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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 (Date of earliest event reported): FEBRUARY 12, 1999
DRYPERS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23422 76-0344044
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
5300 MEMORIAL, SUITE 900
HOUSTON, TEXAS 77007
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 869-8693
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ITEM 5. OTHER EVENTS
On February 12, 1999, the Company announced its intention to discontinue
the operations of its laundry detergent business. The initial results of the
detergent operation in the last two quarters of 1998, which generated an
operating loss of $1.2 million, caused the Company to reconsider its plans for
these operations. As a result, the Company decided in December 1998 to
discontinue these operations and to settle remaining related contractual
obligations. A charge of $5.3 million will result from these obligations and the
write-off of the Company's investment in the detergent business in 1998 and,
along with the 1998 operating loss, will be presented as a discontinued
operation in the 1998 consolidated financial statements. A copy of the Company's
press release dated February 12, 1999, which describes the foregoing is filed as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
The following document is filed as an exhibit to this report in accordance
with Item 601 of Regulation S-K.
99.1 Press release of Drypers Corporation dated February 12, 1999.
SIGNATURES
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 hereunto duly authorized.
DRYPERS CORPORATION
Dated: MARCH 29, 1999 By: /S/ WALTER V. KLEMP
Walter V. Klemp
Chairman of the Board and
Chief Executive Officer
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
DRYPERS TRIMS `99 OUTLOOK FOR LATIN AMERICA
IN RESPONSE TO CURRENCY DEVALUATION
DETERGENT OPERATIONS TO BE DISCONTINUED
HOUSTON, TEXAS (February 12, 1999) - Drypers Corporation (NASDAQ: DYPR)
announced that it is trimming its 1999 expectations for its Latin American
business due to the recent decline of the Brazilian real. Separately, the
Company announced that it will take a one-time charge related to the
discontinuation of its detergent operations.
Drypers expects sales from Brazil and Argentina to be lower than planned
and cost of goods sold to be higher because of the currency situation, resulting
in a reduction in expected 1999 annual earnings, primarily during the first half
of 1999, of approximately $0.15 to $0.20 per share on a consolidated basis.
"All the other aspects of our international and domestic businesses are
looking good," said Walter V. Klemp, Chairman and Chief Executive Officer of
Drypers. "We continue to see growth in our domestic business, and we expect to
announce several major developments in the coming weeks that will expand
distribution for our products including our innovative Drypers with Aloe
Vera(TM) and Drypers with Germ Guard(TM) product lines. As a result, we continue
to expect Drypers to show substantial improvement in earnings in 1999 compared
to 1998."
Discontinuing the detergent operations will result in a one-time charge of
approximately $6.5 million in the Company's 1998 results and is not expected to
affect 1999 results. The detergent unit will continue to operate on a limited
basis, fulfilling customer commitments, while Drypers completes its orderly
disposition.
"We determined that we were unable to rely on the product cost and
performance parameters that originally attracted us to the detergent
opportunity," said Klemp. "In the final analysis, we believe that we can build
shareholder value faster by focusing on our core diaper business."
Fourth quarter results will be announced February 19, 1999.
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DRYPERS TRIMS LATIN AMERICA ESTIMATE/PAGE 2
ABOUT DRYPERS CORPORATION
Drypers Corporation, based in Houston, is the "other diaper company" that
is changing the world. Drypers manufactures and markets disposable baby diapers
and related products under the Drypers(R) brand with exclusive licensing
arrangements with the Sesame Street characters and South American TV personality
Xuxa. Products are sold through grocery stores and mass merchants throughout the
U.S., Latin America and other international markets. Drypers also manufacturers
other branded and private label diapers and related products. Drypers is the
1997 winner of the American Marketing Association's "Gold Edison" award for most
innovative children's product for its Drypers with Aloe Vera.
FORWARD LOOKING STATEMENTS: THIS NEWS RELEASE CONTAINS, AND ANY ORAL
STATEMENTS MADE BY THE COMPANY CONCERNING THIS RELEASE MAY CONTAIN,
FORWARD-LOOKING STATEMENTS THAT INVOLVE ASSUMPTIONS AND UNCERTAINTIES. THE
COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY. SOME OF THE MOST SIGNIFICANT
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, FLUCTUATIONS IN CURRENCY VALUES AND ECONOMIC CONDITIONS IN
INTERNATIONAL MARKETS, COMPETITIVE AND OTHER ECONOMIC FACTORS, PRICE CHANGES BY
COMPETITORS, CHANGES IN COSTS OF RAW MATERIALS, TIMING OF TECHNOLOGICAL ADVANCES
BY THE COMPANY AND ITS COMPETITORS, AND LACK OF ACCEPTANCE BY CONSUMERS OF NEW
PRODUCTS.
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CONTACT: Investor Relations: Lisa Tolar of Drypers Corporation at
713-869-8693.
Media Relations: Alice Brink of Vollmer Public Relations at
713-546-2230 x172
