NEWTON, Iowa, Sept. 19 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) said today that its results for the third quarter and full-year
2005 will be significantly lower than the guidance previously provided by the
company due to higher costs negatively impacting performance. The burden of
its high manufacturing overhead, increasing distribution and fuel expenses,
and rising raw material costs are the primary drivers of these cost increases.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO )
Ralph F. Hake, Maytag's chairman and CEO said, "Although we are
disappointed in these cost increases, our top-line sales projections are
strong compared to last year."
Hake noted that despite the uncertainty in recent months surrounding the
pending sale of Maytag, the company achieved high single-digit sales growth in
its major appliances product lines through the first two months of the third
quarter. He also pointed out that excess manufacturing capacity is still one
of Maytag's biggest issues impacting earnings.
"Our fixed cost structure remains a barrier to acceptable financial
performance, and we intend to address this issue," Hake said. "The actions we
take might require restructuring charges, including asset write-offs,
accelerated depreciation and certain cash costs. These actions will need to
be undertaken irrespective of the pending merger with Whirlpool."
The company stated that in addition to cost increases, unfavorable product
pricing/mix, primarily in floor care, continues to adversely impact results.
The company also anticipates recording significant merger and acquisition
expenses related to the pending acquisition in the third and fourth quarters
of this year.
As a result, Maytag projects that its full year 2005 results will be
significantly lower than the guidance previously provided by the company, and
Maytag expects to report a loss before any restructuring charges in the third
quarter. Due to the current business performance and uncertainty associated
with the manufacturing restructuring, Maytag will no longer provide any
earnings guidance.
In addition, given the expectation that the merger with Whirlpool may not
close prior to the first quarter of 2006, the company has decided to move
forward to complete the new asset-based $600 million five-year, senior secured
revolving credit facility contemplated by the commitment letter previously
announced by the company in June 2005 and which expires on December 30, 2005.
The new facility will replace the current $300 million credit facility and is
expected to be completed early in the fourth quarter of 2005. The new credit
facility is expected to be led by J.P. Morgan Chase Bank, N.A. and Citigroup
Global Markets, Inc. and secured by accounts receivable and inventory of
certain Maytag subsidiaries.
Maytag expects to announce its third quarter 2005 sales and earnings
results on Friday, October 21, 2005.
Maytag Corporation is a $4.7 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).
Maytag Additional Information:
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 anticipated future financial operating
performance and results, expectation as to the closing of the transaction with
Whirlpool and expectation as to the completion of the new credit facility.
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)
Maytag may be unable to obtain shareholder approval required for the
transaction; (2) conditions to the closing of the transaction may not be
satisfied or the merger agreement may be terminated prior to closing; (3)
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; (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 Relating to the Proposed Merger with Whirlpool and
Where to Find It
Whirlpool and Maytag will file a prospectus/proxy statement with the SEC
in connection with the proposed transaction. Investors are urged to read any
such prospectus/proxy statement, when available, which will contain important
information. The prospectus/proxy statement will be, and other documents filed
by Whirlpool and Maytag with the SEC are, available free of charge at the
SEC's website ( http://www.sec.gov ) or from Whirlpool by directing a request
to Whirlpool Corporation, 2000 North M-63, Mail Drop 2800, Benton Harbor, MI
49022-2692, Attention: Larry Venturelli, Vice President, Investor Relations,
or from Maytag Corporation's Web site at http://www.maytagcorp.com . Neither
this communication nor the prospectus/proxy statement, when available, will
constitute an offer to issue Whirlpool common stock in any jurisdiction
outside the United States where such offer or issuance would be prohibited --
such an offer or issuance will only be made in accordance with the applicable
laws of such jurisdiction.
Whirlpool, Maytag and their respective directors, executive officers, and
other employees may be deemed to be participating in the solicitation of
proxies from Maytag stockholders in connection with the approval of the
proposed transaction. Information about Whirlpool's directors and executive
officers is available in Whirlpool's proxy statement, dated March 18, 2005,
for its 2005 annual meeting of stockholders. Information about Maytag's
directors and executive officers is available in Maytag's proxy statement,
dated April 4, 2005, for its 2005 annual meeting of stockholders. Additional
information about the interests of potential participants will be included in
the prospectus/proxy statement Whirlpool and Maytag will file with the SEC.
Media Contact: John Daggett
Maytag Corporate Communications
(641) 787-7711
john.daggett@maytag.com
SOURCE Maytag Corporation
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Related links:
http://www.maytagcorp.com
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CONTACT:
John Daggett of Maytag Corporate
Communications, +1-641-787-7711, john.daggett@maytag.com
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