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Maytag Reports Q4 and Full Year 2003 Results
Jan 29, 2004
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Maytag Corporation has reported fourth-quarter consolidated sales of U.S. $1.272 billion, up 12.8 percent from $1.127 billion in the same period of 2002. The appliance maker also reported fourth-quarter 2003 operating income of $47.3 million and net income of $23.9 million, or $0.30 cents share. In the fourth quarter 2002, Maytag reported $21.7 million in operating income and $3.3 million in net income, or 4 cents per share.

For the full year 2003, Maytag's sales were $4.792 billion, up 2.7 percent from $4.666 billion in 2002. Reported operating income was $228.3 million for 2003 versus $359.5 million for the prior year. Reported net income was $120.1 million, or $1.53 per share, versus $188.8 million, or $2.40 per share in 2002.

"We achieved strong revenue growth in the fourth quarter, and earnings were consistent with our expectations," Maytag Chairman and CEO Ralph F. Hake said in the company's financial statement. "Cash-flow performance was very strong, which enabled us to substantially exceed our targets for pension funding and debt reduction. Maytag Appliances continued its marketplace momentum with additional share gains in the fourth quarter during another quarter of strong industry growth. We experienced especially strong results from Maytag International, Maytag Appliances and Dixie-Narco vending. Floor Care performance improved sequentially from the third quarter."

Maytag said its strong cash flow enabled it to reduce debt by $140 million, exceeding its goal of $100 million, and to contribute $265 million to the pension fund, exceeding the 2003 target of $135 million.

"Our operating income, excluding the items affecting comparability, was down for the quarter and for the year, primarily as the result of the decline in profitability in the Floor Care business," Mr. Hake said. "Throughout 2003, the product mix shift in the floor care industry toward products in lower price categories led to lower volume, margins and pricing within our Floor Care business at Hoover. We continue to introduce new products and lower our cost structure in Floor Care. I believe that this business has been stabilized by these actions and that it is positioned for recovery."

Maytag's home appliances segment, which includes Maytag Appliances, Floor Care, Maytag International, and Maytag Services, had fourth quarter 2003 sales of $1.223 billion, up 12.8 percent from $1.085 billion in the fourth quarter of 2002. Operating income for the home appliances segment was $65.6 million, compared with $36.1 million a year earlier. Both periods included restructuring charges.

For the full year, the home appliances segment had sales of $4.538 billion in 2003, up 2.6 percent from $4.421 billion in 2002. Operating income for the full year was $269.1 million, versus $395.7 million in the prior year. Maytag blamed the decline on Floor Care's decreased volume and profitability year over year. Both periods included restructuring.

Maytag's commercial appliances segment, composed of Dixie-Narco vending equipment and Jade Products, had fourth quarter sales of 48.3 million, up 13.1 percent from $42.7 million a year earlier. The commercial segment reported an operating loss of $2.7 million, compared with a loss of $1.9 million in the fourth quarter of 2002. The company said the loss in profitability in the commercial segment was caused by inefficiencies at Jade as a result of a factory move and systems installations.

Full-year results for the commercial appliances segment included sales of $253.9 million, up 3.8 percent compared to $244.7 million in 2002. Operating income was $11.7 million, down from $13 million reported in 2002. The appliance maker said Dixie-Narco's solid gains in revenue and profitability, as a result of its diversification efforts, were offset by Jade's decline in profitability.

Mr. Hake said the company anticipates low-single-digit growth in unit sales in both the major appliances and floor care industries in 2004, with continuing declines in pricing. "We expect to outgrow the industry in both categories and expect to improve profitability through our product launches, sourcing agreements and efficiencies gained through LeanSigma(R) implementation," he said.

"With the steady flow of new products, we expect to generate revenue and earnings growth in 2004," Mr. Hake continued. "As previously announced, earnings per share in the first quarter are expected to be in the range of $0.42 to $0.47, including a restructuring charge of $0.08 related to the closing of the company's Galesburg (IL, U.S.) plant. For the full year, we are expecting reported earnings of $1.90 to $2.00 per share, including Galesburg-related restructuring charges of approximately $0.40."

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