Maytag
Corporation Reports Fourth Quarter and Full Year 2003 Results
Maytag appears to have turned the corner, according to its latest financial
statement, issued yesterday. Full year figures for 2003 show a 2.8% increase
in turnover against the previous year, but a significant drop in operating
income and net profits. However, Fourth Quarter results look more encouraging.
Maytag remains the key growth brand, with Hoover Floor Care and Jade brands
continuing to underperofrm. 'Profitability improvement is anticipated
through product launches, sourcing agreements and efficiencies gained
through LeanSigma', the company's presentation explains.
Furthermore, two consecutive years of high capital investment have 'refreshed
nearly all product lines', leading to a sizeable reduction in the expected
2004 investment figure. Stong cash flow has also reduced the corporate
debt by some £140m.Maytag Corporation reported fourth quarter consolidated
sales of $1.272bn, up 12.8% from $1.127bn in the same period of 2002.
Fourth quarter 2003 reported operating income was $47.3m and reported
net income was $23.9m, or 30 cents per share. In the fourth quarter 2002,
Maytag reported $21.7m in operating income and $3.3m in net income, or
4 cents per share.
Items that affected comparability of the 30 cents and 4 cents reported
earnings per share in 2003 and 2002, include the following per share amounts:For
the full year 2003, Maytag's sales were $4.792bn, up 2.7% from $4.666bn
in 2002. Reported operating income was $228.3m for 2003 versus $359.5m
for the prior year. Reported net income was $120.1m, or $1.53 per share,
versus $188.8m, or $2.40 per share in 2002.
Items that affected comparability of the $1.53 and $2.40 reported earnings
per share for 2003 and 2002, include the following per share amounts:Commenting
on the company's performance in 2003, Maytag Chairman and CEO Ralph F.
Hake, said, 'We achieved strong revenue growth in the fourth quarter,
and earnings were consistent with our expectations. 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's strong cash flow enabled the corporation to reduce debt by $140m,
exceeding its goal of $100m, and to contribute $265m to the pension fund,
exceeding the 2003 target of $135m.
'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. 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,' Hake
said.
Hake added that the stream of new, innovative product introductions across
the company is progressing well. Contributing to increased performance
in the fourth quarter was an array of new products including the revitalized
tall-tub dishwasher product line, French door bottom freezer refrigerators,
and recently redesigned cooking products. During the fourth quarter, Maytag
successfully launched the Neptune(R) Drying Center(TM), Neptune TL top-loading
washer, two value-priced Hoover upright vacuum cleaners and the Hoover
SpinSweep(TM) outdoor sweeper.
Product momentum is expected to continue through 2004. Maytag Appliances
plans to introduce new products in laundry, cooking and refrigeration.
In Floor Care, a series of new vacuum cleaners and extractors is scheduled
for launch starting in the second quarter.
Additionally, Maytag Services expects to grow its all-brand service program;
Dixie-Narco plans to extend into new product categories; and the number
of Maytag Stores is expected to grow significantly in 2004.
Maytag home water filtration system, the SkyBox(TM) by Maytag personal
beverage vender, and Jenn-Air Attrezzi(TM) small appliances are other
new offerings that are expected to provide growth in 2004.
'We anticipate low single digit growth in unit sales in 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,' Hake said.
'The breakthrough contract Hoover signed with its I.B.E.W. union employees
in North Canton, Ohio, gives the company the flexibility to compete while
providing job guarantees for a number of employees at that location. The
contract, which was signed well ahead of its 2005 expiration, provides
for continuous production as we restructure the Floor Care business,'
he added. The contract is expected to result in a substantial reduction
of annual benefit costs starting in 2004.
One recent development of concern is the imposition of surcharges and
proposed price increases for steel. 'We will work to overcome the impact.
Our expectation is that the anticipated benefit of the Hoover contract
savings and the fourth quarter additional pension contributions will likely
offset the risk of increases in steel costs in 2004,' Hake said.
'With the steady flow of new products, we expect to generate revenue and
earnings growth in 2004. As previously announced, earnings per share in
the first quarter are expected to be in the range of 42 to 47 cents including
a restructuring charge of 8 cents related to the closing of the company's
Galesburg 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 40 cents,' Hake said.
Fourth Quarter Segment Results
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.
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 loss in profitability for the quarter and year in the commercial segment
was caused by inefficiencies at Jade as a result of a factory move and
systems installations.
Full Year 2003 Segment Results
Maytag's 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 segment for the full year was $269.1 million,
versus $395.7 million in the prior year. The major factor in the decline
was Floor Care's decreased volume and profitability year over year. Both
periods included restructuring charges.
Maytag's commercial appliances segment reported 2003 sales of $253.9 million,
up 3.8 percent over $244.7 million in 2002.
Operating income for the commercial appliances segment was $11.7 million,
down from $13 million reported in 2002. Dixie-Narco's solid gains in revenue
and profitability, as a result of its diversification efforts, were offset
by Jade's decline in profitability.
Broughton
Crangrove Takes on Atag and LG
Building on its commitment to premium appliances, Broughton Crangrove
has taken on the national distribution of Atag and LG, delivering the
products nationwide to the majority of major conurbations the next day.
Broughton Crangrove has added the entire range of Atag appliances including
ovens, hobs, hoods, dishwashers and refrigeration, all finished in stainless
steel. Six LG American style fridge freezers are now available from the
company in white, black, titanium and stainless steel finishes.
Allan Nutter, Commercial Director, Broughton Crangrove says, 'This further
strengthens the company's status in the premium appliance category. It
means we can deliver extremely profitable opportunities for the retailer
and the kitchen specialist with these niche market products supported
with exemplary service. The addition of Atag and LG appliances adds to
our range of quality leading branded products and will further our on-going
expansion and successful growth.'
Broughton Crangrove's distribution formula, coupled with an in-depth portfolio
of leading brand appliances has resulted in 'exceptional growth' for 2003,
the company reports.
The company offers a large range of brands in kitchen appliances, sanitaryware,
tiles, plumbing and heating products and invests heavily in stock, the
majority of which is held in three strategically located distribution
centres, to ensure continuance of supply and next day delivery.
Allan Nutter, comments, 'We have had an extremely successful year. Providing
customers with quick and easy access to an expanding range of competitively
priced stocked products, supported by a next day delivery service. These
factors have been a major contribution to our success. Our exemplary customer
service and trade support, coupled with the focus on introducing new and
exclusive products regulclrly have cllso been key growth drivers.'
Broughton Crangrove produces a quarterly price book, a colour catalogue
together with a regular offers of incentivised products and has also recently
invested in Easy Quote for easy pricing.
Tel: 0870 60 60 601.
Sustainable
Water Use: How much does it cost to flush a toilet?
– a one day seminar
• How can Sustainable Urban Drainage Systems reduce the environmental
impact in the built environment?
• What water conservation measures can contribute to EcoPoints?
• Ever wondered how a living machine works?
All these questions, together with others, will be explored in this fascinating
one-day seminar on 26th February 2004,
Venue: BedZED, 24 Helios Road, Wallington, Surrey SM6 7BZ.
Water, water everywhere....or that's what we think. We have a limited
supply of clean water and as demand for water increases year on year,
the issues of reducing water use and more efficient water treatment needs
to be urgently addressed.
This two part, one day seminar will address current water use and waste
water treatment, and experts will present solutions to water management
without compromising our lifestyles. The revisions to Part H of the Building
Regulations will be examined as will as other current legislation. The
seminar will be held at the inspirational BedZED housing scheme in Sutton
and will include a tour around BedZED's Living Machine.
The morning session will cover Reducing Water Demand, Rainwater Harvesting
and SUDS. Speakers include Cath Hassell from Environmental Plumbing consultancy
ech2o, Judith Thornton from CAT and David Calderbank from the Environment
Agency.
The afternoon will explore alternative methods of treating foul water
such as constructed wetlands and composting toilets and speakers include
Louise Halestrop, Environmental Waste management consultancy and David
Triggs, independent water operations and management consultant who will
be giving a tour of the Living machine at the end of the day.Costs: £70
(half day), £130 (full day)
Reduced TGR member rate: £55(half day), £100 (full day)
All prices quoted do not include vat at 17.5%
Places on this seminar are limited.
To book your place, please fill in the attached form and send with your
payment to Paul Liptrot, SEA 42 Braganza Street, London SE17 3RJ
T: 020 7820 3159 E: paull@sustainable-energy.org.uk
Carmel
– in the Frame for 15 Door Styles
Kitchen and bedroom door manufacturer, Carmel Doors, has introduced an
in-frame option across their entire range of door products.
Recognised for their 'exceptional quality and unmatched finish', Carmel’s
doors are five piece solid wood available to any size or finish required
by the customer. The company has 15 current standard styles from plain
or panelled shaker to solid flat slab doors and designs with delicate
chamfer features.
They are available as painted or veneered and all ranges will now be available
as lay-on doors or in-frame.
The new in-frame service is facilitated by significant investment in production
machinery at the Carmel Doors factory near Salisbury. The in-frame options
will include a choice of butt hinge finishes and a range of handles to
compliment the doors and to match the hinge finishes.
Carmel’s decision to move into this additional area of manufacturing
reflects the company’s determination to control all product quality
in-house and to offer accurate lead times for any product or order quantity.
As part of the 'Carmel Complete'initiative n ongoing investment in modern
CNC machinery is taking place to offer a full range of carcass options.
De
Dietrich is offering 3-year guarantees on all consumer purchases until
30th April 2004
This offer is for all appliances included in the 2004 brochure purchased
from dealers and covers the full cost of parts and labour for three years
from the date of purchased as long as the application form is filled in
and returned within one month of purchase and is only available for appliances
sold in mainland UK.
De Dietrich sells a wide variety of innovative kitchen appliances including
the biggest range of induction hobs on the market, pyrolytic ovens including
the first standard sized double pyro double oven, steam technology, hoods,
range cookers, dishwashing and laundry products. It has recently introduced
its intelligent ICS technology in its top of the range appliances.
Point of sale material promoting the free 3 year guarantees will be available
to retailers from Area Sales Managers or the Brandt UK marketing department
on 01256 308 068 or e-mail marketinguk@elcobrandt.com