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 March 31, 1999
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: 515-792-7000
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
The number of shares outstanding of each of the issuer's classes of common
stock, as of March 31, 1999:
Common Stock, $1.25 par value - 88,419,858
Page 1 of 16<PAGE>
MAYTAG CORPORATION
Quarterly Report on Form 10-Q
Quarter Ended March 31, 1999
I N D E X
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income................3
Condensed Consolidated Balance Sheets......................4
Condensed Consolidated Statements of Cash Flows............6
Notes to Condensed Consolidated Financial Statements.......7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................9
Item 3. Quantitative and Qualitative Disclosures about Market
Risk.................................................14
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.....................15
Signatures................................................16
2<PAGE>
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
MAYTAG CORPORATION
Condensed Consolidated Statements of Income
Three Months Ended
March 31
In thousands except per share data 1999 1998
Net sales $1,106,186 $1,040,386
Cost of sales 778,849 736,485
Gross profit 327,337 303,901
Selling, general and administrative expenses 173,845 168,821
Operating income 153,492 135,080
Interest expense (15,379) (15,585)
Other - net 565 328
Income before income taxes and minority
interest 138,678 119,823
Income taxes 52,004 44,132
Income before minority interest 86,674 75,691
Minority interest 342 (3,424)
Net income $ 87,016 $ 72,267
Basic earnings per common share:
Net income $ 0.98 $ 0.77
Diluted earnings per common share:
Net income $ 0.95 $ 0.75
Dividends per common share $ 0.18 $ 0.16
See notes to condensed consolidated financial statements.
3<PAGE>
MAYTAG CORPORATION
Condensed Consolidated Balance Sheets
March 31 December 31
In thousands except share data 1999 1998
Assets
Current assets
Cash and cash equivalents $ 29,941 $ 28,642
Accounts receivable 571,668 472,979
Inventories 414,018 383,753
Deferred income taxes 39,014 39,014
Other current assets 31,570 44,474
Total current assets 1,086,211 968,862
Noncurrent assets
Deferred income taxes 123,773 120,273
Prepaid pension cost 1,434 1,399
Intangible pension asset 62,811 62,811
Other intangibles 437,612 424,312
Other noncurrent assets 46,390 44,412
Total noncurrent assets 672,020 653,207
Property, plant and equipment
Property, plant and equipment 1,983,485 1,954,263
Less allowance for depreciation 1,019,922 988,669
Total property, plant and equipment 963,563 965,594
Total assets $ 2,721,794 $ 2,587,663
See notes to condensed consolidated financial statements.
4<PAGE>
MAYTAG CORPORATION
Condensed Consolidated Balance Sheets - Continued
March 31 December 31
In thousands except share data 1999 1998
Liabilities and Shareowners' Equity
Current liabilities
Notes payable $ 165,281 $ 112,898
Accounts payable 266,202 279,086
Compensation to employees 65,136 81,836
Accrued liabilities 186,972 176,701
Income taxes payable 45,192
Current portion of long-term debt 140,183 140,176
Total current liabilities 868,966 790,697
Noncurrent liabilities
Deferred income taxes 21,068 21,191
Long-term debt, less current portion 464,409 446,505
Postretirement benefit liability 463,586 460,599
Accrued pension cost 76,064 69,660
Other noncurrent liabilities 112,990 117,392
Total noncurrent liabilities 1,138,117 1,115,347
Minority interest 171,858 174,055
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 488,714 467,192
Retained earnings 831,096 760,115
Cost of Common stock in treasury
(1999 - 28,745,886 shares;
1998 - 27,932,506 shares) (865,389) (805,802)
Employee stock plans (44,007) (45,331)
Accumulated other comprehensive income (13,999) (15,048)
Total shareowners' equity 542,853 507,564
Total liabilities and shareowners'
equity $ 2,721,794 $ 2,587,663
See notes to condensed consolidated financial statements.
5<PAGE>
MAYTAG CORPORATION
Condensed Consolidated Statements of Cash Flows
Three Months Ended
March 31
In thousands 1999 1998
Operating activities
Net income $ 87,016 $ 72,267
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority interest (342) 3,424
Depreciation and amortization 37,790 38,104
Deferred income taxes (3,623) (4,362)
Changes in working capital items exclusive
of business acquisitions:
Accounts receivable (96,755) (82,437)
Inventories (27,764) (22,931)
Other current assets 12,924 1,419
Other current liabilities 29,407 55,584
Pension assets and liabilities 6,369 5,199
Postretirement benefit liability 2,987 2,159
Other - net (5,497) 18,288
Net cash provided by operating activities 42,512 86,714
Investing activities
Capital expenditures (32,180) (27,361)
Business acquisitions (3,551)
Total investing activities (35,731) (27,361)
Financing activities
Proceeds from issuance of notes payable 52,392 55,801
Repayment of notes payable (9) (1,617)
Proceeds from issuance of long-term debt 24,000
Repayment of long-term debt (6,089) (131)
Stock repurchases (73,852) (46,844)
Forward stock purchase amendment (63,782)
Stock options exercised and other common stock
transactions 15,572 15,986
Dividends (17,888) (17,558)
Investment by joint venture partner 6,900
Total financing activities (5,874) (51,245)
Effect of exchange rates on cash 392 (360)
Increase in cash and cash equivalents 1,299 7,748
Cash and cash equivalents at beginning of period 28,642 27,991
Cash and cash equivalents at end of period $ 29,941 $ 35,739
See notes to condensed consolidated financial statements.
6<PAGE>
MAYTAG CORPORATION
Notes to Condensed Consolidated Financial Statements
March 31, 1999
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. Operating results for the
three month period ended March 31, 1999 are not necessarily indicative of the
results that are expected for the year ending December 31, 1999. 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
December 31, 1998.
NOTE B--COMPREHENSIVE INCOME
Total comprehensive income and its components, net of related tax, for the first
quarter of 1999 and 1998 are as follows:
Three Months Ended
March 31
In thousands 1999 1998
Net income $ 87,016 $ 72,267
Unrealized gains (losses) on securities 423 (1,963)
Foreign currency translation 626 (479)
Comprehensive income $ 88,065 $ 69,825
The components of accumulated other comprehensive income, net of related tax are
as follows:
March 31 December 31
In thousands 1999 1998
Unrealized losses on securities $ (4,439) $ (4,862)
Foreign currency translation (9,560) (10,186)
Accumulated other comprehensive income $ (13,999) $ (15,048)
NOTE C--INVENTORIES
Inventories consisted of the following:
March 31 December 31
In thousands 1999 1998
Raw materials $ 66,907 $ 69,039
Work in process 71,762 66,578
Finished products 344,339 317,331
Supplies 8,912 8,856
Total FIFO cost 491,920 461,804
Less excess of FIFO cost over LIFO 77,902 78,051
Inventories $ 414,018 $ 383,753
NOTE D--EARNINGS PER SHARE
7<PAGE>
The following table sets forth the computation of basic and diluted earnings per
share:
March 31
In thousands except per share data 1999 1998
Numerator for basic and diluted earnings
per share -- net income $ 87,016 $ 72,267
Denominator for basic earnings per share
-- weighted-average shares 88,686 94,346
Effect of dilutive securities:
Stock option plans 1,822 1,647
Restricted stock awards 141 162
Forward stock purchase contract 605
Dilutive potential common shares 2,568 1,809
Denominator for diluted earnings per
share -- adjusted weighted-average
shares 91,254 96,155
Basic earnings per share $ 0.98 $ 0.77
Diluted earnings per share $ 0.95 $ 0.75
NOTE E--CONTINGENCIES
Maytag has contingent liabilities arising in the normal course of business,
including: guarantees, repurchase agreements, pending litigation, environmental
remediation and other claims, taxes and other claims which are not considered to
be significant in relation to Maytag's consolidated financial position.
NOTE F--SEGMENT REPORTING
Maytag has three reportable segments: home appliances, commercial appliances and
international appliances. Maytag's home appliances segment manufactures major
appliances (laundry products, dishwashers, refrigerators, cooking appliances)
and floor care products. These products are sold primarily to major national
retailers and independent retail dealers in North America and targeted
international markets.
Maytag's commercial appliances segment manufactures commercial cooking and
vending equipment. These products are sold primarily to distributors, soft
drink bottlers, restaurant chains and dealers in North America and targeted
international markets.
The international appliances segment consists of Maytag's 50.5 percent
owned joint venture in China, Rongshida-Maytag, which manufactures laundry
products and refrigerators. These products are sold primarily to department
stores and distributors in China.
Maytag's reportable segments are distinguished by the nature of products
manufactured and sold and types of customers. Maytag's home appliances segment
has been further defined based on distinct geographical locations.
Financial information for Maytag's reportable segments consisted of the
following:
8<PAGE>
Three Months Ended
March 31
In thousands 1999 1998
Net sales
Home appliances $ 926,448 $ 881,986
Commercial appliances 136,746 107,979
International appliances 42,992 50,421
Consolidated total $ 1,106,186 $ 1,040,386
Operating income
Home appliances $ 148,366 $ 127,750
Commercial appliances 18,033 11,884
International appliances (3,083) 4,238
Total for reportable segments 163,316 143,872
Corporate (9,824) (8,792)
Consolidated total $ 153,492 $ 135,080
March 31 December 31
In thousands 1999 1998
Total assets
Home appliances $ 1,844,774 $ 1,736,396
Commercial appliances 309,831 266,750
International appliances 256,952 255,361
Total for reportable segments 2,411,557 2,258,507
Corporate 310,237 329,156
Consolidated total $ 2,721,794 $ 2,587,663
The reconciliation of segment profit to consolidated income before income
taxes and minority interest consisted of the following:
Three Months Ended
March 31
In thousands 1999 1998
Total operating income for reportable
segments $ 163,316 $ 143,872
Corporate (9,824) (8,792)
Interest expense (15,379) (15,585)
Other - net 565 328
Consolidated income before income taxes
and minority interest $ 138,678 $ 119,823
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Comparison of 1999 with 1998
Maytag Corporation ("Maytag") has three reportable segments: home appliances,
commercial appliances and international appliances. (See discussion and
financial information about Maytag's reportable segments in "SEGMENT REPORTING"
section of the Notes to Condensed Consolidated Financial Statements.)
Net Sales: Consolidated net sales were $1.11 billion in the first quarter of
1999, an increase of 6 percent compared to the same period in 1998.
Home appliances net sales increased 5 percent in the first quarter of 1999
compared to 1998. The net sales increase was due primarily to increased sales
of recently introduced premium brand products, including Hoover upright vacuum
cleaners, Hoover deep carpet cleaners, Maytag Neptune laundry products and
Maytag and Jenn-Air brand side by side refrigerators, partially offset by a
decrease in net sales of value brand products. Net sales also benefitted from
9<PAGE>
favorable economic conditions which contributed to strong growth in industry
shipments of major appliances and floor care products. Maytag plans to continue
to introduce new premium brand products throughout the remainder of 1999.
Net sales of commercial appliances were up 27 percent from the first
quarter of 1998. The net sales increase was due primarily to a significant
increase in the sales volume of Dixie-Narco can and bottle venders. First
quarter net sales included sales of Jade Products Company ("Jade"), a
manufacturer of premium commercial ranges and refrigeration units and
commercial-style residential ranges and outdoor grills acquired by Maytag
effective January 1, 1999. Excluding Jade, commercial appliances net sales
increased 23 percent from 1998.
Net sales of international appliances, which consists of Maytag's 50.5
percent owned joint venture in China, were down 15 percent in the first quarter
of 1999 from the same period in 1998. The sales decrease was attributable to
lower unit volume and lower selling prices.
Gross Profit: Consolidated gross profit as a percent of sales increased to 29.6
percent of sales in the first quarter of 1999 from 29.2 percent of sales in the
first quarter of 1998. The increase in gross margin was due primarily to
favorable brand and product sales mix and lower raw material costs compared to
the prior year, partially offset by an increase in research and development
costs.
Maytag expects to continue to realize lower raw material prices in 1999
compared to 1998.
Selling, General and Administrative Expenses: Consolidated selling, general and
administrative expenses were 15.7 percent of sales in the first quarter of 1999
compared to 16.2 percent of sales in the first quarter of 1998. The decrease
was due primarily to lower advertising expenses as a percent of sales in home
appliances in the first quarter of 1999 compared to the first quarter of 1998.
Operating Income: Consolidated operating income for the first quarter of 1999
increased 14 percent to $153 million, or 13.9 percent of sales, compared to $135
million, or 13 percent of sales, in the same period in 1998.
Home appliances operating income increased 16 percent in the first quarter
of 1999 compared to 1998. Operating margin for the first quarter of 1999 was 16
percent of sales compared to 14.5 percent of sales in 1998. The increase in
operating margin was due primarily to the increase in gross profit margins and
decrease in selling, general and administrative expenses as a percent of sales
discussed above.
Commercial appliances operating income increased 52 percent in the first
quarter of 1999 compared to 1998. Operating margin for the first quarter of
1999 was 13.2 percent of sales compared to 11 percent of sales in 1998. The
increase in operating margin was due primarily to the operating leverage
obtained on fixed expenses from the increase in sales volume.
International appliances reported an operating loss of $3 million in the
first quarter of 1999 compared to operating income of $4 million in the first
quarter of 1998. The decrease in operating income was due to the decrease in
net sales described above and an increase in provisions primarily related to
uncollectible accounts receivable. The economic environment in China and the
Asian region continues to adversely impact the operations of Rongshida-Maytag.
Interest Expense: Interest expense remained approximately the same as the first
quarter of 1998 as higher average borrowings were offset by lower interest
rates.
10<PAGE>
Income Taxes: The effective tax rate for the first quarter of 1999 was 37.5
percent which was approximately the same as the first quarter of 1998.
Minority Interest: In the first quarter of 1999, minority interest consisted of
the income attributable to the noncontrolling interest of Anvil Technologies LLC
of $1.9 million and the loss attributable to the noncontrolling interest of
Rongshida-Maytag of $2.2 million. In the first quarter of 1998, minority
interest consisted of the income attributable to the noncontrolling interest of
Anvil Technologies LLC of $1.9 million and the income attributable to the
noncontrolling interest of Rongshida-Maytag of $1.5 million.
Net Income: Net income for the first quarter of 1999 was $87 million, or $0.95
diluted earnings per share, compared to net income of $72.3 million, or $0.75
diluted earnings per share in 1998. The increase in net income was due
primarily to the increase in operating income. The increase in diluted earnings
per share was due to the increase in net income and the positive effect of
Maytag's share repurchase program. (See discussion of the share repurchase
program in "Liquidity and Capital Resources" section of this Management's
Discussion and Analysis.)
Liquidity and Capital Resources
Maytag's primary sources of liquidity are cash provided by operating activities
and borrowings. Detailed information on Maytag's cash flows is presented in the
Condensed Consolidated Statements of Cash Flows.
Net Cash Provided by Operating Activities: Cash flow provided by operating
activities consists primarily of net income adjusted for certain non-cash items,
changes in working capital items, and changes in pension assets and liabilities
and postretirement benefits. Non-cash items include depreciation and
amortization and deferred income taxes. Working capital items consists
primarily of accounts receivable, inventories, other current assets and other
current liabilities.
Net cash provided by operating activities decreased due primarily to an
increase in cash used for working capital in the first quarter of 1999 compared
to the first quarter of 1998.
A portion of Maytag's accounts receivable is concentrated among major
national retailers. A significant loss of business with any of these retailers
could have an adverse impact on Maytag's ongoing operations.
Total Investing Activities: Maytag continually invests in its businesses for
new product designs, cost reduction programs, replacement of equipment, capacity
expansion and government mandated product requirements.
Capital expenditures in the first quarter of 1999 were $32 million compared
to $27 million in the first quarter of 1998. Maytag plans to invest
approximately $190 million in capital expenditures in 1999.
Effective January 1, 1999, Maytag acquired all of the outstanding shares of
Jade for approximately $19 million. In connection with the purchase, Maytag
retired debt and incurred transaction costs of $3.6 million and issued
approximately 290 thousand shares of Maytag common stock at a value of $15.6
million. The acquisition has been accounted for as a purchase, and the results
of its operation have been included in the consolidated financial statements
since the date of acquisition.
Total Financing Activities: Dividend payments on Maytag's common stock in the
first quarter of 1999 were $16 million, or $0.18 per share, compared to $15.2
million, or $0.16 per share in 1998.
During the first quarter of 1999, Maytag's board of directors authorized
11<PAGE>
the repurchase of up to 10 million additional shares beyond the previous
authorizations commencing in 1995 totalling 30.8 million shares. Under these
authorizations, Maytag has repurchased 23.4 million shares at a cost of $749
million through the end of the first quarter of 1999. During the first quarter
of 1999, Maytag repurchased 1.3 million shares at a cost of $74 million. As of
March 31, 1999, of the 17.4 million shares which may be repurchased under the
existing board authorizations, Maytag is committed to purchase 4.4 million
shares under put options contracts, if such options are exercised. (See
discussion of these put option contracts below.) Maytag plans to continue the
repurchase of shares over a non-specified period of time.
During the first quarter of 1998, Maytag amended the forward stock purchase
agreement associated with the repurchase of four million shares by Maytag during
1997. The future contingent purchase price adjustment included in the forward
stock purchase agreement was amended to provide for settlement based on the
difference in the market price of Maytag's common stock at the time of
settlement compared to the market price of Maytag's common stock as of March 24,
1998 rather than as of August 20, 1997. The net cost of the amendment was $64
million. The forward stock purchase contract allows Maytag to determine the
method of settlement. Maytag's objective in this transaction is to reduce the
average price of repurchased shares.
In connection with the share repurchase program, Maytag sells put options
which give the purchaser the right to sell shares of Maytag's common stock to
Maytag at specified prices upon exercise of the options. The put option
contracts allow Maytag to determine the method of settlement. Maytag's
objective in selling put options is to reduce the average price of repurchased
shares. In the first quarter of 1999, Maytag received $10.6 million in premium
proceeds from the sale of put options. As of March 31, 1999, there were 4.4
million put options outstanding with strike prices ranging from $43.30 to
$58.29; the weighted-average strike price was $56.24.
Any funding requirements for future investing and financing activities in
excess of cash on hand and generated from operations will be supplemented by
borrowings. Maytag's commercial paper program is supported by a credit
agreement with a consortium of banks which provides revolving credit facilities
totalling $400 million. This agreement expires June 29, 2001 and includes
covenants for interest coverage and leverage which Maytag was in compliance with
at March 31, 1999. On April 7, 1999, Maytag filed with the Securities and
Exchange Commission a shelf registration statement providing Maytag the ability
to issue an aggregate of $400 million of debt securities. Maytag expects to
issue these securities over a non-specified period of time and expects to use
the net proceeds from the sale of the securities for general corporate purposes,
including share repurchase programs, capital expenditures, working capital,
repayment or reduction of long-term and short-term debt and the financing of
acquisitions.
Market Risks
Maytag is exposed to foreign currency exchange risk inherent in its anticipated
sales and assets and liabilities denominated in foreign currencies. To mitigate
the short-term effects of changes in exchange rates on Maytag's foreign currency
denominated export sales, Maytag enters into foreign currency forward and option
contracts. Maytag's policy is to hedge a portion of its anticipated foreign
currency denominated export sales transactions, which are denominated primarily
in Canadian dollars, for periods not exceeding twelve months.
Maytag also is exposed to interest rate risk in Maytag's debt and the
commodity price risk inherent in Maytag's purchase of certain commodities used
in the manufacture of its products.
There have been no material changes in the reported market risks of Maytag
since December 31, 1998. See further discussion of these market risks and
12<PAGE>
related financial instruments in the Maytag Corporation annual report on Form
10-K for the year ended December 31, 1998.
Year 2000
The much publicized "Year 2000 problem", affecting most companies, arises
because many existing computer programs use only the last two digits to refer to
a year. Therefore, these computer programs do not properly recognize a year
that begins with "20" instead of the familiar "19". If not corrected, these
computer applications could fail or create erroneous results. Maytag uses
computer information systems and manufacturing equipment which may be affected.
It also relies on suppliers and customers who are also dependent on systems and
equipment which use date dependent software.
In 1996, Maytag began its effort for the conversion or replacement of North
American computer information systems which did not properly address the Year
2000. This effort involved both plans for creating replacement systems for
those computer information systems which were developed internally as well as
obtaining versions of software purchased from third parties which are Year 2000
ready. Maytag estimates that this effort is approximately 90 percent complete
as of March 31, 1999. Maytag essentially has converted or replaced its critical
computer information systems for its North American business operations. The
remaining effort relates primarily to the conversion or replacement of
Blodgett's computer information systems and other non-critical computer
information systems which Maytag expects to complete by mid-1999.
In mid-1997, Maytag began to review the manufacturing equipment used in
Maytag s North American operations as well as the systems related to the
infrastructure of the North American manufacturing and office facilities.
Maytag is continuing to inventory and verify Year 2000 readiness of computer
controlled manufacturing equipment and computer controls for the North American
manufacturing and office facilities. Maytag estimates that this effort is
approximately 90 percent complete as of March 31, 1999. Maytag expects to
complete the remediation efforts of its production equipment and systems related
to its infrastructure for its North American business operations by mid-1999.
In 1997, Maytag also began to assess the Year 2000 problem remediation
efforts of third parties in North America who have material relationships with
Maytag including, but not limited to: providers of services such as utilities,
suppliers of raw materials and customers where there is a significant business
relationship. However, there is no assurance that Maytag will not be adversely
affected by the Year 2000 problems of other organizations.
Rongshida-Maytag, Maytag's joint venture in China, is currently reviewing
the implications of the Year 2000 problem on computer information systems and
equipment used in the manufacture of its products or facilities.
The costs associated with Maytag's Year 2000 remediation are being expensed
as incurred, were not material to the performance of Maytag for previous periods
and are not expected to be material relative to the future performance of
Maytag. Maytag estimates it has spent approximately $14 million to date on the
Year 2000 issue and expects to spend not more than $20 million in total on the
Year 2000 issue. Maytag utilizes software which was acquired from third
parties. Maytag has maintenance agreements with certain of its software vendors
which, in return for annual contractual payments, enable it to obtain new
software releases, including versions which are Year 2000 ready.
If Maytag is unsuccessful, or if the remediation efforts of its key
suppliers or customers are unsuccessful with regard to Year 2000 remediation,
there may be a material adverse impact on Maytag's financial position and
results of operations. If Maytag's Year 2000 remediation effort is not
successful, the most likely worst case scenario is that Maytag will be unable to
manufacture and distribute its products. Maytag is unable to estimate the
financial impact of Year 2000 issues because it cannot predict the magnitude or
13<PAGE>
time length of potential Year 2000 business interruptions. Maytag has developed
a contingency plan which includes as a precautionary measure an increased level
of inventory to minimize the potential disruption in Maytag s ability to
manufacture and distribute products.
While Maytag expects its Year 2000 issues to be remedied successfully, it
cannot guarantee that Year 2000 issues, including those of third parties, will
not have an adverse effect on Maytag's consolidated financial position or
results of operations.
Contingencies
Maytag has contingent liabilities arising in the normal course of business or
from operations which have been discontinued or divested. (See discussion of
these contingent liabilities in "CONTINGENCIES" section of the Notes to
Condensed Consolidated Financial Statements.)
Forward-Looking Statements
This Management's Discussion and Analysis contains statements which are not
historical facts and are considered "forward-looking" within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are identified by their use of the terms: "expects," "intends," "may
impact," "plans" or "should." These forward-looking statements involve a number
of risks and uncertainties that may cause actual results to differ materially
from expected results. These risks and uncertainties include, but are not
limited to, the following: business conditions and growth of industries in which
Maytag competes, including changes in economic conditions in the geographic
areas where Maytag's operations exist or products are sold; timing, start-up and
customer acceptance of newly designed products; shortages of manufacturing
capacity; competitive factors, such as price competition and new product
introductions; significant loss of business from a major national retailer; the
ability of Maytag and customers and suppliers to become Year 200 ready in a
timely manner; the cost and availability of raw materials and purchased
components; progress on capital projects; the impact of business acquisitions or
dispositions; the costs of complying with governmental regulations; level of
share repurchases; litigation and other risk factors.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
See discussion of quantitative and qualitative disclosures about market risk in
"Market Risks" section of Management's Discussion and Analysis.
14<PAGE>
MAYTAG CORPORATION
Exhibits and Reports on Form 8-K
March 31, 1999
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 (a) Financial Data Schedule - Quarter Ended March 31, 1999
(b) Reports on Form 8-K
Maytag filed a Form 8-K dated January 15, 1999 under Item 5, Other Events,
indicating it signed an agreement to purchase Jade Range, a privately held
manufacturer of home and commercial appliances.
Maytag filed a Form 8-K dated February 16, 1999 under Item 5, Other Events,
indicating it expected 1999 revenues to exceed record 1998 levels with a
1999 earnings per share growth rate in the mid-teens.
Maytag filed a Form 8-K dated February 16, 1999 under Item 5, Other Events,
indicating the board of directors extended the current share repurchase
program by authorizing the repurchase of up to 10 million additional
shares.
Maytag filed a Form 8-K dated March 25, 1999 under Item 5, Other Events,
indicating its first quarter sales and income were running ahead of
expectations, and earnings per share for the period would likely exceed
current estimates by financial analysts.
15<PAGE>
MAYTAG CORPORATION
Signatures
March 31, 1999
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 thereunto duly authorized.
MAYTAG CORPORATION
Date: May 12, 1999
Gerald J. Pribanic
Executive Vice President and
Chief Financial Officer
Steven H. Wood
Vice President, Financial
Reporting and Audit and Chief
Accounting Officer
16<PAGE>
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0
0
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</TABLE>
