<SPECIAL FEATURE>
June 15, 1999

Dial Corp. for Dad
by Carl Saffell ([email protected])

Trading at 32 9/16 on June 14, 1999

Happy Father's Day, Pops! In my hunt for your stock this year, I must confess that I have not come up with any fancy new technology or earth-shattering discovery.

The company I've selected has been around for a long time. Having spun off its payment services and convention and event services operations into the Viad Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VVI)") else Response.Write("(NYSE: VVI)") end if %> more than two years ago, Dial Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DL)") else Response.Write("(NYSE: DL)") end if %> continues to focus on its primary consumer branded products.

The Dial Corp. (as its website tells us) is a $1.5 billion company based in Scottsdale, Arizona, that manufactures and markets such well-known consumer products as Dial soaps, Purex laundry detergents, Renuzit air fresheners, Armour Star canned meats, and specialty personal care products under the Freeman, Sarah Michaels, and Nature's Accents brand names.

Dial soap, the company's namesake product, is America's #1 antibacterial soap. Dial sells nearly one million bars a day. Purex laundry detergents have staked out a clear leadership position in the value segment, and Purex is the #2 selling detergent brand overall (second to Tide). Renuzit is the #2 brand of air fresheners based on an excellent track record of solid product innovation. Armour Star (that good corned beef hash), founded in 1867, is the #2 canned meat producer in the United States (second to our old friend Spam) and the #1 brand of Vienna sausage.

Dial is a leader in the growing $1 billion specialty personal care business. The just- purchased Freeman line includes natural skin, hair, bath and body, and foot care products sold in the health & beauty care aisles. Also newly acquired, Sarah Michaels is known for its high quality and its innovative merchandising of specialty bath and body products and gift packs. Nature's Accents recently introduced its Accents line of specialty bath and body products and scented candles that can be found at drugstores and mass merchandise stores.

From the company's recent fillings with the SEC we can see:

"Net sales increased $161.9 million, or 11.9%, to $1,524.5 million in 1998 from $1,362.6 million in 1997. Net sales in 1997 included $53 million of net sales from brands that were divested in the third quarter of 1997. Net sales in 1998 increased primarily as a result of a full-year contribution from Nuevo Federal, acquired in September 1997; two quarters of sales from Freeman, acquired in July 1998; and one quarter of sales from Sarah Michaels, acquired in September 1998.

"Domestic branded net sales increased $145.4 million, or 12.6%, to $1,295.4 million in 1998 from $1,150.1 million in 1997. The increase in net sales was the result of the inclusion of the Sarah Michaels and Freeman acquisitions, and sales growth in Dial, up 12.3%; Renuzit, up 12.1%; and Purex, up 5.6%. The increase in sales was offset in part by a 1.9% decline in Armour sales.

"International net sales increased $81.8 million, or 99%, to $164.6 million from $82.8 million in 1997. The increase in net sales resulted primarily from the inclusion of a full year of results of Nuevo Federal and sales growth of 30.7% in Canada, 10.0% in Mexico and 7.0% in the Caribbean. In addition, Nuevo Federal's sales grew 24% in the fourth quarter of 1998 over the same period in 1997. The increase in net sales was offset in part by a 52.3% decline in sales to Asia.

"Gross profit margin increased 1.1 percentage points to 48.4% in 1998 from 47.3% in 1997. The increase resulted primarily from significant improvement in manufacturing efficiencies and favorable raw material prices."

Here is a quick look at the numbers:

Revenue   1996      1997      1998       1999   
Mar     $352,392  $316,242  $335,022   $398,948
Jun      353,758   349,268   366,799 
Sep      350,508   334,290   383,909
Dec      349,742   362,806   438,787
in thousands

Earnings Per Share (EPS)
Quarters  1996     1997   1998    1999    
Mar      $0.220  $0.200  $0.230  $0.260 
Jun       0.220   0.220   0.250  
Sep      -0.280   0.240   0.270 
Dec       0.170   0.230   0.270 
Total     0.330   0.890   1.020   0.260