Maytag Corporation today reported fourth quarter consolidated sales of $1.272 billion, up 12.8 percent from $1.127 billion in the same period of 2002. Fourth quarter 2003 reported operating income was $47.3 million and reported net income was $23.9 million, or 30 cents per share. In the fourth quarter 2002, Maytag reported $21.7 million in operating income and $3.3 million in net income, or 4 cents per share.

Commenting on the company's performance in 2003, Maytag Chairman and CEO Ralph F. Hake, said, "We achieved strong revenue growth in the fourth quarter, and earnings were consistent with our expectations. Cash flow performance was very strong, which enabled us to substantially exceed our targets for pension funding and debt reduction. Maytag Appliances continued its marketplace momentum with additional share gains in the fourth quarter during another quarter of strong industry growth. We experienced especially strong results from Maytag International, Maytag Appliances and Dixie-Narco vending. Floor Care performance improved sequentially from the third quarter."

Maytag's strong cash flow enabled the corporation to reduce debt by $140 million, exceeding its goal of $100 million, and to contribute $265 million to the pension fund, exceeding the 2003 target of $135 million.

"Our operating income, excluding the items affecting comparability, was down for the quarter and for the year, primarily as the result of the decline in profitability in the Floor Care business. Throughout 2003, the product mix shift in the floor care industry toward products in lower price categories led to lower volume, margins and pricing within our Floor Care business at Hoover. We continue to introduce new products and lower our cost structure in Floor Care. I believe that this business has been stabilized by these actions and that it is positioned for recovery," Hake said.

Hake added that the stream of new, innovative product introductions across the company is progressing well. Contributing to increased performance in the fourth quarter was an array of new products including the revitalized tall-tub dishwasher product line, French door bottom freezer refrigerators, and recently redesigned cooking products. During the fourth quarter, Maytag successfully launched the Neptune(R) Drying Center(TM), Neptune TL top-loading washer, two value-priced Hoover upright vacuum cleaners and the Hoover SpinSweep(TM) outdoor sweeper.

Product momentum is expected to continue through 2004. Maytag Appliances plans to introduce new products in laundry, cooking and refrigeration. In Floor Care, a series of new vacuum cleaners and extractors is scheduled for launch starting in the second quarter.

Additionally, Maytag Services expects to grow its all-brand service program; Dixie-Narco plans to extend into new product categories; and the number of Maytag Stores is expected to grow significantly in 2004.

Maytag home water filtration system, the SkyBox(TM) by Maytag personal beverage vender, and Jenn-Air Attrezzi(TM) small appliances are other new offerings that are expected to provide growth in 2004.

"We anticipate low single digit growth in unit sales in the major appliances and floor care industries in 2004, with continuing declines in pricing. We expect to outgrow the industry in both categories and expect to improve profitability through our product launches, sourcing agreements and efficiencies gained through LeanSigma(R) implementation," Hake said.

"The breakthrough contract Hoover signed with its I.B.E.W. union employees in North Canton, Ohio, gives the company the flexibility to compete while providing job guarantees for a number of employees at that location. The contract, which was signed well ahead of its 2005 expiration, provides for continuous production as we restructure the Floor Care business," he added. The contract is expected to result in a substantial reduction of annual benefit costs starting in 2004.

One recent development of concern is the imposition of surcharges and proposed price increases for steel. "We will work to overcome the impact. Our expectation is that the anticipated benefit of the Hoover contract savings and the fourth quarter additional pension contributions will likely offset the risk of increases in steel costs in 2004," Hake said.

"With the steady flow of new products, we expect to generate revenue and earnings growth in 2004. As previously announced, earnings per share in the first quarter are expected to be in the range of 42 to 47 cents including a restructuring charge of 8 cents related to the closing of the company's Galesburg plant. For the full year, we are expecting reported earnings of $1.90 to $2.00 per share including Galesburg-related restructuring charges of approximately 40 cents," Hake said.