UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended April 3, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-655
MAYTAG CORPORATION
| A Delaware Corporation | I.R.S. Employer Identification No. 42-0401785 |
403 West Fourth Street North, Newton, Iowa 50208
Registrant’s telephone number: 641-792-7000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares outstanding of each of the issuer’s classes of common stock, as of April 3, 2004:
Common Stock, $1.25 par value – 78,924,550
Quarterly Report on Form 10-Q
Quarter Ended April 3, 2004
INDEX
| PART I | ||||
| Item 1. | ||||
| 3 | ||||
| 4 | ||||
| 6 | ||||
| 7 | ||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 | ||
| Item 3. | 23 | |||
| Item 4. | 23 | |||
| PART II | ||||
| Item 6. | 24 | |||
| 25 | ||||
Consolidated Statements of Income
| In thousands, except per share data |
Three Months Ended |
|||||||
| April 3 2004 |
March 29 2003 |
|||||||
| Net sales |
$ | 1,218,944 | $ | 1,136,006 | ||||
| Cost of sales |
1,007,823 | 935,886 | ||||||
| Gross profit |
211,121 | 200,120 | ||||||
| Selling, general and administrative expenses |
139,494 | 122,543 | ||||||
| Restructuring charges |
7,995 | 9,387 | ||||||
| Operating income |
63,632 | 68,190 | ||||||
| Interest expense |
(12,891 | ) | (13,779 | ) | ||||
| Other income (loss) |
2,866 | (1,990 | ) | |||||
| Income from continuing operations before income taxes |
53,607 | 52,421 | ||||||
| Income taxes |
14,883 | 17,823 | ||||||
| Income from continuing operations |
38,724 | 34,598 | ||||||
| Loss from discontinued operations |
— | (118 | ) | |||||
| Net income |
$ | 38,724 | $ | 34,480 | ||||
| Basic earnings (loss) per common share: |
||||||||
| Income from continuing operations |
$ | 0.49 | $ | 0.44 | ||||
| Discontinued operations |
— | — | ||||||
| Net income |
$ | 0.49 | $ | 0.44 | ||||
| Diluted earnings (loss) per common share: |
||||||||
| Income from continuing operations |
$ | 0.49 | $ | 0.44 | ||||
| Discontinued operations |
— | — | ||||||
| Net income |
$ | 0.49 | $ | 0.44 | ||||
| Cash dividends paid per share |
$ | 0.18 | $ | 0.18 | ||||
3
Consolidated Balance Sheets
| In thousands, except share data |
April 3 2004 |
January 3 2004 | ||||
| Assets |
||||||
| Current assets |
||||||
| Cash and cash equivalents |
$ | 7,726 | $ | 6,756 | ||
| Accounts receivable-net |
669,879 | 596,832 | ||||
| Inventories |
581,401 | 468,345 | ||||
| Deferred income taxes |
62,205 | 63,185 | ||||
| Other current assets |
80,329 | 94,030 | ||||
| Discontinued current assets |
67,156 | 75,175 | ||||
| Total current assets |
1,468,696 | 1,304,323 | ||||
| Noncurrent assets |
||||||
| Deferred income taxes |
172,331 | 183,685 | ||||
| Prepaid pension cost |
1,595 | 1,666 | ||||
| Intangible pension asset |
66,615 | 66,615 | ||||
| Goodwill |
269,013 | 269,013 | ||||
| Other intangibles |
37,245 | 37,498 | ||||
| Other noncurrent assets |
48,767 | 54,069 | ||||
| Discontinued noncurrent assets |
60,994 | 60,336 | ||||
| Total noncurrent assets |
656,560 | 672,882 | ||||
| Property, plant and equipment |
||||||
| Property, plant and equipment |
2,648,084 | 2,628,985 | ||||
| Less accumulated depreciation |
1,627,826 | 1,582,050 | ||||
| Total property, plant and equipment |
1,020,258 | 1,046,935 | ||||
| Total assets |
$ | 3,145,514 | $ | 3,024,140 | ||
4
Maytag Corporation
Consolidated Balance Sheets - Continued
| In thousands, except share data |
April 3 2004 |
January 3 2004 |
||||||
| Liabilities and Shareowners’ Equity |
||||||||
| Current liabilities |
||||||||
| Notes payable |
$ | 191,284 | $ | 71,491 | ||||
| Accounts payable |
495,287 | 466,734 | ||||||
| Compensation to employees |
65,806 | 69,388 | ||||||
| Accrued liabilities |
247,504 | 245,935 | ||||||
| Current portion of long-term debt |
26,503 | 24,503 | ||||||
| Discontinued current liability |
98,300 | 105,739 | ||||||
| Total current liabilities |
1,124,684 | 983,790 | ||||||
| Noncurrent liabilities |
||||||||
| Long-term debt, less current portion |
877,427 | 874,832 | ||||||
| Postretirement benefit liability |
540,383 | 538,105 | ||||||
| Accrued pension cost |
343,651 | 398,495 | ||||||
| Other noncurrent liabilities |
147,922 | 144,341 | ||||||
| Discontinued noncurrent liability |
18,766 | 18,766 | ||||||
| Total noncurrent liabilities |
1,928,149 | 1,974,539 | ||||||
| Shareowners’ equity |
||||||||
| Preferred stock: |
||||||||
| Authorized—24,000,000 shares (par value $1.00) |
||||||||
| Issued—none |
||||||||
| Common stock: |
||||||||
| Authorized—200,000,000 shares (par value $1.25) |
||||||||
| Issued—117,150,593 shares, including shares in treasury |
146,438 | 146,438 | ||||||
| Additional paid-in capital |
431,187 | 432,696 | ||||||
| Retained earnings |
1,384,891 | 1,360,361 | ||||||
| Cost of common stock in treasury (2004—38,286,575 shares; 2003—38,410,885 shares) |
(1,450,995 | ) | (1,455,706 | ) | ||||
| Employee stock plans |
(806 | ) | (817 | ) | ||||
| Accumulated other comprehensive income |
(418,034 | ) | (417,161 | ) | ||||
| Total shareowners’ equity |
92,681 | 65,811 | ||||||
| Total liabilities and shareowners’ equity |
$ | 3,145,514 | $ | 3,024,140 | ||||
5
Consolidated Statements of Cash Flows
| Three Months Ended |
||||||||
| In thousands |
April 3 2004 |
March 29 2003 |
||||||
| Operating activities |
||||||||
| Net income |
$ | 38,724 | $ | 34,480 | ||||
| Adjustments to reconcile net income to net cash (used in) provided by continuing operating activities: |
||||||||
| Net loss from discontinued operations |
— | 118 | ||||||
| Depreciation |
41,207 | 40,024 | ||||||
| Amortization |
241 | 241 | ||||||
| Deferred income taxes |
12,334 | 9,491 | ||||||
| Restructuring charges, net of cash paid |
5,742 | 8,936 | ||||||
| Accounts receivable |
(73,940 | ) | (36,754 | ) | ||||
| Inventories |
(113,287 | ) | (25,456 | ) | ||||
| Other current assets |
13,565 | 56,913 | ||||||
| Trade payables |
28,400 | (13,419 | ) | |||||
| Other current liabilities |
471 | 2,227 | ||||||
| Pension expense |
15,934 | 16,596 | ||||||
| Pension contributions |
(70,672 | ) | (858 | ) | ||||
| Postretirement benefit liability |
2,278 | 6,671 | ||||||
| Other |
15,126 | (10,915 | ) | |||||
| Net cash (used in) provided by continuing operating activities |
$ | (83,877 | ) | $ | 88,295 | |||
| Investing activities |
||||||||
| Capital expenditures-continuing operations |
$ | (21,729 | ) | $ | (36,798 | ) | ||
| Financing activities |
||||||||
| Net proceeds of notes payable |
$ | 119,792 | $ | 119,373 | ||||
| Repayment of long-term debt |
(3 | ) | (155,456 | ) | ||||
| Stock repurchases |
— | (1,021 | ) | |||||
| Stock options exercised |
1,068 | 208 | ||||||
| Dividends on common stock |
(14,183 | ) | (14,097 | ) | ||||
| Cash to discontinued operations |
(78 | ) | (43 | ) | ||||
| Financing activities-continuing operations |
$ | 106,596 | $ | (51,036 | ) | |||
| Effect of exchange rates on cash |
(20 | ) | 1,641 | |||||
| Increase in cash and cash equivalents |
970 | 2,102 | ||||||
| Cash and cash equivalents at beginning of year |
6,756 | 8,106 | ||||||
| Cash and cash equivalents at end of year |
$ | 7,726 | $ | 10,208 | ||||
6
Notes to Consolidated Financial Statements
April 3, 2004
NOTE A – BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal and recurring nature. Operating results for the three-month period ended April 3, 2004 are not necessarily indicative of the results that are expected for the fiscal year ending January 1, 2005. For further information, refer to the consolidated financial statements and footnotes included in the Maytag Corporation annual report on Form 10-K for the year ended January 3, 2004.
NOTE B – COMPREHENSIVE INCOME
Total comprehensive income and its components, net of related tax are as follows:
| Three Months Ended |
||||||||
| In thousands |
April 3 2004 |
March 29 2003 |
||||||
| Net income |
$ | 38,724 | $ | 34,480 | ||||
| Other comprehensive income (loss) items, net of income taxes |
||||||||
| Unrealized losses on securities |
(422 | ) | (23 | ) | ||||
| Foreign currency translation |
(452 | ) | 1,515 | |||||
| Total other comprehensive income (loss) |
(874 | ) | 1,492 | |||||
| Comprehensive income |
$ | 37,850 | $ | 35,972 | ||||
The components of accumulated other comprehensive loss, net of related tax are as follows:
| In thousands |
April 3 2004 |
January 3 2004 |
||||||
| Minimum pension liability adjustment |
$ | (416,538 | ) | $ | (416,538 | ) | ||
| Unrealized losses on securities |
945 | 1,367 | ||||||
| Foreign currency translation loss |
(2,442 | ) | (1,990 | ) | ||||