UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: June 28, 2000
THE DIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 51-0374887
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
15501 NORTH DIAL BOULEVARD
SCOTTSDALE, ARIZONA 85260-1619
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (480) 754-3425.
<PAGE>
ITEM 5. OTHER EVENTS.
On June 28, 2000, the Company issued a press release relating to its financial
earnings outlook for the second quarter and the balance of 2000, a copy of which
is filed herewith as Exhibit 99.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE DIAL CORPORATION
June 28, 2000
/s/ Susan J. Riley
Executive Vice President and Chief Financial Officer
CYNTHIA DEMERS - CORPORATE AND GOVERNMENT AFFAIRS
(480) 754-4090
BOB FULTON - INVESTOR RELATIONS
(480) 754-1016
Dial Revises Earnings Estimates and Announces a $26 Million Restructuring Charge
SCOTTSDALE, ARIZ., JUNE 28, 2000 - The Dial Corporation (NYSE:DL) revised
downward its earnings outlook for the first half of 2000 and the balance of the
year and announced a $26 million pretax charge to restructure certain operations
of the business.
The Company expects first half earnings per share to be down approximately
30 percent versus prior year and full year earnings per share to be down 25 to
30 percent versus prior year. These earnings per share estimates are before
restructuring and include a one-time gain. Earnings per share in the first half
before restructuring and the one-time gain are expected to be down approximately
40 percent from the same period last year.
The Company will undertake important steps designed to improve future
Profits and operational efficiencies resulting in a $26 million pretax
Restructuring charge (approximately $17 million after tax, or $.19 per share).
In the second quarter, the Company expects to recognize $21 million of the
pretax charge (approximately $14 million after tax, or $.15 per share) against
earnings. The remainder of the charge is expected to be recognized over the
next two quarters. Specifically, the charge will be to:
- close a redundant powder detergent plant
- consolidate manufacturing and logistical operations and discontinue
certain formulations and inventory in the Specialty Personal Care franchise,
and
- restructure certain organizations, including sales, as a result of
acquisitions and changes in the business environment over the past six
months.
The restructuring is expected to result in annual savings of approximately $5
million pretax and improve the Company's service to its customers.
Net sales, as consolidated, are expected to be down approximately 6 percent
in the second quarter of 2000 from the second quarter of 1999. Including the
Dial/Henkel joint venture, sales are expected to be down about 3 percent for the
second quarter of 2000.
Gross margin for the second quarter will be impacted by the reduced
Overhead absorption associated with the lower than expected sales and the mix
Of sales favoring lower margin products. Operating margins will also be
Lower than anticipated because the Company substantially maintained its
marketing and promotional spending in order to drive consumer market share
momentum, which remains strong. Earnings are further reduced due to the
investment in the introduction of the Dial/Henkel laundry products.
Second quarter earnings per share are expected to include approximately
$.06 per share from a one-time gain resulting from a sale of property.
The Company expects to sell the property and building on 23 acres of land
located adjacent to the Company's corporate headquarters in Arizona.
The Company intends to enter into a lease on a new, more utilitarian
research and administration facility that will be constructed on 11 acres
at the same location.
Earnings per share for the second half of the year are expected to be down
approximately 25 to 30 percent versus year ago, reflecting important
improvements in results from the first half but acknowledging the persistence of
the gross profit problems which have resulted from slower than anticipated sales
and mix effects. These earnings per share estimates are before restructuring
charges.
"Despite significant market share gains on each of our core brands
throughout the first half of the year, we are experiencing earnings
difficulties," said Mal Jozoff, Chairman and CEO of Dial. "We stumbled in the
first quarter and our recovery is taking longer than we had anticipated. But we
are confident we will recover. We're taking steps to get back on track as
fast as possible. This restructuring of our detergents manufacturing plants and
Specialty Personal Care logistics, plus our selling organizations in the U.S.
and International, should make us more cost effective and efficient. We believe
our recent acquisitions of Coast soap in the U.S. and of the Plusbelle hair
care line in Argentina, plus the laundry product joint venture with Henkel in
the U.S., Canada, and Mexico, should provide important volume and profit growth
in the future. The sale of our existing research facility and the construction
of a new research facility here in Arizona also should increase our
effectiveness in developing new products and, importantly, is a better use of
our corporate assets," continued Jozoff. "All of these actions should help
contribute to greater shareholder value going forward."
The Dial Corporation is one of America's leading manufacturers of consumer
products, including Dial soaps, Purex laundry detergents, Renuzit air
fresheners, Armour Star canned meats, and the Sarah Michaels, Freeman and
Nature's Accents personal care brands. Dial products have been in the American
marketplace for more than 100 years.
Statements in this press release as to the Company's expectations, beliefs,
plans or predictions for the future are forward looking statements, as that term
is defined by the U.S. Securities and Exchange Commission (SEC). Actual results
might differ materially from those projected in the forward-looking statements.
Factors that could cause actual results to materially differ from those in the
forward-looking statements include, without limitation, the ability of the
Company to complete the sale of its existing research facility before the end of
the second quarter on terms acceptable to the Company, the ability of the
Company to successfully integrate the Coast and Plusbelle acquisitions into its
operations, the ability of the Company to derive the benefits it currently
expects from the restructuring and other factors detailed in the Company's 1999
Annual Report on Form 10-K, including the section entitled "Management's
Discussion and Analysis of Results of Operations and Financial Condition," and
in Exhibit 99 to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 1, 2000. These reports have been filed with the SEC. For a
copy of these reports, please access the Company's Web site at www.dialcorp.com
or call the Dial Consumer Information Center at 1-800-528-0849.
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