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): December 11, 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.)
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Item 5. Other Events
On December 11, 1997 the Company issued a press release indicating it
has reached an agreement with Sears, Roebuck and Co. to begin selling the
full line of Maytag brand major appliances through Sears stores throughout
the U.S.
A copy of the Company's press release issued December 11, 1997 is
attached as Exhibit 99(a) and is incorporated herein by reference.
On December 11, 1997 the Company held a conference call discussing the
outlook for the fourth quarter of 1997, the full year 1997 and full year
1998.
A copy of the conference call remarks made by Gerald J. Pribanic,
Chief Financial Officer, on December 11, 1997 is attached as Exhibit 99(b)
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
December 11, 1997
(Date)
3<PAGE>
EXHIBIT INDEX
The following exhibit is filed herewith.
Exhibit No. Exhibit
99(a) Press Release.
99(b) Conference Call Remarks.
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Maytag Brand Appliances added to Sears Brand Central
NEWTON, Iowa--(Dec. 11, 1997)--Maytag Corporation announced today it has
reached an agreement with Sears, Roebuck and Co. to begin selling the full
line of Maytag brand major appliances through Sears stores throughout the
U.S. Maytag clothes washers and dryers, dishwashers, refrigerators, and
cooking appliances will be available in all Sears full-line and authorized
dealer stores beginning in the spring 1998. Maytag Corporation already
sells its Jenn-Air brand major appliances and Hoover brand floor care
products through Sears.
"Maytag Corporation and Sears have done business for a number of
years," said Leonard A. Hadley, chairman and CEO of Maytag Corporation.
"Adding Maytag brand appliances to the products we sell through Sears is a
logical and important step forward for us. And it complements a number of
other strategic steps we've taken in the past 18 months. We continue to
stay focused on growing the corporation profitably and this is another
initiative that opens significant new opportunities."
Lloyd D. Ward, executive vice president of Maytag Corporation and
president of Maytag Appliances, added, "We are committed to making it as
easy as possible for as many consumers as possible to buy a Maytag brand
appliance. In making that commitment a reality, we have grown with all the
retailers who sell Maytag and we expect to continue to grow with them.
Adding Sears will accelerate that growth."
Hadley concluded with comments about the corporation's performance in
1997. "We have developed a good deal of momentum this year, bringing
innovative new products to market, making strategic acquisitions, and
continuing our commitment to buy back shares of Maytag stock. That
momentum is pushing results for the fourth quarter somewhat higher than we
had anticipated earlier. That in turn, sets the stage for a stronger 1998,
which we expect will benefit from our expanded business with Sears."
Hadley noted that the benefits from the agreement with Sears would not
have an impact on Maytag's 1997 results, but are anticipated to begin to
show up in Maytag's results for the first quarter 1998.
Maytag Corporation is headquartered in Newton, Iowa, on the site of
the company's founding in 1893. Maytag Corporation is a leading producer
of major home appliances, floor care products, commercial laundry and
cooking equipment, and vending machines. Its principal retail brands
include Maytag, Jenn-Air, Hoover, Magic Chef, and Performa by Maytag.
Commercial cooking equipment is manufactured under the Blodgett, Pitco
<PAGE>
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Frialator, MagiKitch'n and Blodgett-Combi brands, and Dixie-Narco is the
corporation's vending equipment manufacturer. Maytag's joint venture in
China is with Hefei Rongshida, one of that country's leading washing
machine companies.
# # #
Media Contacts:
James G. Powell at Maytag 515-791-8392
Peggy Palter at Sears 847-286-8309
Additional Maytag Information is available at :http://www.maytagcorp.com
CPI 9731<PAGE>
Conference call remarks made by Gerald J. Pribanic, Chief Financial Officer
My comments this morning will focus on the progress being made in the
fourth quarter, the fourth quarter forecast and resulting full year
projection. Afterwards, a few comments will be made about the 1998
outlook.
We believe our fourth quarter to date sales continue to outperform the
industry with new product successes from Neptune laundry products, Hoover s
new technology Wind Tunnel upright vacuum and the Steam Vacuum third
generation. All of these new products are seeing strong consumer
acceptance in spite of their significantly higher price points. The
resulting effects are higher unit sales, higher average selling price, and
improving overall earnings and margins. From operations only, we would
look for earnings per share to exceed the current consensus level.
However, an anticipated treasury transaction will result in a charge which
will bring us back near the current consensus.
More specifically, we anticipate refinancing $49 million of ESOP debt
which currently has a 9.35 percent coupon. This is being replaced with a
much lower rate of 5.13 percent. The one-time extraordinary item to be
recognized in the fourth quarter will be $5 million pre-tax or three cents
per share.
As we move into the year-end closing cycle other potential adjustments
could emerge and cause further adjustments both plus and minus which are
not foreseen at this time. Until then, our best estimate for full year
earnings per share is around the consensus level after considering the
previous mentioned debt retirement cost.
Accepting the fact that our 1997 results are not yet finalized and the
1998 budgets still represent work in process, the outlook for 1998 looks
like more good news similar to what we have seen in late 1997. 1997 was a
year with a lot of new product startups and launches while 1998 should
begin to yield the full year benefit of these 1997 partial year
initiatives. Let me reiterate several of these:
1. The new Advanced Product Design line of top mount refrigerators was
started up in the first quarter of 1997 with full retail roll out in the
second quarter. Not only will we have the full year benefit for the top
mounts, but the side-by-side models will begin their startup and roll out
in the first quarter.
2. The new Maytag Neptune line of laundry products saw the commercial line
rolled out at the end of the first quarter in 1997 with the consumer models
hitting the market around mid year. All Maytag Neptune models are getting
strong sell through and are expected to continue their penetration into
1998.
3. Hoover Wind Tunnel upright vacuums which were launched early in the
third quarter of 1997 and will get the full year benefit in 1998. This was
closely followed by Steam Vacuum III which began retail sell through around
mid third quarter. Again, full year benefit in 1998 will have a beneficial
effect on both the top and bottom lines especially because of their higher
price points.
4. Blodgett which was acquired at the beginning of the fourth quarter of
1997 will have an additional three quarters of performance in 1998.<PAGE>
5. The new Rongshida Maytag line of refrigerators for the China market
will startup production in the later part of 1998 and will not yield
significant top line growth because of their late season introduction.
This means that all of the startup costs will be borne in 1998 with very
little top line growth from refrigeration to offset these startup costs.
The net effect of all these new product initiatives is that we are
currently looking for top line growth to be significantly greater than the
overall industry expectations. We are looking for total top line growth to
approach double digits.
Strong top line growth can be expected to generate another year of
solid cash flows. This money will first of all be used for funding
internal capital projects along with modest acquisition possibilities, if
the expected returns justify the project. Beyond that, share buy back will
continue to be an important part of our cash use strategy. Capital
expenditures are expected to be down to about $180 million.
The bottom line expectation is for continuing improvement along with
another strong positive effect on earnings per share. With a lot of
unknowns still out there, we look for at least the 1998 earnings per share
performance to be in the high end of the range for the current analyst's
consensus. If realized, this would give another year of earnings per share
improvement approaching the 20 percent mark.
This is about the best guidance I can give you at this point until
these multiple product initiatives get better seated in the business. <PAGE>
