NEWTON, Iowa, Oct. 21 /PRNewswire-FirstCall/ -- Maytag Corporation
(NYSE: MYG) today reported third quarter consolidated net sales of
$1.26 billion, up 6.5 percent from net sales of $1.19 billion in the same
period last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO )
Reported net loss for the third quarter was $18.2 million or 23 cents per
share, compared with net income of $7.5 million, or 9 cents per share, a year
earlier. Diluted earnings (loss) per share for the third quarters of 2005 and
2004 included the following items:
Three Months Ended
Oct. 1 Oct. 2
2005 2004
Diluted Earnings (Loss) Per Share $(0.23) $0.09
Included in diluted earnings (loss)
per share (net of tax)
were the following items:
Restructuring and related charges - Galesburg 0.01 0.10
Restructuring and related charges -
reorganization 0.01 0.06
Gain on sale of property - (0.10)
In the third quarter, Home Appliances net sales were up 6.7 percent driven
largely by increases in major appliances net sales. In addition, Maytag
Services continued to show strong revenue growth versus a year ago. Compared
to the prior year period, net sales of floor care products in the third
quarter were down despite an increase in unit sales. This net sales decrease
was due to a continued decline of floor care product pricing and mix.
Commercial Products net sales were up 2.5 percent compared to the same period
last year.
Ralph Hake, chairman and CEO, noted, "Despite the top-line sales
successes, our excess manufacturing capacity in some product categories
continues to worsen as consumer demand shifts to our products that we source
from lower cost manufacturers. Also, higher raw material and transportation
costs primarily driven by increases in oil prices negatively impacted the
quarter."
In addition to these expenses, $8.5 million of net merger-related expenses
impacted the quarter.
"Maytag experienced strong growth in key product categories and that again
is indicating that consumers and our trade partners believe in and are
purchasing the Maytag family of quality products and brands," said Hake.
"During the quarter, there were strong sales gains in refrigeration and
laundry, as well as solid growth in Jenn-Air branded appliances."
Hake stated, "Our performance demonstrates the need to urgently address
our specific excess manufacturing capacity issues and eliminate these barriers
to cost competitiveness and acceptable financial performance. We remain
committed to address these issues. The actions we take could include
restructuring charges, asset impairments and/or accelerated depreciation
related to the affected operations and certain cash costs. We continue to
analyze various alternatives to address these structural costs."
The company also said that a new asset-based $600 million five-year,
senior secured revolving credit facility is expected to close early in the
fourth quarter. The new facility will replace the current $300 million credit
facility. The new credit facility is expected to provide Maytag with
substantially more financial capacity and flexibility to meet its 2006 debt
maturities and its long-term financing requirements. Maytag would have the
ability to increase the new credit facility by $150 million to $750 million.
On August 22, 2005, Maytag and Whirlpool signed a definitive merger
agreement in which Whirlpool will acquire all outstanding shares of Maytag in
a cash and stock merger. A preliminary prospectus/proxy statement has been
filed with the Securities and Exchange Commission (SEC) and both parties are
working closely with the Antitrust Division of the U. S. Department of Justice
in its ongoing review of the proposed merger. Maytag and Whirlpool continue
to expect the transaction to close as early as the first quarter of 2006,
following approval from Maytag stockholders and regulatory clearance.
The Maytag Board of Directors has scheduled a special meeting of
stockholders for December 16, 2005, to consider and vote on the adoption of
the merger agreement. Stockholders of record of Maytag as of November 2,
2005, will be entitled to vote on the transaction.
Nine-Month Performance
Maytag's net sales in the first nine months of 2005 were $3.66 billion, up
2.9 percent from net sales of $3.56 billion in the first nine months of 2004.
Operating income was $43.2 million, down 7.4 percent from $46.6 million
reported in the same year-earlier period. Last year, operating income was
negatively impacted by an $18.5 million charge for front-load washer
litigation and nearly $55 million of restructuring and related charges,
compared to about $11 million in the current year.
Reported net loss for the first nine months of 2005 was $7.0 million, or
9 cents per share. In the first nine months of 2004, Maytag reported net
income of $5.1 million, or 6 cents per share. Diluted earnings (loss) per
share for the first nine months of 2005 and 2004 included the following items:
Nine Months Ended
Oct. 1 Oct. 2
2005 2004
Diluted Earnings (Loss) Per Share $(0.09) $0.06
Included in diluted earnings (loss)
per share (net of tax)
were the following items:
Restructuring and related charges - Galesburg 0.03 0.29
Restructuring and related charges -
reorganization 0.06 0.18
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)
For the first nine months of 2005, cash flow used in operations was
$29.6 million, compared to cash flow provided by operations of $107.7 million
for the first nine months of 2004. Cash flow was impacted by a larger
increase in working capital in the current year as well as cash payments on
restructuring charges and litigation related charges paid in the current year,
but recorded in the prior year. The company also said that it has already
made $50 million in voluntary contributions to the qualified pension plan this
year. For the remainder of 2005, the company does not expect to make
additional contributions.
About Maytag Corporation
Maytag Corporation is a $4.8 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).
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 888-323-2711 at 8:20 a.m. CT
(international participants should dial 210-234-0004) and use the pass code
Maytag. The conference call will be recorded and available by telephone from
10:30 a.m. CT October 21 until 10:30 a.m. CT October 25. Persons interested
in listening to the conference call tape should call 800-337-5635 or
internationally 402-220-9654.
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 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
speak only as of this date and include statements regarding anticipated future
financial operating performance and results and expectations as to the closing
of the transaction with Whirlpool. 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 and Where to Find
It
Whirlpool and Maytag have filed a preliminary prospectus/proxy statement
with the SEC in connection with the proposed transaction. Investors are urged
to read the preliminary prospectus/proxy statement, and any other relevant
documents filed or to be filed by Whirlpool or Maytag, including the
definitive prospectus/proxy statement when available, because they contain or
will contain important information. The preliminary prospectus/proxy
statement is, 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. Neither this communication
nor the preliminary prospectus/proxy statement constitutes an offer to sell or
the solicitation of an offer to buy 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 is included in the
preliminary prospectus/proxy statement Whirlpool and Maytag filed with the
SEC.
THIRD QUARTER SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2005 2004 % Change
Home Appliances $1,199,075 $1,123,801 6.7
Commercial Products 63,791 62,217 2.5
Consolidated $1,262,866 $1,186,018 6.5
OPERATING INCOME (LOSS) (in thousands)
2005 2004 % Change
Home Appliances $39 $15,715 (99.8)
Commercial Products (621) 711 (187.3)
Reported $(582) $16,426 (103.5)
Included in operating income (loss)
Restructuring and related
charges-Home Appliances $2,417 $18,981
Gain on sale of property - (9,711)
Restructuring and related
charges-Commercial Products - 81
NET INCOME (LOSS) (in thousands)
2005 2004 % Change
Reported $(18,170) $7,474 (343.1)
Included in net income (loss) (net
of tax)
Restructuring and related
charges $1,502 $12,867
Gain on sale of property - (7,769)
Income from discontinued
operations - (339)
BASIC EARNINGS (LOSS) PER SHARE
2005 2004 % Change
Reported $(0.23) $0.09 (341.0)
Included in basic earnings (loss)
per share (net of tax)
Restructuring and related
charges $0.02 $0.16
Gain on sale of property - (0.10)
Income from discontinued
operations - (0.00)
Basic weighted-average shares
outstanding (thousands) 79,810 79,116
DILUTED EARNINGS (LOSS) PER SHARE
2005 2004 % Change
Reported $(0.23) $0.09 (341.2)
Included in diluted earnings (loss)
per share (net of tax)
Restructuring and related
charges $0.02 $0.16
Gain on sale of property - (0.10)
Income from discontinued
operations - (0.00)
Diluted weighted-average shares
outstanding (thousands) 79,810 79,182
NINE MONTHS SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2005 2004 % Change
Home Appliances $3,475,521 $3,346,229 3.9
Commercial Products 184,902 210,961 (12.4)
Consolidated $3,660,423 $3,557,190 2.9
OPERATING INCOME (LOSS) (in thousands)
2005 2004 % Change
Home Appliances $47,703 $52,319 (8.8)
Commercial Products (4,524) (5,699) 20.6
Reported $43,179 $46,620 (7.4)
Included in operating income (loss)
Restructuring and related
charges-Home Appliances $10,289 $54,760
Front-load washer litigation-
Home Appliances - 18,500
Gain on sale of property - (9,711)
Restructuring and related
charges-Commercial Products 362 149
Goodwill impairment-Commercial
Products - 9,600
NET INCOME (LOSS) (in thousands)
2005 2004 % Change
Reported $(6,957) $5,114 (236.0)
Included in net income (loss) (net
of tax)
Restructuring and related
charges $6,895 $37,064
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)
BASIC EARNINGS (LOSS) PER SHARE
2005 2004 % Change
Reported $(0.09) $0.06 (234.6)
Included in basic earnings (loss)
per share (net of tax)
Restructuring and related
charges $0.09 $0.47
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)
Basic weighted-average shares
outstanding (thousands) 79,813 78,992
DILUTED EARNINGS (LOSS) PER SHARE
2005 2004 % Change
Reported $(0.09) $0.06 (235.0)
Included in diluted earnings (loss)
per share (net of tax)
Restructuring and related
charges 0.09 $0.47
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)
Diluted weighted-average shares
outstanding (thousands) 79,813 79,224
MAYTAG CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
Third Quarter Ended Nine Months Ended
October 1 October 2 October 1 October 2
2005 2004 2005 2004
Net sales $1,262,866 $1,186,018 $3,660,423 $3,557,190
Cost of sales 1,145,232 1,028,130 3,277,859 3,039,678
Gross profit 117,634 157,888 382,564 517,512
Selling, general and
administrative expenses 115,799 122,400 328,734 387,883
Restructuring and related
charges 2,417 19,062 10,651 54,909
Goodwill impairment-
Commercial Products - - - 9,600
Front-load washer
litigation - - - 18,500
Operating income
(loss) (582) 16,426 43,179 46,620
Interest expense (16,794) (14,736) (48,847) (40,843)
Adverse judgment on pre-
acquisition distributor
lawsuit - - - (10,505)
Merger-related expense,
net
(includes $40 million
Triton termination fee
and $40 million
reimbursement by
Whirlpool) (8,468) - (9,516) -
Other-net (1,531) 4,326 2,760 7,248
Income (loss) before
income taxes (27,375) 6,016 (12,424) 2,520
Income tax benefit (9,205) (1,119) (5,467) (2,255)
Income (loss) from
continuing
operations (18,170) 7,135 (6,957) 4,775
Income from
discontinued
operations, net of
tax - 339 - 339
Net income (loss) $(18,170) $7,474 $(6,957) $5,114
Basic earnings (loss) per
common share:
Income (loss) from
continuing
operations $(0.23) $0.09 $(0.09) $0.06
Discontinued
operations - 0.00 - 0.00
Basic weighted-average
shares outstanding 79,810 79,116 79,813 78,992
Diluted earnings (loss)
per common share:
Income (loss) from
continuing
operations $(0.23) $0.09 $(0.09) $0.06
Discontinued
operations - 0.00 - 0.00
Diluted weighted-average
shares outstanding 79,810 79,182 79,813 79,224
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 1 January 1 October 2
2005 2005 2004
ASSETS (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $57,168 $164,276 $57,758
Accounts receivable - net 725,162 629,901 670,079
Inventories 620,755 515,321 572,612
Deferred income taxes 56,488 55,862 48,943
Prepaids and other current assets 32,076 80,137 57,114
Total current assets 1,491,649 1,445,497 1,406,506
Noncurrent assets 644,177 653,365 583,755
Property, plant and equipment 853,108 921,162 949,760
Total assets $2,988,934 $3,020,024 $2,940,021
LIABILITIES AND SHAREOWNERS' EQUITY
(DEFICIT)
Current liabilities
Accounts payable $540,400 $545,901 $471,812
Accrued liabilities 365,016 358,119 374,358
Notes payable and
current portion of long-term debt 215,126 6,043 23,007
Total current liabilities 1,120,542 910,063 869,177
Long-term debt, less current portion 759,066 972,568 973,278
Postretirement benefit liability 525,406 531,995 535,343
Accrued pension cost 498,202 496,480 351,874
Other noncurrent liabilities 181,094 183,942 170,407
Shareowners' equity (deficit) (95,376) (75,024) 39,942
Total liabilities and
shareowners' equity (deficit) $2,988,934 $3,020,024 $2,940,021
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
October 1 October 2
2005 2004
Operating activities
Net income (loss) $(6,957) $5,114
Net income from discontinued
operations - (339)
Depreciation and amortization 125,186 128,036
Deferred income taxes (8,536) 29,723
Loss (gain) on sale of property 534 (9,711)
Restructuring and related charges,
net of cash (13,828) 40,545
Goodwill impairment-Commercial
Products - 9,600
Front-load washer litigation, net of
cash paid (8,922) 9,832
Adverse judgment on pre-acquisition
distributor lawsuit (12,250) 10,505
Change in working capital (205,738) (173,624)
Pension expense 53,810 47,426
Pension contributions (51,873) (93,471)
Postretirement benefit liability (6,589) (2,762)
Other 105,602 106,823
Net cash provided by (used in)
operating activities (29,561) 107,697
Investing activities
Proceeds from business disposition,
net of transaction costs - 11,248
Proceeds from property dispositions,
net of transaction costs 15,768 14,251
Capital expenditures (64,746) (67,036)
Investing activities (48,978) (41,537)
Financing activities
Net reduction of notes payable - (71,491)
Proceeds from issuance of long-term
debt - 100,000
Repayment of long-term debt (2,518) (4,020)
Stock options and employee stock 3,756 3,361
Dividends on common stock (28,692) (42,623)
Other (1,025) (283)
Financing activities (28,479) (15,056)
Effect of exchange rates (90) (102)
Increase (decrease) in cash and
cash equivalents (107,108) 51,002
Cash and cash equivalents at
beginning of period 164,276 6,756
Cash and cash equivalents at end
of period $57,168 $57,758
Media Contact: John Daggett
Maytag Corporate Communications
(641) 787-7711
john.daggett@maytag.com
SOURCE Maytag Corporation
 back to top
Related links:
http://www.maytagcorp.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
John Daggett of Maytag Corporate
Communications, +1-641-787-7711, or john.daggett@maytag.com
|
