including guarantees of our obligations under the credit agreement.

The following wholly-owned subsidiaries are non guarantors of the 9 3/8% Notes:

o Playtex Limited. Playtex Limited is our Canadian subsidiary.
o Playtex Foreign Sales Corporation ("PFSC"). PFSC is a foreign sales
corporation as defined by Internal Revenue Code Section 922, and
o Playtex Products Australia PTY LTD ("PPI Aust"). PPI Aust is a
distributor of personal care products in Australia and New Zealand.

The information, which follows, presents our condensed financial position
as of December 29, 2001 and December 30, 2000 and our condensed statements of
earnings and cash flows for each of our last three fiscal years 2001, 2000, and
1999. The presentation is made based on:

o the Company on a consolidated o the combined guarantors, and
basis, o the combined non-guarantors.
o the parent company only,

F-44

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET DATA
AS OF DECEMBER 29, 2001
(In thousands)

PARENT NON-
ASSETS CONSOLIDATED ELIMINATIONS COMPANY GUARANTORS GUARANTORS
------------ ------------ ------- ---------- ----------

Current assets.................................. $ 218,818 $ 9 $ 114,504 $ 87,001 $ 17,304
Investment in subsidiaries...................... -- (478,436) 465,246 13,190 --
Intercompany receivable......................... -- (97,403) -- 96,338 1,065
Net property, plant and equipment............... 124,761 -- 88 123,983 690
Intangible assets............................... 653,703 -- 440,598 213,105 --
Other noncurrent assets......................... 107,890 (500) 27,873 80,517 --
------------ ------------- ------------ ----------- ----------
Total assets................................ $ 1,105,172 $ (576,330) $ 1,048,309 $ 614,134 $ 19,059
============ ============= ============ =========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities............................. $ 111,038 $ 16 $ 101,916 $ 5,631 $ 3,475
Intercompany payable........................... -- (97,403) 479 94,122 2,802
Long-term debt.................................. 967,186 (507) 967,693 -- --
Other noncurrent liabilities.................... 71,518 -- 22,791 49,135 (408)
------------ ------------- ------------ ----------- ----------
Total liabilities........................... 1,149,742 (97,894) 1,092,879 148,888 5,869
Stockholders' equity............................ (44,570) (478,436) (44,570) 465,246 13,190
------------ ------------- ------------ ----------- ----------
Total liabilities and stockholders' equity.. $ 1,105,172 $ (576,330) $ 1,048,309 $ 614,134 $ 19,059
============ ============= ============ =========== ==========

CONDENSED CONSOLIDATING BALANCE SHEET DATA
AS OF DECEMBER 30, 2000
(In thousands)
PARENT NON-
ASSETS CONSOLIDATED ELIMINATIONS COMPANY GUARANTORS GUARANTORS
------------ ------------ ------- ---------- ----------

Current assets.................................. $ 245,315 $ 8 $ 140,083 $ 89,636 $ 15,588
Investment in subsidiaries...................... -- (461,661) 449,125 12,536 --
Intercompany receivable......................... -- (104,047) 22,958 80,050 1,039
Net property, plant and equipment............... 118,155 -- 119 117,110 926
Intangible assets............................... 675,263 -- 456,045 219,218 --
Other noncurrent assets......................... 100,651 (504) 20,638 80,517 --
------------ ------------- ------------ ----------- ----------
Total assets................................ $ 1,139,384 $ (566,204) $ 1,088,968 $ 599,067 $ 17,553
============ ============= ============ =========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities............................. $ 171,082 $ 10 $ 160,553 $ 6,443 $ 4,076
Intercompany payable........................... -- (104,047) -- 102,703 1,344
Long-term debt.................................. 964,824 (506) 965,330 -- --
Other noncurrent liabilities.................... 59,541 -- 19,148 40,796 (403)
------------ ------------- ------------ ----------- ----------
Total liabilities........................... 1,195,447 (104,543) 1,145,031 149,942 5,017
Stockholders' equity............................ (56,063) (461,661) (56,063) 449,125 12,536
------------ ------------- ------------ ----------- ----------
Total liabilities and stockholders' equity.. $ 1,139,384 $ (566,204) $ 1,088,968 $ 599,067 $ 17,553
============ ============= ============ =========== ==========

F-45

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS DATA
FOR THE TWELVE MONTHS ENDED DECEMBER 29, 2001
(In thousands)

PARENT NON-
CONSOLIDATED ELIMINATIONS COMPANY GUARANTORS GUARANTORS
------------ ------------ ------- ---------- ----------

Net revenues................................... $ 830,048 $ (424,978) $ 787,432 $ 421,339 $ 46,255
Cost of sales.................................. 355,394 (291,635) 314,423 307,894 24,712
----------- ----------- ----------- ----------- ----------
Gross profit............................... 474,654 (133,343) 473,009 113,445 21,543
----------- ----------- ----------- ----------- ----------
Operating expenses:
Advertising, selling and administrative........ 318,603 (133,343) 353,950 79,362 18,634
Amortization of intangibles.................... 22,060 -- 15,447 6,613 --
----------- ----------- ----------- ----------- ----------
Total operating expenses................... 340,663 (133,343) 369,397 85,975 18,634
----------- ----------- ----------- ----------- ----------
Operating earnings......................... 133,991 -- 103,612 27,470 2,909
Interest expense, net.......................... 75,861 -- 88,134 (12,003) (270)
Other expense.................................. 2,103 -- 2,103 -- --
Equity in net earnings of subsidiaries......... -- 28,171 (26,022) (2,149) --
----------- ----------- ----------- ----------- ----------
Earnings before income taxes............... 56,027 (28,171) 39,397 41,622 3,179
Income taxes................................... 25,146 -- 8,516 15,600 1,030
----------- ----------- ----------- ----------- ----------
Earnings before extraordinary loss......... 30,881 (28,171) 30,881 26,022 2,149
----------- ----------- ----------- ----------- ----------
Extraordinary loss, net of tax................. (19,336) -- (19,336) -- --
----------- ----------- ----------- ----------- ----------
Net earnings............................... $ 11,545 $ (28,171) $ 11,545 $ 26,022 $ 2,149
=========== =========== =========== =========== ==========

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS DATA
FOR THE TWELVE MONTHS ENDED DECEMBER 30, 2000
(In thousands)
PARENT NON-
CONSOLIDATED ELIMINATIONS COMPANY GUARANTORS GUARANTORS
------------ ------------ ------- ---------- ----------

Net revenues................................... $ 831,343 $ (432,931) $ 787,896 $ 430,795 $ 45,583
Cost of sales.................................. 352,174 (315,110) 339,700 303,503 24,081
----------- ----------- ----------- ----------- ----------
Gross profit............................... 479,169 (117,821) 448,196 127,292 21,502
----------- ----------- ----------- ----------- ----------
Operating expenses:
Advertising, selling and administrative........ 308,882 (117,821) 316,167 93,483 17,053
Amortization of intangibles.................... 22,350 -- 15,430 6,920 --
----------- ----------- ----------- ----------- ----------
Total operating expenses................... 331,232 (117,821) 331,597 100,403 17,053
----------- ----------- ----------- ----------- ----------
Operating earnings......................... 147,937 -- 116,599 26,889 4,449
Interest expense, net.......................... 84,884 -- 97,213 (12,003) (326)
Equity in net earnings of subsidiaries......... -- 29,255 (26,129) (3,126) --
----------- ----------- ----------- ----------- ----------
Earnings before income taxes............... 63,053 (29,255) 45,515 42,018 4,775
Income taxes................................... 27,509 -- 9,971 15,889 1,649
----------- ----------- ----------- ----------- ----------
Net earnings............................... $ 35,544 $ (29,255) $ 35,544 $ 26,129 $ 3,126
=========== =========== =========== =========== ==========

F-46

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS DATA
FOR THE TWELVE MONTHS ENDED DECEMBER 25, 1999
(In thousands)

PARENT NON-
CONSOLIDATED ELIMINATIONS COMPANY GUARANTORS GUARANTORS
------------ ------------ ------- ---------- ----------

Net revenues................................... $ 787,711 $ (399,075) $ 741,983 $ 398,280 $ 46,523
Cost of sales.................................. 331,242 (294,977) 321,882 280,166 24,171
----------- ----------- ----------- ----------- ----------
Gross profit............................... 456,469 (104,098) 420,101 118,114 22,352
----------- ----------- ----------- ----------- ----------
Operating expenses:
Advertising, selling and administrative........ 280,176 (104,098) 281,579 84,135 18,560
Amortization of intangibles.................... 21,064 -- 14,060 7,004 --
----------- ----------- ----------- ----------- ----------
Total operating expenses................... 301,240 (104,098) 295,639 91,139 18,560
----------- ----------- ----------- ----------- ----------
Operating earnings......................... 155,229 -- 124,462 26,975 3,792
Interest expense, net.......................... 78,961 -- 91,070 (12,003) (106)
Equity in net earnings of subsidiaries......... -- 28,724 (25,935) (2,789) --
----------- ----------- ----------- ----------- ----------
Earnings before income taxes............... 76,268 (28,724) 59,327 41,767 3,898
Income taxes................................... 32,197 -- 15,256 15,832 1,109
----------- ----------- ----------- ----------- ----------
Net earnings............................... $ 44,071 $ (28,724) $ 44,071 $ 25,935 $ 2,789
=========== =========== =========== =========== ==========

F-47

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS DATA
FOR THE TWELVE MONTHS ENDED DECEMBER 29, 2001
(In thousands)

PARENT NON-
CONSOLIDATED ELIMINATIONS COMPANY GUARANTORS GUARANTORS
------------ ------------ ------- ---------- ----------

Net earnings..................................... $ 11,545 $ (28,171) $ 11,545 $ 26,022 $ 2,149
Non-cash items included in earnings:
Extraordinary loss, net of tax............ 19,336 -- 19,336 -- --
Amortization of intangibles............... 22,060 -- 15,447 6,613 --
Amortization of deferred financing
costs................................ 2,923 -- 2,923 -- --
Depreciation.............................. 13,140 -- 32 12,812 296
Deferred taxes............................ 12,902 -- 5,757 7,150 (5)
Other, net................................ (1,016) 28,171 (27,038) (2,149) --
Increase in net working capital.............. 46,045 -- 45,267 2,402 (1,624)
Increase in amounts due to Parent............ -- -- 23,437 (24,869) 1,432
---------- ----------- ---------- ----------- ----------
Net cash flows from operations....... 126,935 -- 96,706 27,981 2,248
Cash flows used for investing activities:
Purchase of property, plant and
equipment................................. (19,950) -- (2) (19,836) (112)
Businesses and intangibles acquired, net..... (500) -- -- (500) --
---------- ----------- ---------- ------------ ----------
Net cash flows used for investing
activities........................ (20,450) -- (2) (20,336) (112)
Cash flows used for financing activities:
Net borrowings under working capital
credit facilities......................... 17,000 -- 17,000 -- --
Long-term debt borrowings.................... 850,000 -- 850,000 -- --
Long-term debt repayments.................... (909,763) -- (909,763) -- --
Payment of debt extinguishment fees.......... (21,177) -- (21,177) -- --
Payment of financing costs................... (19,500) -- (19,500) -- --
Issuance of shares of common stock, net...... 679 -- 679 -- --
Receipt (payment) of dividends............... -- -- 8,365 (7,645) (720)
---------- ----------- ---------- ----------- ----------
Net cash flows used for
financing activities............ (82,761) -- (74,396) (7,645) (720)
Increase in cash................................. 23,724 -- 22,308 -- 1,416
Cash at beginning of period...................... 10,282 8 4,390 1 5,883
---------- ----------- ---------- ----------- ----------
Cash at end of period............................ $ 34,006 $ 8 $ 26,698 $ 1 $ 7,299
========== =========== ========== =========== ==========

F-48

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS DATA
FOR THE TWELVE MONTHS ENDED DECEMBER 30, 2000
(In thousands)

PARENT NON-
CONSOLIDATED ELIMINATIONS COMPANY GUARANTORS GUARANTORS
------------ ------------ ------- ---------- ----------

Net earnings..................................... $ 35,544 $ (29,255) $ 35,544 $ 26,129 $ 3,126
Non-cash items included in earnings:
Amortization of intangibles............... 22,350 -- 15,430 6,920 --
Amortization of deferred financing
costs................................ 3,750 -- 3,750 -- --
Depreciation.............................. 11,547 -- 63 11,177 307
Deferred taxes............................ 11,383 -- 3,930 7,453 --
Other, net................................ (3,214) 29,255 (28,992) (2,968) (509)
Increase in net working capital.............. (2,634) -- (1,011) (1,545) (78)
Increase (decrease) in amounts
due to Parent.............................. -- -- 18,600 (17,325) (1,275)
---------- ----------- ---------- ----------- ----------
Net cash flows from operations....... 78,726 -- 47,314 29,841 1,571
Cash flows used for investing activities:
Purchase of property, plant and
equipment................................. (22,724) -- (243) (22,196) (285)
Businesses acquired, net..................... (279) -- (279) -- --
---------- ----------- ---------- ----------- ----------
Net cash flows used for investing
activities........................ (23,003) -- (522) (22,196) (285)
Cash flows used for financing activities:
Net payments under working capital
facilities and long-term debt
obligations............................... (56,313) -- (56,313) -- --
Payment of financing costs................... (553) -- (553) -- --
Issuance of shares of common stock, net...... 3,899 -- 3,899 -- --
Receipt (payment) of dividends............... -- -- 8,713 (7,645) (1,068)
---------- ----------- ---------- ----------- ----------
Net cash flows used for
financing activities............ (52,967) -- (44,254) (7,645) (1,068)
Increase in cash................................. 2,756 -- 2,538 -- 218
Cash at beginning of period...................... 7,526 8 1,852 1 5,665
---------- ----------- ---------- ----------- ----------
Cash at end of period............................ $ 10,282 $ 8 $ 4,390 $ 1 $ 5,883
========== =========== ========== =========== ==========

F-49

PLAYTEX PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS DATA
FOR THE TWELVE MONTHS ENDED DECEMBER 25, 1999
(In thousands)

PARENT NON-
CONSOLIDATED ELIMINATIONS COMPANY GUARANTORS GUARANTORS
------------ ------------ ------- ---------- ----------

Net earnings..................................... $ 44,071 $ (28,724) $ 44,071 $ 25,935 $ 2,789
Non-cash items included in earnings:
Amortization of intangibles............... 21,064 -- 14,060 7,004 --
Amortization of deferred financing
costs................................ 3,398 -- 3,398 -- --
Depreciation.............................. 9,847 -- 59 9,504 284
Deferred taxes............................ 9,070 -- 2,244 6,895 (69)
Other, net................................ (113) 28,724 (31,385) 1,797 751
Increase in net working capital.............. (31,050) -- (2,229) (27,647) (1,174)
Increase (decrease) in amounts
due to Parent.............................. -- -- (24,139) 22,658 1,481
---------- ----------- ---------- ----------- ----------
Net cash flows from operations....... 56,287 -- 6,079 46,146 4,062
Cash flows used for investing activities:
Purchase of property, plant and
equipment................................. (20,802) -- 18,186 (38,968) (20)
Businesses acquired, net..................... (210,109) -- (210,109) -- --
---------- ----------- ---------- ----------- ----------
Net cash flows used for investing
activities........................ (230,911) -- (191,923) (38,968) (20)
Cash flows used for financing activities:
Net borrowings under working capital
facilities and long-term debt
obligations............................... 176,126 -- 176,126 -- --
Payment of financing costs................... (2,480) -- (2,480) -- --
Issuance of shares of common stock, net...... 1,633 -- 1,633 -- --
Receipt (payment) of dividends............... -- -- 8,955 (7,645) (1,310)
---------- ----------- ---------- ----------- ----------
Net cash flows provided by
(used for) financing activities... 175,279 -- 184,234 (7,645) (1,310)
Increase in cash................................. 655 -- (1,610) (467) 2,732
Cash at beginning of period...................... 6,871 8 3,462 468 2,933
---------- ----------- ---------- ----------- ----------
Cash at end of period............................ $ 7,526 $ 8 $ 1,852 $ 1 $ 5,665
========== =========== ========== =========== ==========

F-50

20. SUBSEQUENT EVENT

On March 25, 2002, we announced a plan to close our Watervliet, New York
plastic molding facility by the end of 2002. The facility currently manufactures
component parts primarily for the Company's infant feeding category and employs
approximately 160 people. The production of the majority of these parts in the
future will be outsourced to plastic molders with specialized technology.

We anticipate annualized cost savings of approximately $1.5 million
beginning in 2003. The impact to on-going operating results in 2002 will be
immaterial, as partial year savings will be offset by transition costs. We will
record a one-time pre-tax charge in the first quarter of 2002 of approximately
$8 million to cover exit costs and asset write-offs, which are mostly non-cash
charges. The net cash outflow associated with this project in 2002 will be
approximately $1.5 million.

F-51

PLAYTEX PRODUCTS, INC.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Playtex Products, Inc.:

We have audited the accompanying consolidated balance sheets of Playtex
Products, Inc. and subsidiaries as of December 29, 2001 and December 30, 2000,
and the related consolidated statements of earnings, changes in stockholders'
equity and accumulated other comprehensive earnings and cash flows for the
twelve months ended December 29, 2001, December 30, 2000 and December 25, 1999
included on pages F-19 through F-51 in the Company's 2001 Annual Report on Form
10-K. In connection with our audits of the consolidated financial statements, we
also have audited the related consolidated financial statement schedule, on page
26 in the Company's Annual Report on Form 10-K. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on our
audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Playtex Products, Inc. and subsidiaries as of December 29, 2001 and December 30,
2000 and the results of their operations and their cash flows for the twelve
months ended December 29, 2001, December 30, 2000 and December 25, 1999, in
conformity with accounting principles generally accepted in the United States of
America. Also in our opinion, the related 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
herein.

/s/ KPMG LLP

January 28, 2002, except as to Note 20, which is as of March 25, 2002
New York, New York

F-52

PLAYTEX PRODUCTS, INC.

REPORT OF MANAGEMENT

The management of Playtex Products, Inc. is responsible for the financial
and operating information contained in the Annual Report, including the
financial statements covered by the independent auditors' report. These
statements were prepared in conformity with accounting principles generally
accepted in the United States of America and include, where necessary, informed
estimates and judgments.

The Company maintains systems of accounting and internal control designed
to provide reasonable assurance that assets are safeguarded against loss, and
transactions are executed and recorded properly so as to ensure that the
financial records are reliable for preparing financial statements.

Elements of these control systems are the establishment and communication
of accounting and administrative policies and procedures, the selection and
training of qualified personnel, and continuous programs of internal review.

The Company's financial statements are reviewed by its Audit Committee,
which is composed entirely of non-employee Directors. This Committee meets with
the independent auditors and management to review the scope and results of the
annual audit, interim reviews, internal controls, and financial reporting
matters. The independent auditors have direct access to the Audit Committee.

/s/ MICHAEL R. GALLAGHER
Chief Executive Officer
and Director

/s/ GLENN A. FORBES
Executive Vice President,
Chief Financial Officer
and Director

January 28, 2002
Westport, Connecticut

F-53

PLAYTEX PRODUCTS, INC.

OTHER INFORMATION

CORPORATE INFORMATION

Our common stock is traded on the New York Stock Exchange under the symbol
PYX. We do not pay dividends on our common stock and it is our policy to retain
earnings for use in our business. Under our debt agreements, we are restricted
from paying dividends unless we meet certain specified financial criteria
immediately following such payment.

We will send you, at no charge, a copy of our Summary Annual Report and
Annual Report on Form 10-K for fiscal 2001, upon your written request to our
Investor Relations Department at our Corporate Offices. If you wish, you can
call Playtex Products, Inc. Investor Relations at (203) 341- 4017.

This document is also included in our filings with the Securities and
Exchange Commission which are made electronically through their EDGAR system and
are available to the public at the SEC's website - www.sec.gov.

STOCK TRANSFER AGENT AND REGISTRAR

Playtex Products, Inc.
c/o Mellon Investor Services
P.O. Box 3315
South Hackensack, New Jersey 07606-1915
(800) 851-9677
www.mellon-investor.com

INDEPENDENT AUDITORS

KPMG LLP
345 Park Avenue
New York, New York 10154

CORPORATE OFFICES

Playtex Products, Inc.
300 Nyala Farms Road
Westport, CT 06880

F-54

PLAYTEX PRODUCTS, INC.

OTHER INFORMATION

BOARD OF DIRECTORS

Robert B. Haas Chairman of the Board of Playtex Products, Inc. and
Chairman of the Board and Chief Executive
Officer of Haas Wheat & Partners, L.P.

Michael R. Gallagher Chief Executive Officer

Glenn A. Forbes Executive Vice President and Chief Financial Officer

Richard C. Blum Chairman of the Board and President of Richard C.
Blum & Associates, Inc.

Michael R. Eisenson President and Chief Executive Officer of Charlesbank
Capital Partners, LLC

R. Jeffrey Harris Of Counsel and Director of Apogent Technologies, Inc.

C. Ann Merrifield Executive Vice President, Genzyme Biosurgery

Susan R. Nowakowski Chief Operating Officer and Executive Vice President,
AMN Healthcare Services, Inc.

John C. Walker Partner, BLUM Capital Partners, L.P.

Wyche H. Walton Senior Vice President of Haas Wheat & Partners, L.P.

Douglas D. Wheat President of Haas Wheat & Partners, L.P.

PRINCIPAL OFFICERS

Michael R. Gallagher Chief Executive Officer

Glenn A. Forbes Executive Vice President and Chief Financial Officer

Kevin M. Dunn President, Consumer Products Division

John D. Leahy President, International/Corporate Sales Division

Richard G. Powers President, Personal Products Division

James S. Cook Senior Vice President, Operations

Paul A. Siracusa Senior Vice President, Research and Development

Frank M. Sanchez Vice President, Human Resources

Vincent S. Viviani Vice President, Quality Systems

Paul E. Yestrumskas Vice President, General Counsel and Secretary

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

F-55

INDEX TO EXHIBITS

EXHIBIT NO. DESCRIPTION
----------- -----------

3(a) Restated Certificate of Incorporation, as amended through June
6, 1995. (Incorporated herein by reference to Exhibit 3.2 of
Playtex's Form 8-K, dated June 6, 1995.)

3(b) By-laws of the Company, as amended through May 31, 2001.
(Incorporated herein by reference to Exhibit 3 of Playtex's
Form 10-Q for the period ended June 30, 2001, dated August 14,
2001.)

4(a) Indenture dated, May 22, 2001 relating to the 9 3/8% Senior
Subordinated Notes due 2011 (the "Senior Subordinated Notes")
among Playtex Products, Inc., as issuer, Playtex Sales &
Services, Inc., Playtex Manufacturing, Inc., Playtex
Investment Corp., Playtex International Corp., TH Marketing
Corp., Smile-Tote, Inc., Sun Pharmaceuticals Corp., Personal
Care Group, Inc., Personal Care Holdings, Inc., and Carewell
Industries, Inc., as Guarantors and the Bank of New York, as
Trustee. (Incorporated herein by reference to Exhibit 4.1 of
Playtex's Registration Statement on Form S-4 dated June 28,
2001, File No. 333-64070-03.)

4(a)(1) Registration Rights Agreement relating to the Senior
Subordinated Notes among Playtex Products, Inc., as issuer,
the guarantors named therein, Credit Suisse First Boston
Corporation and Wells Fargo Brokerage Services, LLC (the
"Initial Purchasers"). (Incorporated herein by reference to
Exhibit 4.2 of Playtex's Registration Statement on Form S-4
dated June 28, 2001, File No. 333-64070-03.)

4(b) Form of Junior Subordinated Note of Playtex. (Incorporated
herein by reference to Exhibit 4(i) of Playtex's Registration
Statement on Form S-1, File No. 33-25485.)

4(b)(1) Form of Junior Subordinated Note of Playtex dated December 15,
1989. (Incorporated herein by reference to Exhibit 4(f)(1) of
Playtex's Annual Report on Form 10-K for the year ended
December 30, 1989.)

4(b)(2) Junior Subordinated Note of Playtex dated December 15, 1990.
(Incorporated herein by reference to Exhibit 4(f)(2) of
Playtex's Annual Report on Form 10-K for the year ended
December 29, 1990.)

4(b)(3) Junior Subordinated Note of Playtex dated December 15, 1991.
(Incorporated herein by reference to Exhibit 4(h)(3) of
Playtex's Registration Statement on Form S-1, No. 33-43771.)

4(b)(4) Junior Subordinated Note of Playtex dated December 15, 1992.
(Incorporated herein by reference to Exhibit 4(h)(4) of
Playtex's Annual Report on Form 10-K for the year ended
December 26, 1992.)

4(b)(5) Junior Subordinated Note of Playtex dated December 15, 1993.
(Incorporated herein by reference to Exhibit 4(j)(5) of
Playtex's Registration Statement on Form S-1, No. 33-71512.)

4(b)(6) Agreement between Playtex and Playtex Apparel Partners, L.P.
dated November 30, 1994 relating to Junior Subordinated Notes.
(Incorporated herein by reference to Exhibit 4(d)(6) of
Playtex's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.)

4(c) Indenture relating to the 6% Convertible Notes, dated as of
January 29, 1999, between Playtex Products, Inc. and Marine
Midland Bank. (Incorporated herein by reference to Exhibit 2.2
of Playtex's Form 8-K, dated February 12, 1999.)

X-1

EXHIBIT NO. DESCRIPTION
----------- -----------

10(a) Credit Agreement, dated as of May 22, 2001, among Playtex
Products, Inc., Credit Suisse First Boston, as the
Administrative Agent, and the lenders from time to time
parties to the Credit Agreement. (Incorporated herein by
reference to Exhibit 10.1 of Playtex's Registration Statement
on Form S-4 dated June 28, 2001, File No. 333-64070-03.)

10(b) Receivables Purchase Agreement, dated as of May 22, 2001,
among Playtex Products, Inc., Credit Suisse First Boston, New
York Branch, Playtex A/R LLC, and Gramercy Capital
Corporation. (Incorporated herein by reference to Exhibit 10.2
of Playtex's Registration Statement on Form S-4 dated June 28,
2001, File No. 333-64070-03.)

10(c) Purchase and Contribution Agreement, dated as of May 22, 2001,
between Playtex Products, Inc., and Playtex A/R LLC.
(Incorporated herein by reference to Exhibit 10.3 of Playtex's
Registration Statement on Form S-4 dated June 28, 2001, File
No. 333-64070-03.)

10(d) Consulting Agreement between Family Products and Joel E.
Smilow, dated January 30, 1993. (Incorporated herein by
reference to Exhibit 10(m) of Playtex's Registration Statement
on Form S-1, No. 33-71512.)

10(d)(1) First Amendment to the Consulting Agreement, dated as of
August 17, 1999, between Playtex Products Inc., and Joel E.
Smilow. (Incorporated herein by reference to Exhibit 10(c)(1)
of Playtex's Annual Report on Form 10-K for the fiscal year
ended December 25, 1999.)

10(e) Deferred Benefit Equalization Plan dated August 15, 1977, as
amended April 15, 1987. (Incorporated herein by reference to
Exhibit 10(e) of Playtex Holding's Annual Report on Form 10-K
for the year ended December 28, 1987.)

10(f) Playtex Management Incentive Plan. (Incorporated herein by
reference to Exhibit 10(e) of Playtex's Annual Report on Form
10-K for the year ended December 30, 2000.)

10(g) Playtex 1994 Stock Option Plan for Directors and Executive and
Key Employees. (Incorporated herein by reference to Exhibit
10(hh) of Playtex's Registration Statement on Form S-1, No.
33-71512.)

10(g)(1) Amendment No. 1 to the 1994 Stock Option Plan. (Incorporated
herein by reference to Exhibit 10.2 of Playtex's Form 8-K,
dated June 6, 1995.)

10(g)(2) Amendment No. 2 to the 1994 Stock Option Plan. (Incorporated
herein by reference to Exhibit 10.2 of Playtex's Form 8-K,
dated June 6, 1995.)

10(g)(3) Amendment No. 3 to the 1994 Stock Option Plan. (Incorporated
herein by reference to Exhibit 10.2 of Playtex's Form 8-K,
dated June 6, 1995.)

10(g)(4) Amendment No. 4 to the 1994 Stock Option Plan. (Incorporated
herein by reference to Exhibit 10.2 of Playtex's Form 8-K,
dated June 6, 1995.)

10(g)(5) Amendment No. 5 to the 1994 Stock Option Plan. (Incorporated
herein by reference to Exhibit 10(l)(5) of Playtex's Annual
Report on Form 10-K for the fiscal year ended December 26,
1998.)

10(g)(6) Amendment No. 6 to the 1994 Stock Option Plan. (Incorporated
herein by reference to Exhibit 10(l)(6) of Playtex's Annual
Report on Form 10-K for the fiscal year ended December 26,
1998.)

X-2

EXHIBIT NO. DESCRIPTION
----------- -----------

10(g)(7) Playtex 1994 Stock Option Plan for Directors and Executive and
Key Employees as amended through April 6, 1999. (Incorporated
herein by reference to Exhibit 10(l) of Playtex's Form 10-Q
for the period ended June 26, 1999, dated August 4, 1999.)

10(g)(8) Playtex 1994 Stock Option Plan for Directors and Executive and
Key Employees as amended through April 2001. (Incorporated
herein by reference to Exhibit 10(l) of Playtex's Form 10-Q
for the period ended June 30, 2001, dated August 14, 2001.)

10(h) Memorandum of Understanding, dated June 21, 1995 with Michael
R. Gallagher, Chief Executive Officer. (Incorporated herein by
reference to Exhibit 10(ab) of Playtex's Annual Report on Form
10-K for the fiscal year ended December 30, 1995.)

10(h)(1) Memorandum of Understanding, dated May 18, 1999 with Michael
R. Gallagher, Chief Executive Officer. (Incorporated herein by
reference to Exhibit 10(m) of Playtex's Form 10-Q for the
period ended June 26, 1999, dated August 4, 1999.)

10(i) Form of Retention Agreement dated as of July 22, 1997 between
Michael R. Gallagher and the Company. (Incorporated herein by
reference to Exhibit 10.1 of Playtex's Registration Statement
on Form S-4 dated August 29, 1997, File No. 333-33915.)

10(j) Form of Retention Agreement dated as of July 22, 1997 between
each of, James S. Cook, John D. Leahy, Richard G. Powers,
Frank M. Sanchez, and Paul E. Yestrumskas and the Company.
(Incorporated herein by reference to Exhibit 10.3 of Playtex's
Registration Statement on Form S-4 dated August 29, 1997, File
No. 333-33915.)

10(k) Form of Retention Agreement dated as of March 13, 2000 between
Paul A. Siracusa and the Company. (Incorporated herein by
reference to Exhibit 10(j) of Playtex's Annual Report on Form
10-K for the year ended December 30, 2000.)

10(l) Form of Retention Agreement dated as of March 21, 2000 between
Glenn A. Forbes and the Company. (Incorporated herein by
reference to Exhibit 10(k) of Playtex's Annual Report on Form
10-K for the year ended December 30, 2000.)

10(m) Form of Retention Agreement dated as of August 1, 2000 between
Kevin M. Dunn and the Company. (Incorporated herein by
reference to Exhibit 10(l) of Playtex's Annual Report on Form
10-K for the year ended December 30, 2000.)

10(n) Form of Retention Agreement dated as of August 1, 2000 between
Vincent S. Viviani and the Company. (Incorporated herein by
reference to Exhibit 10(m) of Playtex's Annual Report on Form
10-K for the year ended December 30, 2000.)

10(o) Amended Trademark License Agreement dated November 19, 1991
among Marketing Corporation, Apparel and Family Products.
(Incorporated herein by reference to Exhibit 10(r) of
Playtex's Registration Statement on Form S-1, File No.
33-43771.)

10(p) Amended Trademark License Agreement dated November 19, 1991 by
and between Apparel and Family Products. (Incorporated herein
by reference to Exhibit 10(s) of Playtex's Registration
Statement on Form S-1, File No. 33-43771.)

X-3

EXHIBIT NO. DESCRIPTION
----------- -----------

10(q) Release Agreement, dated November 5, 1991, between Playtex
Investment Corp. and Playtex Apparel Partners, L.P.
(Incorporated herein by reference to Exhibit 10(gg) of
Playtex's Registration Statement on Form S-1, No. 33-71512.)

10(r) Stock Purchase Agreement dated as of March 17, 1995 between
Playtex and HWH Capital Partners, L.P., HWH Valentine
Partners, L.P. and HWH Surplus Valentine Partners, L.P.
(Incorporated herein by reference to Exhibit 10.1 of Playtex's
Form 8-K, dated March 17, 1995.)

10(r)(1) Amendment No.1 to Stock Purchase Agreement, dated as of June
1, 1998, by and among the Company, HWH Capital Partners, L.P.,
HWH Valentine Partners, L.P., HWH Surplus Valentine Partners,
L.P. to the Stock Purchase Agreement, dated as of March 17,
1995. (Incorporated herein by reference to Exhibit 10(3) of
Playtex's Post Effective Amendment No. 1 to Form S-3 dated as
of June 12, 1998, File No. 333-50099.)

10(r)(2) First Amended and Restated Registration Rights Agreement,
dated as of June 1, 1998, by and among the Company, HWH
Capital Partners, L.P., HWH Valentine Partners, L.P., HWH
Surplus Valentine Partners, L.P. to the Stock Purchase
Agreement, dated as of March 17, 1995. (Incorporated herein by
reference to Exhibit 10(5) of Playtex's Post Effective
Amendment No. 1 to Form S-3 dated as of June 12, 1998, No.
333-50099.)

10(r)(3) Amendment No. 1, dated as of January 29, 1999 to the First
Amended and Restated Registration Rights Agreement, dated as
of March 17, 1995, as amended and restated as of June 1, 1998
by and among the Company, HWH Capital Partners, L.P., HWH
Valentine Partners, L.P., HWH Surplus Valentine Partners, L.P.
to the Stock Purchase Agreement. (Incorporated herein by
reference to Exhibit 10(t)(3) of Playtex's Annual Report on
Form 10-K for the fiscal year ended December 26, 1998.)

10(s) Stock Purchase Agreement, dated as of December 19, 1997, among
Playtex Products, Inc., and the Shareholders of Carewell
Industries, Inc. (Incorporated herein by reference to Exhibit
10(af) of Playtex's Annual Report on Form 10-K for the year
ended December 27, 1997.)

10(t) Asset Purchase Agreement, dated as of January 26, 1998, among
Playtex Products, Inc., Binky-Griptight, Inc., Lewis Woolf
Griptight Limited and L.W.G. Holdings Limited. (Incorporated
herein by reference to Exhibit 10(ag) of Playtex's Annual
Report on Form 10-K for the year ended December 27, 1997.)

10(u) Merger Agreement, dated as of December 22, 1997, among Playtex
Products, Inc., PCG Acquisition Corp., J.W. Childs Equity
Partners L.P. and Personal Care Holdings, Inc. (Incorporated
herein by reference to Exhibit 2.1 of Playtex's Form 8-K,
dated February 12, 1998.)

10(v) Asset Sale Agreement, dated as of May 13, 1999, by and between
Playtex Products, Inc. and Colgate Palmolive Company.
(Incorporated herein by reference to Exhibit 2.1 of Playtex's
Current Report on Form 8-K, dated July 15, 1999.)

10(v)(1) Amendment No. 1 to the Asset Sale Agreement, dated as of June
25, 1999, by and between Playtex Products, Inc. and Colgate
Palmolive Company. (Incorporated herein by reference to
Exhibit 2.2 of Playtex's Current Report on Form 8-K, dated
July 15, 1999.)

10(w) Registration Rights Agreement, dated as of January 28, 1998
among Playtex Products, Inc. and J.W. Childs Equity Partners,
L.P. (Incorporated herein by reference to Exhibit 2.2 of
Playtex's Form 8-K, dated February 12, 1998.)

X-4

EXHIBIT NO. DESCRIPTION
----------- -----------

10(w)(1) First Amended and Restated Registration Rights Agreement,
dated as of June 1, 1998, by and among the Company, J.W.
Childs Equity Partners, L.P and certain other Stockholders
named in the Stockholders Agreement dated as of January 28,
1998. (Incorporated herein by reference to Exhibit 10(6) of
Playtex's Post Effective Amendment No. 1 to Form S-3, dated as
of June 12, 1998, File No. 333-50099.)

10(x) Stockholders Agreement, dated as of January 28, 1998, between
Playtex Products, Inc. and J.W. Childs Equity Partners, L.P.
and certain other Stockholders named therein. (Incorporated
herein by reference to Exhibit 2.3 of Playtex's Form 8-K,
dated February 12, 1998.)

10(y) Letter Agreement, dated as of June 1, 1998, by and among the
Company, J.W. Childs Equity Partners, L.P and certain other
Stockholders named in the Stockholders Agreement dated as of
January 28, 1998. (Incorporated herein by reference to Exhibit
10(7) of Playtex's Post Effective Amendment No. 1 to Form S-3,
dated as of June 12, 1998, File No. 333-50099.)

10(z) Letter of Waiver, dated as of June 1, 1998, by and among the
Company, Donaldson, Lufkin & Jenrette International, J.W.
Childs Equity Partners, L.P and certain other Stockholders
named in the Stockholders Agreement dated as of January 28,
1998. (Incorporated herein by reference to Exhibit 10(8) of
Playtex's Post Effective Amendment No. 1 to Form S-3, dated as
of June 12, 1998, File No. 333-50099.)

10(aa) Stock Purchase Agreement, dated June 1, 1998 between J.W.
Childs Equity Partners, L.P. (the "seller"), RCBA Playtex,
L.P. (the "Buyer"), and Richard C. Blum & Associates, Inc.
(the "Guarantor"). (Incorporated herein by reference to
Exhibit 10(1) of Playtex's Post Effective Amendment No. 1 to
Form S-3, dated as of June 12, 1998, File No. 333-50099.)

10(ab) Stockholders Agreement, dated June 1, 1998 between RCBA
Playtex, L.P. and the Company. (Incorporated herein by
reference to Exhibit 10(2) of Playtex's Post Effective
Amendment No. 1 to Form S-3, dated as of June 12, 1998, File
No. 333-50099.)

10(ab)(1) Amended and Restated Stockholders Agreement, dated September
3, 1998 between the Company, RCBA Playtex, L.P. and RCBA
Strategic Partners. (Incorporated herein by reference to
Exhibit 10(ac)(1) of Playtex's Annual Report on Form 10-K for
the fiscal year ended December 26, 1998.)

10(ac) Registration Rights Agreement, dated June 1, 1998 between RCBA
Playtex, L.P. and the Company. (Incorporated herein by
reference to Exhibit 10(4) of Playtex's Post Effective
Amendment No. 1 to Form S-3, dated as of June 12, 1998, File
No. 333-50099.)

10(ac)(1) Amendment No. 1, dated as of January 29, 1999, to the
Registration Rights Agreement, dated as of June 1, 1998
between RCBA Playtex, L.P. and the Company. (Incorporated
herein by reference to Exhibit 10(ad)(1) of Playtex's Annual
Report on Form 10-K for the fiscal year ended December 26,
1998.)

10(ad) Registration Rights Agreement, dated as of January 29, 1999,
between Playtex Products, Inc. and Mondial Industries Limited
Partnership. (Incorporated herein by reference to Exhibit 2.3
of Playtex's Form 8-K, dated February 12, 1999.)

10(ae) Sublease Agreement between Playtex and AMBAC Capital
Management, Inc. dated as of February 20, 1998. (Incorporated
herein by reference to Exhibit 10(ah) of Playtex's Annual
Report on Form 10-K for the fiscal year ended December 26,
1998.)

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EXHIBIT NO. DESCRIPTION
----------- -----------

10(af) Agreement of Lease between Playtex Manufacturing, Inc. and
Trammell Crow NE, Inc. (Incorporated herein by reference to
Exhibit 10(ai) of Playtex's Annual Report on Form 10-K for the
fiscal year ended December 26, 1998.)

10(ag) Lease Agreement between Playtex Manufacturing, Inc. and Tetra
Pak Plastic Packaging R&D GmbH, Hitek FSP, S.A., Tetra Laval
Holdings & Finance S.A., and Tetra Laval Credit Inc., dated as
of April 26, 1996. (Incorporated herein by reference to
Exhibit 10(ai) of Playtex's Annual Report on Form 10-K for the
year ended December 27, 1997.)

10(ah) Lease Agreement between Playtex Manufacturing, Inc. and BTM
Capital Corporation, dated as of June 20, 1996. (Incorporated
herein by reference to Exhibit 10(aj) of Playtex's Annual
Report on Form 10-K for the year ended December 27, 1997.)

10(ai) Interest Rate Swap Agreement effective November 30, 2000
between Playtex Products, Inc., and Wells Fargo Bank, N.A.
(Incorporated herein by reference to Exhibit 10(ai) of
Playtex's Annual Report on Form 10-K for the year ended
December 30, 2000.)

10(aj) Interest Rate Swap Agreement effective December 4, 2000
between Playtex Products, Inc., and Toronto Dominion (New
York), Inc. (Incorporated herein by reference to Exhibit
10(aj) of Playtex's Annual Report on Form 10-K for the year
ended December 30, 2000.)

*12(a) Statement re-computation of ratios.

*21(a) Subsidiaries of Playtex.

*23 Consent of KPMG LLP.

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Exhibits marked with an " * " are filed as a part of this Annual Report on Form
10-K, all other exhibits are incorporated by reference as individually noted.
Exhibits listed as 10(e) through and including 10(n) could be considered
compensatory plans or in some manner benefit certain employees.

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