-- Revenues increased 7.3 percent over the same period in 2003.
-- First quarter reported earnings were 49 cents per share versus
44 cents per share in the prior year.
-- First quarter earnings, excluding restructuring charges, were 56 cents
- in line with the company's expectations, up 8 percent over the same
period last year.
-- Maytag Appliances gained market share for the third consecutive
quarter in an environment of strong industry growth; the corporation's
multiple product launch strategy is on track and contributing to
results.
-- Maytag International and Dixie-Narco performed well.
NEWTON, Iowa, April 22 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) today reported first quarter consolidated sales of $1.219 billion,
up 7.3 percent from $1.136 billion in the same period of 2003. Earnings for
the quarter met the company's expectations.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO )
First quarter 2004 reported operating income was $63.6 million, and
reported net income was $38.7 million, or 49 cents per share. This includes a
benefit of $2.1 million or 3 cents per share for the quarter as a result of
the election to record the benefits of Medicare legislation that will provide
federal reimbursements for a portion of the company's retiree prescription
drug costs.
In the first quarter 2003, Maytag reported $68.2 million in operating
income and $34.5 million in net income, or 44 cents per share.
Three Months Ended
April 3 March 29
2004 2003
Diluted Earnings Per Share
Reported $0.49 $0.44
Included in diluted earnings per share (net of tax)
Restructuring charges 0.07 0.08
Excluding restructuring charges $0.56 $0.52
Commenting on first quarter performance, Maytag chairman and CEO Ralph
Hake stated, "Our results reflect steady progress on many fronts. The
company's multiple product launch strategy is being well-executed, with new
models entering the marketplace on schedule. This successful implementation
resulted in strong overall sales growth and market share improvement in Major
Appliances. Results in our Major Appliances segment offset declines in the
Housewares segment attributable to a reduction in sales of Hoover floor care
products."
Hake cited the Maytag(R) Neptune(R) TL top-loading washer, the Neptune(R)
Drying Center, Maytag(R) and Amana(R) ranges and dishwashers as new products
that are contributing to results. Hake added, "We are pleased to see the
excellent reception to products outside our traditional categories, most
notably the SkyBox(TM) home vender. The SpinSweep(TM) outdoor cleaner
introduced by Hoover has also been well-received. Both products are tangible
results of our diversification efforts."
Maytag International and Dixie-Narco vending both performed well in the
quarter with innovative new products driving profitable growth. Maytag
International has added new channels and customers in key geographic regions.
Hoover continues its recovery strategy of becoming cost competitive and
launching multiple new products. "While compelling mid-line products are
expected to build sales volume starting in the second quarter of this year,
Hoover's high-end, distinctly innovative product introductions are scheduled
to enter the marketplace in 2005," Hake said. Hoover's new EmPower(TM)
upright, in the mid-price range, began shipping late in the first quarter.
While floor care industry sales increased in the first quarter, most of
the growth was at low price points, where Hoover is underrepresented. Hake
said, "Hoover has been restructured for cost improvement and greater
flexibility, and the organization has made strong progress in designing and
launching new products. However, after a solid fourth quarter, Hoover
struggled with market share and revenue generation in the first quarter."
In the first quarter of 2004 versus the prior year, Maytag experienced
higher advertising expenses to support product introductions. Additionally,
rising costs of steel, resins and fuel were challenges in the first quarter,
and will continue to demand aggressive management, Hake noted.
In the first quarter, the company made $70 million of the $90 million
voluntary pension contributions planned for the full year. Although Maytag
has no minimum ERISA funding requirements, at least an additional $20 million
in pension contributions are expected to be made later in the year.
Total pension and postretirement expense is $2.5 million lower in the
first quarter of 2004 versus the prior year as a result of expected returns
from higher pension contributions, reduced retiree medical benefits accruals
related to a new collective bargaining agreement at Hoover in North Canton,
Ohio, and the election to record the benefits of Medicare legislation that
will provide federal reimbursements for a portion of the company's retiree
prescription drug costs. The effect of the subsidy for 2004 is expected to be
$8.6 million, which will be recognized evenly throughout the fiscal year. As
a result of the election to record the Medicare legislation benefits, Maytag
has reduced its accumulated benefit obligation for retiree medical costs by
$52.8 million.
Also reflected in first quarter reported earnings is a reduction of tax
expense, net of fees, of 3 cents per share. This is the result of the
corporation filing amended returns for prior years following a comprehensive
review conducted across the company.
"Competitive challenges will continue in the major appliance and floor
care industries, coupled with rising steel, resin and fuel costs. We plan to
offset these pressures with continuing successful execution of planned product
launches, aggressive cost reduction efforts and efficiencies gained through
LeanSigma(R) implementation," Hake said. He reaffirmed that for the full year
2004, excluding restructuring charges of approximately 40 cents per share
related primarily to the planned closing of the Galesburg, Ill. plant, the
corporation expects earnings of $2.30 to $2.40 per share.
Effective with the first quarter of 2004, Maytag changed its segment
reporting from two segments to three, as the company aligns its segment
reporting to reflect new initiatives and accountabilities within the company.
The new reporting segments are Major Appliances, Housewares and Commercial
Products. Net sales and operating income have been reclassified for the new
segments for 2003 by quarter and for the full year 2002. The reclassified
sales and earnings tables can be viewed on the company's Web site
http://www.maytagcorp.com by clicking on Financial Center, then Reclassified
Financials. Additionally, Maytag's First Quarter 10-Q was filed concurrently
with this earnings announcement and can be found on the corporate Web site
under Financial Center, SEC Filings.
First Quarter Segment Results
Major Appliances
Three Months Ended %Change
April 3 March 29
2004 2003
Net Sales (in thousands) $947,273 $830,868 14.0
Operating Income (in thousands)
Reported $54,979 $45,137 21.8
Included in operating income
Restructuring charges 7,995 9,387
Excluding restructuring charges $62,974 $54,524 15.5
-- Maytag's Major Appliances segment, which includes Maytag Appliances,
Maytag Services and Maytag International, had first quarter 2004
sales of $947.3 million, up 14 percent from $830.9 million in the
first quarter of 2003.
-- Operating income for the Major Appliances segment, excluding
restructuring charges, increased 15.5 percent to $63.0 million
compared with $54.5 million a year earlier. Including restructuring
charges, operating income increased 21.8 percent to $55.0 million,
compared with $45.1 million a year earlier.
Housewares
Three Months Ended %Change
April 3 March 29
2004 2003
Net Sales (in thousands) $178,780 $213,970 (16.4)
Operating Income (in thousands) $18,995 $29,567 (35.8)
-- Maytag's Housewares segment, which includes Hoover Floor Care and
Maytag Housewares, had first quarter 2004 sales of $178.8 million,
down 16.4 percent from $214.0 million in the first quarter of 2003.
The decrease is attributable to a substantial reduction in sales of
floor care products in the first quarter of 2004 when compared to the
same period last year. Based on a consumer shift to products at
lower price points, a decline in floor care revenues accelerated in
the second quarter of 2003.
-- Operating income for the Housewares segment decreased 35.8 percent to
$19.0 million compared with $29.6 million a year earlier.
Commercial Products
Three Months Ended %Change
April 3 March 29
2004 2003
Net Sales (in thousands) $92,891 $91,168 1.9
Operating Income (in thousands) $3,903 $5,250 (25.6)
-- The Commercial Products segment, which includes Dixie-Narco Vending,
Maytag Specialty and Maytag Commercial Laundry, had first quarter
2004 sales of $92.9 million, up 1.9 percent from $91.2 million in the
first quarter of 2003.
-- Operating income for the Commercial Products segment decreased 25.6
percent to $3.9 million compared with $5.3 million a year earlier.
While Dixie-Narco performed well, this was offset by a poor
performance by Jade Products commercial cooking business,
attributable to higher stainless steel prices, increased product
development costs, and production inefficiencies.
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), Hoover(R), Jenn-Air(R), Amana(R), Dixie-Narco(R) and Jade(R).
Quarterly Conference Call
Maytag will host a conference call, with a corresponding audio and visual
webcast, today, Thursday, April 22, at 8:30 a.m. Central (9:30 a.m. Eastern)
to discuss its performance with members of the financial community. During
the call, Maytag's CEO Ralph F. Hake and CFO George Moore will comment on
various aspects of the results and answer questions.
Persons wishing to participate in the call should telephone 800-937-4592
at 8:20 a.m. Central (9:20 a.m. Eastern) (international participants should
dial 415-904-2456). 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
April 22 until 10:30 a.m. CT April 24. Persons interested in listening to the
conference call tape should call 800-633-8284 (or internationally
402-977-9140) and use access code number 21192265.
Additionally, Maytag's conference call will be distributed live, along
with an accompanying visual presentation, over CCBN's Investor Distribution
Network to both institutional and individual investors. Individual investors
can listen to the call and view the presentation 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 and presentation via CCBN's password-protected event
management site, StreetEvents (http://www.streetevents.com). The 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." To listen to the live
call and view the presentation, 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 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 restructuring charges. Reconciliations from GAAP
reported results to non-GAAP reported measurements in this press release 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 restructuring charges, to
evaluate the performance of its businesses. There are inherent limitations in
the use of earnings, excluding restructuring charges, 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 January 3, 2004, and each quarter's 10-Q.
GAAP to Non-GAAP Reconciliations (unaudited)
Three Months Ended
April 3 March 29
2004 2003
Net Sales (in thousands) $1,218,944 $1,136,006
Gross profit as a percentage of
sales 17.3% 17.6%
Operating Income (in thousands)
Reported $63,632 $68,190
Included in operating income
Restructuring charges 7,995 9,387
Excluding restructuring charges $71,627 $77,577
Percent of Sales
Operating income 5.2% 6.0%
Excluding restructuring charges 5.9% 6.8%
Net Income (in thousands)
Reported $38,724 $34,480
Included in net income (net of tax)
Restructuring charges 5,317 6,195
Excluding restructuring charges $44,041 $40,675
Diluted Earnings Per Share
Reported $0.49 $0.44
Included in diluted earnings per
share (net of tax)
Restructuring charges 0.07 0.08
Excluding restructuring charges $0.56 $0.52
FIRST QUARTER SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2004 2003 % Change
Major Appliances $947,273 $830,868 14.0
Housewares 178,780 213,970 (16.4)
Commercial Products 92,891 91,168 1.9
Consolidated $1,218,944 $1,136,006 7.3
OPERATING INCOME (LOSS) (in thousands)
2004 2003 % Change
Major Appliances $54,979 $45,137 21.8
Housewares 18,995 29,567 (35.8)
Commercial Products 3,903 5,250 (25.6)
General Corporate & Other (14,245) (11,764) 21.1
Reported $63,632 $68,190 (6.7)
Included in operating income
Restructuring charges-Major
Appliances $7,995 $9,387
NET INCOME (in thousands)
2004 2003 % Change
Reported $38,724 $34,480 12.3
Included in net income (net of tax)
Restructuring charges $5,317 $6,195
BASIC EARNINGS PER SHARE
2004 2003 % Change
Reported $0.49 $0.44 11.4
Included in basic earnings per
share (net of tax)
Restructuring charges $0.07 $0.08
Excluding restructuring charges $0.56 $0.52
Basic weighted-average shares
outstanding (thousands) 78,847 78,364
DILUTED EARNINGS PER SHARE
2004 2003 % Change
Reported $0.49 $0.44 11.4
Included in diluted earnings per
share (net of tax)
Restructuring charges $0.07 $0.08
Excluding restructuring charges $0.56 $0.52
Diluted weighted-average shares
outstanding (thousands) 79,225 78,572
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
First Quarter Ended
April 3 March 29
2004 2003
Net sales $1,218,944 $1,136,006
Cost of sales 1,007,823 935,886
Gross profit 211,121 200,120
Selling, general and
administrative expenses 139,494 122,543
Restructuring charges 7,995 9,387
Operating income 63,632 68,190
Interest expense (12,891) (13,779)
Other income (loss) 2,866 (1,990)
Income from
continuing
operations before
income taxes 53,607 52,421
Income taxes 14,883 17,823
Income from
continuing
operations 38,724 34,598
Gain (loss) from
discontinued
operations, net of
tax - (118)
Net income $38,724 $34,480
Basic earnings (loss) per
common share:
Income from
continuing
operations $0.49 $0.44
Discontinued
operations - -
Net income $0.49 $0.44
Basic weighted-average
shares outstanding 78,847 78,364
Diluted earnings (loss)
per common share:
Income from
continuing
operations $0.49 $0.44
Discontinued
operations - -
Net income $0.49 $0.44
Diluted weighted-average
shares outstanding 79,225 78,572
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 3 January 3 March 29
2004 2004 2003
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $7,726 $6,756 $10,208
Accounts receivable - net 669,879 596,832 623,202
Inventories 581,401 468,345 493,889
Deferred income taxes 62,205 63,185 67,763
Other current assets 80,329 94,030 59,890
Discontinued current assets 67,156 75,175 77,132
Total current assets 1,468,696 1,304,323 1,332,084
Noncurrent assets 595,566 612,546 640,736
Discontinued noncurrent assets 60,994 60,336 60,086
Total noncurrent assets 656,560 672,882 700,822
Property, plant and equipment 1,020,258 1,046,935 1,055,126
Total assets $3,145,514 $3,024,140 $3,088,032
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Accounts payable $495,287 $466,734 $358,380
Accrued liabilities 313,310 315,323 313,787
Notes payable and
current portion of long-term debt 217,787 95,994 341,784
Discontinued current liabilities 98,300 105,739 101,627
Total current liabilities 1,124,684 983,790 1,115,578
Long-term debt, less current portion 877,427 874,832 735,320
Postretirement benefit liability 540,383 538,105 524,181
Accrued pension cost 343,651 398,495 504,360
Other noncurrent liabilities 147,922 144,341 117,310
Total discontinued noncurrent
liabilities 18,766 18,766 21,817
Shareowners' equity 92,681 65,811 69,466
Total liabilities and
shareowners' equity $3,145,514 $3,024,140 $3,088,032
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Three Months Ended
April 3 March 29
2004 2003
Operating activities
Net income $38,724 $34,480
Net (income) loss from discontinued
operations - 118
Depreciation and amortization 41,448 40,265
Deferred income taxes 12,334 9,491
Special charges, net of cash paid 5,742 8,936
Change in working capital (158,827) (75,629)
Pension expense 15,934 16,596
Pension contributions (70,672) (858)
Postretirement benefit liability 2,278 6,671
Other 29,162 48,225
Net cash provided by continuing
operating activities (83,877) 88,295
Investing activities
Capital expenditures-continuing
operations (21,729) (36,798)
Financing activities
Proceeds (reduction) in financing
obligations 119,789 (36,083)
Dividends (14,183) (14,097)
Stock repurchase - (1,021)
Other 990 165
Financing activities-continuing
operations 106,596 (51,036)
Effect of exchange rates (20) 1,641
Increase in cash and cash
equivalents 970 2,102
Cash and cash equivalents at
beginning of period 6,756 8,106
Cash and cash equivalents at end
of period $7,726 $10,208
Media Contact: Lynne Dragomier
Maytag Corporate Communications
(641) 787-7711
ldragomier@maytag.com
SOURCE Maytag Corporation
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Related links:
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CONTACT:
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