-- Consolidated sales increased 3 percent sequentially from the second
quarter, led by sales increases in major appliances; Hoover floor care
sales were up slightly when compared to the second quarter.
-- Operating performance improved sequentially as a result of the higher
sales volumes and the savings from 'One Company' restructuring despite
cost increases in steel and other materials.
-- Several milestones were accomplished including the successful 'One
Company' systems conversion, a new Amana labor agreement and sale of
Maytag's interest in a joint venture in China.
-- Positive cash flow enabled the company to reduce total debt levels by
approximately $100 million and increase cash by $50 million from the
second quarter.
-- Unfavorable year-over-year comparisons were caused primarily by
accelerating steel costs and lower Hoover floor care sales and
margins.
NEWTON, IOWA, Oct. 21 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) today reported third quarter consolidated sales of $1.19 billion,
down 3 percent from sales of $1.22 billion in the same period last year. Net
income for the third quarter of 2004 was $7.5 million or 9 cents per share,
compared with $36.6 million or 46 cents per share a year ago.
While year-over-year comparisons are unfavorable, the company pointed out
that progress has been made with sequential improvements from the second
quarter to the third quarter of this year. Consolidated sales are up 3
percent from $1.15 billion in the second quarter. Third quarter net income of
$7.5 million or 9 cents per share was an improvement over the second quarter's
net loss of $41.1 million or 52 cents per share. Included in the third quarter
are restructuring and related charges of 16 cents per share for the Galesburg
closure and "One Company" reorganization, as well as a gain of 10 cents per
share from the sale of a Canadian warehouse.
The sequential improvements in the third quarter resulted primarily from
higher sales in major appliances and savings from cost-reduction efforts. The
improvement was achieved despite significantly higher steel and energy-related
costs.
Unfavorable year-over-year comparisons were caused primarily by lower
Hoover floor care sales volumes and pricing, as well as higher steel costs.
The third quarter diluted earnings per share for 2004 and 2003 included the
following items:
Three Months Ended
October 2 September 27
2004 2003
Diluted Earnings Per Share $0.09 $0.46
Included in diluted earnings per share (net of tax)
were the following items:
Restructuring and related charges - Galesburg
plant closing and reorganizations 0.16 0.11
Gain on sale of property-Home Appliances (0.10) -
Income from discontinued operations - (0.02)
Commenting on the third quarter, Maytag chairman and CEO Ralph Hake
stated, "We accomplished a great deal in the third quarter with the sequential
improvement in sales and operating income. We are taking the right actions to
improve Maytag's performance going forward. Our 'One Company' restructuring,
which consolidates Hoover floor care, Maytag Appliances and corporate
organizations, is on track for $150 million in annual savings and lowered our
costs in the third quarter. We successfully completed the systems conversion
required for the 'One Company' consolidation. Also in the third quarter, we
made significant progress in cash flow and lowered inventories from the
previous quarter, reached a new labor agreement at our Amana plant, and
completed the sale of our joint venture in China."
Operating results for the third quarter were impacted by a charge of
$7.2 million recorded in connection with the "One Company" restructuring.
Restructuring charges of $11.9 million were recorded in connection with
closing the Galesburg plant. Annual savings of $30 million from the closing
of the plant are anticipated to start in the fourth quarter of 2004.
Cash flow in the third quarter was favorably impacted by improvements in
working capital levels gained from lower inventories, lower capital
expenditures and higher accounts payable, by the sale of Maytag's warehouse in
Burlington, Ontario, and by the completion of the sale of Maytag's interest in
a joint venture in China. The positive cash flow performance enabled the
company to reduce total debt levels by approximately $100 million and increase
cash and cash equivalents by $50 million from the second quarter.
Commenting on earnings expectations for the fourth quarter, Hake said that
the company expects reported earnings per share in the range of 5 to 10 cents.
This guidance includes restructuring and related charges of approximately 10
cents per share.
Effective with the third quarter of 2004, Maytag changed its segment
reporting from three segments to two, as the company aligned its segment
reporting to reflect its major restructuring effort to consolidate Hoover
floor care, Maytag Appliances and Corporate Headquarters organizations. The
new reporting segments are Home Appliances, which includes major appliances
and floor care products as well as the company's international export business
and service operations, and Commercial Products, which includes vending
equipment and commercial cooking products. Net sales and operating income have
been reclassified for the new segments for 2003 and 2004 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 SEC Filings.
Nine-Month Performance
Maytag's sales increased 1.1 percent to $3.56 billion in the first nine
months of 2004 compared with $3.52 billion the prior year. Operating income
was $46.6 million, down from $181.0 million reported for the first nine months
of 2003.
Net income for the first nine months of 2004 was $5.1 million or 6 cents
per share, compared with $96.3 million or $1.22 per share reported for the
first nine months of 2003.
The diluted earnings per share for the first nine months of 2004 and 2003
included the following items:
Nine Months Ended
October 2 September 27
2004 2003
Diluted Earnings Per Share $0.06 $1.22
Included in diluted earnings per share (net of tax)
were the following items:
Restructuring and related charges
- Galesburg plant closing 0.29 0.29
Restructuring and related charges
- reorganizations 0.18 0.14
Goodwill impairment-Commercial Products 0.12 -
Front-load washer litigation 0.16 -
Adverse judgment on pre-acquisition
distributor lawsuit 0.09 -
Gain on sale of property-Home Appliances (0.10) -
Income from discontinued operations - (0.01)
Maytag's Home Appliances segment had nine-month sales of $3.35 billion, up
slightly from sales of $3.28 billion in the first nine months of 2003.
Operating income for the segment was $52.3 million, down from $161.6 million
in last year's nine-month period.
The Commercial Products segment reported nine month sales of
$211.0 million and operating loss of $5.7 million. In the first nine months of
2003, the segment had sales of $236.4 million and operating income of
$19.4 million.
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 800-633-8414
at 8:20 a.m. CT (international participants should dial 212-346-6538.) The
conference call will be recorded and available by telephone from 10:30 a.m. CT
Oct. 21 until 10:30 a.m. CT Oct. 23. Persons interested in listening to the
conference call tape should call 800-633-8284 (or internationally
402-977-9140) and use access code number 21210440.
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.
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).
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.
THIRD QUARTER SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2004 2003 % Change
Home Appliances $1,123,801 $1,145,856 (1.9)
Commercial Products 62,217 75,411 (17.5)
Consolidated $1,186,018 $1,221,267 (2.9)
OPERATING INCOME (in thousands)
2004 2003 % Change
Home Appliances $15,715 $55,813 (71.8)
Commercial Products 711 5,550 (87.2)
Reported $16,426 $61,363 (73.2)
Included in operating income
Restructuring and related
charges-Home Appliances $18,981 $13,060
Gain on sale of property (9,711) -
Restructuring and related
charges-Commercial Products 81 83
$9,351 $13,143
NET INCOME (in thousands)
2004 2003 % Change
Reported $7,474 $36,565 (79.6)
Included in net income (net of tax)
Restructuring and related charges $12,867 $8,806
Gain on sale of property (7,769) -
Income from discontinued operations (339) (1,247)
Total $4,759 $7,559
BASIC EARNINGS PER SHARE
2004 2003 % Change
Reported $0.09 $0.47 (79.7)
Included in basic earnings per
share (net of tax)
Restructuring and related charges $0.16 $0.11
Gain on sale of property (0.10) -
Income from discontinued operations (0.00) (0.02)
*Total $0.06 $0.10
Basic weighted-average shares
outstanding (thousands) 79,116 78,588
DILUTED EARNINGS PER SHARE
2004 2003 % Change
Reported $0.09 $0.46 (79.7)
Included in diluted earnings per
share (net of tax)
Restructuring and related charges $0.16 $0.11
Gain on sale of property (0.10) -
Income from discontinued operations (0.00) (0.02)
*Total $0.06 $0.10
Diluted weighted-average shares
outstanding (thousands) 79,182 78,813
*Totals may not be additive due to rounding
NINE MONTHS SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2004 2003 % Change
Home Appliances $3,346,229 $3,283,726 1.9
Commercial Products 210,961 236,440 (10.8)
Consolidated $3,557,190 $3,520,166 1.1
OPERATING INCOME (LOSS) (in thousands)
2004 2003 % Change
Home Appliances $52,319 $161,565 (67.6)
Commercial Products (5,699) 19,396 (129.4)
Reported $46,620 $180,961 (74.2)
Included in operating income (loss)
Restructuring and related
charges-Home Appliances $54,760 $50,243
Front-load washer litigation-
Home Appliances 18,500 -
Gain on sale of property (9,711) -
Restructuring and related
charges-Commercial Products 149 215
Goodwill impairment-Commercial
Products 9,600 -
$73,298 $50,458
NET INCOME (in thousands)
2004 2003 % Change
Reported $5,114 $96,279 (94.7)
Included in net income (net of tax)
Restructuring and related charges $37,064 $33,806
Goodwill impairment-Commercial
Products 9,600 -
Front-load washer litigation 12,488 -
Adverse judgment on pre-
acquisition distributor lawsuit 7,091 -
Gain on sale of property (7,769) -
Income from discontinued
operations (339) (844)
Total $58,135 $32,962
BASIC EARNINGS PER SHARE
2004 2003 % Change
Reported $0.06 $1.23 (94.7)
Included in basic earnings per
share (net of tax)
Restructuring and related charges $0.47 $0.43
Goodwill impairment-Commercial
Products 0.12 -
Front-load washer litigation 0.16 -
Adverse judgment on pre-
acquisition distributor lawsuit 0.09 -
Gain on sale of property (0.10) -
Income from discontinued operations (0.00) (0.01)
*Total $0.74 $0.42
Basic weighted-average shares
outstanding (thousands) 78,992 78,473
DILUTED EARNINGS PER SHARE
2004 2003 % Change
Reported $0.06 $1.22 (94.7)
Included in diluted earnings per
share (net of tax)
Restructuring and related charges $0.47 $0.43
Goodwill impairment-Commercial
Products 0.12 -
Front-load washer litigation 0.16 -
Adverse judgment on pre-
acquisition distributor lawsuit 0.09 -
Gain on sale of property (0.10) -
Income from discontinued operations (0.00) (0.01)
*Total $0.73 $0.42
Diluted weighted-average shares
outstanding (thousands) 79,224 78,669
*Totals may not be additive due to rounding
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
Third Quarter Ended Nine Months Ended
October 2 September 27 October 2 September 27
2004 2003 2004 2003
Net sales $1,186,018 $1,221,267 $3,557,190 $3,520,166
Cost of sales 1,028,130 1,000,269 3,039,678 2,885,035
Gross profit 157,888 220,998 517,512 635,131
Selling, general and
administrative expenses 122,400 146,492 387,883 403,712
Restructuring and related
charges 19,062 13,143 54,909 50,458
Goodwill impairment-
Commercial Products - - 9,600 -
Front-load washer
litigation - - 18,500 -
Operating income 16,426 61,363 46,620 180,961
Interest expense (14,736) (12,728) (40,843) (40,786)
Adverse judgment on pre-
acquisition distributor
lawsuit - - (10,505) -
Other income 4,326 4,078 7,248 2,265
Income from continuing
operations before income
taxes 6,016 52,713 2,520 142,440
Income taxes (1,119) 17,395 (2,255) 47,005
Income from continuing
operations 7,135 35,318 4,775 95,435
Income from discontinued
operations, net of tax 339 1,247 339 844
Net income $7,474 $36,565 $5,114 $96,279
Basic earnings per common share:
Income from continuing
operations $0.09 $0.45 $0.06 $1.22
Discontinued operations 0.00 0.02 0.00 0.01
Net income $0.09 $0.47 $0.06 $1.23
Basic weighted-average
shares outstanding 79,116 78,588 78,992 78,473
Diluted earnings per
common share:
Income from continuing
operations $0.09 $0.45 $0.06 $1.21
Discontinued operations 0.00 0.02 0.00 0.01
Net income $0.09 $0.46 $0.06 $1.22
Diluted weighted-average
shares outstanding 79,182 78,813 79,224 78,669
Earnings per share totals may not be additive due to rounding
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 2 January 3 September 27
2004 2004 2003
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $57,758 $6,756 $3,145
Accounts receivable - net 670,079 596,832 704,390
Inventories 572,612 468,345 482,822
Deferred income taxes 48,943 63,185 67,558
Other current assets 57,114 94,030 43,391
Discontinued current assets - 75,175 72,873
Total current assets 1,406,506 1,304,323 1,374,179
Noncurrent assets 583,755 612,546 598,682
Discontinued noncurrent assets - 60,336 59,624
Total noncurrent assets 583,755 672,882 658,306
Property, plant and equipment 949,760 1,046,935 1,054,881
Total assets $2,940,021 $3,024,140 $3,087,366
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Accounts payable $471,812 $466,734 $397,698
Accrued liabilities 374,358 315,323 358,409
Notes payable and current portion
of long-term debt 23,007 95,994 128,869
Discontinued current liabilities - 105,739 102,719
Total current liabilities 869,177 983,790 987,695
Long-term debt, less current portion 973,278 874,832 898,372
Postretirement benefit liability 535,343 538,105 533,918
Accrued pension cost 351,874 398,495 403,938
Other noncurrent liabilities 170,407 144,341 127,447
Total discontinued noncurrent liabilities - 18,766 18,766
Shareowners' equity 39,942 65,811 117,230
Total liabilities and
shareowners' equity $2,940,021 $3,024,140 $3,087,366
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Nine Months Ended
October 2 September 27
2004 2003
Operating activities
Net income $5,114 $96,279
Net income from discontinued operations (339) (844)
Depreciation and amortization 128,036 122,185
Deferred income taxes 29,723 39,850
Gain on sale of property (9,711) -
Restructuring and related charges,
net of cash 40,545 36,258
Goodwill impairment-Commercial Products 9,600 -
Front-load washer litigation, net of
cash paid 9,832 -
Adverse judgment on pre-acquisition
distributor lawsuit 10,505 -
Change in working capital (173,624) (87,005)
Pension expense 47,426 48,025
Pension contributions (93,471) (137,444)
Postretirement benefit liability (2,762) 16,408
Other 106,823 102,119
Net cash provided by continuing
operating activities 107,697 235,831
Investing activities
Proceeds from business disposition,
net of transaction costs 11,248 13,168
Proceeds from property disposition,
net of transaction costs 14,251 -
Capital expenditures-continuing
operations (67,036) (133,082)
Investing activities-continuing
operations (41,537) (119,914)
Financing activities
Net proceeds (reduction) in financing
obligations 24,489 (77,211)
Dividends (42,623) (42,351)
Stock repurchases - (1,021)
Other 3,078 (331)
Financing activities-continuing
operations (15,056) (120,914)
Effect of exchange rates (102) 36
Increase (decrease) in cash and
cash equivalents 51,002 (4,961)
Cash and cash equivalents at
beginning of period 6,756 8,106
Cash and cash equivalents at end
of period $57,758 $3,145
SOURCE Maytag Corporation
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CONTACT:
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