Maytag Corporation has unveiled plans to change its segment reporting beginning in the first quarter 2004 from two segments to three, as the company aligns its internal reporting to reflect new initiatives and accountabilities within the company. In addition, the appliance maker said the new segment reporting structure should provide investors with enhanced clarity and consistent financial information.
Chairman and CEO Ralph F. Hake made the announcement during a conference with financial analysts in New York City, NY, U.S. Also during the conference, Mr. Hake described the company's plans for 2004 and said he expects earnings per share for next year to be in the range of U.S. $1.90 to $2.00 per share, including approximately $0.40 in charges from restructuring. For the first quarter 2004, the company expects earnings per share in the range of $0.42 to $0.47 a share, which includes $0.08 in charges from restructuring.
Starting with its first-quarter earnings announcement in April 2004, the corporation will disclose sales and operating margin for three business segments -- Major Appliances (which includes Maytag Appliances, Maytag International and Maytag Services), Housewares (which includes Hoover Floor Care and Maytag Housewares), and Commercial Products (which includes Dixie- Narco Vending Systems, Maytag Specialty and Maytag Commercial Laundry). Currently, Maytag reports just two segments, Home Appliances and Commercial Appliances.
"We believe these changes more accurately reflect our new initiatives and accountabilities within the company in 2004," Mr. Hake said. "The change will help our investors better understand, estimate and evaluate the way our business segments align with their markets and customers."
Mr. Hake also revealed how the corporation's estimates of 2003 full-year sales expectations would break down into the three new segments: Major Appliances, $3.6 billion; Housewares, $780 million; and Commercial Products, $390 million. Talking further about the current year, Mr. Hake affirmed the company's 2003 expectations for earnings (including approximately $0.53 from restructuring and discontinued operations) to be in the range of $1.62 to $1.67 per share.
"We are coming out of 2003 a stronger company both financially and operationally," Mr. Hake said. "Certainly 2003 can be best described as challenging. However, Maytag made great strides in cost containment this year, and we are beginning to reap the benefits of the tough decisions we had to make for the good of the company. Our cash flow is strong, we are reducing our debt, and we successfully launched many innovative new products."
This past year, Maytag introduced the Neptune(R) Drying Center(TM) and extended the Neptune washer to a top-load configuration. Maytag also launched new cooking products and it further diversified into products such as the SkyBox(TM) home vendor, the Jenn-Air Attrezzi(TM) line of kitchen appliances and, at Hoover, the SpinSweep(TM) outdoor sweeper.
"Innovation drives growth, and Maytag is well positioned to grow in major appliances," Mr. Hake said. "We continue to see improvement in major appliances, and after a difficult year at Hoover, we are seeing marked improvement there as that business continues to stabilize. The challenges at Hoover remain, but we have aggressively addressed the fixed cost structure there, and we are encouraged by the array of products that Hoover is preparing for launch next year."
George Moore, Maytag's executive vice president and chief financial officer, reflected on this year's financial performance. "We expect our strong cash flow generation in 2003 to allow us to reduce debt by $100 million. In addition, we made a $135 million voluntary contribution to our pension fund, which has helped reduce our under funded position by $65 million from the prior year," he said. Mr. Moore added that he anticipates some pressure next year from higher pension and post-retirement medical expenses. He said ongoing cost-saving initiatives and a strong line-up of product introductions should enable Maytag to meet these challenges.
Mr. Hake also discussed industry trends at the conference. In major appliances, industry shipments for 2003 are expected to increase 3 percent, and grow another 1 to 2 percent next year. Driven by a stream of new products and vigorous brand-building activities, Maytag expects to exceed the industry growth rate again in 2004. In floor care, industry unit shipments are expected to end 2003 flat or up slightly. Next year, Hoover expects industry shipments to grow 2 to 3 percent.
Other Maytag executives appeared at the conference to discuss the company's operations, including William Beer, president of Maytag Appliances; Tom Briatico, president of Hoover Floor Care; Doug Huffer, president of Dixie- Narco Vending Systems; R. Craig Breese, president of Maytag International; Steve Benton, vice president and general manager of Maytag Services; Ken Boyle, vice president of strategic initiatives; Craig Ibsen, vice president and general manager of Maytag Specialty group; and Chris Wignall, senior vice president of marketing and sales, Maytag Appliances.
to Daily News