FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or
15(d)
of the Securities Exchange Act of 1934
Date of Report: December 3, 2001
THE DIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
| DELAWARE (State or Other Jurisdiction of Incorporation or Organization) 15501 NORTH DIAL BOULEVARD SCOTTSDALE, ARIZONA (Address of Principal Executive Offices) |
51-0374887 (I.R.S. Employer Identification No.) 85260-1619 (Zip Code) |
Registrant's Telephone Number, Including Area Code (480) 754-3425
ITEM 5. OTHER EVENTS
On August 28, 2001 Dial sold all of the stock of its wholly-owned subsidiary, Sarah Michaels, Inc., and inventory, other operating, intellectual property and other intangible assets associated with its Specialty Personal Care business. The SPC business included the businesses conducted under the Sarah Michaels and Freeman trademarks.
Dial retained all accounts receivable and accounts payable relating to the Specialty Personal Care business generated prior to August 28, 2001.
The accompanying consolidated balance sheets, statements of consolidated operations and statements of consolidated cash flows have been prepared to reflect the historical results of continuing operations as adjusted for the reclassification of the Specialty Personal Care business as discontinued operations.
The Dial Corporation
Consolidated Balance Sheets
| April 1, | July 1, | September 30, | December 31, | March 31, | June 30, | September 29, | ||||||||||||||||||||||||||
| 2000 | 2000 | 2000 | 2000 | 2001 | 2001 | 2001 | ||||||||||||||||||||||||||
Cash and cash equivalents |
$ | 4,947 | $ | 19,852 | $ | 6,424 | $ | 6,733 | $ | 4,467 | $ | 7,977 | $ | 6,570 | ||||||||||||||||||
Receivables, net of allowances |
145,433 | 160,943 | 130,457 | 136,041 | 125,642 | 122,414 | 122,419 | |||||||||||||||||||||||||
Inventories |
155,155 | 145,877 | 156,537 | 144,806 | 152,805 | 145,571 | 147,447 | |||||||||||||||||||||||||
Deferred income taxes |
13,870 | 12,611 | 12,641 | 16,573 | 16,823 | 17,439 | 19,863 | |||||||||||||||||||||||||
Income tax receivable |
— | — | — | — | 6,591 | — | 31,110 | |||||||||||||||||||||||||
Current assets of discontinued operations |
64,927 | 61,382 | 70,353 | 80,932 | 37,933 | 39,391 | — | |||||||||||||||||||||||||
Other current assets |
10,999 | 5,824 | 5,447 | 3,403 | 5,012 | 5,951 | 6,844 | |||||||||||||||||||||||||
Total
current assets |
395,331 | 406,489 | 381,859 | 388,488 | 349,273 | 338,743 | 334,253 | |||||||||||||||||||||||||
Property and equipment, net |
298,398 | 299,186 | 291,209 | 294,924 | 276,988 | 271,349 | 264,067 | |||||||||||||||||||||||||
Deferred income taxes |
48,016 | 46,815 | 45,230 | 48,623 | 46,560 | 45,523 | 45,643 | |||||||||||||||||||||||||
Intangibles, net |
320,554 | 424,489 | 423,934 | 421,744 | 430,446 | 429,507 | 427,013 | |||||||||||||||||||||||||
Non-current assets of discontinued operations |
220,625 | 216,050 | 209,927 | 205,620 | 204,669 | 197,772 | — | |||||||||||||||||||||||||
Other assets |
41,086 | 67,699 | 68,075 | 33,318 | 33,958 | 34,476 | 24,514 | |||||||||||||||||||||||||
TOTAL
ASSETS |
$ | 1,324,010 | $ | 1,460,728 | $ | 1,420,234 | $ | 1,392,717 | $ | 1,341,894 | $ | 1,317,370 | $ | 1,095,490 | ||||||||||||||||||
LIABILITIES
& EQUITY |
||||||||||||||||||||||||||||||||
Margin Trade accounts payable |
$ | 86,966 | $ | 113,163 | $ | 115,449 | $ | 128,093 | $ | 107,874 | $ | 109,857 | $ | 107,132 | ||||||||||||||||||
Short term debt |
151,807 | 130,484 | 167,270 | 125,776 | 115,762 | 78,999 | — | |||||||||||||||||||||||||
Income taxes payable |
11,079 | 13,255 | 11,704 | 10,746 | — | 6,040 | — | |||||||||||||||||||||||||
Current liabilities of discontinued operations |
10,849 | 13,945 | 24,647 | 30,399 | 17,165 | 13,844 | — | |||||||||||||||||||||||||
Other current liabilities |
72,680 | 91,386 | 98,641 | 110,587 | 105,558 | 121,486 | 154,038 | |||||||||||||||||||||||||
Total
current liabilities |
333,381 | 362,233 | 417,711 | 405,601 | 346,359 | 330,226 | 261,170 | |||||||||||||||||||||||||
Long-term debt |
410,650 | 526,468 | 469,187 | 469,271 | 469,270 | 448,467 | 480,936 | |||||||||||||||||||||||||
Pension and other benefits |
229,008 | 226,824 | 220,447 | 217,035 | 215,455 | 214,340 | 213,455 | |||||||||||||||||||||||||
Other liabilities |
6,333 | 6,782 | 6,943 | 6,903 | 6,698 | 6,965 | 7,163 | |||||||||||||||||||||||||
Total
liabilities |
979,372 | 1,122,307 | 1,114,288 | 1,098,810 | 1,037,782 | 999,998 | 962,724 | |||||||||||||||||||||||||
Common stock, $.01 par |
1,056 | 1,056 | 1,057 | 1,057 | 1,057 | 1,057 | 1,057 | |||||||||||||||||||||||||
Additional capital |
408,792 | 397,934 | 400,703 | 402,024 | 407,497 | 412,329 | 419,409 | |||||||||||||||||||||||||
Retained income (deficit) |
204,335 | 198,176 | 164,724 | 153,600 | 163,045 | 174,141 | (14,928 | ) | ||||||||||||||||||||||||
Accumulated other comprehensive income |
(2,965 | ) | (3,517 | ) | (3,488 | ) | (3,465 | ) | (3,922 | ) | (3,697 | ) | (1,171 | ) | ||||||||||||||||||
Unearned employee benefits |
(52,941 | ) | (41,421 | ) | (43,124 | ) | (45,128 | ) | (48,620 | ) | (51,359 | ) | (56,330 | ) | ||||||||||||||||||
Treasury stock |
(213,639 | ) | (213,807 | ) | (213,926 | ) | (214,181 | ) | (214,945 | ) | (215,099 | ) | (215,271 | ) | ||||||||||||||||||
Total
stockholders’ equity |
344,638 | 338,421 | 305,946 | 293,907 | 304,112 | 317,372 | 132,766 | |||||||||||||||||||||||||
TOTAL
LIABILITIES & EQUITY |
$ | 1,324,010 | $ | 1,460,728 | $ | 1,420,234 | $ | 1,392,717 | $ | 1,341,894 | $ | 1,317,370 | $ | 1,095,490 | ||||||||||||||||||
The Dial Corporation
Statement of Consolidated Operations
| 2000 | |||||||||||||||||||||
| First | Second | Third | Fourth | Full | |||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||||||
Net
Sales |
$ | 346,282 | $ | 388,570 | $ | 385,624 | $ | 401,798 | $ | 1,522,274 | |||||||||||
Costs and expenses: |
|||||||||||||||||||||
Cost of products sold |
173,142 | 193,426 | 197,471 | 207,154 | 771,193 | ||||||||||||||||
Asset writedowns and discontinued product inventories
as a result of restructuring and special charges |
— | 6,813 | 3,030 | 676 | 10,519 | ||||||||||||||||
Total cost of products sold |
173,142 | 200,239 | 200,501 | 207,830 | 781,712 | ||||||||||||||||
Selling, general and administrative expenses |
128,502 | 153,952 | 158,128 | 162,945 | 603,527 | ||||||||||||||||
Restructuring and special charges and other asset writedowns |
— | 3,586 | 3,596 | 235 | 7,417 | ||||||||||||||||
Total costs and expenses |
301,644 | 357,777 | 362,225 | 371,010 | 1,392,656 | ||||||||||||||||
Operating income |
44,638 | 30,793 | 23,399 | 30,788 | 129,618 | ||||||||||||||||
Interest and other expenses |
(9,639 | ) | (12,322 | ) | (13,875 | ) | (14,470 | ) | (50,306 | ) | |||||||||||
Net
Income (loss) of joint ventures |
(721 | ) | (3,624 | ) | (13,635 | ) | (19,634 | ) | (37,614 | ) | |||||||||||
Other income (expense) — gain (loss) on special items |
— | 6,662 | 4,583 | (2,002 | ) | 9,243 | |||||||||||||||
Income (loss) from continuing operations before income taxes |
34,278 | 21,509 | 472 | (5,318 | ) | 50,941 | |||||||||||||||
Income taxes (benefit) |
11,607 | 6,666 | 918 | (2,539 | ) | 16,652 | |||||||||||||||
Income (loss) from continuing operations |
22,671 | 14,843 | (446 | ) | (2,779 | ) | 34,289 | ||||||||||||||
Discontinued operation: |
|||||||||||||||||||||
Loss from discontinued Specialty Personal Care
segment, net of income tax |
(1,173 | ) | (13,714 | ) | (25,720 | ) | (4,690 | ) | (45,297 | ) | |||||||||||
Loss on disposal of discontinued Specialty Personal
Care segment, net of income tax |
— | — | — | — | — | ||||||||||||||||
Net Income (Loss) |
$ | 21,498 | $ | 1,129 | $ | (26,166 | ) | $ | (7,469 | ) | $ | (11,008 | ) | ||||||||
Weighted average basic shares outstanding |
93,979 | 91,084 | 91,150 | 91,241 | 92,237 | ||||||||||||||||
Weighted average equivalent shares |
631 | 287 | — | — | — | ||||||||||||||||
Weighted average diluted shares outstanding |
94,610 | 91,371 | 91,150 | 91,241 | 92,237 | ||||||||||||||||
Basic net income (loss) per common share: |
|||||||||||||||||||||
Income (loss) from continuing operations |
$ | 0.24 | $ | 0.16 | $ | (0.00 | ) | $ | (0.03 | ) | $ | 0.37 | |||||||||
Loss from discontinued operations |
(0.01 | ) | (0.15 | ) | (0.28 | ) | (0.05 | ) | (0.49 | ) | |||||||||||
Basic net income (loss) per common share |
$ | 0.23 | $ | 0.01 | $ | (0.29 | ) | $ | (0.08 | ) | $ | (0.12 | ) | ||||||||
Diluted net income (loss) per common share: |
|||||||||||||||||||||
Income (loss) from continuing operations |
$ | 0.24 | $ | 0.16 | $ | (0.00 | ) | $ | (0.03 | ) | $ | 0.37 | |||||||||
Loss from discontinued operations |
(0.01 | ) | (0.15 | ) | (0.28 | ) | (0.05 | ) | (0.49 | ) | |||||||||||
Diluted net income (loss) per common share |
$ | 0.23 | $ | 0.01 | $ | (0.29 | ) | $ | (0.08 | ) | $ | (0.12 | ) | ||||||||
[Additional columns below]
[Continued from above table, first column(s) repeated]
| 2001 | |||||||||||||||||
| First | Second | Third | Nine | ||||||||||||||
| Quarter | Quarter | Quarter | Months | ||||||||||||||
Net
Sales |
$ | 389,672 | $ | 416,602 | $ | 430,487 | $ | 1,236,761 | |||||||||
Costs and expenses: |
|||||||||||||||||
Cost of products sold |
198,464 | 209,815 | 211,613 | 619,892 | |||||||||||||
Asset writedowns and discontinued product inventories
as a result of restructuring and special charges |
— | — | 10,940 | 10,940 | |||||||||||||
Total cost of products sold |
198,464 | 209,815 | 222,553 | 630,832 | |||||||||||||
Selling, general and administrative expenses |
156,628 | 170,081 | 170,523 | 497,232 | |||||||||||||
Restructuring and special charges and other asset writedowns |
— | — | 486 | 486 | |||||||||||||
Total costs and expenses |
355,092 | 379,896 | 393,562 | 1,128,550 | |||||||||||||
Operating income |
34,580 | 36,706 | 36,925 | 108,211 | |||||||||||||
Interest and other expenses |
(13,872 | ) | (12,023 | ) | (11,934 | ) | (37,829 | ) | |||||||||
Net income (loss) of joint ventures |
2,000 | 4 | 986 | 2,990 | |||||||||||||
Other income (expense) — gain (loss) on special items |
— | — | — | — | |||||||||||||
Income (loss) from continuing operations before income taxes |
22,708 | 24,687 | 25,977 | 73,372 | |||||||||||||
Income taxes (benefit) |
8,013 | 8,728 | 12,114 | 28,855 | |||||||||||||
Income (loss) from continuing operations |
14,695 | 15,959 | 13,863 | 44,517 | |||||||||||||
Discontinued operation: |
|||||||||||||||||
Loss from discontinued Specialty Personal Care
segment, net of income tax |
(1,597 | ) | (1,218 | ) | (876 | ) | (3,691 | ) | |||||||||
Loss on disposal of discontinued Specialty Personal
Care segment, net of income tax |
— | — | (198,403 | ) | (198,403 | ) | |||||||||||
Net Income (Loss) |
$ | 13,098 | $ | 14,741 | $ | (185,416 | ) | $ | (157,577 | ) | |||||||
Weighted average basic shares outstanding |
91,291 | 91,368 | 91,494 | 91,385 | |||||||||||||
Weighted average equivalent shares |
294 | 442 | — | — | |||||||||||||
Weighted average diluted shares outstanding |
91,585 | 91,810 | 91,494 | 91,385 | |||||||||||||
Basic net income (loss) per common share: |
|||||||||||||||||
Income (loss) from continuing operations |
$ | 0.16 | $ | 0.17 | $ | 0.15 | $ | 0.49 | |||||||||
Loss from discontinued operations |
(0.02 | ) | (0.01 | ) | (2.18 | ) | (2.21 | ) | |||||||||
Basic net income (loss) per common share |
$ | 0.14 | $ | 0.16 | $ | (2.03 | ) | $ | (1.72 | ) | |||||||
Diluted net income (loss) per common share: |
|||||||||||||||||
Income (loss) from continuing operations |
$ | 0.16 | $ | 0.17 | $ | 0.15 | $ | 0.49 | |||||||||
Loss from discontinued operations |
(0.02 | ) | (0.01 | ) | (2.18 | ) | (2.21 | ) | |||||||||
Diluted net income (loss) per common share |
$ | 0.14 | $ | 0.16 | $ | (2.03 | ) | $ | (1.72 | ) | |||||||
The Dial Corporation
Statement of Consolidated Cash Flows
| 2000 | |||||||||||||||||||||||
| First | Second | Third | Fourth | Full | |||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||||||||
Net income (loss) |
$ | 21,498 | $ | 1,129 | $ | (26,166 | ) | $ | (7,469 | ) | $ | (11,008 | ) | ||||||||||
Adjustments to reconcile net income to net cash
provided (used) by operating activities: |
|||||||||||||||||||||||
Discontinued operations, net of tax |
1,173 | 13,714 | 25,720 | 4,690 | 45,297 | ||||||||||||||||||
Special and restructuring charges |
— | 10,399 | 17,760 | 20,247 | 48,406 | ||||||||||||||||||
Depreciation |
9,259 | 9,742 | 9,789 | 10,918 | 39,708 | ||||||||||||||||||
Amortization |
1,714 | 1,928 | 2,295 | 2,361 | 8,298 | ||||||||||||||||||
Deferred income taxes |
4,645 | 3,952 | (183 | ) | (6,538 | ) | 1,876 | ||||||||||||||||
Gain (loss) — special items |
— | (6,662 | ) | (4,583 | ) | 2,002 | (9,243 | ) | |||||||||||||||
Change in operating assets and liabilities: |
|||||||||||||||||||||||
Receivables |
5,977 | (13,901 | ) | 30,486 | (5,584 | ) | 16,978 | ||||||||||||||||
Inventories |
(11,229 | ) | 12,441 | (10,712 | ) | 10,324 | 824 | ||||||||||||||||
Trade accounts payable |
(32,502 | ) | 24,082 | 2,337 | 12,642 | 6,559 | |||||||||||||||||
Income taxes payable |
(33,851 | ) | 2,781 | (1,551 | ) | (958 | ) | (33,579 | ) | ||||||||||||||
Other assets and liabilities, net |
(9,446 | ) | 9,023 | (3,868 | ) | 15,745 | 11,454 | ||||||||||||||||
Net cash provided (used) by operating activities |
(42,762 | ) | 68,628 | 41,324 | 58,380 | 125,570 | |||||||||||||||||
CASH
FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES: |
|||||||||||||||||||||||
Capital expenditures |
(4,608 | ) | (11,876 | ) | (9,497 | ) | (16,107 | ) | (42,088 | ) | |||||||||||||
Investment in and loans to joint ventures |
(3,264 | ) | (22,810 | ) | (1,136 | ) | 13,720 | (13,490 | ) | ||||||||||||||
Acquisition of business, net of cash acquired |
— | (116,836 | ) | (2,237 | ) | (79 | ) | (119,152 | ) | ||||||||||||||
Proceeds from disposition of discontinued operation |
— | — | — | — | — | ||||||||||||||||||
Investments in and transfers from discontinued operation |
11,627 | (3,229 | ) | (16,127 | ) | (5,999 | ) | (13,728 | ) | ||||||||||||||
Proceeds from sale of assets |
(1 | ) | 13,644 | 1,696 | (4,381 | ) | 10,958 | ||||||||||||||||
Net cash provided (used) by investing activities |
3,754 | (141,107 | ) | (27,301 | ) | (12,846 | ) | (177,500 | ) | ||||||||||||||
CASH
FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES: |
|||||||||||||||||||||||
Net change in long-term debt |
109,699 | 115,818 | (57,281 | ) | 84 | 168,320 | |||||||||||||||||
Common stock purchased for treasury |
(83,143 | ) | — | (111 | ) | 110 | (83,144 | ) | |||||||||||||||
Net change in short-term debt |
91,644 | (21,323 | ) | 36,786 | (41,494 | ) | 65,613 | ||||||||||||||||
Dividends paid on common stock |
(7,533 | ) | (7,287 | ) | (7,293 | ) | (3,649 | ) | (25,762 | ) | |||||||||||||
Cash proceeds from stock options |
526 | 176 | 448 | (276 | ) | 874 | |||||||||||||||||
Net change in receivables sold |
(73,177 | ) | — | — | — | (73,177 | ) | ||||||||||||||||
Net cash provided (used) by financing activities |
38,016 | 87,384 | (27,451 | ) | (45,225 | ) | 52,724 | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents |
(992 | ) | 14,905 | (13,428 | ) | 309 | 794 | ||||||||||||||||
Cash and cash equivalents, beginning of period |
5,939 | 4,947 | 19,852 | 6,424 | 5,939 | ||||||||||||||||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD |
$ | 4,947 | $ | 19,852 | $ | 6,424 | $ | 6,733 | $ | 6,733 | |||||||||||||
[Additional columns below]
[Continued from above table, first column(s) repeated]
| 2001 | |||||||||||||||||||||||||
| First | Second | Third | Nine | ||||||||||||||||||||||
| Quarter | Quarter | Quarter | Months | ||||||||||||||||||||||
Net income (loss) |
$ | 13,098 | $ | 14,741 | $ | (185,416 | ) | $ | (157,577 | ) | |||||||||||||||
Adjustments to reconcile net income to net cash
provided (used) by operating activities: |
|||||||||||||||||||||||||
Discontinued operations, net of tax |
1,597 | 1,218 | 199,279 | 202,094 | |||||||||||||||||||||
Special and restructuring charges |
— | — | 11,787 | 11,787 | |||||||||||||||||||||
Depreciation |
9,761 | 9,578 | 9,857 | 29,196 | |||||||||||||||||||||
Amortization |
2,430 | 2,486 | 2,570 | 7,486 | |||||||||||||||||||||
Deferred income taxes |
1,100 | 494 | (2,189 | ) | (595 | ) | |||||||||||||||||||
Gain (loss) — special items |
— | — | — | — | |||||||||||||||||||||
Change in operating assets and liabilities: |
|||||||||||||||||||||||||
Receivables |
10,399 | 3,228 | (214 | ) | 13,413 | ||||||||||||||||||||
Inventories |
(7,999 | ) | 7,234 | (2,391 | ) | (3,156 | ) | ||||||||||||||||||
Trade
accounts payable |
(20,219 | ) | 1,983 | (2,725 | ) | (20,961 | ) | ||||||||||||||||||
Income taxes payable |
(17,337 | ) | 12,631 | (37,150 | ) | (41,856 | ) | ||||||||||||||||||
Other assets and liabilities, net |
(8,336 | ) | 14,122 | 38,338 | 44,124 | ||||||||||||||||||||
Net cash provided (used) by operating activities |
(15,506 | ) | 67,715 | 31,746 | 83,955 | ||||||||||||||||||||
CASH
FLOWS PROVIDED (USED) BY INVESTING
ACTIVITIES: |
|||||||||||||||||||||||||
Capital expenditures |
(3,091 | ) | (6,489 | ) | (7,976 | ) | (17,556 | ) | |||||||||||||||||
Investment in and loans to joint ventures |
— | — | — | — | |||||||||||||||||||||
Acquisition of business, net of cash acquired |
(75 | ) | — | — | (75 | ) | |||||||||||||||||||
Proceeds from disposition of discontinued operation |
— | — | 8,000 | 8,000 | |||||||||||||||||||||
Investments in and transfers from discontinued operation |
29,833 | 828 | 15,684 | 46,345 | |||||||||||||||||||||
Proceeds from sale of assets |
2 | 2,269 | (11 | ) | 2,260 | ||||||||||||||||||||
Net cash provided (used) by investing activities |
26,669 | (3,392 | ) | 15,697 | 38,974 | ||||||||||||||||||||
CASH
FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES: |
|||||||||||||||||||||||||
Net change in long-term debt |
(1 | ) | (20,803 | ) | 32,469 | 11,665 | |||||||||||||||||||
Common stock purchased for treasury |
— | — | — | — | |||||||||||||||||||||
Net change in short-term debt |
(10,014 | ) | (36,763 | ) | (78,999 | ) | (125,776 | ) | |||||||||||||||||
Dividends paid on common stock |
(3,653 | ) | (3,635 | ) | (3,662 | ) | (10,950 | ) | |||||||||||||||||
Cash proceeds from stock options |
239 | 388 | 1,342 | 1,969 | |||||||||||||||||||||
Net change in receivables sold |
— | — | — | — | |||||||||||||||||||||
Net cash provided (used) by financing activities |
(13,429 | ) | (60,813 | ) | (48,850 | ) | (123,092 | ) | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents |
(2,266 | ) | 3,510 | (1,407 | ) | (163 | ) | ||||||||||||||||||
Cash and cash equivalents, beginning of period |
6,733 | 4,467 | 7,977 | 6,733 | |||||||||||||||||||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD |
$ | 4,467 | $ | 7,977 | $ | 6,570 | $ | 6,570 | |||||||||||||||||
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
December 3, 2001
/s/ Conrad A. Conrad
Executive Vice President and Chief Financial Officer