-- Fourth quarter reported earnings were 30 cents a share versus 4 cents
a share in the prior year.
-- Fourth quarter earnings, excluding items affecting comparability,
were 55 cents -- at the high end of the company's range of
expectations.
-- Cash flow was very strong; debt reduction and pension contributions
exceeded targets.
-- Fourth quarter revenues were up 12.8 percent over the same period in
2002; up 2.7 percent for the full year.
-- Maytag Appliances gained market share in the fourth quarter over last
year.
-- Floor Care improved sequentially from the third quarter.
NEWTON, Iowa, Jan. 29 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) today reported fourth quarter consolidated sales of
$1.272 billion, up 12.8 percent from $1.127 billion in the same period of
2002. Fourth quarter 2003 reported operating income was $47.3 million and
reported net income was $23.9 million, or 30 cents per share. In the fourth
quarter 2002, Maytag reported $21.7 million in operating income and
$3.3 million in net income, or 4 cents per share.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO )
Items that affected comparability of the 30 cents and 4 cents reported
earnings per share in 2003 and 2002, include the following per share amounts:
Q4 2003 Q4 2002
Reported earnings per share $0.30 $0.04
Restructuring charges related to closing Galesburg 0.13 0.57
Asset impairment Floor Care motor line 0.10 --
Loss on investments 0.09 --
Discontinued operations (gain) loss (0.06) 0.01
Earnings excluding items affecting comparability $0.55 $0.62
For the full year 2003, Maytag's sales were $4.792 billion, up 2.7 percent
from $4.666 billion in 2002. Reported operating income was $228.3 million for
2003 versus $359.5 million for the prior year. Reported net income was
$120.1 million, or $1.53 per share, versus $188.8 million, or $2.40 per share
in 2002.
Items that affected comparability of the $1.53 and $2.40 reported earnings
per share for 2003 and 2002, include the following per share amounts:
2003 2002
Reported earnings per share $1.53 $2.40
Restructuring charges related to closing
Galesburg and salaried workforce reduction 0.56 0.56
Asset impairment Floor Care motor line 0.10 --
Loss on investments 0.09 --
Discontinued operations (gain) loss (0.07) 0.03
Gain on sale of distribution center -- (0.07)
Earnings excluding items affecting comparability $2.20 $2.93
Commenting on the company's performance in 2003, Maytag Chairman and CEO
Ralph F. Hake, said, "We achieved strong revenue growth in the fourth quarter,
and earnings were consistent with our expectations. Cash flow performance was
very strong, which enabled us to substantially exceed our targets for pension
funding and debt reduction. Maytag Appliances continued its marketplace
momentum with additional share gains in the fourth quarter during another
quarter of strong industry growth. We experienced especially strong results
from Maytag International, Maytag Appliances and Dixie-Narco vending. Floor
Care performance improved sequentially from the third quarter."
Maytag's strong cash flow enabled the corporation to reduce debt by
$140 million, exceeding its goal of $100 million, and to contribute
$265 million to the pension fund, exceeding the 2003 target of $135 million.
"Our operating income, excluding the items affecting comparability, was
down for the quarter and for the year, primarily as the result of the decline
in profitability in the Floor Care business. Throughout 2003, the product mix
shift in the floor care industry toward products in lower price categories led
to lower volume, margins and pricing within our Floor Care business at Hoover.
We continue to introduce new products and lower our cost structure in Floor
Care. I believe that this business has been stabilized by these actions and
that it is positioned for recovery," Hake said.
Hake added that the stream of new, innovative product introductions across
the company is progressing well. Contributing to increased performance in the
fourth quarter was an array of new products including the revitalized tall-tub
dishwasher product line, French door bottom freezer refrigerators, and
recently redesigned cooking products. During the fourth quarter, Maytag
successfully launched the Neptune(R) Drying Center(TM), Neptune TL top-loading
washer, two value-priced Hoover upright vacuum cleaners and the Hoover
SpinSweep(TM) outdoor sweeper.
Product momentum is expected to continue through 2004. Maytag Appliances
plans to introduce new products in laundry, cooking and refrigeration. In
Floor Care, a series of new vacuum cleaners and extractors is scheduled for
launch starting in the second quarter.
Additionally, Maytag Services expects to grow its all-brand service
program; Dixie-Narco plans to extend into new product categories; and the
number of Maytag Stores is expected to grow significantly in 2004.
Maytag home water filtration system, the SkyBox(TM) by Maytag personal
beverage vender, and Jenn-Air Attrezzi(TM) small appliances are other new
offerings that are expected to provide growth in 2004.
"We anticipate low single digit growth in unit sales in the major
appliances and floor care industries in 2004, with continuing declines in
pricing. We expect to outgrow the industry in both categories and expect to
improve profitability through our product launches, sourcing agreements and
efficiencies gained through LeanSigma(R) implementation," Hake said.
"The breakthrough contract Hoover signed with its I.B.E.W. union employees
in North Canton, Ohio, gives the company the flexibility to compete while
providing job guarantees for a number of employees at that location. The
contract, which was signed well ahead of its 2005 expiration, provides for
continuous production as we restructure the Floor Care business," he added.
The contract is expected to result in a substantial reduction of annual
benefit costs starting in 2004.
One recent development of concern is the imposition of surcharges and
proposed price increases for steel. "We will work to overcome the impact.
Our expectation is that the anticipated benefit of the Hoover contract savings
and the fourth quarter additional pension contributions will likely offset the
risk of increases in steel costs in 2004," Hake said.
"With the steady flow of new products, we expect to generate revenue and
earnings growth in 2004. As previously announced, earnings per share in the
first quarter are expected to be in the range of 42 to 47 cents including a
restructuring charge of 8 cents related to the closing of the company's
Galesburg plant. For the full year, we are expecting reported earnings of
$1.90 to $2.00 per share including Galesburg-related restructuring charges of
approximately 40 cents," Hake said.
Fourth Quarter Segment Results
-- Maytag's home appliances segment, which includes Maytag Appliances,
Floor Care, Maytag International and Maytag Services, had fourth
quarter 2003 sales of $1.223 billion, up 12.8 percent from
$1.085 billion in the fourth quarter of 2002.
-- Operating income for the home appliances segment was $65.6 million,
compared with $36.1 million a year earlier. Both periods included
restructuring charges.
-- Maytag's commercial appliances segment, composed of Dixie-Narco
vending equipment and Jade Products, had fourth quarter sales of
$48.3 million, up 13.1 percent from $42.7 million a year earlier.
-- The commercial segment reported an operating loss of $2.7 million,
compared with a loss of $1.9 million in the fourth quarter of 2002.
The loss in profitability for the quarter and year in the commercial
segment was caused by inefficiencies at Jade as a result of a factory
move and systems installations.
Full Year 2003 Segment Results
-- Maytag's home appliances segment had sales of $4.538 billion in 2003,
up 2.6 percent from $4.421 billion in 2002.
-- Operating income for the segment for the full year was
$269.1 million, versus $395.7 million in the prior year. The major
factor in the decline was Floor Care's decreased volume and
profitability year over year. Both periods included restructuring
charges.
-- Maytag's commercial appliances segment reported 2003 sales of
$253.9 million, up 3.8 percent over $244.7 million in 2002.
-- Operating income for the commercial appliances segment was
$11.7 million, down from $13 million reported in 2002. Dixie-Narco's
solid gains in revenue and profitability, as a result of its
diversification efforts, were offset by Jade's decline in
profitability.
Maytag Corporation is a leading producer of home and commercial
appliances. Its products are sold to customers throughout North America and
in international markets. The corporation's principal brands include
Maytag(R), Amana(R), Jenn-Air(R), Jade(R), Hoover(R) and Dixie-Narco(R).
Quarterly Conference Call
Maytag will host a conference call today, Thursday, Jan. 29, at 8:30 a.m.
Central (9:30 a.m. Eastern) to discuss its business performance with members
of the financial community. During the call, Hake and Maytag CFO George Moore
will comment on various aspects of the results and answer questions.
Persons wishing to participate in the call should telephone 888-568-1403
at 8:20 a.m. CT (international participants should dial 415-247-8503.)
Connections will be made as quickly as possible, but a wait of 10 minutes is
not uncommon. For those who are unable to participate in the 8:30 a.m. call,
the conference call will be recorded and available by telephone from
10:30 a.m. CT Jan. 29 until 10:30 a.m. CT Jan. 31. Persons interested in
listening to the conference call tape should call 800-633-8284 (or
internationally 402-977-9140) and use access code number 21182305.
Additionally, Maytag's conference call will be distributed live over
CCBN's Investor Distribution Network to both institutional and individual
investors. Individual investors can listen to the call through CCBN's
individual investor center at http://www.fulldisclosure.com or by visiting any of the
investor sites in CCBN's Individual Investor Network. Institutional investors
can access the call via CCBN's password-protected event management site,
StreetEvents (http://www.streetevents.com). It can also be accessed through the News
Center on Maytag's Web site, http://www.maytagcorp.com . To listen to the live call,
persons should go to the Web site at least 15 minutes prior to the start of
the call to register, download and install any necessary computer audio
software. For persons unable to listen to the live Internet broadcast,
replays will be available on both the Maytag and CCBN Web sites.
Non-GAAP Measurements
In addition to the reported GAAP results provided throughout this
document, the company has provided non-GAAP measurements, which present
earnings on a basis excluding specified items affecting comparability. Details
of the items are presented in the tables within this document. Reconciliations
from GAAP reported results to non-GAAP reported measurements described in this
press release are provided in the financial tables attached to this document.
Also, reconciliations from GAAP reported results to non-GAAP measurements that
may be discussed on this morning's earnings conference call can be found on
the company's Web site at http://www.maytagcorp.com .
The company has provided these non-GAAP measurements as a way to help
investors better understand its earnings and enhance comparisons of the
company's earnings from period to period. Among other things, the company's
management uses the earnings results, excluding items affecting comparability,
to evaluate the performance of its businesses. There are inherent limitations
in the use of earnings, excluding items affecting comparability, because the
company's actual results do include the impact of these items. The non-GAAP
measures are intended only as a supplement to the comparable GAAP measures and
the company compensates for the limitations inherent in the use of non-GAAP
measures by using GAAP measures in conjunction with the non-GAAP measures. As
a result, investors should consider these non-GAAP measures in addition to,
and not in substitution for, or as superior to, measures of financial
performance prepared in accordance with GAAP.
Forward-Looking Statements
Certain statements in this news release, including any discussion of
management expectations for future periods, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to differ
materially from the future results expressed or implied by those statements.
For a description of such factors, refer to "Forward Looking Statements" in
the Management's Discussion and Analysis section of Maytag's Annual Report on
Form 10-K for the year ended December 31, 2002, and each quarter's 10-Q.
FOURTH QUARTER SALES AND EARNINGS COMPARISON
NET SALES (in thousands)
2003 2002 % Change
Home appliances $1,223,360 $1,084,654 12.8
Commercial appliances 48,340 42,747 13.1
Consolidated $1,271,700 $1,127,401 12.8
OPERATING INCOME (LOSS) (in thousands)
2003 2002 % Change
Home appliances $65,572 $36,132 81.5
Commercial appliances (2,731) (1,860) 46.8
General corporate (15,509) (12,523) 23.8
Reported $47,332 $21,749 117.6
Included in operating income
Restructuring charges-Home
appliances $14,471 $67,112
Asset impairment-Home appliances 11,217 -
$25,688 $67,112
NET INCOME (in thousands)
2003 2002 % Change
Reported $23,853 $3,253 633.3
Included in net income (net of tax)
Restructuring charges $10,091 $44,294
Asset impairment 7,578 -
Loss on investments 7,185 -
(Gain) loss from discontinued
operations (4,910) 718
Total $19,944 $45,012
BASIC EARNINGS PER SHARE
2003 2002 % Change
Reported $0.30 $0.04 650.0
Included in basic earnings per
share (net of tax)
Restructuring charges $0.13 $0.57
Asset impairment 0.10 -
Loss on investments 0.09 -
(Gain) loss from discontinued
operations (0.06) 0.01
Comparable* $0.56 $0.62
Basic weighted-average shares
outstanding (thousands) 78,714 78,141
DILUTED EARNINGS PER SHARE
2003 2002 % Change
Reported $0.30 $0.04 650.0
Included in diluted earnings per
share (net of tax)
Restructuring charges $0.13 $0.57
Asset impairment 0.10 -
Loss on investments 0.09 -
(Gain) loss from discontinued
operations (0.06) 0.01
Comparable* $0.55 $0.62
Diluted weighted-average shares
outstanding (thousands) 78,964 78,388
*Comparable earnings per share may not be additive due to rounding
The fourth quarter ended January 3, 2004 consisted of 14 weeks;
The fourth quarter ended December 28, 2002 consisted of 13 weeks.
TWELVE MONTHS SALES AND EARNINGS COMPARISON
NET SALES (in thousands)
2003 2002 % Change
Home appliances $4,537,970 $4,421,328 2.6
Commercial appliances 253,896 244,703 3.8
Consolidated $4,791,866 $4,666,031 2.7
OPERATING INCOME (LOSS) (in thousands)
2003 2002 % Change
Home appliances $269,135 $395,712 (32.0)
Commercial appliances 11,743 13,041 (10.0)
General corporate (52,585) (49,258) 6.8
Reported $228,293 $359,495 (36.5)
Included in operating income
Restructuring charges-Home
appliances $63,575 $67,112
Asset impairment-Home appliances 11,217 -
Restructuring charges-Commercial
appliances 215 -
Restructuring charges-General
corporate 1,139 -
Gain on sale of distribution
center - (8,276)
$76,146 $58,836
NET INCOME (in thousands)
2003 2002 % Change
Reported $120,133 $188,794 (36.4)
Included in net income (net of tax)
Restructuring charges $43,866 $44,294
Asset impairment 7,578 -
Loss on investments 7,185 -
Gain on sale of distribution
center - (5,462)
(Gain) loss from discontinued
operations (5,755) 2,607
Total $52,874 $41,439
BASIC EARNINGS PER SHARE
2003 2002 % Change
Reported $1.53 $2.43 (37.0)
Included in basic earnings per
share (net of tax)
Restructuring charges $0.56 $0.57
Asset impairment 0.10 -
Loss on investments 0.09 -
Gain on sale of distribution
center - (0.07)
(Gain) loss from discontinued
operations (0.07) 0.03
Comparable* $2.20 $2.96
Basic weighted-average shares
outstanding (thousands) 78,537 77,735
DILUTED EARNINGS PER SHARE
2003 2002 % Change
Reported $1.53 $2.40 (36.3)
Included in diluted earnings per
share (net of tax)
Restructuring charges $0.56 $0.56
Asset impairment 0.10 -
Loss on investments 0.09 -
Gain on sale of distribution
center - (0.07)
(Gain) loss from discontinued
operations (0.07) 0.03
Comparable* $2.20 $2.93
Diluted weighted-average shares
outstanding (thousands) 78,746 78,504
*Comparable earnings per share may not be additive due to rounding
The twelve months ended January 3, 2004 consisted of 53 weeks;
The twelve months ended December 28, 2002 consisted of 52 weeks.
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Fourth Quarter Ended Twelve Months Ended
January 3 December 28 January 3 December 28
2004 2002 2004 2002
Net sales $1,271,700 $1,127,401 $4,791,866 $4,666,031
Cost of sales 1,047,300 894,458 3,932,335 3,661,429
Gross profit 224,400 232,943 859,531 1,004,602
Selling, general and
administrative expenses 151,380 144,082 555,092 577,995
Restructuring charges 14,471 67,112 64,929 67,112
Asset impairment 11,217 - 11,217 -
Operating income 47,332 21,749 228,293 359,495
Interest expense (11,977) (14,746) (52,763) (62,390)
Loss on investments (7,185) - (7,185) -
Other income (loss) 2,150 (987) 4,415 (1,449)
Income from
continuing
operations before
income taxes and
minority interest 30,320 6,016 172,760 295,656
Income taxes 11,377 2,045 58,382 100,523
Income from
continuing
operations before
minority interest 18,943 3,971 114,378 195,133
Minority interest - - - (3,732)
Income from
continuing
operations 18,943 3,971 114,378 191,401
Gain (loss) from
discontinued
operations, net of
tax 4,910 (718) 5,755 (2,607)
Net income $23,853 $3,253 $120,133 $188,794
Basic earnings (loss) per
common share:
Income from
continuing
operations $0.24 $0.05 $1.46 $2.46
Discontinued
operations 0.06 (0.01) 0.07 (0.03)
Net income $0.30 $0.04 $1.53 $2.43
Basic weighted-average
shares outstanding 78,714 78,141 78,537 77,735
Diluted earnings (loss)
per common share:
Income from
continuing
operations $0.24 $0.05 $1.45 $2.44
Discontinued
operations 0.06 (0.01) 0.07 (0.03)
Net income $0.30 $0.04 $1.53 $2.40
Diluted weighted-average
shares outstanding 78,964 78,388 78,746 78,504
Earnings per share totals may not be additive due to rounding
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 3 December 28
2004 2002
ASSETS
Current assets
Cash and cash equivalents $6,756 $8,106
Accounts receivable - net 596,832 586,447
Inventories 468,345 468,433
Deferred income taxes 63,185 66,911
Other current assets 94,030 116,803
Discontinued current assets 75,175 76,899
Total current assets 1,304,323 1,323,599
Noncurrent assets 612,546 653,337
Discontinued noncurrent assets 60,336 61,205
Total noncurrent assets 672,882 714,542
Property, plant and equipment 1,046,935 1,066,108
Total assets $3,024,140 $3,104,249
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Accounts payable $466,734 $363,639
Accrued liabilities 315,323 323,800
Notes payable and
current portion of long-term debt 95,994 373,871
Discontinued current liabilities 105,739 102,430
Total current liabilities 983,790 1,163,740
Long-term debt, less current portion 874,832 738,767
Postretirement benefit liability 538,105 517,510
Accrued pension cost 398,495 488,751
Other noncurrent liabilities 144,341 131,525
Total discontinued noncurrent
liabilities and minority interest 18,766 21,817
Shareowners' equity 65,811 42,139
Total liabilities and
shareowners' equity $3,024,140 $3,104,249
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Twelve Months Ended
January 3 December 28
2004 2002
Operating activities
Net income $120,133 $188,794
Net (Income) Loss from discontinued
operations (5,755) 2,607
Loss on investments 7,185 -
Asset impairment 11,217 -
Depreciation and amortization 165,785 163,708
Deferred income taxes 56,660 88,643
Special charges, net of cash paid 45,939 62,483
Change in working capital 110,299 60,815
Pension expense 65,044 52,561
Pension contributions (268,119) (193,108)
Postretirement benefit liability 20,594 12,255
Other 25,400 (74,041)
Net cash provided by continuing
operating activities 354,382 364,717
Investing activities
Proceeds from business disposition 16,168 -
Settlement of Amana purchase contract 11,939 -
Capital expenditures (199,300) (229,764)
Investing activities-continuing
operations (171,193) (229,764)
Financing activities
Reduction in financing obligations (127,592) (199,453)
Dividends (including minority
interest) (56,524) (61,587)
Other (543) 24,097
Financing activities-continuing
operations (184,659) (236,943)
Effect of exchange rates 120 726
Decrease in cash and cash
equivalents (1,350) (101,264)
Cash and cash equivalents at
beginning of period 8,106 109,370
Cash and cash equivalents at end
of period $6,756 $8,106
Media contact:
Lynne Dragomier, Maytag Corporate Communications, 641/787-7711
ldragomier@maytag.com
SOURCE Maytag Corporation
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CONTACT:
Lynne Dragomier of Maytag Corporate
Communications, +1-641-787-7711, lynne.dragomier@maytag.com
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