UNITED STATES
SECURITIES ANE EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: January 24, 2003
THE DIAL CORPORATION
| 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.
Table Of Contents
Item 5. Other Events.
Income Statement Restated for Argentina Discontinued Operation
The following sets forth Dial’s consolidated income statement for the first, second and third quarters of 2002 and the first nine months of 2002, each of which have been restated to reflect Dial’s Argentina business as a discontinued operation. Dial has previously disclosed that it has entered into an agreement to sell its Argentina business and, subject to negotiated closing conditions and Argentine governmental consents, the transaction currently is expected to close late in the first quarter or early in the second quarter of 2003.
| 2002 | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Nine Months | |||||||||||||||||
| First | Second | Third | Ended | ||||||||||||||
| Quarter | Quarter | Quarter | Sept. 28, 2002 | ||||||||||||||
Net Sales |
$ | 294,579 | $ | 320,015 | $ | 334,003 | $ | 948,597 | |||||||||
Costs and expenses: |
|||||||||||||||||
Cost of products sold |
186,172 | 198,018 | 210,412 | 594,602 | |||||||||||||
Asset writedowns and other special items, net gain |
— | (1,182 | ) | — | (1,182 | ) | |||||||||||
| 186,172 | 196,836 | 210,412 | 593,420 | ||||||||||||||
Selling, general and administrative expenses |
60,807 | 65,593 | 65,959 | 192,359 | |||||||||||||
Total costs and expenses |
246,979 | 262,429 | 276,371 | 785,779 | |||||||||||||
Operating income |
47,600 | 57,586 | 57,632 | 162,818 | |||||||||||||
Interest and other expenses |
(11,024 | ) | (9,459 | ) | (9,741 | ) | (30,224 | ) | |||||||||
Net earnings of joint ventures |
— | 1,749 | — | 1,749 | |||||||||||||
Income from continuing operations before income taxes |
36,576 | 49,876 | 47,891 | 134,343 | |||||||||||||
Income tax expense on continuing operations |
13,480 | 18,098 | 17,707 | 49,285 | |||||||||||||
Net income from continuing operations |
23,096 | 31,778 | 30,184 | 85,058 | |||||||||||||
Discontinued operations |
|||||||||||||||||
Adjustment on disposal of discontinued SPC segment, net of tax |
1,260 | — | — | 1,260 | |||||||||||||
Income from operations of discontinued Argentina segment, net of tax |
476 | 1,654 | 918 | 3,048 | |||||||||||||
Total loss from discontinued operations |
1,736 | 1,654 | 918 | 4,308 | |||||||||||||
Cumulative effect of change in accounting principle, net of tax |
(43,308 | ) | — | — | (43,308 | ) | |||||||||||
Net Income (Loss) |
$ | (18,476 | ) | $ | 33,432 | $ | 31,102 | $ | 46,058 | ||||||||
Basic shares outstanding |
91,794 | 92,243 | 92,539 | 92,188 | |||||||||||||
Equivalent shares |
1,285 | 2,235 | 2,112 | 1,974 | |||||||||||||
Diluted shares outstanding |
93,079 | 94,478 | 94,651 | 94,162 | |||||||||||||
Basic net income (loss) per common share: |
|||||||||||||||||
Income from continuing operations without special items |
$ | 0.25 | $ | 0.32 | $ | 0.33 | $ | 0.90 | |||||||||
Special items |
— | 0.02 | — | 0.02 | |||||||||||||
Adjustment on disposal of discontinued SPC segment |
0.01 | — | — | 0.01 | |||||||||||||
Income from operations of discontinued Argentina segment |
0.01 | 0.02 | 0.01 | 0.03 | |||||||||||||
Cumulative effect of change in accounting principle |
(0.47 | ) | — | — | (0.47 | ) | |||||||||||
Basic net income (loss) per common share |
$ | (0.20 | ) | $ | 0.36 | $ | 0.34 | $ | 0.50 | ||||||||
Diluted net income (loss) per common share: |
|||||||||||||||||
Income from continuing operations without special items |
$ | 0.25 | $ | 0.31 | $ | 0.32 | $ | 0.88 | |||||||||
Special items |
— | 0.02 | — | 0.02 | |||||||||||||
Adjustment on disposal of discontinued SPC segment |
0.01 | — | — | 0.01 | |||||||||||||
Income from operations of discontinued Argentina segment |
0.01 | 0.02 | 0.01 | 0.03 | |||||||||||||
Cumulative effect of change in accounting principle |
(0.47 | ) | — | — | (0.46 | ) | |||||||||||
Diluted net income (loss) per common share |
$ | (0.20 | ) | $ | 0.35 | $ | 0.33 | $ | 0.49 | ||||||||
Legal Proceedings
As we have previously disclosed, Dial is defending a lawsuit filed by the U.S. Equal Employment Opportunity Commission (“EEOC”). This lawsuit is pending in the U.S. District Court for the Northern District of Illinois, Eastern Division, and is entitled Equal Employment Opportunity Commission v. The Dial Corporation, Civil Action No. 99 C 3356. The EEOC alleges that Dial has engaged in a pattern and practice of discrimination against a class of female employees at its Aurora, Illinois manufacturing facility by subjecting them to sexual harassment and failing to take prompt remedial action after these employees complained about alleged harassment. Most of the potential claimants’ allegations relate to incidences that allegedly occurred prior to 1996. The EEOC is seeking injunctive relief and unspecified compensatory and punitive damages.
Dial has denied the EEOC’s allegations. The trial is scheduled to begin in late April 2003. During initial settlement discussions, the EEOC has indicated that it is seeking $15 million to resolve this case. Based upon our investigation, we do not believe the facts warrant such a large settlement. Accordingly, we are preparing for trial.
There currently are 89 potential claimants. However, we currently believe that the number of claimants who ultimately will be eligible to recover damages in this case is much fewer than 89 based upon the potential claimants’ individualized allegations and Dial’s defenses. Nevertheless, no assurances can be given regarding the number of potential claimants who will ultimately be eligible to recover monetary damages. Compensatory and punitive damages are limited to a maximum of $300,000 for each potential claimant.
We continue to believe that this case will not have a material adverse effect on our financial condition. However, depending on the outcome, this case could have a material adverse effect on our operating results in the quarter in which the case is resolved. In addition, negative publicity resulting from this lawsuit could adversely affect our sales and operating results.
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
January 24, 2003
/s/ Conrad A. Conrad
Conrad A. Conrad
Executive Vice President and Chief Financial Officer