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Maytag Q2 Appliance Segment Sales Dip 2.7%

7/15/2003 11:55:00 AM Eastern

Newton, Iowa - Second quarter declines in sales volume and pricing of floor care products pulled overall sales in the home appliances segment at Maytag down 2.7 percent, to $1.09 billion, from $1.12 billion in the year-ago period.

Operating income for the home appliances segment, which includes major appliances as well as floor care, plunged 55.2 percent in the second three months, ended June 30, reaching $57.3 million, down from $127.8 million in the second quarter of 2002. Current-year operating income includes a $26.7 million charge for a plant closing.

'Maytag achieved a respectable performance despite challenging second quarter market conditions,' said Ralph Hake, chairman/CEO. 'While major appliance industry unit sales were up about 1 percent in the quarter, the floor care industry was down nearly 9 percent in the April and May timeframe.

Hake said Maytag has completed the majority of its corporate-wide restructuring plan announced in April, and that cost reductions and new product introductions will be on track to support second half performance.

'We worked hard to reduce our costs, and those efforts should continue to pay off in the second half as we benefit from our restructuring savings, steel cost reductions and multiple product launches,' said Hake. 'We plan to bring new products to market in virtually all of our platforms, with improved consumer benefits, costs and quality improvements,' he added.

When the commercial appliances segment is added to Maytag's home appliances business, consolidated second quarter sales slid 2.5 percent, hitting $1.16 billion, down from $1.19 billion in the same period a year earlier. Net income decreased 62.9 percent in the second quarter, to $25.2 million, including $18.8 million in after-tax charges, compared with net income of $68 million in the same three months in 2002.

First-half home appliances segment sales dropped 3.4 percent, hitting $2.16 billion, down from $2.24 billion year-on-year. Operating income for home appliances in the first six months was off 45.3 percent, to $135.1 million, down from $246.8 million in the same six months a year ago.

Consolidated first-half sales dropped 3 percent, to $2.3 billion, down from $2.4 billion in the first half of last year. Net income decreased 52.1 percent in the first half, to $59.7 million, including a $25 million after-tax charge, compared with net income of $124.8 million year over year.

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