UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): July 17, 1997
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: 515-792-7000
N/A
(Former name or former address, if changed since last report.)
Page 1 of 4<PAGE>
Item 5. Other Events
On July 17, 1997 the Company issued a press release on its second quarter
and first half of 1997 results and included an update of information regarding a
major customer, Montgomery Ward, which filed for Chapter 11 bankruptcy
protection on July 7.
A copy of the Company's press release issued July 17, 1997 is attached as
Exhibit 99(a) and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c)Exhibits.
The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
2<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Maytag Corporation
(Registrant)
By: s/s G. J. Pribanic
G. J. Pribanic
Chief Financial Officer
July 17, 1997
(Date)
3<PAGE>
EXHIBIT INDEX
The following exhibit is filed herewith.
Exhibit No. Exhibit
99(a) Press Release.
4<PAGE>
MAYTAG'S SECOND QUARTER SALES UP NEARLY 8 PERCENT
NEWTON, IOWA--(July 17, 1997)--Maytag's sales in the second quarter of
this year rose 7.9 percent over the second quarter of 1996, while net
income was off slightly from the year-earlier period.
Consolidated sales in the quarter increased to $814.5 million and
included $26.3 million in sales from Maytag's China joint venture formed
last fall. Sales were $754.6 million in last year's second period.
Operating income was $88.4 million in the quarter, up 8 percent from
$81.8 million a year ago. Net income was $43.8 million (45 cents a share),
compared to last year's second quarter record of $44.3 million (43 cents a
share).
Discussing the results, Maytag Chairman and Chief Executive Officer
Leonard A. Hadley said, "Sales of Hoover brand floor care products and
Dixie-Narco vending equipment continued to be strong in the second quarter,
and Maytag's commercial laundry equipment business benefitted from our new
high-efficiency, horizontal-axis washer. Sales were up for Maytag
International, which handles export sales and licensing agreements, and our
China joint venture had another successful quarter.
"Major appliances, our largest product category, posted a slight sales
increase for the quarter in an intensely competitive business environment.
Sales of the new Maytag and Jenn-Air brand refrigerators were exceptionally
strong. Maytag laundry equipment and dishwashers, plus Magic Chef cooking
appliances, also experienced quarterly gains in unit sales. We noted some
weakness in other branded product categories and in private label sales.
"As expected, operating income for major home appliances was somewhat
<PAGE>
2
depressed by costs associated with the initial production of our new
products, aggressive merchandising programs and added costs involving our
recently established regional product distribution centers.
"Net income was impacted by higher interest expense in this year's
second quarter, compared to the second quarter of 1996.
"Looking ahead, we continue to believe 1997 will be another good year
for Maytag. Our new products and models should help generate increased
sales in the second half of this year, and some costs associated with the
new product initiatives will decrease."
Maytag's North American home appliance segment (major appliances and
floor care products) reported record second quarter sales of $724.6 million
and operating income of $84.6 million. A year ago, second quarter sales
were $709.5 million and operating income was $85.2 million.
Dixie-Narco's vending equipment sales rose to $63.7 million, versus
$45.1 million a year ago. Operating income was $7.7 million, compared to
$3 million in the second quarter of 1997 when the company experienced
production-related problems.
Maytag's China joint venture with Hefei Rongshida reported second
quarter sales of $26.3 million and operating income of $2.6 million.
First Half 1997
Maytag's consolidated sales in the first six months of this year were
$1.607 billion, up 8.2 percent from $1.486 billion in last year's first
half. Operating income was $164.9 million, versus $118.5 million last year
after a $40 million restructuring charge.
Net income in the first half of 1997 was $82.3 million (84 cents a
share), compared to $60.5 million (58 cents a share). Excluding the
<PAGE>
3
restructuring charge, last year's first half net income was $84.9 million
(82 cents a share).
Maytag's North American home appliance segment reported first half
sales of $1.426 billion and operating income of $158.1 million. A year
ago, first half sales were $1.392 billion and operating income was $123.9
million, after the $40 million restructuring charge.
Dixie-Narco's first half sales rose to $119.6 million, versus $93.7
million a year ago. Operating income was $14.3 million, compared to $8.9
million in the first half of last year.
Maytag's China joint venture had sales of $61.7 million in the first
half of this year and operating income of $6.1 million.
Discussing a current situation, Hadley noted that the corporation
faces unresolved issues involving a major customer, Montgomery Ward, which
filed for Chapter 11 bankruptcy protection on July 7. At the time of the
filing, after adjustments which should be available in bankruptcy, Maytag
had accounts receivables due from Montgomery Ward of approximately $39
million.
Hadley said, "It is too early to determine when and to what extent the
amount due from Montgomery Ward will be recovered. Based on information
currently available, we have a reserve for the portion of this account we
consider to be at risk. We continue to evaluate this situation and are
having discussions with Montgomery Ward regarding our relationship as they
restructure their business, operating under the auspices of bankruptcy
court."
Maytag Corporation is a leading producer of major home appliances,
floor care products and vending equipment. Its well-known brands include
<PAGE>
4
Maytag, Jenn-Air, Hoover, Magic Chef and Admiral. Dixie-Narco is the
corporation's vending equipment manufacturer. Maytag's joint venture in
China is with Hefei Rongshida, one of the country's leading washing machine
companies.
* * *
CPI9715
Media Contact: Additional Information:
James G. Powell http://www.maytagcorp.com
Maytag Communications
515-791-8392<PAGE>
5
SECOND QUARTER SALES AND EARNINGS RECONCILIATION
NET SALES (in thousands)
1997 1996 %Change
Home appliances
North America $ 724,569 $ 709,511 + 2.1
Asia 26,255
Vending equipment 63,717 45,108 + 41.3
Consolidated $ 814,541 $ 754,619 + 7.9
OPERATING INCOME (in thousands)
1997 1996 %Change
Home appliances
North America $ 84,596 $ 85,172 - 0.7
Asia 2,625
Vending equipment 7,739 3,017 +156.5
General corporate (6,574) (6,370)
Consolidated $ 88,386 $ 81,819 + 8.0
NET INCOME (in thousands)
1997 1996 %Change
Reported $ 43,783 $ 44,343 - 1.3
EARNINGS PER SHARE
1997 1996 %Change
Reported $ 0.45 $ 0.43 + 4.7
Weighted average shares
outstanding (thousands) 97,785 102,604 - 4.7 <PAGE>
6
FIRST HALF SALES AND EARNINGS RECONCILIATION
NET SALES (in thousands)
1997 1996 %Change
Home appliances
North America $1,425,729 $1,392,161 + 2.4
Asia 61,708
Vending equipment 119,573 93,704 +27.6
Consolidated $1,607,010 $1,485,865 + 8.2
OPERATING INCOME (in thousands)
1997 1996 %Change
Home appliances
North America $ 158,103 $ 163,901 - 3.5
Restructuring charge (40,000)
Asia 6,149
Vending equipment 14,300 8,940 +60.0
General corporate (13,666) (14,321)
Consolidated $ 164,886 $ 118,520 +39.1
NET INCOME (in thousands)
1997 1996 %Change
Comparative $ 82,283 $ 84,861 - 3.0
Restructuring charge
(after-tax) (24,400)
Reported $ 82,283 $ 60,461 +36.1
EARNINGS PER SHARE
1997 1996 %Change
Comparative $ O.84 $ 0.82 + 2.4
Restructuring charge (0.24)
Reported $ 0.84 $ 0.58 +44.8
Weighted average shares
outstanding (thousands) 97,700 103,667 - 5.8 <PAGE>
MAYTAG CORPORATION -
CONDENSED STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
(In thousands, except per share data)
Second Quarter Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
_________________________________________________________________________
Net sales............... $ 814,541 $ 754,619 $1,607,010 $1,485,865
Cost of sales........... 590,096 547,404 1,173,083 1,076,223
Gross profit ........ 224,445 207,215 433,927 409,642
Selling, general and
administrative expenses. 136,059 125,396 269,041 251,122
Restructuring charge.... 40,000
Operating income .... 88,386 81,819 164,886 118,520
Interest expense........ (14,431) (10,458) (29,142) (21,360)
Other - net............. ( 1,601) 891 478 1,955
Income before
income taxes and
minority interest.... 72,354 72,252 136,222 99,115
Income taxes............ 27,728 27,909 51,872 38,654
Income before
minority interest.... 44,626 44,343 84,350 60,461
Minority interest....... (843) (2,067)
Net income .......... $ 43,783 $ 44,343 $ 82,283 $ 60,461
==========================================================================
Earnings per common share:
Net income .......... $ 0.45 $ 0.43 $ 0.84 $ 0.58
==========================================================================
Weighted average shares
outstanding............. 97,785 102,604 97,700 103,667
__________________________________________________________________________
<PAGE>
MAYTAG CORPORATION -
CONDENSED STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION
(In thousands)
June 30 Dec. 31
1997 1996
(unaudited)
__________________________________________________________________________
ASSETS
Current assets
Cash and cash equivalents.................... $ 33,770 $ 27,543
Accounts receivable - net.................... 511,328 462,882
Inventories.................................. 366,400 327,136
Deferred income taxes........................ 30,266 30,266
Other current assets......................... 45,908 57,132
Total current assets..................... 987,672 904,959
Noncurrent assets............................ 555,635 573,096
Property, plant and equipment ............... 894,125 851,885
Total assets ............................ $2,437,432 $2,329,940
==========================================================================
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Accounts payable and accrued expenses........ $ 448,736 $ 455,435
Notes payable and
current maturities of long-term debt....... 162,417 114,576
Total current liabilities................ 611,153 570,011
Deferred income taxes ....................... 27,115 27,012
Long-term debt .............................. 479,100 488,537
Postretirement benefits other than pensions.. 451,536 447,415
Other noncurrent liabilities ................ 157,694 152,998
Minority interest ........................... 72,044 69,977
Shareowners' equity ......................... 638,790 573,990
Total liabilities and shareowners' equity $2,437,432 $2,329,940
==========================================================================
<PAGE>
