Strength in Major Appliances Offsets Floor Care Weakness
NEWTON, Iowa, July 15 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) today announced its second quarter sales and earnings were down
versus a year ago, but in line with management and Wall Street expectations.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO )
Maytag reported second quarter consolidated sales of $1.163 billion and
operating income of $51.4 million. Reported net income was $25.2 million, or
32 cents per share. Included in these results were after-tax restructuring
charges of $18.8 million, or 24 cents per share, for the closing of the
company's manufacturing plant in Galesburg, Ill., and a salaried work force
reduction implemented during the second quarter.
A year ago, second quarter consolidated sales were $1.193 billion and
operating income was $121.8 million. Reported net income for the period was
$68 million, or 86 cents per share.
"Maytag achieved a respectable performance despite challenging
second-quarter market conditions," said Ralph Hake, Maytag Chairman and CEO.
"While major appliance industry unit sales were up about 1 percent in the
quarter, the floor care industry was down nearly 9 percent in the April and
May timeframe. We worked hard to reduce our costs, and those efforts should
continue to pay off in the second half as we benefit from our restructuring
savings, steel cost reductions and multiple product launches."
During the second quarter, floor care products experienced declines in
volume and pricing as floor care industry sales continued to slump. As
previously discussed in the first quarter, corporate-wide cost increases for
steel, pension and retiree medical negatively impacted profitability in the
quarter.
In Maytag's commercial segment, vending products continued to perform well
even in an industry where sales are declining.
Hake said Maytag has completed the majority of the corporate-wide
restructuring plan that was announced in April, adding that he expects
aggressive cost reductions and a host of innovative new product introductions
to be on track to support second-half performance.
"We plan to bring new products to market in virtually all of our platforms
with improved consumer benefits, costs and quality improvements," Hake added.
"The products -- from an oven with the largest capacity on the market to a
top-load version of the Neptune washer -- are expected to contribute to
improved volumes and margins."
In addition, Hake noted that Maytag should be on track to reduce debt and
fund the company's pension plan consistent with the previously announced goals
for the year. "At this point, we're expecting full-year 2003 reported
earnings to be in the range of $1.80 to $1.90 per share, which includes pretax
restructuring charges of approximately $60 million, or 50 cents per share, for
the Galesburg closing and salaried workforce reduction."
Second Quarter Segment Results
Maytag's home appliances segment, which includes major appliances and
floor care products, had second quarter 2003 sales of $1.086 billion, down
2.7 percent from $1.116 billion in the second quarter of 2002. Operating
income for the segment was $57.3 million, compared with $127.8 million a year
earlier. Current year operating income includes $26.7 million Galesburg
closing and work force reduction-related charges.
The corporation's commercial appliances segment, composed of Dixie-Narco
vending equipment and Jade Products, had second quarter sales of
$76.7 million, basically flat compared to $76.8 million in the second quarter
of 2002. The segment reported operating income of $7.7 million, versus
$7.6 million in last year's second quarter.
Quarterly Conference Call
Maytag will host a conference call today, July 15, to discuss its business
performance with members of the investment community. The call will be at
8:30 a.m. CT, and those wishing to participate should telephone 888-882-0083
about 10 minutes prior to the start of the call. Additionally, the conference
call will be broadcast live over the Internet. It can be accessed in the
Corporate News Center on Maytag's Web site, http://www.maytagcorp.com , or by going
to CCBN's investor center at http://www.companyboardroom.com . Replays of the call
will be available on both Web sites. A summary of the key messages from the
quarterly conference call can also be accessed in the Corporate News Center on
Maytag's Web site.
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,
Amana, Jenn-Air, Hoover and Dixie-Narco.
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.
SECOND QUARTER SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2003 2002 % Change
Home appliances $1,086,169 $1,116,169 (2.7)
Commercial appliances 76,724 76,786 (0.1)
Consolidated $1,162,893 $1,192,955 (2.5)
OPERATING INCOME (LOSS) (in thousands)
2003 2002 % Change
Home appliances $57,286 $127,835 (55.2)
Commercial appliances 7,676 7,558 1.6
General corporate (13,554) (13,611) (0.4)
Reported $51,408 $121,782 (57.8)
Included in operating income (loss)
Restructuring charge-Home appliances $26,657 $-
Restructuring charge-Commercial appliances 132
Restructuring charge-General corporate 1,139
$27,928 $-
NET INCOME (in thousands)
2003 2002 % Change
Reported $25,234 $67,988 (62.9)
Included in net income
Restructuring charge (net of tax) $18,805 $-
Loss from discontinued operations 286 341
Total $19,091 $341
BASIC EARNINGS PER SHARE
2003 2002 % Change
Reported $0.32 $0.87 (63.1)
Included in basic earnings per share
Restructuring charge (net of tax) $0.24 $-
Basic weighted-average shares outstanding
(thousands) 78,467 77,781
DILUTED EARNINGS PER SHARE
2003 2002 % Change
Reported $0.32 $0.86 (62.7)
Included in diluted earnings per share
Restructuring charge (net of tax) $0.24 $-
Diluted weighted-average shares outstanding
(thousands) 78,622 79,152
FIRST HALF SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2003 2002 % Change
Home appliances $2,160,003 $2,235,405 (3.4)
Commercial appliances 138,896 135,193 2.7
Consolidated $2,298,899 $2,370,598 (3.0)
OPERATING INCOME (LOSS) (in thousands)
2003 2002 % Change
Home appliances $135,051 $246,794 (45.3)
Commercial appliances 9,774 8,902 9.8
General corporate (25,227) (26,675) (5.4)
Reported $119,598 $229,021 (47.8)
Included in operating income (loss)
Restructuring charge-Home appliances $36,044 $-
Restructuring charge-Commercial appliances 132
Restructuring charge-General corporate 1,139
$37,315 $-
NET INCOME (in thousands)
2003 2002 % Change
Reported $59,714 $124,752 (52.1)
Included in net income
Restructuring charge (net of tax) $25,001 $-
Loss from discontinued operations 404 1,658
Total $25,405 $1,658
BASIC EARNINGS PER SHARE
2003 2002 % Change
Reported $0.76 $1.61 (52.7)
Included in basic earnings per share
Restructuring charge (net of tax) $0.32 $-
Discontinued operations 0.01 0.02
Total $0.32 $0.02
Basic weighted-average shares outstanding
(thousands) 78,416 77,392
DILUTED EARNINGS PER SHARE
2003 2002 % Change
Reported $0.76 $1.59 (52.2)
Included in diluted earnings per share
Restructuring charge (net of tax) $0.32 $-
Discontinued operations 0.01 0.02
Total $0.32 $0.02
Diluted weighted-average shares outstanding
(thousands) 78,597 78,546
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
Second Quarter Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
Net sales $1,162,893 $1,192,955 $2,298,899 $2,370,598
Cost of sales 948,880 925,151 1,884,766 1,843,364
Gross profit 214,013 267,804 414,133 527,234
Selling, general and
administrative expenses 134,677 146,022 257,220 298,213
Restructuring charges 27,928 - 37,315 -
Operating income 51,408 121,782 119,598 229,021
Interest expense (14,279) (15,678) (28,058) (33,085)
Other - net 177 253 (1,813) 1,249
Income from continuing
operations before income
taxes and minority
interest 37,306 106,357 89,727 197,185
Income taxes 11,786 36,162 29,609 67,043
Income from continuing
operations before minority
interest 25,520 70,195 60,118 130,142
Minority interest - (1,866) - (3,732)
Income from continuing
operations 25,520 68,329 60,118 126,410
Loss from discontinued
operations, net of tax (286) (341) (404) (1,658)
Net income $25,234 $67,988 $59,714 $124,752
Basic earnings (loss) per
common share:
Income from continuing
operations $0.33 $0.88 $0.77 $1.63
Discontinued operations - - (0.01) (0.02)
Net income $0.32 $0.87 $0.76 $1.61
Basic weighted-average
shares outstanding 78,467 77,781 78,416 77,392
Diluted earnings (loss)
per common share:
Income from continuing
operations $0.32 $0.86 $0.76 $1.61
Discontinued operations - - (0.01) (0.02)
Net income $0.32 $0.86 $0.76 $1.59
Diluted weighted-average
shares outstanding 78,622 79,152 78,597 78,546
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30 December 31 June 30
2003 2002 2002
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $5,581 $8,106 $7,029
Accounts receivable - net 665,123 586,447 633,760
Inventories 521,977 468,433 543,013
Deferred income taxes 69,307 66,911 64,648
Other current assets 48,819 116,803 27,907
Discontinued current assets 76,177 76,899 83,817
Total current assets 1,386,984 1,323,599 1,360,174
Noncurrent assets 629,413 653,337 652,078
Discontinued noncurrent assets 61,907 61,205 60,604
Total noncurrent assets 691,320 714,542 712,682
Property, plant and equipment 1,056,845 1,066,108 1,049,402
Total assets $3,135,149 $3,104,249 $3,122,258
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $691,729 $687,439 $698,502
Notes payable and current portion of
long-term debt 209,785 373,871 432,051
Discontinued current liabilities 101,939 102,430 108,729
Total current liabilities 1,003,453 1,163,740 1,239,282
Long-term debt, less current portion 908,957 738,767 747,812
Postretirement benefit liability 530,545 517,510 505,674
Accrued pension cost 458,765 488,751 304,284
Other noncurrent liabilities 122,531 131,525 145,818
Minority interest - - -
Total discontinued noncurrent
liabilities and minority interest 21,817 21,817 21,817
Shareowners' equity 89,081 42,139 157,571
Total liabilities and shareowners'
equity $3,135,149 $3,104,249 $3,122,258
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Six Months Ended
June 30
2003 2002
Operating activities
Net income $59,714 $124,752
Net loss from discontinued operations 403 1,658
Depreciation and amortization 81,006 79,694
Change in working capital (150,432) (92,826)
Pension and postretirement (22,355) (40,115)
Other - net 132,384 69,895
Net cash provided by continuing operating
activities 100,720 143,058
Investing activities
Capital expenditures (85,626) (99,246)
Investing activities-continuing operations (85,626) (99,246)
Financing activities
Increase (reduction) in financing obligations 7,239 (35,063)
Dividends (including minority interest) (28,213) (33,451)
Stock repurchase (1,021) -
Other (441) (78,572)
Financing activities-continuing operations (22,436) (147,086)
Effect of exchange rates 4,817 933
Decrease in cash and cash equivalents (2,525) (102,341)
Cash and cash equivalents at beginning of
period 8,106 109,370
Cash and cash equivalents at end of period $5,581 $7,029
CONTACT: Kevin Waetke, Corporate Communications of Maytag Corporation,
+1-641-787-8853
SOURCE Maytag Corporation
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CONTACT:
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