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
http://www.newscom.com/cgi-bin/prnh/20000505/MYGLOGO
http://photoarchive.ap.org/ DATASOURCE: Maytag Corporation CONTACT:
John Daggett of Maytag Corporate Communications, +1-641-787-7711,
or Web site: http://www.maytagcorp.com/
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