The Maytag Corporation board of directors declared a quarterly dividend of $0.09 a share on the firm's common stock. The quarterly dividend is payable June 15, 2005, to shareowners of record at the close of business June 1, 2005.
"Today's decision by the board to immediately reduce the dividend by 50 percent should allow the company more financial flexibility to fund our restructuring plan and to have additional cash available for debt reduction and pension funding," Ralph Hake, Maytag chairman and CEO, said in a statement. "Also, the additional cash will be invested in our business as we step up our advertising and R&D expenses in the second half of 2005 with the many new product introductions that are planned.
"The decision to reduce the dividend was not taken lightly," Mr. Hake continued. "The board understands the importance of the dividend to our shareholders; however, it is essential that our dividend payout is more in line with current earnings trends."
Mr. Hake also said that over the balance of this year, Maytag will be finalizing its plan to restructure certain manufacturing operations and determining the investments necessary to support these initiatives.
"These actions may require asset write-offs and accelerated depreciation as well as cash costs and investments," he said. "We are currently seeking a new credit agreement that will provide us substantially more covenant flexibility and funding stability to meet our financing requirements. We have received financing commitments from banks for multi-year credit facilities and expect to replace our current agreement with a new facility during the second quarter 2005."
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