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 2, 2005 |
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 2, 2005:
Common Stock, $1.25 par value – 79,698,173
1
MAYTAG CORPORATION
Quarterly Report on Form 10-Q
Quarter Ended April 2, 2005
INDEX
| PART I |
FINANCIAL INFORMATION | |||
| Item 1. |
Financial Statements | |||
| Consolidated Statements of Operations | 3 | |||
| Consolidated Balance Sheets | 4 | |||
| Consolidated Statements of Cash Flows | 6 | |||
| Notes to Consolidated Financial Statements | 7 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 | ||
| Item 3. |
Quantitative and Qualitative Disclosures about Market Risk | 22 | ||
| Item 4. |
Controls and Procedures | 22 | ||
| PART II |
OTHER INFORMATION | |||
| Item 6. |
Exhibits | 23 | ||
| Signatures | 24 | |||
2
Maytag Corporation
Consolidated Statements of Operations
| Three Months Ended |
||||||||
| In thousands, except per share data |
April 2 2005 |
April 3 2004 |
||||||
| Net sales |
$ | 1,167,839 | $ | 1,218,944 | ||||
| Cost of sales |
1,038,769 | 1,007,823 | ||||||
| Gross profit |
129,070 | 211,121 | ||||||
| Selling, general and administrative expenses |
100,130 | 139,494 | ||||||
| Restructuring and related charges |
4,854 | 7,995 | ||||||
| Operating income |
24,086 | 63,632 | ||||||
| Interest expense |
(15,775 | ) | (12,891 | ) | ||||
| Other income |
2,428 | 2,866 | ||||||
| Income before taxes |
10,739 | 53,607 | ||||||
| Income tax expense |
3,007 | 14,883 | ||||||
| Net income |
$ | 7,732 | $ | 38,724 | ||||
| Basic earnings per common share: |
||||||||
| Net income |
$ | 0.10 | $ | 0.49 | ||||
| Diluted earnings per common share: |
||||||||
| Net income |
$ | 0.10 | $ | 0.49 | ||||
| Cash dividends paid per share |
$ | 0.18 | $ | 0.18 | ||||
3
Maytag Corporation
Consolidated Balance Sheets
| In thousands, except share data |
April 2 2005 |
January 1 2005 | ||||
| Assets |
||||||
| Current assets |
||||||
| Cash and cash equivalents |
$ | 98,510 | $ | 164,276 | ||
| Accounts receivable-net |
655,730 | 629,901 | ||||
| Inventories |
541,673 | 515,321 | ||||
| Deferred income taxes |
54,589 | 55,862 | ||||
| Prepaids and other current assets |
71,727 | 80,137 | ||||
| Total current assets |
1,422,229 | 1,445,497 | ||||
| Noncurrent assets |
||||||
| Deferred income taxes |
252,186 | 253,428 | ||||
| Prepaid pension cost |
1,368 | 1,492 | ||||
| Intangible pension asset |
49,051 | 49,051 | ||||
| Goodwill |
259,413 | 259,413 | ||||
| Other intangibles, net |
35,434 | 36,016 | ||||
| Other noncurrent assets |
44,653 | 53,965 | ||||
| Total noncurrent assets |
642,105 | 653,365 | ||||
| Property, plant and equipment |
||||||
| Land |
15,818 | 15,489 | ||||
| Buildings and improvements |
343,817 | 343,321 | ||||
| Machinery and equipment |
1,837,813 | 1,866,485 | ||||
| Construction in progress |
28,854 | 19,874 | ||||
| Property, plant and equipment |
2,226,302 | 2,245,169 | ||||
| Less accumulated depreciation |
1,336,964 | 1,324,007 | ||||
| Total property, plant and equipment |
889,338 | 921,162 | ||||
| Total assets |
$ | 2,953,672 | $ | 3,020,024 | ||
4
Maytag Corporation
Consolidated Balance Sheets - Continued
| In thousands, except share data |
April 2 2005 |
January 1 2005 |
||||||
| Liabilities and Shareowners’ Deficit |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 518,605 | $ | 545,901 | ||||
| Compensation to employees |
50,784 | 50,195 | ||||||
| Accrued liabilities |
283,450 | 307,924 | ||||||
| Current portion of long-term debt |
189,043 | 6,043 | ||||||
| Total current liabilities |
1,041,882 | 910,063 | ||||||
| Noncurrent liabilities |
||||||||
| Long-term debt, less current portion |
779,826 | 972,568 | ||||||
| Postretirement benefit liability |
532,289 | 531,995 | ||||||
| Accrued pension cost |
498,189 | 496,480 | ||||||
| Other noncurrent liabilities |
179,904 | 183,942 | ||||||
| Total noncurrent liabilities |
1,990,208 | 2,184,985 | ||||||
| Shareowners’ deficit |
||||||||
| 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 |
424,110 | 428,889 | ||||||
| Retained earnings |
1,287,750 | 1,294,412 | ||||||
| Cost of common stock in treasury (2005—37,515,261 shares; 2004—37,737,263 shares) |
(1,421,763 | ) | (1,430,176 | ) | ||||
| Employee stock plans |
(3,482 | ) | (3,913 | ) | ||||
| Accumulated other comprehensive loss |
(511,471 | ) | (510,674 | ) | ||||
| Total shareowners’ deficit |
(78,418 | ) | (75,024 | ) | ||||
| Total liabilities and shareowners’ deficit |
$ | 2,953,672 | $ | 3,020,024 | ||||
5
Consolidated Statements of Cash Flows
| Three Months Ended |
||||||||
| In thousands |
April 2 2005 |
April 3 2004 |
||||||
| Operating activities |
||||||||
| Net income |
$ | 7,732 | $ | 38,724 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
| Depreciation |
41,296 | 41,207 | ||||||
| Amortization |
600 | 241 | ||||||
| Deferred income taxes |
2,517 | 12,334 | ||||||
| Restructuring and related charges, net of cash paid |
(13,828 | ) | 5,742 | |||||
| Adverse judgment on pre-acquisition distributor lawsuit |
(12,250 | ) | — | |||||
| Changes in working capital items |
||||||||
| Accounts receivable |
(26,579 | ) | (73,940 | ) | ||||
| Inventories |
(26,889 | ) | (113,287 | ) | ||||
| Other current assets |
8,042 | 13,565 | ||||||
| Trade payables |
(26,501 | ) | 28,400 | |||||
| Other current liabilities |
(4,841 | ) | 471 | |||||
| Pension expense |
17,533 | 15,934 | ||||||
| Pension contributions |
(15,729 | ) | (70,672 | ) | ||||
| Postretirement benefit liability |
294 | 2,278 | ||||||
| Other liabilities |
(2,854 | ) | 9,749 | |||||
| Other assets |
1,509 | 4,910 | ||||||
| Other |
181 | 467 | ||||||
| Net cash used in operating activities |
$ | (49,767 | ) | $ | (83,877 | ) | ||
| Investing activities |
||||||||
| Capital expenditures |
$ | (12,849 | ) | $ | (21,729 | ) | ||
| Proceeds from property disposition, net of transaction costs |
11,123 | — | ||||||
| Investing activities |
$ | (1,726 | ) | $ | (21,729 | ) | ||
| Financing activities |
||||||||
| Net proceeds of notes payable |
$ | — | $ | 119,792 | ||||
| Repayment of long-term debt |
(2,000 | ) | (3 | ) | ||||
| Stock options and employee stock |
2,060 | 1,068 | ||||||
| Dividends on common stock |
(14,311 | ) | (14,183 | ) | ||||
| Other |
— | (78 | ) | |||||
| Total - Financing activities |
$ | (14,251 | ) | $ | 106,596 | |||
| Effect of exchange rates on cash |
(22 | ) | (20 | ) | ||||
| Increase (decrease) in cash and cash equivalents |
(65,766 | ) | 970 | |||||
| Cash and cash equivalents at beginning of period |
164,276 | 6,756 | ||||||
| Cash and cash equivalents at end of period |
$ | 98,510 | $ | 7,726 | ||||
6
MAYTAG CORPORATION
Notes to Consolidated Financial Statements
April 2, 2005
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 2, 2005, are not necessarily indicative of the results that are expected for the fiscal year ending December 31, 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 1, 2005 (the “2004 Form 10-K”).
NOTE B – COMPREHENSIVE INCOME
Total comprehensive income and its components, net of related tax are as follows:
| Three Months Ended |
||||||||
| In thousands |
April 2 2005 |
April 3 2004 |
||||||
| Net income |
$ | 7,732 | $ | 38,724 | ||||
| Other comprehensive loss items, net of income taxes |
||||||||
| Unrealized losses on securities, net of tax |
— | (422 | ) | |||||
| Foreign currency translation, net of tax |
(797 | ) | (452 | ) | ||||
| Total other comprehensive loss |
(797 | ) | (874 | ) | ||||
| Comprehensive income |
$ | 6,935 | $ | 37,850 | ||||
The components of accumulated other comprehensive loss, net of related tax are as follows
| In thousands |
April 2 2005 |
January 1 2005 |
||||||
| Minimum pension liability adjustment |
$ | (507,793 | ) | $ | (507,793 | ) | ||
| Foreign currency translation loss |
(3,678 | ) | (2,881 | ) | ||||
| Accumulated other comprehensive loss |
$ | (511,471 | ) | $ | (510,674 | ) | ||
7
NOTE C – INVENTORIES
Inventories consisted of the following:
| In thousands |
April 2 2005 |
January 1 2005 | ||||
| Raw materials |
$ | 79,765 | $ | 86,416 | ||
| Work in process |
||||||