Exhibit 99
Maytag’s Second Quarter Sales and Earnings on Target
NEWTON, Iowa, July 15 /PRNewswire-FirstCall/—Maytag Corporation (NYSE: MYG-News) today announced its second quarter sales and earnings were down versus a year ago, but in line with management and Wall Street expectations.
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,www.maytagcorp.com, or by going to CCBN’s investor center atwww.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.
2
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 | ) |
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Consolidated | | $ | 1,162,893 | | $ | 1,192,955 | | (2.5 | ) |
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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 | ) |
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Reported | | $ | 51,408 | | | $ | 121,782 | | | (57.8 | ) |
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Included in operating income (loss) | | | | | | | | | | | |
Restructuring charge-Home appliances | | $ | 26,657 | | | $ | — | | | | |
Restructuring charge-Commercial appliances | | | 132 | | | | | | | | |
Restructuring charge-General corporate | | | 1,139 | | | $ | — | | | | |
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| | | $ | 27,928 | | | $ | — | | | | |
NET INCOME (in thousands)
| | | 2003
| | 2002
| | % Change
| |
Reported | | $ | 25,234 | | $ | 67,988 | | (62.9 | ) |
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Included in net income | | | | | | | | | |
Restructuring charge (net of tax) | | $ | 18,805 | | $ | — | | | |
Loss from discontinued operations | | | 286 | | | 341 | | | |
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Total | | $ | 19,091 | | $ | 341 | | | |
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BASIC EARNINGS PER SHARE
| | | 2003
| | 2002
| | % Change
| |
Reported | | $ | 0.32 | | $ | 0.87 | | (63.1 | ) |
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Included in basic earnings per share | | | | | | | | | |
Restructuring charge (net of tax) | | $ | 0.24 | | $ | — | | | |
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Basic weighted-average shares | | | | | | | | | |
outstanding (thousands) | | | 78,467 | | | 77,781 | | | |
DILUTED EARNINGS PER SHARE
| | | 2003
| | 2002
| | % Change
| |
Reported | | $ | 0.32 | | $ | 0.86 | | (62.7 | ) |
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Included in diluted earnings per share | | | | | | | | | |
Restructuring charge (net of tax) | | $ | 0.24 | | $ | — | | | |
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Diluted weighted-average shares | | | | | | | | | |
outstanding (thousands) | | | 78,622 | | | 79,152 | | | |
3
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 | |
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Consolidated | | $ | 2,298,899 | | $ | 2,370,598 | | (3.0 | ) |
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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 | ) |
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Reported | | $ | 119,598 | | | $ | 229,021 | | | (47.8 | ) |
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Included in operating income (loss) | | | | | | | | | | | |
Restructuring charge-Home appliances | | $ | 36,044 | | | $ | — | | | | |
Restructuring charge-Commercial appliances | | | 132 | | | | | | | | |
Restructuring charge-General corporate | | | 1,139 | | | | | | | | |
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| | | $ | 37,315 | | | $ | — | | | | |
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NET INCOME (in thousands)
| | | 2003
| | 2002
| | % Change
| |
Reported | | $ | 59,714 | | $ | 124,752 | | (52.1 | ) |
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Included in net income | | | | | | | | | |
Restructuring charge (net of tax) | | $ | 25,001 | | $ | — | | | |
Loss from discontinued operations | | | 404 | | | 1,658 | | | |
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Total | | $ | 25,405 | | $ | 1,658 | | | |
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BASIC EARNINGS PER SHARE
| | | 2003
| | 2002
| | % Change
| |
Reported | | $ | 0.76 | | $ | 1.61 | | (52.7 | ) |
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Included in basic earnings per share | | | | | | | | | |
Restructuring charge (net of tax) | | $ | 0.32 | | $ | — | | | |
Discontinued operations | | | 0.01 | | | 0.02 | | | |
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Total | | $ | 0.32 | | $ | 0.02 | | | |
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Basic weighted-average shares | | | | | | | | | |
outstanding (thousands) | | | 78,416 | | | 77,392 | | | |
DILUTED EARNINGS PER SHARE
| | | 2003
| | 2002
| | % Change
| |
Reported | | $ | 0.76 | | $ | 1.59 | | (52.2 | ) |
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Included in diluted earnings per share | | | | | | | | | |
Restructuring charge (net of tax) | | $ | 0.32 | | $ | — | | | |
Discontinued operations | | | 0.01 | | | 0.02 | | | |
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Total | | $ | 0.32 | | $ | 0.02 | | | |
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Diluted weighted-average shares | | | | | | | | | |
outstanding (thousands) | | | 78,597 | | | 78,546 | | | |
4
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
| | | Second Quarter Ended
June 30
| | | Six Months Ended
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 | |
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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 | | | | — | |
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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 | |
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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 | |
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Income from continuing operations before minority interest | | | 25,520 | | | | 70,195 | | | | 60,118 | | | | 130,142 | |
Minority interest | | | — | | | | (1,866 | ) | | | — | | | | (3,732 | ) |
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Income from continuing operations | | | 25,520 | | | | 68,329 | | | | 60,118 | | | | 126,410 | |
Loss from discontinued operations, net of tax | | | (286 | ) | | | (341 | ) | | | (404 | ) | | | (1,658 | ) |
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Net income | | $ | 25,234 | | | $ | 67,988 | | | $ | 59,714 | | | $ | 124,752 | |
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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 | |
5
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| | | June 30 2003
| | December 31
2002
| | June 30 2002
|
| | | (Unaudited) | | | | (Unaudited) |
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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 |
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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 |
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Total noncurrent assets | | | 691,320 | | | 714,542 | | | 712,682 |
Property, plant and equipment | | | 1,056,845 | | | 1,066,108 | | | 1,049,402 |
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Total assets | | $ | 3,135,149 | | $ | 3,104,249 | | $ | 3,122,258 |
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LIABILITIES AND SHAREOWNERS' EQUITY | | | | | | | | | |
Current liabilities | | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 691,729 | | $ | 687,439 | | $ | 698,502 |
Notes payable andcurrent portion of long-term debt | | | 209,785 | | | 373,871 | | | 432,051 |
Discontinued current liabilities | | | 101,939 | | | 102,430 | | | 108,729 |
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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 |
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Total liabilities and shareowners' equity | | $ | 3,135,149 | | $ | 3,104,249 | | $ | 3,122,258 |
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6
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 | |
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Net cash provided by continuing operating activities | | | 100,720 | | | | 143,058 | |
Investing activities | | | | | | | | |
Capital expenditures | | | (85,626 | ) | | | (99,246 | ) |
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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 | ) |
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Financing activities-continuing operations | | | (22,436 | ) | | | (147,086 | ) |
Effect of exchange rates | | | 4,817 | | | | 933 | |
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Decrease in cash and cash equivalents | | | (2,525 | ) | | | (102,341 | ) |
Cash and cash equivalents at beginning of period | | | 8,106 | | | | 109,370 | |
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Cash and cash equivalents at end of period | | $ | 5,581 | | | $ | 7,029 | |
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7
