NEWTON, Iowa, Feb. 3 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) announced today fourth quarter consolidated sales of
$1.24 billion, up 6.6 percent from sales of $1.16 billion in the same period
last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO )
Net loss for the fourth quarter of 2005 was $75 million or 93 cents per
share, compared with a net loss of $14.1 million, or 18 cents per share, a
year ago. Diluted loss per share for the fourth quarters of 2005 and 2004
included the following items:
Three Months Ended
Quarter 4 Quarter 4
2005 2004
Diluted Loss Per Share $(0.93) $(0.18)
Included in diluted loss per share (net of tax)
were the following items:
Restructuring and related
charges - manufacturing 0.32 0.01
Restructuring and related
charges - reorganization - 0.12
Asset impairment 0.11 -
Goodwill impairment-Commercial Products 0.06 -
Front-load washer litigation - 0.13
Merger-related expense, net 0.13 -
Fourth quarter 2005 results were impacted by restructuring charges of
$42.1 million recorded primarily in connection with the closing of the
Florence, South Carolina, plant, which was announced in the fourth quarter. A
$13.8 million non-cash asset impairment charge related to a laundry product
line and a goodwill impairment charge of $4.5 million involving a commercial
cooking business were recorded in the quarter. In addition, $10.2 million of
merger-related expenses associated with the pending sale of the company to
Whirlpool impacted the quarter. Last year's quarterly results included
restructuring and related charges of $14.8 million and a $15 million charge
for front-load washer litigation.
In the fourth quarter of 2005, net sales were up 6.9 percent in Home
Appliances, driven by solid sales in all major appliance categories,
especially refrigeration. Compared with the prior year period, sales of floor
care products were down significantly for the quarter. Maytag Services
continued its strong performance with double-digit revenue growth versus a
year ago, while Maytag International revenues were down slightly. In the
fourth quarter, Commercial Products net sales were down 1.1 percent from the
same period a year ago.
Operating results were negatively impacted by lower utilization of
manufacturing capacity, a disappointing performance in floor care due to
continued volume decline and price erosion, as well as higher distribution
costs.
Maytag Chairman and CEO Ralph Hake said, "We showed solid top-line sales
growth during the quarter with increases in all our major appliance product
categories. However, I am extremely disappointed that our positive sales
gains in major appliances were more than offset by our overall high cost
structure and poor floor care performance."
Hake emphasized, "Improving our financial results is the top priority for
Maytag. We will address our profitability over the next several quarters by
continuing to pursue business improvement initiatives. We also expect to
evaluate alternative strategies for our floor care product line and commercial
businesses, including their possible sale."
During the quarter, the company also entered into a new $600 million,
five-year, senior-secured revolving credit agreement. The new credit
agreement should provide the company with substantially more financial
flexibility, including the capacity to refinance all 2006 debt maturities, as
well as providing working capital needed to operate the business. Maytag has
the ability to increase the new credit facility by $150 million to
$750 million.
In the fourth quarter, Maytag certified substantial compliance with the
Antitrust Division of the Department of Justice in response to the request for
additional information ("second request") regarding the proposed merger with
Whirlpool Corporation. On December 22, 2005, Maytag shareholders
overwhelmingly approved the proposed merger agreement with Whirlpool with 97.8
percent of the voted shares cast in favor of the merger.
The proposed merger is currently being reviewed by the Antitrust Division
of the Department of Justice. In order to facilitate the review, Whirlpool
and Maytag have agreed not to close the proposed merger before February 27,
2006, without the Antitrust Division's concurrence, although the Antitrust
Division may request additional time for review. Whirlpool and Maytag continue
to expect the transaction to close as early as the first quarter of 2006.
Full-Year Performance
Maytag's net sales for the full fiscal year 2005 were $4.9 billion, up 3.8
percent from the $4.72 billion reported for fiscal 2004. Net loss for fiscal
2005 was $81.9 million or $1.02 per share, compared to a net loss of $9
million or 11 cents per share a year ago. Diluted loss per share for the full
fiscal years of 2005 and 2004 included the following items:
Twelve Months Ended
2005 2004
Diluted Loss Per Share $(1.02) $(0.11)
Included in diluted loss per share (net of tax)
were the following items:
Restructuring and related
charges - manufacturing 0.35 0.30
Restructuring and related
charges - reorganization 0.06 0.30
Asset impairment 0.11 -
Goodwill impairment-Commercial Products 0.06 0.12
Front-load washer litigation - 0.29
Adverse judgment on pre-acquisition
distributor lawsuit - 0.09
Gain on sale of property - (0.10)
Merger-related expense, net
(includes $40 million Triton termination
fee and $40 million reimbursement by
Whirlpool) 0.22 -
Full-year 2005 results included restructuring and related charges of
$52.8 million, a non-cash asset impairment charge related to a laundry product
line of $13.8 million and a goodwill impairment charge of $4.5 million
involving a commercial cooking business. In addition to these expenses,
$19.7 million of net merger-related expenses impacted results in 2005. Prior
year results included restructuring and related charges of $69.8 million, a
$33.5 million charge for front-load washer litigation, a $9.6 million goodwill
impairment charge related to the previously mentioned commercial cooking
business and a $9.7 million gain on the sale of a warehouse.
Home Appliances sales for 2005 were $4.66 billion, up 4.6 percent from
fiscal 2004. This growth was spurred by increases in major appliances, both
in domestic and international markets. Maytag Services' revenues were up
double-digit for the full year. Commercial Products' sales were down 10.1
percent, impacted by declining sales in the vending industry.
Operating loss for fiscal 2005 was $37.1 million, compared with operating
income of $40.3 million in the prior 12-month period. Factors negatively
impacting full-year results, in addition to the restructuring and impairments
previously mentioned, included: higher raw material and distribution costs;
lower utilization of manufacturing capacity, primarily in laundry and floor
care; and declines in sales and margins for floor care products and vending
equipment.
For the full fiscal year 2005, cash flow provided by operations was
$20.8 million compared with $261.7 million provided by operations in the same
12-month period in 2004. Cash flow was impacted by a larger net loss and an
increase in working capital in 2005 as well as cash payments for restructuring
and litigation-related charges paid in 2005, but recorded in the prior year.
About Maytag Corporation
Maytag Corporation is a $4.9 billion home and commercial appliance company
focused in North America and in targeted international markets. The
corporation's primary brands are Maytag(R), Hoover(R), Jenn-Air(R), Amana(R),
Dixie-Narco(R) and Jade(R).
Quarterly Conference Call
Maytag will host a conference call for members of the financial community
today at 8:30 a.m. CT (9:30 a.m. ET) to comment on its performance. Chairman
& CEO Ralph Hake and CFO George Moore will participate in the call. The
company will not conduct a question-and-answer session during this conference
call.
Persons wishing to listen should telephone 888-942-8132 at 8:20 a.m. CT
(international participants should dial 210-234-0005) and use the pass code
Maytag. The conference call will be recorded and available by telephone from
10:30 a.m. CT February 3 until 10:30 a.m. CT February 6. Persons interested
in listening to the conference call tape should call 800-685-2427 or
internationally 203-369-3101.
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). The audio webcast can also be accessed
through Maytag's Web site, http://www.maytagcorp.com , by clicking on the
"Corporate News Center" and then "Conference Calls." Replays will be
available on both the Maytag and CCBN Web sites.
This document includes statements that do not directly or exclusively
relate to historical facts. Such statements are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These forward-looking statements
speak only as of this date and include statements regarding anticipated future
financial operating performance and results and expectations as to the closing
of the transaction with Whirlpool. These statements are based on the current
expectations of management of Maytag. There are a number of risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements included in this document. For example, with
respect to the transaction with Whirlpool (1) conditions to the closing of the
transaction may not be satisfied or the merger agreement may be terminated
prior to closing; (2) Maytag may be unable to obtain the regulatory approvals
required to close the transaction, or required regulatory approvals may delay
the transaction or result in the imposition of conditions that could have a
material adverse effect on Maytag or cause the parties to abandon the
transaction; (3) Maytag may be unable to achieve cost-cutting goals or it may
take longer than expected to achieve those goals; (4) the transaction may
involve unexpected costs or unexpected liabilities; (5) the credit ratings of
Maytag or its subsidiaries may be different from what the parties expect; (6)
the businesses of Maytag may suffer as a result of uncertainty surrounding the
transaction; (7) the industry may be subject to future regulatory or
legislative actions that could adversely affect Maytag; and (8) Maytag may be
adversely affected by other economic, business, and/or competitive factors.
Additional factors that may affect the future results of Maytag are set forth
in its filings with the Securities and Exchange Commission ("SEC"), which are
available at http://www.maytagcorp.com. Maytag undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
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 January 3, 2004, and each quarter's 10-Q.
FOURTH QUARTER SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2005 2004 % Change
Home Appliances $1,189,371 $1,112,467 6.9
Commercial Products 51,321 51,880 (1.1)
Consolidated $1,240,692 $1,164,347 6.6
OPERATING LOSS (in thousands)
2005 2004 % Change
Home Appliances $(71,865) $(4,855) (1,380.2)
Commercial Products (8,415) (1,417) (493.9)
Reported $(80,280) $(6,272) (1,180.0)
Included in operating loss
Restructuring and related
charges-Home Appliances $42,068 $14,551
Asset impairment-Home Appliances 13,800 -
Front-load washer litigation-
Home Appliances - 15,000
Restructuring and related
charges-Commercial Products 60 298
Goodwill impairment-Commercial
Products 4,525 -
NET LOSS (in thousands)
2005 2004 % Change
Reported $(74,990) $(14,120) (431.1)
Included in net loss (net of tax)
Restructuring and related charges $26,120 $10,024
Asset impairment 8,556 -
Goodwill impairment-Commercial
Products 4,525 -
Front-load washer litigation - 10,125
Merger-related expense, net 10,269 -
BASIC AND DILUTED LOSS PER SHARE
2005 2004 % Change
Reported $(0.93) $(0.18) (416.7)
Included in basic and diluted loss
per share (net of tax)
Restructuring and related charges $0.32 $0.13
Asset impairment 0.11 -
Goodwill impairment-Commercial
Products 0.06 -
Front-load washer litigation - 0.13
Merger-related expense, net 0.13 -
Basic and diluted weighted-average
shares
outstanding (thousands) 80,358 79,336
TWELVE MONTHS SALES AND EARNINGS COMPARISON (2005 UNAUDITED)
NET SALES (in thousands)
2005 2004 % Change
Home Appliances $4,664,892 $4,458,696 4.6
Commercial Products 236,223 262,842 (10.1)
Consolidated $4,901,115 $4,721,538 3.8
OPERATING INCOME (LOSS) (in thousands)
2005 2004 % Change
Home Appliances $(24,162) $47,465 (150.9)
Commercial Products (12,939) (7,117) (81.8)
Reported $(37,101) $40,348 (192.0)
Included in operating income (loss)
Restructuring and related
charges-Home Appliances $52,357 $69,310
Asset impairment-Home Appliances 13,800 -
Front-load washer litigation-
Home Appliances - 33,500
Gain on sale of property-Home
Appliances - (9,711)
Restructuring and related
charges-Commercial Products 422 448
Goodwill impairment-Commercial
Products 4,525 9,600
NET LOSS (in thousands)
2005 2004 % Change
Reported $(81,947) $(9,006) (809.9)
Included in net loss (net of tax)
Restructuring and related charges $33,015 $47,087
Asset impairment 8,556 -
Goodwill impairment-Commercial
Products 4,525 9,600
Front-load washer litigation - 22,613
Adverse judgment on pre-
acquisition distributor lawsuit - 7,091
Gain on sale of property - (7,769)
Income from discontinued operations - (339)
Merger-related expense, net
(includes $40 million Triton
termination fee and $40 million
reimbursement by Whirlpool) 17,778 -
BASIC AND DILUTED LOSS PER SHARE
2005 2004 % Change
Reported $(1.02) $(0.11) (827.3)
Included in basic and diluted loss
per share (net of tax)
Restructuring and related charges 0.41 $0.60
Asset impairment 0.11 -
Goodwill impairment-Commercial
Products 0.06 0.12
Front-load washer litigation - 0.29
Adverse judgment on pre-
acquisition distributor lawsuit - 0.09
Gain on sale of property - (0.10)
Merger-related expense, net
(includes $40 million Triton
termination fee and $40 million
reimbursement by Whirlpool) 0.22 -
Basic and diluted weighted-average
shares outstanding (thousands) 79,949 79,078
MAYTAG CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Fourth Quarter Ended Twelve Months Ended
December 31 January 1 December 31 January 1
2005 2005 2005 2005
(unaudited) (unaudited) (unaudited)
Net sales $1,240,692 $1,164,347 $4,901,115 $4,721,538
Cost of sales 1,135,599 1,021,640 4,413,458 4,061,319
Gross profit 105,093 142,707 487,657 660,219
Selling, general and
administrative expenses 124,920 119,130 453,654 507,013
Restructuring and related
charges 42,128 14,849 52,779 69,758
Asset impairment 13,800 - 13,800 -
Goodwill impairment-
Commercial Products 4,525 - 4,525 9,600
Front-load washer
litigation - 15,000 - 33,500
Operating income (loss) (80,280) (6,272) (37,101) 40,348
Interest expense (16,964) (15,431) (65,811) (56,274)
Adverse judgment on pre-
acquisition distributor
lawsuit - - - (10,505)
Merger-related expense, net
(includes $40 million
Triton termination fee
and $40 million
reimbursement by
Whirlpool) (10,179) - (19,695) -
Other-net (414) (2,135) 2,346 5,113
Loss before income taxes (107,837) (23,838) (120,261) (21,318)
Income tax benefit (32,847) (9,718) (38,314) (11,973)
Loss from continuing
operations (74,990) (14,120) (81,947) (9,345)
Income from
discontinued operations,
net of tax - - - 339
Net loss $(74,990) $(14,120) $(81,947) $(9,006)
Basic loss per common
share:
Loss from continuing
operations $(0.93) $(0.18) $(1.02) $(0.12)
Discontinued
operations - - - -
Net loss $(0.93) $(0.18) $(1.02) $(0.11)
Basic weighted-average
shares outstanding 80,358 79,336 79,949 79,078
Diluted loss per common
share:
Loss from continuing
operations $(0.93) $(0.18) $(1.02) $(0.12)
Discontinued
operations - - - -
Net loss $(0.93) $(0.18) $(1.02) $(0.11)
Diluted weighted-average
shares outstanding 80,358 79,336 79,949 79,078
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31 January 1
2005 2005
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $72,339 $164,276
Accounts receivable - net 672,734 629,901
Inventories 633,657 515,321
Deferred income taxes 73,031 55,862
Prepaids and other current assets 44,775 80,137
Total current assets 1,496,536 1,445,497
Noncurrent assets 659,133 653,365
Property, plant and equipment 797,902 921,162
Total assets $2,953,571 $3,020,024
LIABILITIES AND SHAREOWNERS' DEFICIT
Current liabilities
Accounts payable $550,986 $545,901
Accrued liabilities 387,136 358,119
Notes payable and current portion
of long-term debt 408,277 6,043
Total current liabilities 1,346,399 910,063
Long-term debt, less current portion 563,368 972,568
Postretirement benefit liability 522,367 531,995
Accrued pension cost 526,864 496,480
Other noncurrent liabilities 181,895 183,942
Shareowners' deficit (187,322) (75,024)
Total liabilities and shareowners'
deficit $2,953,571 $3,020,024
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Twelve Months Ended
December 31 January 1
2005 2005
(unaudited)
Operating activities
Net loss $(81,947) $(9,006)
Net income from discontinued operations - (339)
Depreciation and amortization 167,547 169,782
Deferred income taxes (56,054) 2,636
Loss (gain) on sale of property 4,174 (7,945)
Restructuring and related charges,
net of cash 27,285 36,859
Asset impairment 13,800 -
Goodwill impairment-Commercial Products 4,525 9,600
Front-load washer litigation, net of
cash paid (12,003) 23,092
Adverse judgment on pre-acquisition
distributor lawsuit (12,250) 10,505
Change in working capital (156,029) (948)
Pension expense 71,948 63,024
Pension contributions (52,715) (94,324)
Postretirement benefit liability (9,627) (6,110)
Other 112,162 64,903
Net cash provided by operating activities 20,816 261,729
Investing activities
Capital expenditures (93,406) (94,420)
Proceeds from business disposition,
net of transaction costs - 11,248
Proceeds from property dispositions,
net of transaction costs 15,839 23,477
Investing activities (77,567) (59,695)
Financing activities
Net reduction of notes payable - (71,491)
Proceeds from issuance of long-term debt - 100,000
Repayment of long-term debt (3,055) (21,521)
Stock options and employee stock 4,927 5,478
Dividends on common stock (35,921) (56,899)
Other (1,024) (280)
Financing activities (35,073) (44,713)
Effect of exchange rates (113) 199
Increase (decrease) in cash and
cash equivalents (91,937) 157,520
Cash and cash equivalents at
beginning of period 164,276 6,756
Cash and cash equivalents at end of period $72,339 $164,276
Media Contact: John Daggett
Maytag Corporate Communications
(641) 787-7711
john.daggett@maytag.com
SOURCE Maytag Corporation
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CONTACT:
Media, John Daggett, Maytag Corporate
Communications, +1-641-787-7711, john.daggett@maytag.com
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