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: July 20, 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 July 20, 2000, the Company issued a press release relating to its financial
results for the second quarter of 2000, a copy of which is filed herewith as
Exhibit 99.1.
ITEM 7.
(C) Exhibits
(99.1) Press Release of the Company dated July 20, 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
July 20, 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 REPORTS SECOND QUARTER 2000 EARNINGS IN LINE
WITH REVISED GUIDANCE
SCOTTSDALE, ARIZ., JULY 20, 2000 - The Dial Corporation (NYSE: DL) announced
today net income, excluding a restructuring charge and a one-time gain on a sale
of property which were announced on June 28, 2000, of $9.5 million, or $0.10 per
share (diluted), versus $29.4 million, or $0.29 per share (diluted), in the
second quarter of 1999 and in line with revised guidance released on June 28,
2000. The year-over-year reduction in operating results was caused mainly by
lower than expected sales and gross margin as previously disclosed. Net income,
as reported, of $1.1 million, or $0.01 per share (diluted), includes $21.1
million of the $26 million pre-tax restructuring charge and a $6.7 million
pre-tax one-time gain on the sale of property which were previously announced.
Net sales for the quarter declined 5 percent to $408.7 million from
$430.3 million in the second quarter of 1999. Net sales, including net joint
venture sales, were down 2 percent for the quarter. Reasons for the
year-over-year reduction in sales for the quarter include general retail
trade inventory reductions and increased competition in many of the categories
in which the Company competes.
Gross margin for the quarter was 48.9 percent excluding the
restructuring charge. Gross margin was negatively impacted primarily by reduced
overhead absorption in the Company's manufacturing facilities associated with
lower sales and a shift in the mix of sales to lower margin products. The
Company's earnings were further reduced by joint venture losses of $3.6 million
in the quarter. The Company's income tax expense in the quarter benefited from
lower effective tax rates on income from export sales and the gain on the sale
of property.
Net income for the first half, excluding the previously announced
restructuring charge and one-time gain, was $31.0 million, or $0.33 per share
(diluted), versus $55.3 million, or $0.55 per share (diluted), in the prior
year. Net income for the first half, including the previously announced
restructuring charge and one-time gain, was $22.6 million, or $0.24 per share
(diluted). Net sales for the first half declined 6 percent to $781.9 million
from $829.3 million in the first half of 1999. Net sales, including joint
venture sales, were down 2 percent for the half. Sales were impacted primarily
by general retail trade inventory reductions and increased competitive activity
throughout the first half as well as other factors previously disclosed.
"This has been a difficult period for our Company," said Mal Jozoff,
Chairman and CEO of Dial. "The combination of certain one-time events and
changes in the business environment have negatively impacted our business
throughout the first half of 2000. Nevertheless, we are seeing signs of
improvement. Our established brands remain strong despite heavy competitive
spending; our new products are being well received by our customers; and
our fundamentals, like inventories and receivables, are improving. Dial
is getting the problems of the first half under control and we believe we
will be in a position to resume our history of progress."
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 Cosmetics
and Nature's Accents personal care brands. Dial products have been in the
American marketplace for more than 100 years. For more information about The
Dial Corporation, 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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THE DIAL CORPORATION
SUMMARY OF OPERATIONS
Unaudited
In millions, except for per share data
QUARTER ENDED SIX MONTHS ENDED
------------- ----------------
JULY 1, 2000 JULY 3, 1999 JULY 1, 2000 JULY 3, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . . . . . $ 408.7 $ 430.3 $ 781.9 $ 829.3
-------------- ------------- -------------- -------------
Costs and expenses:
Cost of products sold. . . . . . . . . . . . 208.9 211.2 397.4 413.7
Asset write-downs and discontinued product
inventories as a result of restructuring. . 17.2 - 17.2 -
-------------- ------------- -------------- -------------
226.1 211.2 414.6 413.7
Selling, general and administrative expenses . . 169.3 164.6 310.7 312.1
Restructuring charges and other asset writedowns 3.9 - 3.9 -
-------------- ------------- -------------- -------------
173.2 164.6 314.6 312.1
399.3 375.8 729.2 725.8
Operating income . . . . . . . . . . . . . . . 9.4 54.5 52.7 103.5
Interest and accretion expense . . . . . . . 12.3 8.3 22.0 16.7
Net Earnings (Loss) of Joint Venture . . . . (3.6) - (4.4) -
Other income - Gain on Sale of facility. . . . 6.7 - 6.7 -
-------------- ------------- -------------- -------------
Income before income taxes . . . . . . . . . . 0.2 46.2 33.0 86.8
Income taxes . . . . . . . . . . . . . . . . (0.9) 16.8 10.4 31.5
-------------- ------------- -------------- -------------
Net income . . . . . . . . . . . . . . . . . . $ 1.1 $ 29.4 $ 22.6 $ 55.3
============== ============= ============== =============
Basic earnings per share . . . . . .. . . . . $ 0.01 $ 0.30 $ 0.24 $ 0.56
============== ============= ============== =============
Diluted earnings per share . . . . . . . . . . $ 0.01 $ 0.29 $ 0.24 $ 0.55
============== ============= ============== =============
Basic shares outstanding . . . . . . . . . . . 91.1 98.6 93.1 98.6
Common share equivalents . . . . . . . . . . 0.3 2.0 0.5 2.1
-------------- ------------- -------------- -------------
Diluted shares outstanding . . . . .. . . . . 91.4 100.6 93.6 100.7
============== ============= ============== =============
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THE DIAL CORPORATION
SUMMARY OF NET SALES
Unaudited
In millions
QUARTER ENDED SIX MONTHS ENDED
------------- ----------------
JULY 1, 2000 JULY 3, 1999 JULY 1, 2000 JULY 3, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Dial. . . . . . . . . . . . . . . . . $ 100.4 $ 112.1 $ 183.6 $ 201.0
Purex . . . . . . . . . . . . . . . . 121.7 122.9 234.4 242.1
Renuzit . . . . . . . . . . . . . . . 50.6 48.7 101.3 98.6
Armour. . . . . . . . . . . . . . . . 51.1 57.4 95.8 111.7
Specialty Personal Care . . . . . . . 19.6 24.0 46.8 50.8
------------- ------------- ------------- -------------
Total Domestic Branded. . . . . . . 343.4 365.1 661.9 704.2
International . . . . . . . . . . . . 47.0 46.0 85.5 89.7
Commercial Markets & Other. . . . . . 18.3 19.2 34.5 35.4
------------- ------------- ------------- -------------
Total reported - The Dial Corporation 408.7 430.3 781.9 829.3
Net Sales of Dial/Henkel, LLC
an unconsolidated joint venture. . 11.2 - 29.0 -
------------- ------------- ------------- -------------
Total Sales
reported and unconsolidated. . . . $ 419.9 $ 430.3 $ 810.9 $ 829.3
============= ============= ============= =============
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THE DIAL CORPORATION
CONDENSED BALANCE SHEET
Unaudited
In millions
JULY 1, DEC. 31,
2000 1999
------------------ ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets. . . . . . . . . . . . . . . . . . . $ 400.2 $ 332.5
Non-current assets. . . . . . . . . . . . . . . . . 1,054.3 937.2
------------------ ---------
Total assets . . . . . . . . . . . . . . . . . $ 1,454.5 $1,269.7
================== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities . . . . . . . . . . . . . . . . $ 356.1 $ 318.1
Long-term liabilities . . . . . . . . . . . . . . . 760.0 540.3
Stockholders' equity. . . . . . . . . . . . . . . . 338.4 411.3
------------------ ---------
Total liabilities and stockholders' equity . . $ 1,454.5 $1,269.7
================== =========
CONDENSED STATEMENT OF CASH FLOWS
Unaudited
In millions
QUARTER ENDED . . . . . .. SIX MONTHS ENDED
--------------- -------------------
JULY 1, . . JULY 3, JULY 1, JULY 3,
2000 1999 2000 1999
------------------ --------- --------- -------
Net cash provided by operations . . . . . . $ 64.4 $ 25.4 $ 35.0 $ 25.9
Net cash used by investing activities . . . . . . . (137.0) (11.8) (146.5) (13.6)
Net cash provided (used) by financing activities. . 87.4 (13.6) 125.4 (19.4)
------------------ --------- --------- -------
Net decrease in cash and cash equivalents . . . . . 14.8 0.0 13.9 (7.1)
Cash and cash equivalents, beginning of year/period 5.2 5.3 6.1 12.4
------------------ --------- --------- -------
Cash and cash equivalents, end of period. . . . . . $ 20.0 $ 5.3 $ 20.0 $ 5.3
======== ======== ========= =======
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