Maytag
Reports Lower Sales in Q2, Compounded by Litigation and Restructuring
Charges
Maytag has reported second quarter consolidated sales of $1.15bn, down
1 percent from $1.16bn in the same period of 2003. Lower Hoover floor
care sales as well as higher material costs and lower burden absorption
negatively affected reported results compared with prior year. Also impacting
second quarter results were contingent liabilities recorded for pending
litigation, restructuring charges, and a goodwill impairment charge. Reported
net loss for the second quarter of 2004 was $41.1m, compared with net
income of $25.2m in 2003.
Contingent liabilities for pending litigation recorded in the second quarter
include an increased reserve for early generation front-load washer litigation
and for an adverse judgment involving the termination of a commercial
distributorship for Amana products that occurred prior to Maytag's acquisition
of the Amana business.
The second quarter earnings (loss) per share for 2004 and 2003 included
the following items:
• Restructuring and related charges - Galesburg (0.13)
• Restructuring and related charges - reorganization (0.11)
• Goodwill impairment-Commercial Products (0.12)
• Front-load washer litigation (0.16)
• Adverse judgment on pre-acquisition distributor lawsuit (0.09)
Commenting on the second quarter, Maytag chairman and CEO Ralph Hake stated,
'Our operational performance was disappointing. The Housewares segment
loss had the largest impact because we anticipated a recovery at Hoover
floor care. Within our Major Appliances segment, Maytag Appliances underperformed
because of material costs, under-absorbed burden and the strike at our
Newton, Iowa, facility. However, several major risks have been addressed,
including the Newton work stoppage and costs related to early generation
front-load washer litigation. Our 'One Company' cost savings plans, which
will lower our cost structure dramatically, are on track.'
Sales decreased in the Commercial Products segment, primarily due to a
decline in the vending industry. In addition, continued performance issues
at Jade resulted in a goodwill impairment charge.
Maytag Appliances' sales increased in the second quarter but less than
industry unit growth of 9.7 percent. 'In the second quarter we gave back
our first quarter branded market share gains, and some OEM share. We expect
sales to improve in the last half of the year as we introduce new products,
which customers are anticipating,' Hake commented.
Hake noted that the new contract ratified by union employees of Maytag's
Newton Laundry Products operations, which followed a three-week work stoppage,
provides an improved cost structure and a continuation of supply. The
financial impact of the work stoppage to the second quarter exceeded $5m
in direct costs. A contract with union employees at Maytag's Amana, Iowa,
Refrigeration Products plant will expire in September. Maytag's Galesburg,
Illinois, Refrigeration Products plant is scheduled to cease production
in September, and the company's new Reynosa, Mexico, refrigeration plant
is operational.
'In refrigeration, there is strong demand for the new Jenn-Air French
door bottom-freezer model, and new Amana and Maytag French door bottom-freezer
models are being launched in the second half. In laundry, Neptune top-load
laundry is selling well; the Neptune Drying Center is seeing a sales lift
with our recent incentives, and we expect the new Maytag under-counter
laundry products, sourced from Samsung, to be well-received when they
are launched this fall. In cooking, new Jenn-Air and Maytag double oven
ranges and other refreshed models are planned to be in the marketplace
in the third quarter,' Hake said.
In addition to the new product launch schedule, Hake said other positive
trends include Maytag International's good performance as it expands its
customer base in key markets, and Maytag Services' continuing growth with
its all-brand service and parts programs.
In June, Maytag announced a comprehensive restructuring expected to yield
$150 million in annual cost savings. The restructuring, which will consolidate
the Hoover floor care business, Maytag Appliances' business and corporate
headquarters organizations, is expected to lower the company's cost structure
and increase marketplace competitiveness. The restructuring is on track
for completion by year-end.
Hoover continues to be challenged by loss of market share. 'Our strategy
is to introduce innovative products and reduce cost structure. Hoover
has launched nine of the 15 new products expected this year. We should
be better positioned at the high end of the floor care pricing spectrum
with new products scheduled for early 2005,' Hake said.
Six-Month
Performance
Maytag's sales in the first six months of 2004 amounted to $2.37 billion,
up 3.1 percent from sales of $2.30 billion in the first six months of
2003. Operating income was $30.2 million, down 74.8 percent from $119.6
million in the year-earlier period.
Reported net loss for the first six months of 2004 was $2.4 million, or
3 cents per share. In the first six months of 2003, Maytag's reported
net income was $59.7 million, or 76 cents per share.
Full-Year Expectations
Free cash flow (cash flow from operations less capital expenditures) is
expected to be $125 to $150 million for the year. In addition, the company
made a $20 million contribution to the pension plan in the second quarter,
completing the $90 million in voluntary contributions planned for the
year.
Commenting on earnings expectations for the full year 2004, Hake said
that additional increases in steel costs beginning in July and actions
to reduce inventory levels will negatively impact second half results.
These items will be partially offset by savings from the company's restructuring
activities and by lower pension and postretirement medical costs associated
with the Newton contract. The restructuring benefits will have more impact
in the fourth quarter than in the third.
As a result, the company now expects full-year reported earnings per share
in the range of 20 to 30 cents. The 2004 full-year guidance includes restructuring
charges of approximately 80 cents per share.
G&G
Drawer Interiors – Limited Only by Imagination
A
noticeable trend is emerging – many major kitchen manufacturers are
advertising their products with detailed images of drawer interiors meticulously
organised to store specific products and items.
These
beech block trays, moulded for collective or highly individual storage
are often depicted in combination with more conventional vacuum formed
plastic dividers. But it is the endless permutations that are intriguing.
What is not commonly known is that around 80% of the highly individual
concepts and ideas come from one specialist source - G&G Products
of Manchester. The company has established a design and manufacturing
base that has allowed it to develop ideas for individual customers that
make for a huge degree of differentiation.
‘The reasons are obvious when the product is viewed’ says the
company. The wooden trays are generally machined from laminated beech
blocks – although any hardwood can be specified. The plastic is vacuum
formed to an exceptional finish. But in both cases the obvious level of
quality is of the very finest.’
G&G managing director Sam Grinshpan has established a design and production
facility with extreme flexibility – from the CAD and graphics to
the multi-head 5-axis routers and high-tech throughfeed finishing sanders.
So trays can be produced to size, with specific cut outs to suit individual
products and utensils, or more general dividers that merely compartmentalise
the drawer interior.
‘Anything is possible’ says Sam Grinshpan. This statement is
clearly backed by a browse through the G&G colour brochure or a visit
to the factory showrooms. Cutlery trays are shown in endless combinations
alongside dedicated utensil trays and knife racks. These can even be combined
with one sliding back over the other. There are intriguing ideas for spices,
stainless steel containers, pasta and cereal bottles as well as for crockery
and saucepans. The point is that the products from G&G are practical
but add enormous sales value to the kitchen.
Naturally, the bedroom and home office interiors markets are equal beneficiaries.
Tel: 0161 723 1000
Email: mailto:mail@gandgproducts.co.uk
Lofra
Unveils its Latest Innovation in Insulation
Italian
cooker manufacturer, Lofra, has developed a new application for its insulation
material which has resulted in an increase in the volume of its ovens.
Lofra has replaced its original insulation with a thinner material which
is not only more energy efficient, but makes the capacity of its ovens
approximately 10 per cent larger than other ovens with the same dimensions.
Chris Rogers, Lofra UK’s sales and marketing director, said:
‘It is often assumed that energy efficiency means less performance.
This is not the case. Manufacturers, such as ourselves, have recognised
the need to develop energy efficient products with improved performance,
and that’s exactly what we’ve done with our cooker insulation.
‘People are not only getting more for their money in terms of capacity,
but will also benefit from the lower running costs of an energy efficient
appliance.’
All appliances in the UK are rated on a pan-European basis, with a common
A-G energy labelling scale, where A represents the best appliances and
G the worst. All Lofra cookers produced since October 2003 are A rated
and carry an energy efficiency label indicating this. An A rated product
offers improved performance, better insulation and a reduction in energy
consumption.
For stockist enquiries, contact Lofra on 01675 479 600.
Lighting
Solutions from East Coast Fittings
Supplier
and distributor of quality furniture fittings and components, East Coast
Fittings, is able to offer state-of-the-art cabinet and other furniture
lighting for kitchen and bedrooms.
The
products and systems manufactured by international specialist Hera offer
not only functionality, but design and flair. They give kitchen and bedroom
designers wide scope to practically augment their furniture.
The full Hera range stocked and immediately available from East Coast
Fittings’ new 60,000 square feet headquarters, warehousing and distribution
facility include a number of particular solutions that are catching the
attention of many of the UK’s prominent KBB manufacturers.
Specifically, spotlights offer varied effects and the 20W recessed and
surface mounted spotlight offers advantages like the slim 1.5mm overall
height, a light aluminium chrome reflector and 60 degree beam angle, the
halogen spotlight can be recessed with only a 55mm diameter cut-out and
the lights only need a 100mm minimum clearance from combustible materials.
ECF also offer a 20W spotlight with ‘cool’ housing which additionally
features an opaque glass cover, easy bulb replacement and a 75mm overall
diameter. This product has a super-slim 1.2mm overall height.
A surface mounted angled spotlight offers a 22.5 degree reflector angle
and 50mm beam angle, it too features easy lamp replacement and an overall
diameter of 78mm.
A special product in this category is the 20W thermally optimised recessed
spotlight which gives permanent light even when a door is located directly
below the source with no danger of heat damage. Installation is easy and
quick with a clamp fixing and this 68mm recessed halogen spotlight also
sports an opaque glass cover.
Also part of the programme are fluorescent strip lights which have been
tried and tested over a million times and can be connected in rows with
additional plug connectors. The SL Slimlite is extremely small for tight
spaces and gives 50% extra light. It is a through wired covered tube with
very low operating temperatures and features a flat start via an electronic
ballast.
Special products are, for example, an illuminated glass shelf which is
evenly lit via a T2 tube featuring a flat start. Also an easy to install
triangular light with a brushed stainless steel housing and invisible
installation using just a single screw. The halogen spotlight features
an easy clip-on system.
ECF also stocks a full array of technical systems to support the lights
such as electronic sensor switches, electronic safety isolating transformers
and connection and extension cable for halogen lights.
Lighting forms just one category in East Coast Fittings’ expanding
portfolio of products. From decorative hardware to functional internal
and space saving systems, to doors and associated components as well as
special solutions, ECF says that it is now in a position to offer a complete
service to the furniture industry anywhere in the country at short and
manageable delivery times.
In addition to the opening of a new 2000 square feet warehouse in August,
East Coast Fittings plans to issue a new and technically comprehensive
catalogue later this year. This will include all the latest technological
developments within the realm of lighting solutions.
Tel: 01664 424288
Herbert
Direct - Passion for Detail
John
and Sharon Herbert have great enthusiasm when it comes to supplying beautifully
finished high quality furniture accessories for kitchens, bedrooms and
bathrooms and have recently launched a new company, Herbert Direct.
John
Herbert is a well-known figure in the industry, having worked for the
family business Herbert Furniture Fittings for 26 years. This valuable
experience leads Herbert Direct forward, giving it the type of mix required
to provide its client base with the right product first time.
'What makes Herbert Direct different,' explains John, 'is that with our
vast expanse of knowledge in the industry, we can supply high quality
products from around the world, from ltalian manufacturers Compagnucci
- suppliers of premium wirework and mechanisms, including a corner solution
- to Leitner Design of Austria with its bespoke wooden products.
'With great expertise in hand picking the best products in the market
place, Herbert Direct saves our clients both time and money, and by working
with different furniture designers to create bespoke items - as well as
holding our own stock - the high calibre attained sets us out to be quite
unique.'
Herbert Direct, specialists in the supply of distinctive products to the
furniture industry, has become the UK's sole distributor for Compagnucci.
The Compagnucci corner solution (pictured) is a design that incorporates
a smooth swing action from the closed position, and just one model caters
for both left and right handed situations helping to reduce your stock
and storage requirements. Each basket sits on a folded down metal tray
allowing a greater weight load of 15 kilos per basket, with nylon buffers
on the runners to prevent noise.
Herbert Direct is also the sole distributor of a corner solution that
suits an internal carcass depth of 450mm; standard and studio height units
with matching swing action, at 450mm and 500mm deep; and a new manual
corner solution where all four baskets can be pulled out of the unit for
easy accessibility.
Tel: 0870 770 7656
Email: mailto:sales@herbertdirect.co.uk
Web: http://www.herbertdirect.co.uk
One
Style, One Brand - The Stoves Design Process
Stoves
Product Design Manager, Ian Johnstone, explains the thinking behind Stoves
new built-in collection: ‘We had three clear aims when it came to
developing the new-look Stoves built-in range. Attention to detail, ease
of use and ease of cleaning were all at the very top of our list.
‘Consumers
want kitchen appliances that not only look the business but give the best
results. Our aim from the outset was therefore to develop a range of highly
designed, functional products that are beautiful to look at but have intelligent,
technologically advanced features to match.
‘Where the look of the product was concerned we made the decision
to go for a one style, one brand approach to make the range much easier
for retailers to sell and much easier for consumers to understand.
‘Starting at the top of the Stoves range, we took the style of the
current Premier built-in appliances and improved it. As a result, the
new built-in ovens, hobs and hoods now feature superior styling and a
smart new logo design based on a proven design that consumers already
know and love.
‘On stainless steel products, the logo has been smartly embossed
into the metal, while on the black and white designs, the logo has been
screened on to the ovens and ceramic hobs to offer matching items that
cater for consumer demand for coordinating appliance packages.
‘We have also paid real attention to the design detail of the built-in
range. Control knobs are easier to grip and now feature a plated and brushed
finish to mirror the retro look of 1970s stereo buttons. Oven handles
have also been made just that bit slimmer. The clock display is now red
rather than green, all of which adds to the quality feel and consumer
appeal of the product range. To complete the picture, all our hoods feature
a matching red display panel.
‘We haven't stopped at the exterior though. Many improvements have
been made to the oven interior, including the introduction of Pristine®
enamel, which is now a standard but unique feature on all of the Stoves
built-in appliances. Pristine® has been tested and approved by the
Vitreous Enamel Association and is up to three times more easier to clean
than conventional enamels - a real selling point for retailers.’
Even
More LG from Lathams
After success selling its range of LG HI-MACS® Natural Acrylic Stone™
solid surface worktops, James Latham Plc is increasing its offering of
LG products.
Chris Sutton, group panel products director comments, ‘Because the
Natural Acrylic Stone™ range was so successful LG is a major brand
fast becoming recognised in kitchen and bathroom applications, the demand
was there to extend the LG HI-MACS® product offering. This has resulted
in us extending our range with three new products that we expect to be
just as successful!’
James Latham is now supplying LG HI-MACS® solid colours, providing
shades such as Fiery Red, Orange and Banana, helping to add a contemporary
twist to interiors. More colours can also be found in the LG HI-MACS®
Volcanics range, where large translucent chips in the surfaces help to
intensify the clarity of the product.
The company is also moving into a new field by supplying LG DecoBowl™
for the bathroom and LG DecoSink™ for the kitchen, both supplied
in a variety of models and sizes.
Available in a range of dimensions, each non-porous LG HI-MACS® product
also comes with a specialist hygiene certificate.
LG HI-MACS® products are available across James Latham’s UK distribution
network. To find out more about these or any other products available,
visit the website at http://www.lathamtimber.co.uk,
or contact the marketing department on 0116 281 2264 or e-mail mailto:marketing@lathams.co.uk.
J
& J Ormerod on Profit Track 100 List
Lancashire
kitchen and bedroom manufacturer J & J Ormerod PLC has won national
recognition. The Rossendale-based company has been listed on the Sunday
Times PricewaterhouseCoopers Profit Track 100. The table which lists 100
of the best performing companies in the UK.
Stephen Greenhalgh, Joint Managing Director said: 'Everyone is naturally
delighted with the news, which reflects how well the company has performed
in recent years. It puts both J & J Ormerod and Rossendale on the
map.
'Being listed on the Sunday Times PricewaterhouseCoopers Profit Track
100 is a great credit to all our staff and management.
'Our policy has been to plough profits back into the company in order
to invest in new plant and machinery. Last year we invested £6M
on an extension to our Olive Mill factory and offices, which has increased
our ability to compete with manufacturers throughout the UK and Europe.
'We have also developed our own showroom in Stacksteads. The new Rossendale
Interiors showroom features over 40 displays and has proved extremely
popular. 'The investment strategy has also helped create new jobs and
just as significant helped protect the long term futures of our existing
workforce.'
The tumover for the last 12 months was £31M up from £29M in
the previous year and the signs are good this year, with tumover in March
up by 25 per cent on the same month last year. These results have come
on the back of a new business strategy to concentrate production at the
middle end of the market.
Added Stephen Greenhalgh: 'In 2002 we took a long hard look at the business
and made some difficult decisions about product lines. We decided to concentrate
on the more middle-market products. There was clearly an element of risk
about the strategy because it meant phasing out the bottom of the range
models, which until then, made up 20 per cent of tumover.
'But the results proved it was the right move at the right time. The future
looks bright for the company and for our employees in what is a highly
competitive market.'
J & J Ormerod designs, manufactures and supplies kitchens and bedrooms
to independent high street fumiture stores throughout the UK and into
Europe. It is one of Rossendale's oldest and largest firms, with over
400 employees at four sites in the area.
The company was also invited to The Profit Track 100 awards event and
dinner which was held at the Langham Hilton. London, on Tuesday 15th June
2004.
Tel: 01706 877877
Email: mailto:info@jjoplc.com
Hitachi
Capital Consumer Finance wins Kutchenhaus Retail Credit Business
Kutchenhaus
has appointed Hitachi Capital Consumer Finance to provide retail credit
services for its recently launched UK business.
Kutchenhaus has been trading in Europe for over 60 years but opened its
UK retail venture in May 2004. It believes the buoyant UK market matches
its customer profile perfectly.
Hitachi Capital will be providing both interest free and interest bearing
credit services to Kutchenhaus customers who visit the showroom at Trafford
Retail Park, Manchester.
‘Using our completely flexible kitchen package in terms of appliances,
finishes, styling and installation, our customer’s kitchen is designed
and built – no flat packs but only rigid kitchens,’ says Martin
Fritzen, UK Managing Director of Kutchenhaus.
Kutchenhaus has been building kitchens for UK homes for several years
through its partnerships with building contractors.
‘As Kutchenhaus is offering customers such a variable product, retail
credit services are an important part of the sales process,’ says
Ben Robinson, Market Development Manager for Hitachi Capital. ‘Retail
credit will allow customers to opt for a higher spec kitchen should they
want it and spread the payments over a pre-agreed period,’
Kutchenhaus is also taking advantage of Hitachi Capital’s on-line
credit processing system, Credit Master. Credit applications are authorised
over the Internet with agreements then printed off in-store.
‘This will give Kutchenhaus even greater control of their business
and is in keeping with the professional service they want to give to customers,’
added Ben Robinson.
To find out more about Hitachi Capital’s retail credit services or
Credit Master call 0800 085 8745
Change
of Trading Style and Addresses for Loveridge
Tony
Loveridge Kitchens & Bathrooms is now known as Loveridge Kitchens
& Bathrooms and has moved to a new address in Atherstone.
The address is now:-
Unit 2b Grove Business Park
Atherstone-on-Stour
Stratford-upon-Avon
Warwickshire
CV37 8DX
Tel. 01789 450796
Fax 01789 450987
The company's new email address is mailto:loveridgekb@btconnect.com
Any post sent to Tony Loveridge in Chapel Street, Stratford-upon-Avon
should be re-addressed as above.
Emails should no longer be sent to tonyloveridge@aol.com as this account
has now been closed.