NEWTON, Iowa, July 22 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) today reported second quarter consolidated sales of $1.23 billion,
up 6.7 percent from sales of $1.15 billion in the same period last year.
Reported net income for the second quarter was $3.5 million or 4 cents per
share, compared with a net loss of $41.1 million, or 52 cents per share, a
year earlier. Diluted earnings per share for the second quarter included the
following:
Three Months Ended
July 2 July 3
2005 2004
Diluted Earnings (Loss) Per Share $0.04 $(0.52)
Included in diluted earnings (loss)
per share (net of tax) were the following items:
Restructuring and related charges - Galesburg 0.01 0.13
Restructuring and related charges - reorganization 0.02 0.11
Goodwill impairment-Commercial Products - 0.12
Front-load washer litigation - 0.16
Adverse judgment on pre-acquisition
distributor lawsuit - 0.09
Second quarter sales were up year-over-year in all major categories of the
home appliances segment -- refrigeration, laundry, cooking, dishwashing and
floor care. Sales of Commercial Products declined versus a year ago, a result
of continued weakness in the vending industry.
Maytag Chairman and CEO Ralph Hake said that sales of major appliances
showed solid improvement during the quarter with refrigeration and cooking
product sales up appreciably. "Sales of our French-Door bottom-freezers under
the Jenn-Air, Maytag and Amana brand names are strong. In cooking, all Jenn-
Air products, including cook tops and wall ovens generated positive gains for
the company. Also, Jenn-Air stainless steel dishwashers and Maytag's new
Neptune front-load washers have generated encouraging consumer interest this
quarter."
Hake noted that all floor care categories sold under the Hoover brand
experienced significant year-over-year growth with market share gains in
upright vacuums as the primary sales driver.
Maytag Services and Maytag International continued to produce strong
revenue growth compared to the second quarter of 2004.
"Compared to last year, operations benefited from sales growth, a positive
mix in major appliances, and savings from our 'One Company' restructuring and
the Galesburg plant closing," said Hake. "However, these improvements were
offset by rising raw material costs including steel and resins, higher fuel
and transportation costs and lower floor care pricing."
Sales were up sequentially from the first quarter of 2005, benefiting from
refrigeration sales beyond normal seasonal increases. Operating income was
down sequentially from the first quarter of 2005, due to planned national
advertising expenditure increases, which more than offset the benefit from
increased sales.
During the quarter, the company signed a commitment letter for a
$500 million five-year, senior secured revolving credit facility. The new
credit facility would be fully underwritten by J.P. Morgan Chase Bank, N.A.
and Citigroup Global Markets, Inc. and secured by accounts receivable and
inventory of certain Maytag subsidiaries. The company also announced that it
has amended its current $300 million revolving credit facility, due March
2007. The current $300 million credit facility would be replaced upon the
issuance of the $500 million credit facility.
Six-Month Performance
Maytag's sales in the first six months of 2005 were $2.40 billion, up one
percent from sales of $2.37 billion in the first six months of 2004.
Operating income was $43.8 million, up from $30.2 million reported in the
year-earlier period.
Reported net income for the first six months of 2005 was $11.2 million, or
14 cents per share. In the first six months of 2004, Maytag reported a net
loss of $2.4 million, or 3 cents per share.
For the first six months of 2005, cash flow used by operations was
$47.4 million, approximately the same as the first six months of 2004. The use
of cash flow in both periods is due primarily to seasonal increases in working
capital. Cash flow was also impacted by lower pension contributions in the
first half of 2005 compared to the same period in 2004. As of the end of the
second quarter, cash and cash equivalents increased by $61.5 million to
$69 million, compared to the same period in the prior year, and total debt
levels declined by $118 million to $977 million.
The earnings (loss) per share for the first six months of 2005 and 2004
included the following items:
Six Months Ended
July 2 July 3
2005 2004
Diluted Earnings (Loss) Per Share $0.14 $(0.03)
Included in diluted earnings (loss) per share
(net of tax) were the following items:
Restructuring and related charges - Galesburg 0.02 0.20
Restructuring and related charges - reorganization 0.05 0.11
Goodwill impairment-Commercial Products - 0.12
Front-load washer litigation - 0.16
Adverse judgment on pre-acquisition
distributor lawsuit - 0.09
Full-Year Projections
Maytag reaffirmed that its earnings per share estimate for the full year
2005 are expected to be in the range of 45 to 55 cents, including
approximately 10 cents in restructuring charges.
About Maytag
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 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 for this conference
call.
Persons wishing to listen should telephone 888-489-9488 at 8:20 a.m. CT
(international participants should dial 415-537-1945). The conference call
will be recorded and available by telephone from 10:30 a.m. CT July 22 until
10:30 a.m. CT July 26. Persons interested in listening to the conference call
tape should call 800-633-8284 (or internationally 402-977-9140) and use access
code number 21251588.
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
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
include statements regarding benefits of the proposed transactions, expected
cost savings and anticipated future financial operating performance and
results, including estimates of growth. 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 a group led by Ripplewood Holdings L.L.C. (1)
Maytag may be unable to obtain shareholder approval required for the
transaction; (2) Maytag may be unable to obtain regulatory approvals required
for 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) conditions to the closing of the transaction may not be
satisfied or the merger agreement may be terminated prior to closing; (4)
Maytag may be unable to achieve cost-cutting goals or it may take longer than
expected to achieve those goals; (5) the transaction may involve unexpected
costs or unexpected liabilities; (6) the credit ratings of Maytag or its
subsidiaries may be different from what the parties expect; (7) the businesses
of Maytag may suffer as a result of uncertainty surrounding the transaction;
(8) the industry may be subject to future regulatory or legislative actions
that could adversely affect Maytag; and (9) 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.
Additional Information and Where to Find It
In connection with the proposed transaction with an investor group led by
private equity firm Ripplewood Holdings L.L.C., Maytag has filed a definitive
proxy statement and may file other relevant documents concerning the proposed
merger with SEC. WE URGE INVESTORS TO READ THE DEFINITIVE PROXY STATEMENT AND
THE OTHER RELEVANT DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT MAYTAG AND THE PROPOSED TRANSACTION.
Investors can obtain free copies of the definitive proxy statement as well as
other filed documents containing information about Maytag at
http://www.sec.gov, SEC's Web site. Free copies of Maytag's SEC filings are
also available on Maytag's Web site at http://www.maytagcorp.com .
Participants in the Solicitation
Maytag and its executive officers and directors and Ripplewood Holdings
L.L.C., Triton Acquisition Holding and Triton Acquisition and their respective
affiliates, executive officers and directors may be deemed, under SEC rules,
to be participants in the solicitation of proxies from Maytag's stockholders
with respect to the proposed transaction. Information regarding the officers
and directors of Maytag is included in its definitive proxy statement for its
2005 annual meeting filed with SEC on April 4, 2005. More detailed
information regarding the identity of potential participants, and their direct
or indirect interests, by securities, holdings or otherwise, is set forth in
the proxy statement and other materials filed or to be filed with SEC in
connection with the proposed transaction.
Media Contact: John Daggett
Maytag Corporate Communications
(641) 787-7711
john.daggett@maytag.com
SECOND QUARTER SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2005 2004 % Change
Home Appliances $1,163,259 $1,077,643 7.9
Commercial Products 66,459 74,586 (10.9)
Consolidated $1,229,718 $1,152,229 6.7
OPERATING INCOME (LOSS) (in thousands)
2005 2004 % Change
Home Appliances $21,029 $(23,741) 188.6
Commercial Products (1,354) (9,697) 86.0
Reported $19,675 $(33,438) 158.8
Included in operating income (loss)
Restructuring and related charges-
Home Appliances $3,156 $27,783
Front-load washer litigation-
Home Appliances - 18,500
Restructuring and related
charges-Commercial Products 224 69
Goodwill impairment-Commercial
Products - 9,600
NET INCOME (LOSS) (in thousands)
2005 2004 % Change
Reported $3,481 $(41,084) 108.5
Included in net income (loss)
(net of tax)
Restructuring and related charges $2,092 $18,879
Goodwill impairment-Commercial
Products - 9,600
Front-load washer litigation - 12,488
Adverse judgment on pre-
acquisition distributor lawsuit - 7,091
BASIC EARNINGS (LOSS) PER SHARE
2005 2004 % Change
Reported $0.04 $(0.52) 108.4
Included in basic earnings (loss)
per share (net of tax)
Restructuring and related charges $0.03 $0.24
Goodwill impairment-Commercial
Products - 0.12
Front-load washer litigation - 0.16
Adverse judgment on pre-
acquisition distributor lawsuit - 0.09
Basic weighted-average shares
outstanding (thousands) 79,818 79,012
DILUTED EARNINGS (LOSS) PER SHARE
2005 2004 % Change
Reported $0.04 $(0.52) 108.4
Included in diluted earnings (loss)
per share (net of tax)
Restructuring and related charges $0.03 $0.24
Goodwill impairment-Commercial
Products - 0.12
Front-load washer litigation - 0.16
Adverse judgment on pre-
acquisition distributor lawsuit - 0.09
Diluted weighted-average shares
outstanding (thousands) 79,818 79,012
FIRST HALF SALES AND EARNINGS COMPARISON
NET SALES (in thousands)
2005 2004 % Change
Home Appliances $2,276,446 $2,222,429 2.4
Commercial Products 121,111 148,744 (18.6)
Consolidated $2,397,557 $2,371,173 1.1
OPERATING INCOME (LOSS) (in thousands)
2005 2004 % Change
Home Appliances $47,664 $36,604 30.2
Commercial Products (3,903) (6,410) 39.1
Reported $43,761 $30,194 44.9
Included in operating income (loss)
Restructuring and related
charges-Home Appliances $7,872 $35,778
Front-load washer litigation-
Home Appliances - 18,500
Restructuring and related
charges-Commercial Products 362 69
Goodwill impairment-Commercial
Products - 9,600
NET INCOME (LOSS) (in thousands)
2005 2004 % Change
Reported $11,213 $(2,360) 575.1
Included in net income (loss) (net
of tax)
Restructuring and related charges $5,393 $24,196
Goodwill impairment-Commercial
Products - 9,600
Front-load washer litigation - 12,488
Adverse judgment on pre-
acquisition distributor lawsuit - 7,091
BASIC EARNINGS (LOSS) PER SHARE
2005 2004 % Change
Reported $0.14 $(0.03) 570.6
Included in basic earnings (loss)
per share (net of tax)
Restructuring and related charges $0.07 $0.31
Goodwill impairment-Commercial
Products - 0.12
Front-load washer litigation - 0.16
Adverse judgment on pre-
acquisition distributor lawsuit - 0.09
Basic weighted-average shares
outstanding (thousands) 79,690 78,929
DILUTED EARNINGS (LOSS) PER SHARE
2005 2004 % Change
Reported $0.14 $(0.03) 570.6
Included in diluted earnings (loss)
per share (net of tax)
Restructuring and related charges 0.07 $0.31
Goodwill impairment-Commercial
Products - 0.12
Front-load washer litigation - 0.16
Adverse judgment on pre-
acquisition distributor lawsuit - 0.09
Diluted weighted-average shares
outstanding (thousands) 79,690 78,929
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
Second Quarter Ended Six Months Ended
July 2 July 3 July 2 July 3
2005 2004 2005 2004
Net sales $1,229,718 $1,152,229 $2,397,557 $2,371,173
Cost of sales 1,093,858 1,003,726 2,132,627 2,011,549
Gross profit 135,860 148,503 264,930 359,624
Selling, general and
administrative expenses 112,805 125,989 212,935 265,483
Restructuring and related
charges 3,380 27,852 8,234 35,847
Goodwill impairment-
Commercial Products - 9,600 - 9,600
Front-load washer
litigation - 18,500 - 18,500
Operating income (loss) 19,675 (33,438) 43,761 30,194
Interest expense (16,278) (13,215) (32,053) (26,106)
Adverse judgment on pre-
acquisition distributor
lawsuit - (10,505) - (10,505)
Other-net 815 55 3,243 2,921
Income (loss) before
income taxes 4,212 (57,103) 14,951 (3,496)
Income tax expense (benefit) 731 (16,019) 3,738 (1,136)
Net income (loss) $3,481 $(41,084) $11,213 $(2,360)
Basic earnings (loss) per
common share:
Net income (loss) $0.04 $(0.52) $0.14 $(0.03)
Basic weighted-average
shares outstanding 79,818 79,012 79,690 78,929
Diluted earnings (loss)
per common share:
Net income (loss) $0.04 $(0.52) $0.14 $(0.03)
Diluted weighted-average
shares outstanding 79,818 79,012 79,690 78,929
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 2 January 1 July 3
2005 2005 2004
ASSETS (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $69,015 $164,276 $7,492
Accounts receivable - net 724,544 629,901 636,929
Inventories 604,383 515,321 591,588
Deferred income taxes 52,973 55,862 61,335
Other current assets 45,419 80,137 89,329
Discontinued current assets - - 69,941
Total current assets 1,496,334 1,445,497 1,456,614
Noncurrent assets 653,626 653,365 574,949
Discontinued noncurrent assets - - 61,069
Total noncurrent assets 653,626 653,365 636,018
Property, plant and equipment 869,157 921,162 991,443
Total assets $3,019,117 $3,020,024 $3,084,075
LIABILITIES AND SHAREOWNERS' EQUITY
(DEFICIT)
Current liabilities
Accounts payable $553,169 $545,901 $423,950
Accrued liabilities 356,623 358,119 334,507
Notes payable and current portion
of long-term debt 188,977 6,043 223,982
Discontinued current liabilities - - 100,962
Total current liabilities 1,098,769 910,063 1,083,401
Long-term debt, less current portion 787,839 972,568 870,546
Postretirement benefit liability 528,436 531,995 541,380
Accrued pension cost 504,133 496,480 337,407
Other noncurrent liabilities 177,418 183,942 188,888
Total discontinued noncurrent
liabilities - - 18,766
Shareowners' equity (deficit) (77,478) (75,024) 43,687
Total liabilities and
shareowners' equity (deficit) $3,019,117 $3,020,024 $3,084,075
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Six Months Ended
July 2 July 3
2005 2004
Operating activities
Net income (loss) $11,213 $(2,360)
Depreciation and amortization 82,842 84,066
Deferred income taxes (8,707) 21,903
Restructuring and related charges,
net of cash (14,735) 29,032
Goodwill impairment-Commercial Products - 9,600
Front-load washer litigation, net of
cash paid (4,292) 18,500
Adverse judgment on pre-acquisition
distributor lawsuit (12,250) 10,505
Change in working capital (178,445) (207,738)
Pension expense 35,509 31,866
Pension contributions (27,849) (92,744)
Postretirement benefit liability (3,559) 3,275
Other 72,849 45,133
Net cash used in operating activities (47,424) (48,962)
Investing activities
Proceeds from business disposition,
net of transaction costs 11,123 -
Capital expenditures (35,601) (48,872)
Investing activities (24,478) (48,872)
Financing activities
Net proceeds of notes payable - 129,484
Dividends on common stock (21,490) (28,395)
Repayment of long-term debt (2,518) (4,020)
Stock options and employee stock 1,722 1,975
Other (1,025) (276)
Financing activities (23,311) 98,768
Effect of exchange rates (48) (198)
Increase (decrease) in cash and
cash equivalents (95,261) 736
Cash and cash equivalents at
beginning of period 164,276 6,756
Cash and cash equivalents at end
of period $69,015 $7,492
SOURCE Maytag Corporation
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http://www.maytagcorp.com
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CONTACT:
John Daggett, Maytag Corporate
Communications, +1-641-787-7711, john.daggett@maytag.com
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