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: October 24, 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 7.
(C) Exhibits
(99) Press Release of the Company dated October 24, 2000
ITEM 9. REGULATION FD DISCLOSURE.
On October 24, 2000, we issued a press release relating to our financial results
for the third quarter of 2000, a copy of which is furnished herewith as Exhibit
99.
In response to questions received after our earnings conference call on October
24, 2000, we are furnishing the following information in response to those
questions. We do not intend to update this information, unless we believe it is
appropriate or necessary to do so in accordance with the SEC's Regulation FD.
What is the accounts payable balance at September 30, 2000?
$127.5 million
What is the amount of the third quarter 2000 sales for the Dial/Henkel LLC
joint venture?
$9.2 million
What should be considered a normal tax rate for Dial?
We believe that the effective tax rate in 2001 will be approximately 36%,
compared to an effective tax rate of 34.5% before and after special charge
an a gain in the third quarter of 2000.
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
October 24, 2000
/s/ Conrad A. Conrad
Senior Vice President and Chief Financial Officer
Exhibit 99
MEDIA RELATIONS - CYNTHIA A. DEMERS
(480) 754-4090
INVESTOR RELATIONS - STEPHEN BLUM
(480) 754-5040
DIAL REPORTS THIRD QUARTER EARNINGS
<PAGE>
SCOTTSDALE, ARIZ., OCTOBER 24, 2000 - The Dial Corporation (NYSE:DL)
today announced third quarter net income of $4.4 million, or $0.05 per
Share (diluted), excluding previously announced special charges and a one-time
gain. This compares to net income of $30.8 million, or $0.31 per share
(diluted) in the third quarter last year.
As previously announced, the Company will also record a $60.0 million to
$70.0 million special charge in the second half of 2000 to restructure the
Specialty Personal Care business and the Dial/Henkel joint venture, and to pay
severance costs for prior management. The Company recorded $48.7 million of
this charge in the third quarter of 2000, including $11.5 million for the joint
venture. The Company also recorded a charge of $2.6 million in the third
quarter of 2000 for expenses related to closing the Bristol, Pa. plant announced
in the second quarter of 2000. These charges were partially offset by a $4.6
million pre-tax gain in the third quarter from changes to certain benefit plans.
As a result of these charges and gain, the Company reported a third quarter net
loss of $26.2 million, or $0.29 per share (diluted).
Net sales for the third quarter declined 6 percent to $411.1 million from
$437.0 million in the third quarter of 1999. The reduction in sales from last
year's third quarter resulted primarily from the Company's concerted effort to
reduce end of quarter shipments and promotions, as well as increased competition
in many of the categories in which the Company competes, partially offset by
acquisitions made earlier this year.
Gross margin for the third quarter, excluding the previously announced
special charge, was 47.8 percent, compared to 49.7 percent in the year ago
period. Gross margin was negatively impacted primarily by reduced overhead
absorption in the Company's manufacturing facilities associated with lower
sales, as well as higher costs associated with petroleum related materials and
activities and higher costs resulting from consolidating the Specialty Personal
Care business' distribution and warehouse facilities
Excluding previously announced special charges and one-time gains, net
Income for the nine month period was $35.4 million, or $0.38 per share
(diluted), versus $86.1 million, or $0.86 per share (diluted), in the prior
year period. Including one-time charges and gains, the Company had a net loss
for the nine months of $3.5 million, or $0.04 per share (diluted).
Net sales for the nine month period were down 5.8 percent to $1,193.0
Million from $1,266.3 million in the prior year period. Sales in the nine month
Period were impacted by factors previously disclosed by the Company as impacting
First half results, the Company's concerted efforts to reduce end of quarter
Shipments and promotions, and increased competition in many of the categories in
which the Company competes, partially offset by acquisitions made earlier
this year.
Total debt at the end of the third quarter was $636.5 million, down $20.5
million from the balance at the end of the second quarter. The reduction in
debt was funded from free cash flow generated in the quarter and cash on hand.
Debt repayment is expected to be accelerated as a result of the previously
announced reduction of the Company's quarterly dividend. Cash flow from
operations in the third quarter was $23.1 million compared to $36.4 million in
the third quarter of 1999. The year-over-year reduction in cash flow from
operations resulted primarily from a reduction in net income, offset, in part,
by the non-cash portion of the one-time charges.
"The third quarter was clearly a time of transition for Dial," said Herbert
M. Baum, Dial chairman, president and chief executive officer. "We took
significant steps to increase our competitiveness and the future success of the
Company by moving to a business unit organization; bringing in experienced, key
executives; eliminating under-performing SKUs; discontinuing the unprofitable
Nature's Accent personal care line and the unprofitable private label specialty
soaps business; re-evaluating the Dial/Henkel joint venture; and reducing end of
quarter shipments and promotions. As a result, we're comfortable with the
consensus estimate for net earnings of $0.50 per share for this year excluding
one-time items."
"Despite lower earnings this year as compared to last year, our cash
generated from operations remains strong," added Baum. "For the nine month
period, cash flow from operations was $58.0 million versus $62.3 million in last
year's period - at which time the Company reported record earnings. This
resulted primarily from a reduction in net income offset, in part, by the
non-cash impact of the special charges announced in the second and third quarter
of this year. We believe that further improvements will occur as we better
align product shipments with everyday sales and achieve the benefits of our cost
improvement programs."
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 and Freeman
Cosmetics 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 the term
is defined by the 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 are detailed in Dial's SEC filings.
Senior management will host a LIVE CONFERENCE CALL and REAL-TIME WEBCAST
today, beginning at 1:00 p.m. Eastern Time and lasting approximately 45
minutes to discuss the Company's third quarter results and outlook for the
balance of fiscal 2000.
Access for the conference call and webcast is open to the press and general
public in a listen only mode. To access the conference call, please dial
1-952-556-2804. The webcast may also be accessed at www.streetfusion.com with
replays available shortly after the conclusion of the call at the same Web
address as well as by dialing 1-703-326-3020 and entering the ID code (for the
replay only) 4685688.
###
<TABLE>
<CAPTION>
THE DIAL CORPORATION
SUMMARY OF OPERATIONS
Unaudited
In millions, except for per share data
QUARTER ENDED NINE MONTHS ENDED
------------- -----------------
SEPTEMBER 30, 2000 OCTOBER 2, 1999 SEPTEMBER 30, 2000
-------------------- ----------------- --------------------
<S> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . . . . . . . $ 411.1 $ 437.0 $ 1,193.0
-------------------- ----------------- --------------------
Costs and expenses:
Cost of products sold. . . . . . . . . . . . . . 214.7 220.0 612.2
Asset write-downs and discontinued product
inventories as a result of restructuring. . . 31.3 - 48.5
-------------------- ----------------- --------------------
246.0 220.0 660.7
Selling, general and administrative expenses . . 173.6 161.3 484.4
Restructuring charges and other asset writedowns 8.5 - 12.3
-------------------- ----------------- --------------------
182.1 161.3 496.7
Total costs and expenses . . . . . . . . . . . . 428.1 381.3 1,157.4
-------------------- ----------------- --------------------
Operating income . . . . . . . . . . . . . . . . . (17.0) 55.7 35.6
Interest and accretion expense . . . . . . . . . 13.9 8.0 35.8
Net loss of Joint Venture . . . . . . . . . . . (13.6) (0.4) (18.0)
Other income - Gain on Special Items . . . . . . 4.6 - 11.2
-------------------- ----------------- --------------------
Income before income taxes . . . . . . . . . . . . (39.9) 47.3 (7.0)
Income taxes . . . . . . . . . . . . . . . . . . (13.7) 16.5 (3.5)
-------------------- ----------------- --------------------
Net income . . . . . . . . . . . . . . . . . . . . $ (26.2) $ 30.8 $ (3.5)
==================== ================= ====================
Basic earnings per share . . . . . . . . . . . . . $ (0.29) $ 0.31 $ (0.04)
==================== ================= ====================
Diluted earnings per share . . . . . . . . . . . . $ (0.29) $ 0.31 $ (0.04)
==================== ================= ====================
Basic shares outstanding . . . . . . . . . . . . . 91.2 98.3 92.5
Common share equivalents . . . . . . . . . . . . 0.1 1.8 0.4
-------------------- ----------------- --------------------
Diluted shares outstanding . . . . . . . . . . . . 91.3 100.1 92.9
==================== ================= ====================
OCTOBER 2, 1999
-----------------
<S> <C>
Net Sales. . . . . . . . . . . . . . . . . . . . . $ 1,266.3
-----------------
Costs and expenses:
Cost of products sold. . . . . . . . . . . . . . 633.7
Asset write-downs and discontinued product
inventories as a result of restructuring. . . -
-----------------
633.7
Selling, general and administrative expenses . . 473.4
Restructuring charges and other asset writedowns -
-----------------
473.4
Total costs and expenses . . . . . . . . . . . . 1,107.1
-----------------
Operating income . . . . . . . . . . . . . . . . . 159.2
Interest and accretion expense . . . . . . . . . 24.7
Net loss of Joint Venture . . . . . . . . . . . (0.4)
Other income - Gain on Special Items . . . . . . -
-----------------
Income before income taxes . . . . . . . . . . . . 134.1
Income taxes . . . . . . . . . . . . . . . . . . 48.0
-----------------
Net income . . . . . . . . . . . . . . . . . . . . $ 86.1
=================
Basic earnings per share . . . . . . . . . . . . . $ 0.87
=================
Diluted earnings per share . . . . . . . . . . . . $ 0.86
=================
Basic shares outstanding . . . . . . . . . . . . . 98.5
Common share equivalents . . . . . . . . . . . . 2.1
-----------------
Diluted shares outstanding . . . . . . . . . . . . 100.6
=================
</TABLE>
<TABLE>
<CAPTION>
THE DIAL CORPORATION
SUMMARY OF NET SALES
Unaudited
In millions
QUARTER ENDED NINE MONTHS ENDED
------------- -----------------
SEPTEMBER 30, 2000 OCTOBER 2, 1999 SEPTEMBER 30, 2000 OCTOBER 2, 1999
------------------- ---------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Dial . . . . . . . . . . . $ 101.1 $ 106.8 $ 284.6 $ 307.8
Purex. . . . . . . . . . . 115.7 112.8 350.0 354.9
Renuzit. . . . . . . . . . 54.9 53.4 156.2 152.0
Armour . . . . . . . . . . 47.3 67.5 143.3 179.2
Specialty Personal Care. . 24.7 37.8 71.5 88.6
------------------- ---------------- ------------------- ----------------
Total Domestic Branded . 343.7 378.3 1,005.6 1,082.5
International. . . . . . . 52.0 42.1 137.5 131.8
Commercial Markets & Other 15.4 16.6 49.9 52.0
------------------- ---------------- ------------------- ----------------
Total sales reported . . . $ 411.1 $ 437.0 $ 1,193.0 $ 1,266.3
=================== ================ =================== ================
</TABLE>
<TABLE>
<CAPTION>
THE DIAL CORPORATION
CONDENSED BALANCE SHEET
Unaudited
In millions
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------------- --------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets . . . . . . . . . . . . . . . . . . . $ 370.1 $ 332.5
Non-current assets . . . . . . . . . . . . . . . . . 1,038.4 937.2
------------------- --------------------
Total assets. . . . . . . . . . . . . . . . . . $ 1,408.5 $ 1,269.7
=================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities. . . . . . . . . . . . . . . . . $ 253.6 $ 318.0
Long-term liabilities. . . . . . . . . . . . . . . . 849.0 540.4
Stockholders' equity . . . . . . . . . . . . . . . . 305.9 411.3
------------------- --------------------
Total liabilities and stockholders' equity. . . $ 1,408.5 $ 1,269.7
=================== ====================
CONDENSED STATEMENT OF CASH FLOWS
Unaudited
In millions
QUARTER ENDED. . . . . . . . . . . . . . . . . NINE MONTHS ENDED
---------------------------------------------------- -------------------
SEPTEMBER 30, 2000 . . . . . . . . . . . . . . OCTOBER 2, 1999 SEPTEMBER 30, 2000 OCTOBER 2, 1999
---------------------------------------------------- ------------------- -------------------- -----------------
Net cash provided by operations. . . . . . . . . . . $ 23.1 $ 36.4 $ 58.0 $ 62.3
Net cash used by investing activities. . . . . . . . (9.1) (22.9) (155.6) (36.5)
Net cash provided (used) by financing activities . . (27.5) (10.9) 98.0 (30.3)
------------------- -------------------- ----------------- -------
Net increase (decrease) in cash and cash equivalents (13.5) 2.6 0.4 (4.5)
Cash and cash equivalents, beginning of year/period. 20.0 5.3 6.1 12.4
------------------- -------------------- ----------------- -------
Cash and cash equivalents, end of period . . . . . . $ 6.5 $ 7.9 $ 6.5 $ 7.9
=================== ==================== ================= =======
</TABLE>
