Dial Reports 2001 First Quarter Results in Line with Expectations; Company Confirms Second Quarter and Full-Year Earnings Estimate

Apr 25, 2001, 01:00 ET from Dial Corporation

    SCOTTSDALE, Ariz., April 25 /PRNewswire/ -- The Dial Corporation
 (NYSE:   DL) today announced first quarter net income of $13.1 million or
 $0.14 per share (diluted).  This includes $1.3 million or $0.01 per share
 (diluted) recovered from the recently restructured Dial/Henkel joint venture
 resulting primarily from lower than expected costs associated with the
 discontinuation of Purex Advanced laundry detergent.  The consensus estimate
 of net income from operations for the Company as reported by First Call was
 $0.13 per share.  Comparatively, first quarter 2000 net income was $21.5
 million or $0.23 per share (diluted).
     Herbert M. Baum, The Dial Corporation chairman, president, and chief
 executive officer, said: "First-quarter operating results are in line with
 expectations.  Since coming on board last August, we have made progress in
 dealing with the effects of past business practices such as end of quarter
 price promotions; acquisitions that are dilutive to earnings; and a stock
 repurchase program.  As we look to the balance of 2001, while there is
 uncertainty about the economic climate in the U.S., we remain confident our
 strong stable of value brands should position us well relative to our
 competitors.  We exited the first quarter with good momentum in most of our
 businesses and continue to expect improvement in the second, third and fourth
 quarters.  We currently expect both earnings per share for the second quarter
 and full year of 2001 to be well within the range of estimates
 ($0.10 - $0.16 per share and $0.55 - $0.66 per share, respectively) as
 reported by First Call."
     In the first quarter the Company lowered some of its trade allowances and
 list prices for certain Personal Cleansing and Laundry Care products.  This
 change had no impact on net income.  It did result, however, in (as recorded)
 lower SG&A expenses and lower sales of about $10 million in the first quarter.
 Reported net sales in the first quarter were $401.5 million, up 7.6 percent
 from $373.1 in the first quarter of 2000.  The increase in sales includes
 $30.4 million of sales from acquisitions made in the second quarter of 2000,
 as well as strong sales in the Laundry Care and Personal Cleansing businesses
 coupled with new product introductions in the Air Fresheners business.
 However, increased sales were partially offset by a decline in sales in the
 Specialty Personal Care and Food Products businesses.
     Commenting on business unit performance, Baum added, "Our Personal
 Cleansing and Laundry Care businesses had a particularly good first quarter.
 Personal Cleansing sales grew 14.4 percent (4.1 percent without Coast which
 was acquired in the second quarter of last year) primarily due to strong
 performance of the base business and the national launch of Dial Complete.
 Laundry Care sales increased 9.3 percent in the first quarter (7.4 percent
 without Zout which was acquired in the second quarter of last year) primarily
 driven by strong performance in the mass merchandising channel.  This is
 particularly noteworthy since the overall detergent category was flat to year
 ago in the quarter.  First quarter sales for our Air Fresheners business were
 up primarily due to new product introductions, including the national launch
 of our One Touch Electric Scented Oil Air Freshener.  Sales of our Food
 Products business were down versus prior year reflecting weakened demand.
 Specialty Personal Care sales were down versus prior year mainly due to the
 discontinuation of both the Nature's Accents product line and other
 unprofitable SKUs associated with a special charge taken in the second half of
 2000."
     Gross margin for the first quarter was 48.8 percent compared to
 49.5 percent in the year-ago period.  Gross margin was negatively impacted
 130 basis points by the previously mentioned reduction of trade allowances and
 list prices for certain products.  Excluding the impact of this change, gross
 margin improved versus the year ago period by 60 basis points to 50.1 percent
 primarily due to a favorable sales mix offset in part by higher energy costs.
     SG&A expenses increased 15.8 percent primarily due to higher marketing
 costs to support new product launches and core business consumer marketing.
 In addition interest expense and accretion increased 42.3 percent compared to
 prior year as a result of higher debt levels associated with acquisitions made
 in 2000 and the 2000 stock repurchase program.
     Total debt at the end of the quarter was $585.0 million, down
 $10.0 million from the balance at the end of 2000.  The reduction in debt was
 funded from free cash flow generated in the quarter.  Cash flow from
 operations in the first quarter was $15.0 million compared to negative cash
 flow from operations of $29.4 million in the first quarter of 2000.  Debt
 repayment in 2001 is expected to be approximately $80 million - $90 million.
 Proceeds from any future asset sales would also be used to pay down debt.
     The Company reiterated it is continuing to review strategic alternatives
 for its Specialty Personal Care (SPC) unit while working aggressively to
 improve the performance of this business.  Discussions with interested parties
 have taken place.  At this time the Company believes that if a decision is
 made to divest this unit, a write-down of its assets to their estimated market
 value would be required.  Based upon current estimates, such a write-down
 would be in the range of $150 to $170 million after tax.
     As part of the previously announced SFX01 initiative, the Company is
 exploring the sale of non-core assets that can be decoupled without
 substantial adverse consequence to tax and SG&A considerations.  Toward this
 objective, the Company has begun a preliminary exploration of strategic
 alternatives for certain of its international assets.
 
     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 personal care
 brands.  Dial products have been in the American marketplace for more than
 100 years.  For more information about The Dial Corporation, visit the
 Company's Web site at www.dialcorp.com.
 
     Statements in this press release as to the Company's expectations,
 beliefs, plans or predictions for the future are forward-looking statements
 within the Private Securities Litigation Reform Act of 1995 (the "PSLRA").
 Such forward-looking statements include the Company's expectations for
 earnings per share for the second quarter and full year 2001 and for debt
 repayment of $80 million to $90 million in 2001.
     Forward-looking statements are inherently uncertain as they are based on
 various expectations and assumptions concerning future events and are subject
 to numerous known and unknown risks and uncertainties which could cause actual
 events or results to differ materially from those projected.  For example,
 actual events or results could differ materially if (1) competition in the
 categories in which the Company competes continues or intensifies, resulting
 in lower sales or requiring increased expenditures and lower profit margins to
 preserve or maintain market shares, (2) competitive pressures require the
 Company to reduce prices and/or profit margins, (3) efforts to reduce costs
 are unsuccessful or do not yield anticipated savings, (4) new products, such
 as Renuzit OneTouch, Renuzit Fresh Gels, Renuzit Fresh Elements, Dial Complete
 and Purex Tabs, are unsuccessful or do not produce the sales anticipated,
 (5) there are increases in raw material costs or higher petroleum, natural gas
 and energy costs continue to persist throughout 2001, or (6) the Company does
 not achieve the benefits anticipated from steps being taken to try to improve
 operations and financial results, including the restructuring and special
 charges taken in 2000.  These and other factors that could cause actual events
 or results to differ materially from those in the forward-looking statements
 are described in "Management's Discussion and Analysis of Results of
 Operations and Financial Condition - Factors That May Affect Future Results
 and Financial Condition" in the Company's Annual Report on Form 10-K for the
 year ended December 31, 2000.
     In addition, no assurance can be given that the Company will decide to
 sell its Specialty Personal Care business or any other assets or, if sold,
 that any sale will be on terms favorable to the Company.  Further, no
 assurance can be given that the Company's lenders will waive compliance with
 covenants that may be violated by any such sale, including agreeing to waive
 compliance with the minimum net worth covenant in the event the Company
 decides to sell the Specialty Personal Care business.
     Due to these inherent uncertainties, the investment community is urged not
 to place undue reliance on forward-looking statements.  In addition, the
 Company undertakes no obligation to update or revise forward-looking
 statements to reflect changed assumptions, the occurrence of unanticipated
 events or changes to projections over time.
 
     Management will host a live conference call and real-time web cast today,
 beginning at 1:00 p.m. Eastern Time and lasting approximately 45 minutes to
 discuss the Company's first quarter results and outlook for the balance of
 fiscal 2001.
     Access for the conference call and web cast is open to the press and
 general public in a listen only mode.  To access the conference call, please
 dial (952) 556-2808.  The web cast may be accessed at
 http://investor.info.dialcorp.com.  Replays of the conference call are
 available shortly after the conclusion of the call at the same Web address as
 well as by dialing (703) 326-3020 and entering Code 5136552.
 
 
                              THE DIAL CORPORATION
                             Summary of Operations
                                   Unaudited
 
                                        In millions, except for per share data
 
                                                      Quarter ended
                                                March 31,       April 1,
                                                   2001           2000
 
     Net Sales                                   $401.5          $373.1
     Costs and expenses:
       Cost of products sold                      205.4           188.5
       Selling, general and
        administrative expenses                   163.7           141.4
       Total costs and expenses                   369.1           329.9
     Operating income                              32.4            43.2
       Interest and accretion expense              13.8             9.7
       Net Earnings (Loss) of Joint Venture         2.0            (0.7)
     Income before income taxes                    20.6            32.8
       Income taxes                                 7.5            11.3
     Net income                                   $13.1           $21.5
 
     Basic earnings per share                     $0.14           $0.23
     Diluted earnings per share                   $0.14           $0.23
 
     Basic shares outstanding                      91.3            94.0
       Common share equivalents                     0.3             0.6
     Diluted shares outstanding                    91.6            94.6
 
 
                              THE DIAL CORPORATION
                              Summary of Net Sales
                                   Unaudited
 
                                                       In millions
 
                                                      Quarter ended
                                                 March 31,      April 1,
                                                   2001           2000
 
     Personal Cleansing                           $97.9           $85.6
     Laundry Care                                 123.2           112.7
     Air Fresheners                                58.4            50.8
     Food Products                                 42.2            44.7
         Total Domestic Branded                   321.7           293.8
     Specialty Personal Care                       10.2            24.7
     International                                 55.7            38.5
     Commercial Markets & Other                    13.9            16.1
 
     Total sales reported                        $401.5          $373.1
 
 
                              The Dial Corporation
                            Condensed Balance Sheet
 
                                                      In millions
 
                                               Unaudited
                                                March 31,     December 31,
                                                   2001           2000
     Assets
 
     Current assets                              $349.3          $377.8
     Non-current assets                           992.6         1,004.2
 
       Total assets                            $1,341.9        $1,382.0
 
     Liabilities and Stockholders' Equity
 
     Current liabilities                         $346.4          $394.9
     Long-term liabilities                        691.4           693.2
     Stockholders' equity                         304.1           293.9
 
       Total liabilities and
          stockholders' equity                 $1,341.9        $1,382.0
 
 
                         Condensed Statement of Cash Flows
                                     Unaudited
 
                                                      In millions
 
                                                     Quarter ended
                                                March 31,       April 1,
                                                   2001           2000
 
     Net cash provided (used) by operations       $15.0         $(29.4)
 
     Net cash used by investing activities         (3.3)          (9.5)
 
     Net cash provided (used)
      by financing activities:
       Net change in long-term and
        short-term borrowings                     (10.0)         128.1
       Common stock purchased for treasury           --          (83.1)
       Dividends paid                              (3.9)          (7.0)
 
     Net cash provided (used) by
      financing activities                        (13.9)          38.0
 
     Net decrease in cash and cash equivalents     (2.2)          (0.9)
     Cash and cash equivalents,
      beginning of year/period                      6.8            6.1
 
     Cash and cash equivalents, end of period      $4.6           $5.2
 
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SOURCE Dial Corporation
    SCOTTSDALE, Ariz., April 25 /PRNewswire/ -- The Dial Corporation
 (NYSE:   DL) today announced first quarter net income of $13.1 million or
 $0.14 per share (diluted).  This includes $1.3 million or $0.01 per share
 (diluted) recovered from the recently restructured Dial/Henkel joint venture
 resulting primarily from lower than expected costs associated with the
 discontinuation of Purex Advanced laundry detergent.  The consensus estimate
 of net income from operations for the Company as reported by First Call was
 $0.13 per share.  Comparatively, first quarter 2000 net income was $21.5
 million or $0.23 per share (diluted).
     Herbert M. Baum, The Dial Corporation chairman, president, and chief
 executive officer, said: "First-quarter operating results are in line with
 expectations.  Since coming on board last August, we have made progress in
 dealing with the effects of past business practices such as end of quarter
 price promotions; acquisitions that are dilutive to earnings; and a stock
 repurchase program.  As we look to the balance of 2001, while there is
 uncertainty about the economic climate in the U.S., we remain confident our
 strong stable of value brands should position us well relative to our
 competitors.  We exited the first quarter with good momentum in most of our
 businesses and continue to expect improvement in the second, third and fourth
 quarters.  We currently expect both earnings per share for the second quarter
 and full year of 2001 to be well within the range of estimates
 ($0.10 - $0.16 per share and $0.55 - $0.66 per share, respectively) as
 reported by First Call."
     In the first quarter the Company lowered some of its trade allowances and
 list prices for certain Personal Cleansing and Laundry Care products.  This
 change had no impact on net income.  It did result, however, in (as recorded)
 lower SG&A expenses and lower sales of about $10 million in the first quarter.
 Reported net sales in the first quarter were $401.5 million, up 7.6 percent
 from $373.1 in the first quarter of 2000.  The increase in sales includes
 $30.4 million of sales from acquisitions made in the second quarter of 2000,
 as well as strong sales in the Laundry Care and Personal Cleansing businesses
 coupled with new product introductions in the Air Fresheners business.
 However, increased sales were partially offset by a decline in sales in the
 Specialty Personal Care and Food Products businesses.
     Commenting on business unit performance, Baum added, "Our Personal
 Cleansing and Laundry Care businesses had a particularly good first quarter.
 Personal Cleansing sales grew 14.4 percent (4.1 percent without Coast which
 was acquired in the second quarter of last year) primarily due to strong
 performance of the base business and the national launch of Dial Complete.
 Laundry Care sales increased 9.3 percent in the first quarter (7.4 percent
 without Zout which was acquired in the second quarter of last year) primarily
 driven by strong performance in the mass merchandising channel.  This is
 particularly noteworthy since the overall detergent category was flat to year
 ago in the quarter.  First quarter sales for our Air Fresheners business were
 up primarily due to new product introductions, including the national launch
 of our One Touch Electric Scented Oil Air Freshener.  Sales of our Food
 Products business were down versus prior year reflecting weakened demand.
 Specialty Personal Care sales were down versus prior year mainly due to the
 discontinuation of both the Nature's Accents product line and other
 unprofitable SKUs associated with a special charge taken in the second half of
 2000."
     Gross margin for the first quarter was 48.8 percent compared to
 49.5 percent in the year-ago period.  Gross margin was negatively impacted
 130 basis points by the previously mentioned reduction of trade allowances and
 list prices for certain products.  Excluding the impact of this change, gross
 margin improved versus the year ago period by 60 basis points to 50.1 percent
 primarily due to a favorable sales mix offset in part by higher energy costs.
     SG&A expenses increased 15.8 percent primarily due to higher marketing
 costs to support new product launches and core business consumer marketing.
 In addition interest expense and accretion increased 42.3 percent compared to
 prior year as a result of higher debt levels associated with acquisitions made
 in 2000 and the 2000 stock repurchase program.
     Total debt at the end of the quarter was $585.0 million, down
 $10.0 million from the balance at the end of 2000.  The reduction in debt was
 funded from free cash flow generated in the quarter.  Cash flow from
 operations in the first quarter was $15.0 million compared to negative cash
 flow from operations of $29.4 million in the first quarter of 2000.  Debt
 repayment in 2001 is expected to be approximately $80 million - $90 million.
 Proceeds from any future asset sales would also be used to pay down debt.
     The Company reiterated it is continuing to review strategic alternatives
 for its Specialty Personal Care (SPC) unit while working aggressively to
 improve the performance of this business.  Discussions with interested parties
 have taken place.  At this time the Company believes that if a decision is
 made to divest this unit, a write-down of its assets to their estimated market
 value would be required.  Based upon current estimates, such a write-down
 would be in the range of $150 to $170 million after tax.
     As part of the previously announced SFX01 initiative, the Company is
 exploring the sale of non-core assets that can be decoupled without
 substantial adverse consequence to tax and SG&A considerations.  Toward this
 objective, the Company has begun a preliminary exploration of strategic
 alternatives for certain of its international assets.
 
     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 personal care
 brands.  Dial products have been in the American marketplace for more than
 100 years.  For more information about The Dial Corporation, visit the
 Company's Web site at www.dialcorp.com.
 
     Statements in this press release as to the Company's expectations,
 beliefs, plans or predictions for the future are forward-looking statements
 within the Private Securities Litigation Reform Act of 1995 (the "PSLRA").
 Such forward-looking statements include the Company's expectations for
 earnings per share for the second quarter and full year 2001 and for debt
 repayment of $80 million to $90 million in 2001.
     Forward-looking statements are inherently uncertain as they are based on
 various expectations and assumptions concerning future events and are subject
 to numerous known and unknown risks and uncertainties which could cause actual
 events or results to differ materially from those projected.  For example,
 actual events or results could differ materially if (1) competition in the
 categories in which the Company competes continues or intensifies, resulting
 in lower sales or requiring increased expenditures and lower profit margins to
 preserve or maintain market shares, (2) competitive pressures require the
 Company to reduce prices and/or profit margins, (3) efforts to reduce costs
 are unsuccessful or do not yield anticipated savings, (4) new products, such
 as Renuzit OneTouch, Renuzit Fresh Gels, Renuzit Fresh Elements, Dial Complete
 and Purex Tabs, are unsuccessful or do not produce the sales anticipated,
 (5) there are increases in raw material costs or higher petroleum, natural gas
 and energy costs continue to persist throughout 2001, or (6) the Company does
 not achieve the benefits anticipated from steps being taken to try to improve
 operations and financial results, including the restructuring and special
 charges taken in 2000.  These and other factors that could cause actual events
 or results to differ materially from those in the forward-looking statements
 are described in "Management's Discussion and Analysis of Results of
 Operations and Financial Condition - Factors That May Affect Future Results
 and Financial Condition" in the Company's Annual Report on Form 10-K for the
 year ended December 31, 2000.
     In addition, no assurance can be given that the Company will decide to
 sell its Specialty Personal Care business or any other assets or, if sold,
 that any sale will be on terms favorable to the Company.  Further, no
 assurance can be given that the Company's lenders will waive compliance with
 covenants that may be violated by any such sale, including agreeing to waive
 compliance with the minimum net worth covenant in the event the Company
 decides to sell the Specialty Personal Care business.
     Due to these inherent uncertainties, the investment community is urged not
 to place undue reliance on forward-looking statements.  In addition, the
 Company undertakes no obligation to update or revise forward-looking
 statements to reflect changed assumptions, the occurrence of unanticipated
 events or changes to projections over time.
 
     Management will host a live conference call and real-time web cast today,
 beginning at 1:00 p.m. Eastern Time and lasting approximately 45 minutes to
 discuss the Company's first quarter results and outlook for the balance of
 fiscal 2001.
     Access for the conference call and web cast is open to the press and
 general public in a listen only mode.  To access the conference call, please
 dial (952) 556-2808.  The web cast may be accessed at
 http://investor.info.dialcorp.com.  Replays of the conference call are
 available shortly after the conclusion of the call at the same Web address as
 well as by dialing (703) 326-3020 and entering Code 5136552.
 
 
                              THE DIAL CORPORATION
                             Summary of Operations
                                   Unaudited
 
                                        In millions, except for per share data
 
                                                      Quarter ended
                                                March 31,       April 1,
                                                   2001           2000
 
     Net Sales                                   $401.5          $373.1
     Costs and expenses:
       Cost of products sold                      205.4           188.5
       Selling, general and
        administrative expenses                   163.7           141.4
       Total costs and expenses                   369.1           329.9
     Operating income                              32.4            43.2
       Interest and accretion expense              13.8             9.7
       Net Earnings (Loss) of Joint Venture         2.0            (0.7)
     Income before income taxes                    20.6            32.8
       Income taxes                                 7.5            11.3
     Net income                                   $13.1           $21.5
 
     Basic earnings per share                     $0.14           $0.23
     Diluted earnings per share                   $0.14           $0.23
 
     Basic shares outstanding                      91.3            94.0
       Common share equivalents                     0.3             0.6
     Diluted shares outstanding                    91.6            94.6
 
 
                              THE DIAL CORPORATION
                              Summary of Net Sales
                                   Unaudited
 
                                                       In millions
 
                                                      Quarter ended
                                                 March 31,      April 1,
                                                   2001           2000
 
     Personal Cleansing                           $97.9           $85.6
     Laundry Care                                 123.2           112.7
     Air Fresheners                                58.4            50.8
     Food Products                                 42.2            44.7
         Total Domestic Branded                   321.7           293.8
     Specialty Personal Care                       10.2            24.7
     International                                 55.7            38.5
     Commercial Markets & Other                    13.9            16.1
 
     Total sales reported                        $401.5          $373.1
 
 
                              The Dial Corporation
                            Condensed Balance Sheet
 
                                                      In millions
 
                                               Unaudited
                                                March 31,     December 31,
                                                   2001           2000
     Assets
 
     Current assets                              $349.3          $377.8
     Non-current assets                           992.6         1,004.2
 
       Total assets                            $1,341.9        $1,382.0
 
     Liabilities and Stockholders' Equity
 
     Current liabilities                         $346.4          $394.9
     Long-term liabilities                        691.4           693.2
     Stockholders' equity                         304.1           293.9
 
       Total liabilities and
          stockholders' equity                 $1,341.9        $1,382.0
 
 
                         Condensed Statement of Cash Flows
                                     Unaudited
 
                                                      In millions
 
                                                     Quarter ended
                                                March 31,       April 1,
                                                   2001           2000
 
     Net cash provided (used) by operations       $15.0         $(29.4)
 
     Net cash used by investing activities         (3.3)          (9.5)
 
     Net cash provided (used)
      by financing activities:
       Net change in long-term and
        short-term borrowings                     (10.0)         128.1
       Common stock purchased for treasury           --          (83.1)
       Dividends paid                              (3.9)          (7.0)
 
     Net cash provided (used) by
      financing activities                        (13.9)          38.0
 
     Net decrease in cash and cash equivalents     (2.2)          (0.9)
     Cash and cash equivalents,
      beginning of year/period                      6.8            6.1
 
     Cash and cash equivalents, end of period      $4.6           $5.2
 
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 SOURCE  Dial Corporation