NEWTON, Iowa, April 22 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) today reported first quarter consolidated sales of $1.168 billion,
down 4.2 percent from sales of $1.219 billion in the same period last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO )
Consolidated net income for the first quarter was $7.7 million or 10 cents
per share, compared with net income of $38.7 million, or 49 cents per share, a
year earlier. Diluted earnings per share for the first quarter included the
following:
Three Months Ended
April 2, April 3,
2005 2004
Diluted Earnings Per Share $0.10 $0.49
Included in diluted earnings per share
(net of tax) were the following items:
Restructuring and related charges - Galesburg 0.01 0.07
Restructuring and related
charges - reorganization 0.03 --
Savings from restructuring activities implemented in 2004 only partially
offset rising costs. Lower net sales and higher costs -- primarily for steel
and energy-related items, and higher distribution costs -- reduced
first-quarter, year-over-year profitability.
Maytag Chairman and CEO Ralph Hake stated that while the company achieved
the gains that were anticipated through the 'One Company' restructuring, it is
clear that not enough progress has been made. "We must immediately take more
aggressive steps to improve our cost position by reducing our manufacturing
footprint," he said. "This will require a manufacturing restructuring that
addresses our noncompetitive supply chain costs and burden absorption issues.
A new financing plan will fund these business initiatives, which will include
a new credit agreement and finalizing plans to refinance 2006 debt
maturities."
In the Home Appliance segment, sales declined compared to the prior year
primarily as a result of lower sales of OEM refrigeration products, lower
sales at Best Buy as well as lower average selling prices for floor care
products.
However, Hake noted that the company experienced sequential market share
improvement in all major appliance categories, signaling that the actions
Maytag has implemented to improve its sales performance are taking root. He
said, "We expect further growth from new products scheduled for launch in the
first half 2005, among them are the Maytag(R) Neptune(R) 27-inch washer and
dryer, the Jenn-Air(R) suite of glass-front appliances, and the new Hoover(R)
FloorMate(TM) hard floor cleaner."
Maytag Services and Maytag International continue to perform well,
producing double-digit revenue growth this quarter versus prior year.
Commercial Products remained down year over year given the ongoing weakness in
the vending industry.
While sales were up slightly in Home Appliances compared with the fourth
quarter, Hake noted that the Jenn-Air(R) premium appliance lines and the
company's value brands posted strong gains in the quarter. The corporation
saw an improvement in average selling prices this quarter based upon its
recent pricing actions; however, these increases were largely offset by
selected 2004 price repositioning and product mix.
As expected, floor care sales were down year over year due to pricing
actions in 2004. However, floor care did see stabilization in market share in
key categories with positive momentum attributed to the full-size extractor
category. "We expect new floor care product launches to take hold with new
premium products slated for the second half of the year," Hake said. "Going
forward, our most innovative products this year focus on floor care and
laundry, which we believe are significant opportunities."
Cash flow from operations in the first quarter of 2005 was a use of
$49.8 million, compared with a use of $83.9 million in the first quarter of
2004. The improvement in cash flow was due to a smaller growth in working
capital and lower pension contributions, partially offset by higher cash
payments for restructuring charges and payment of $12.3 million for the final
resolution of a distributor lawsuit.
Maytag's overall debt levels are down $126 million from the prior year,
and cash and cash equivalents were increased by $91 million to $99 million.
In addition, inventories were down from the prior year. In 2004, Maytag had
higher inventories for its refrigeration transition and new product
introductions.
Hake noted that the lower-than-expected realization from our pricing
actions, as well as higher fuel and energy-related raw material costs have
prompted the company to reduce guidance for 2005. Maytag now expects reported
earnings per share for the full year 2005 in the range of 45 cents to
55 cents, including approximately 10 cents in restructuring charges. Earlier,
the company noted that 2005 guidance for reported earnings per share were
expected to be in the range of $1.10 to $1.30, including about 5 cents for
restructuring charges.
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 today at 8:30 a.m. CT (9:30 a.m. ET) to
discuss its performance with members of the financial community. During the
call, 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 800-721-7189
at 8:20 a.m. CT (international participants should dial 303-957-1267). 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 21243180.
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.
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 1,
2005, and each quarter's 10-Q.
FIRST QUARTER SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2005 2004 % Change
Home Appliances $1,113,187 $1,144,786 (2.8)
Commercial Products 54,652 74,158 (26.3)
Consolidated $1,167,839 $1,218,944 (4.2)
OPERATING INCOME (LOSS) (in thousands)
2005 2004 % Change
Home Appliances $26,635 $60,345 (55.9)
Commercial Products (2,549) 3,287 (177.6)
Reported $24,086 $63,632 (62.1)
Included in operating income (loss)
Restructuring and related
charges-Home Appliances $4,717 $7,995
Restructuring and related
charges-Commercial Products 138 -
NET INCOME (in thousands)
2005 2004 % Change
Reported $7,732 $38,724 (80.0)
Included in net income (net of tax)
Restructuring and related
charges $3,301 $5,317
BASIC EARNINGS PER SHARE
2005 2004 % Change
Reported $0.10 $0.49 (80.2)
Included in basic earnings per
share (net of tax)
Restructuring and related
charges $0.04 $0.07
Basic weighted-average shares
outstanding (thousands) 79,562 78,847
DILUTED EARNINGS PER SHARE
2005 2004 % Change
Reported $0.10 $0.49 (80.1)
Included in diluted earnings per
share (net of tax)
Restructuring and related
charges $0.04 $0.07
Diluted weighted-average shares
outstanding (thousands) 79,562 79,225
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
First Quarter Ended
April 2 April 3
2005 2004
Net sales $1,167,839 $1,218,944
Cost of sales 1,038,769 1,007,823
Gross profit 129,070 211,121
Selling, general and administrative
expenses 100,130 139,494
Restructuring and related charges 4,854 7,995
Operating income 24,086 63,632
Interest expense (15,775) (12,891)
Other income 2,428 2,866
Income before income taxes 10,739 53,607
Income taxes 3,007 14,883
Net income $7,732 $38,724
Basic earnings per common share:
Net income $0.10 $0.49
Basic weighted-average shares
outstanding 79,562 78,847
Diluted earnings per common share:
Net income $0.10 $0.49
Diluted weighted-average shares
outstanding 79,562 79,225
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 2 January 1 April 3
2005 2005 2004
ASSETS (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $98,510 $164,276 $7,726
Accounts receivable - net 655,730 629,901 669,879
Inventories 541,673 515,321 581,401
Deferred income taxes 54,589 55,862 62,205
Other current assets 71,727 80,137 80,329
Discontinued current assets - - 67,156
Total current assets 1,422,229 1,445,497 1,468,696
Noncurrent assets 642,105 653,365 595,566
Discontinued noncurrent assets - - 60,994
Total noncurrent assets 642,105 653,365 656,560
Property, plant and equipment 889,338 921,162 1,020,258
Total assets $2,953,672 $3,020,024 $3,145,514
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Accounts payable $518,605 $545,901 $494,143
Accrued liabilities 334,234 358,119 314,454
Notes payable and
current portion of long-term debt 189,043 6,043 217,787
Discontinued current liabilities - - 98,300
Total current liabilities 1,041,882 910,063 1,124,684
Long-term debt, less current portion 779,826 972,568 877,427
Postretirement benefit liability 532,289 531,995 540,383
Accrued pension cost 498,189 496,480 343,651
Other noncurrent liabilities 179,904 183,942 147,922
Total discontinued noncurrent
liabilities - - 18,766
Shareowners' equity (deficit) (78,418) (75,024) 92,681
Total liabilities and
shareowners' equity (deficit) $2,953,672 $3,020,024 $3,145,514
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Three Months Ended
April 2 April 3
2005 2004
Operating activities
Net income $7,732 $38,724
Depreciation and amortization 41,896 41,448
Deferred income taxes 2,517 12,334
Restructuring and related charges,
net of cash (13,829) 5,742
Adverse judgment on pre-acquisition
distributor lawsuit (12,250) -
Change in working capital (79,969) (158,827)
Pension expense 17,533 15,934
Pension contributions (15,729) (70,672)
Postretirement benefit liability 294 2,278
Other 2,038 29,162
Net cash used in operating
activities (49,767) (83,877)
Investing activities
Capital expenditures (12,849) (21,729)
Proceeds from property disposition,
net of transaction costs 11,123 -
Investing activities (1,726) (21,729)
Financing activities
Net proceeds in financing obligations - 119,789
Dividends (14,311) (14,183)
Repayment of long term debt (2,000) -
Stock options and employee stock 2,060 -
Other - 990
Financing activities (14,251) 106,596
Effect of exchange rates (22) (20)
Increase (decrease) in cash and
cash equivalents (65,766) 970
Cash and cash equivalents at
beginning of period 164,276 6,756
Cash and cash equivalents at end
of period $98,510 $7,726
Media Contact: Karen Lynn
Maytag Corporate Communications
(641) 787-8185
klynn2@maytag.com
SOURCE Maytag Corporation
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Related links:
http://www.maytagcorp.com
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AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Karen Lynn, Maytag Corporate Communications,
+1-641-787-8185, or klynn2@maytag.com
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