Maytag Corporation announced on Wednesday that its fourth-quarter comparative net income was up 29.5 percent from a year ago, while consolidated sales for the period grew 2.6 percent versus the same period a year earlier. For the full year 2002, the appliance maker’s sales were up 11.5 percent, while comparable net income rose 65.6 percent.
Maytag reported fourth quarter 2002 consolidated sales of U.S. $1.127 billion. Excluding special items, operating income was $88.9 million and comparative net income was $48.3 million, or $0.62 per share, versus $0.48 per share in last year's final period. As previously announced, the company incurred a fourth quarter restructuring charge of $67.1 million in connection with the closing of its Galesburg, Ill. manufacturing facility. Including the restructuring charge, Maytag reported fourth quarter operating income of $21.7 million and net income of $3.3 million, or $0.04 per share, which included a loss from discontinued operations.
A year ago, Maytag's fourth quarter sales were $1.099 billion. Excluding special items, operating income was $78.2 million and comparative net income was $37.3 million, or $0.48 per share, including goodwill amortization of $0.03 per share. Special items in the fourth quarter of 2001 included $9.8 million for restructuring, $7.2 million for a loss on securities and $44.5 million for a loss on discontinued operations. Including the special items, Maytag's operating income in the fourth quarter of 2001 was $68.4 million, with a net loss for the period of $20.7 million, or a loss of $0.27 per share.
Commenting on the company's 2002 performance, Ralph F. Hake, Maytag chairman and CEO, said, "Our fourth quarter financial performance, evidenced by our sales growth, earnings and strong cash flow, again demonstrated significant improvement over our year-ago results. This is more evidence that our strategy of innovative products, supported by preferred brands, is succeeding.
"Maytag's earnings in the fourth quarter were up significantly due to benefits from the Amana integration, a favorable mix of higher margin products and our aggressive cost reduction initiatives. Additionally, our strong cash flow enabled us to exceed our combined targets for debt reduction and pension funding by a substantial amount."
Mr. Hake noted that the company began 2003 with an aggressive product launch program, including cooking, small household appliances, refrigeration, and air purifier introductions. This included both the Maytag Cordless Iron and the Hoover Silent Air Purifier, which were introduced at the International Housewares Show this month. Jenn-Air introduced a new warming drawer and redesigned cooktops. A new refrigerator design with a slide out drawer bottom freezer and French style doors on the top, called the Trio, is being sold under the Kenmore Elite brand at Sears.
"We will continue to focus on growth through innovation in 2003 by introducing new or redesigned products in every quarter this year," said Mr. Hake. "The company will have an exciting new laundry platform, several new floor care products and we will introduce a newly designed vending unit. All these products will support earnings and margin growth in 2003."
He added, "With the steady cadence of our new products, we expect to grow revenues by approximately 7 percent this year. Our normalized earnings per share in the first quarter should be about $0.70, and for the full year, we're expecting earnings from continuing operations of $3.10 to $3.20 per share in what we anticipate will be a challenging market and an inflationary cost environment."
Fourth Quarter Segment Results
Maytag's home appliances segment, which includes major appliances and floor care products, had fourth quarter 2002 sales of $1.085 billion, up 2.2 percent from $1.061 billion in the fourth quarter of 2001. Excluding special charges, operating income for the segment was $103.2 million, compared with $92.1 million a year earlier.
The corporation's commercial appliances segment, composed of Dixie-Narco vending equipment and Jade Products, had fourth quarter sales of $42.7 million, up 13.5 percent from $37.7 million in the fourth quarter of 2001. The segment reported an operating loss of $1.9 million, compared with an operating loss of $3.6 million in the fourth quarter of 2001, excluding a special charge.
Maytag's consolidated sales for the full-year 2002 were $4.666 billion, up 11.5 percent from sales of $4.185 billion in 2001. Excluding special items from both years, Maytag's operating income was $418.3 million, compared with $298.9 million a year earlier. Comparative net income was $230.2 million, or $2.93 per share, versus $139 million, or $1.77 per share in 2001. Including special items and losses from discontinued operations, Maytag's reported net income for 2002 was $188.8 million, or $2.40 per share, compared with $47.7 million, or $1.41 per share in 2001, which included goodwill amortization of $0.13 per share.
Maytag's home appliances segment had sales of $4.421 billion in 2002, compared with $3.955 billion in 2001. Excluding special items, operating income for the segment was $454.5 million, versus $332.6 million in the prior year.
Maytag commercial appliances reported 2002 sales of $244.7 million, compared with $230.2 million in 2001. Operating income for the segment was $13 million, versus $6.4 million in the prior year, excluding a special charge.
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