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Maytag Corp.

Posted On: 7/25/2002

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Maytag Corp. reported that its second quarter sales were up 22% from the second quarter of last year and income from continuing operations rose 147%, excluding special items in the prior year, and Dixie-Narco played a role in the strong results.

Maytag's consolidated sales in the second quarter of this year were $1.193 billion, versus $975.2 million, and operating income was $121.8 million, compared with $64 million in 2001. Income from continuing operations was $68.3 million, or $0.86 per share, compared with $27.7 million, or $0.35 a share a year earlier.

Net income, including discontinued operations, was $68 million, or $0.86 per share during the second quarter, versus $21.8 million a year earlier. This year's second quarter results include the Amana appliance business, which Maytag acquired in August of last year.

Maytag's commercial appliances segment, composed of Dixie-Narco vending equipment and Jade kitchen products, had second quarter sales of $76.8 million, up 13% from $67.9 million in the second quarter of 2001. The segment reported operating income of $7.6 million, compared with $4.2 million in last year's second quarter.

"As we anticipated a month ago, all our businesses delivered improved results in the second quarter. Most of the 22% year-over-year sales growth was due to the Amana acquisition. The remainder came from increased sales of Maytag laundry products and all Jenn-Air appliances, strong sales of the new Hoover Floor Mate hard-floor cleaner and improvement in Dixie-Narco's glass-front vender business," said Maytag chairman and CEO Ralph F. Hake. "Our improvement in second quarter income is attributable to a favorable mix of higher margin Maytag laundry and Jenn-Air products, overall volume-related efficiencies and positive results generated by our cost control initiatives."

Maytag's sales in the first six months of 2002 amounted to $2.37 billion, up 21% from sales of $1.95 billion in the first half of 2001. Operating income was $229 million, up 62% from $141 million in the year-earlier period.

Net income in this year's first half was $124.8 million, or $1.59 per share, and it included a loss of $0.02 a share from discontinued operations, compared with $98.1 million, or $2.04 per share in the first half of last year.

The commercial appliances segment reported first half sales of $135.2 million and an operating income of $8.9 million. In the first half of 2001, commercial sales were $132.6 million and operating income was $7.1 million.

Looking ahead, Hake sees Maytag continuing to perform well, but year-over-year growth may not be as strong in the second half of this year as it was in the first.

"So far this year, we've been comparing results to periods in 2001 when we did not own Amana, but year-over-year growth comparisons will change because Amana was acquired August 1 of last year," said Hake. "Additionally, the major appliance industry has been surprisingly strong in the first half of this year, but I think the industry growth rate will taper off in the months ahead. Maytag's business could be less robust because of that, plus we will experience our normal production shutdowns in the second half."

On the plus side, Hake added that Maytag has some exciting new home and commercial appliance products that will be in the marketplace in August and September and that the company will continue to benefit from its cost control initiatives. For the full year 2002, the company expects Maytag's sales to be up about 15% over 2001 and earnings per share from continuing operations should be about $3.10, compared with last year's earnings of $1.77 from continuing operations, excluding special items. "Overall, we are on track to deliver strong cash flow to reduce total debt by approximately $200 million this year," Hake concluded.