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Maytag Q3 Majap Sales Up 3%

10/15/2002 08:57:00 AM Eastern

Newton, Iowa - Third quarter sales and net profit in Maytag's home appliance segment, which includes major appliances and floor care products, edged up 3 percent, reaching $1.10 billion, up from $1.07 billion in the year-ago period.

Net income for the segment jumped 48.2 percent in the three months, ending Sept. 30, hitting $55.6 million, compared with $37.5 million in the year-earlier quarter. Operating income in the home appliance segment, excluding the gain on the sale of a distribution center, hit $104.5 million, up 22.6 percent from the $85.2 million recorded in the third quarter of 2001.

'We continue to see dramatic improvements in year-over-year performance, despite what is admittedly a challenging environment for home appliances,' said Ralph F. Hake, chairman/CEO. Hake noted the segment's improvement in operating margins - up 160 basis points in the third quarter, to 8.6 percent, and up 210 basis points year to date, to 9.3 percent. 'This reflects the rapid integration of Amana and aggressive cost reduction actions,' Hake said.

For the nine months, home appliance sales rose 15.3 percent, to $3.3 billion, up from $2.9 billion in the same period in 2001. Operating income, excluding the gain on the distribution center sale, increased 46.1 percent, reaching $351.3 million, up from $240.5 million in the same period last year. Net income jumped 78.8 percent, to $182 million, compared with $101.8 million year over year.

Maytag said its ongoing competitiveness will benefit from the recently announced relocation of refrigeration production in late 2003 and 2004, but the closing of a refrigeration plant in Illinois will result in pre-tax restructuring charges in the range of $140 million to $160 million. The company said $70 million to $80 million of this will be recognized in the fourth quarter, with the remainder in 2003 and 2004.

Overall Maytag sales rose 3.1 percent in the third quarter, hitting $1.2 billion, up from $1.1 billion in the third quarter of last year. In the third quarter, consolidated net income hit $60.8 million, including the gain on the distribution center sales, compared with a loss of $29.7 million, including special items, in the third quarter of 2001. Last year's third quarter included two months of the acquired Amana majap business.

For the nine months, overall Maytag sales increased 14.7 percent, to $3.5 billion, up from $3.1 billion in the same period last year. Consolidated net income for the nine months more than doubled, to $185.5 million, including a loss from discontinued operations and the gain on the distribution center sale, up from $68.4 million year over year.

Looking ahead, Hake expects to continue to see slower industry sales in the fourth quarter and lower production rates on some majaps.