Exhibit 99
MAYTAG REPORTS LOWER FIRST QUARTER SALES AND EARNINGS;
INITIATES CORPORATE-WIDE RESTRUCTURING TO REDUCE COSTS
NEWTON, IOWA--(April 16, 2003)--Maytag Corporation (NYSE: MYG) announced
today its first quarter sales and earnings were down from the first quarter of
last year. The company also announced a cost-reduction plan, which is expected
to result in 2003 savings of approximately $20 million. This savings is part of
the company's total anticipated expense reductions of $40 million this year.
Maytag reported first quarter consolidated sales of $1.136 billion and
operating income of $68.2 million. Reported net income was $34.5 million, or 44
cents per share. Included in these results were pretax charges of $9.4 million,
or 8 cents per share, for the closing of the company's manufacturing plant in
Galesburg, Ill. The company also incurred approximately $3.5 million of costs
associated with previously announced product recalls.
A year ago, first quarter 2002 consolidated sales were $1.178 billion and
operating income was $107.2 million. Net income for the period, including a $1.3
million loss from discontinued operations, was $56.8 million, or 73 cents per
share.
"Industry-wide sales of floor care products were down dramatically in the
first quarter, and sales volume, pricing and mix of our Hoover floor care
products sharply declined," said Ralph F. Hake, Maytag chairman and CEO. "Our
major appliance sales were also less than expected in an industry that was down
1.8 percent. Cost increases for steel, pension and health care were expected to
be offset by cost reductions, but these actions were insufficient in the first
quarter."
Hake said the company remains committed to improving performance by
introducing innovative new products in nearly all categories this year, and
through aggressive cost improvements. He also pointed to a favorable first
quarter performance in the company's commercial segment, driven by increased
sales of Dixie-Narco glass-front venders and revenues from machine refurbishing
and currency changing equipment.
On the cost side of the equation Hake said, "We have been prudent in
managing inventories, and we have multiple initiatives in place that will help
offset cost increases as we
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move further into the year. Additionally, during the second quarter we will
streamline the corporation by eliminating about 500 jobs, or 8 percent of our
salaried positions."
Maytag currently has approximately 20,900 employees and about 6,400 are in
salaried positions. Hake indicated that nearly all company operations will be
involved in the restructuring and, when completed, it is expected to generate
current-year savings of about $20 million. Hake said the $20 million
restructuring savings this year is part of the company's plan to reduce expenses
by a total of $40 million in 2003 through cost-savings initiatives in logistics,
benefits, recurring expenses and other areas. The annualized savings from the
restructuring and other cost- savings initiatives are expected to be
approximately $65 million. The company will incur second quarter charges of
approximately $20 million associated with the salaried workforce restructuring.
Looking ahead, Hake said, "We expect business conditions to remain
challenging in the second quarter. We will stay focused on bringing new products
to market, lowering our costs, and funding product innovation that is vital to
our success. In addition, our cash flow will continue to be targeted to further
reducing debt and funding our pension plan.
"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 special charges of
approximately $60 million, or 50 cents per share, for the Galesburg closing and
salaried workforce restructuring."
First Quarter Segment Results
Maytag's home appliances segment, which includes major appliances and floor
care products, had first quarter 2003 sales of $1.074 billion, down 4 percent
from $1.119 billion in the first quarter of 2002. Operating income for the
segment was $77.8 million, compared with $119 million a year earlier. Current
year operating income includes a $9.4 million Galesburg-related charge.
The corporation's commercial appliances segment, composed of Dixie-Narco
vending equipment and Jade Products, had first quarter sales of $62.2 million,
up 6 percent from $58.4 million in the first quarter of 2002. The segment
reported operating income of $2.1 million, versus $1.3 million in last year's
first quarter.
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Quarterly Conference Call
Maytag will host a conference call today, April 16, to discuss its business
performance with members of the investment community. The call will be at 7:30
a.m. CDT, and those wishing to participate should telephone 800-633-8137 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 at www.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.
CPI0307
Media Contact: Additional Information:
James G. Powell www.maytagcorp.com
Maytag Communications
641-787-8392
jpowel@maytag.com
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FIRST QUARTER SALES AND EARNINGS COMPARISON (UNAUDITED)
NET SALES (in thousands)
2003 2002 % Change
----------- ----------- --------
Home appliances $ 1,073,834 $ 1,119,236 (4.1)
Commercial appliances 62,172 58,407 6.4
----------- -----------
Consolidated $ 1,136,006 $ 1,177,643 (3.5)
=========== ===========
OPERATING INCOME (LOSS) (in thousands)
2003 2002 % Change
----------- ----------- --------
Home appliances $ 77,765 $ 118,959 (34.6)
Commercial appliances 2,098 1,344 56.1
General corporate (11,673) (13,064) (10.6)
----------- -----------
Reported $ 68,190 $ 107,239 (36.4)
=========== ===========
Included in operating income (loss)
Restructuring charge (included in Home appliances) $ 9,387 $ --
=========== ===========
NET INCOME (in thousands)
2003 2002 % Change
----------- ----------- --------
Reported $ 34,480 $ 56,764 (39.3)
=========== ===========
Included in net income
Restructuring charge (net of tax) $ 6,195 $ --
Loss from discontinued operations 118 1,317
----------- -----------
Total $ 6,313 $ 1,317
=========== ===========
BASIC EARNINGS PER SHARE
2003 2002 % Change
----------- ----------- --------
Reported $ 0.44 $ 0.74 (40.5)
=========== ===========
Included in basic earnings per share
Restructuring charge (net of tax) $ 0.08 $ --
Discontinued operations -- 0.02
----------- -----------
Total $ 0.08 $ 0.02
=========== ===========
Basic weighted-average shares
outstanding (thousands) 78,364 77,004
DILUTED EARNINGS PER SHARE
2003 2002 % Change
----------- ----------- --------
Reported $ 0.44 $ 0.73 (39.7)
=========== ===========
Included in diluted earnings per share
Restructuring charge (net of tax) $ 0.08 $ --
Discontinued operations -- 0.02
----------- -----------
Total $ 0.08 $ 0.02
=========== ===========
Diluted weighted-average shares
outstanding (thousands) 78,572 77,940
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
First Quarter
Ended
March 31
2003 2002
- ------------------------------------------------------------------------------------------------
Net sales $ 1,136,006 $ 1,177,643
Cost of sales 935,886 918,213
----------- -----------
Gross profit 200,120 259,430
Selling, general and administrative expenses 122,543 152,191
Special charges 9,387 --
----------- -----------
Operating income 68,190 107,239
Interest expense (13,779) (17,407)
Other - net (1,990) 996
----------- -----------
Income from continuing operations before income taxes
and minority interest 52,421 90,828
Income taxes 17,823 30,881
----------- -----------
Income from continuing operations before minority interest 34,598 59,947
Minority interest -- (1,866)
----------- -----------
Income from continuing operations 34,598 58,081
Loss from discontinued operations, net of tax (118) (1,317)
----------- -----------
Net income (loss) $ 34,480 $ 56,764
=========== ===========
Basic earnings (loss) per common share:
Income from continuing operations $ 0.44 $ 0.75
Discontinued operations -- (0.02)
Net income (loss) $ 0.44 $ 0.74
Basic weighted-average shares outstanding 78,364 77,004
Diluted earnings (loss) per common share:
Income from continuing operations $ 0.44 $ 0.75
Discontinued operations -- (0.02)
Net income (loss) $ 0.44 $ 0.73
Diluted weighted-average shares outstanding 78,572 77,940
MAYTAG CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31 December 31 March 31
2003 2002 2002
(Unaudited) (Unaudited)
- -----------------------------------------------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 10,208 $ 8,106 $ 33,878
Accounts receivable - net 623,202 586,447 669,302
Inventories 493,889 468,433 493,453
Deferred income taxes 67,763 66,911 63,647
Other current assets 59,890 116,803 37,919
Discontinued currrent assets 77,132 76,899 81,616
----------- ------------- -------------
Total current assets 1,332,084 1,323,599 1,379,815
Noncurrent assets 640,736 653,337 654,872
Discontinued noncurrent assets 60,086 61,205 60,939
---------- ------------- -------------
Total noncurrent assets 700,822 714,542 715,811
Property, plant and equipment 1,055,126 1,066,108 1,047,074
----------- ------------- -------------
Total assets $ 3,088,032 $ 3,104,249 $ 3,142,700
=========== ============= =============
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 672,167 $ 687,439 $ 700,585
Notes payable and
current portion of long-term debt 341,784 373,871 367,505
Discontinued current liabilities 101,627 102,430 106,881
----------- ------------- -------------
Total current liabilities 1,115,578 1,163,740 1,174,971
Long-term debt, less current portion 735,320 738,767 774,001
Postretirement benefit liability 524,181 517,510 502,255
Accrued pension cost 504,360 488,751 336,058
Other noncurrent liabilities 117,310 131,525 142,074
Minority interest - - 100,149
Total discontinued noncurrent liabilities and minority interest 21,817 21,817 21,817
Shareowners' equity 69,466 42,139 91,375
----------- ------------- -------------
Total liabilities and shareowners' equity $ 3,088,032 $ 3,104,249 $ 3,142,700
=========== ============= =============
MAYTAG CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Three Months Ended
March 31
---------------------------
2003 2002
- -----------------------------------------------------------------------------------------------
Operating activities
- -----------------------------------------------------------------------------------------------
Net income $ 34,480 $ 56,764
Net loss from discontinued operations 118 1,317
Depreciation and amortization 40,265 38,667
Change in working capital (88,280) (97,006)
Pension and postretirement 22,192 (11,708)
Other - net 79,520 60,404
------------ -------------
Net cash provided by continuing operating activities 88,295 48,438
Investing activities
- -----------------------------------------------------------------------------------------------
Capital expenditures (36,798) (50,439)
------------ -------------
Investing activities-continuing operations (36,798) (50,439)
Financing activities
- -----------------------------------------------------------------------------------------------
Reduction in financing obligations (36,083) (67,947)
Dividends (including minority interest) (14,097) (17,581)
Stock repurchase (1,021) -
Other 165 11,475
------------ -------------
Financing activities-continuing operations (51,036) (74,053)
Effect of exchange rates on cash 1,641 562
------------ -------------
Increase (decrease) in cash and cash equivalents 2,102 (75,492)
Cash and cash equivalents at beginning of period 8,106 109,370
------------ -------------
Cash and cash equivalents at end of period $ 10,208 $ 33,878
============ =============
Cash flows from discontinued operations
- -----------------------------------------------------------------------------------------------
Net cash used by discontinued operating activities $ (1,523) $ (4,670)
Investing activities-discontinued operations 1,119 (938)
Financing activities-discontinued operations 43 650
------------ -------------
Decrease in cash-discontinued operations $ (361) $ (4,958)
============ =============