"Higher raw material and energy costs significantly impacted our operating results for the quarter and the year"
Maytag Chairman and CEO Ralph Hake stated

Maytag Corporation today reported fourth quarter consolidated sales of $1.16 billion, down 8.4 percent from sales of $1.27 billion in the same period last year. Net loss for the fourth quarter of 2004 was $14.1 million or 18 cents per share, compared to net income of $23.9 million or 30 cents per share a year ago. The fourth quarter of 2004 included 13 weeks, versus 14 weeks in the fourth quarter a year ago.

The fourth quarter included restructuring and related charges of 13 cents per share for the Galesburg closure and "One Company" reorganization, as well as 13 cents per share for reserves related to the early generation front-load washer litigation.

Unfavorable fourth quarter and year-over-year comparisons were caused primarily by lower Hoover floor care sales and margins and lower sales of vending equipment in Commercial Products, along with higher steel and energy- related costs.

For the full year 2004, Maytag's sales were $4.72 billion, down 1.5 percent from $4.79 billion in 2003. Operating income was $40.3 million for 2004 versus $228.3 million for the prior year. Net loss for 2004 was $9 million or 11 cents per share, versus net income of $120.1 million, or $1.53 per share in 2003.

Commenting on the fourth quarter and full year, Maytag Chairman and CEO Ralph Hake stated, "Higher raw material and energy costs significantly impacted our operating results for the quarter and the year. We have addressed our challenges head on, and have taken decisive steps to improve Maytag's performance going forward. This includes completing our 'One Company' restructuring, which is expected to realize $150 million in annual savings.

"We had a cadence of new products in 2004 that continued our leadership in innovation with a 24-inch compact washer and dryer, the successful French door bottom-freezer refrigerator, the dual-fuel, double-oven free-standing range, the Maytag(R) Neptune(R) Drying Center and Maytag(R) Neptune(R) Top-Load high- efficiency washer, to name just a few. We expect to see the benefit of this 2004 product line-up, along with those planned for 2005, during this coming year."

Maytag Services and Maytag International experienced double-digit revenue growth during 2004, with both becoming increasingly important to the overall business. Weakness in the vending industry produced a sales decline in Commercial Products, partially offset by improved performance in the Jade commercial cooking business.

Hake noted that the company experienced sequential volume growth in the floor care business in the fourth quarter, particularly with extractors and hard floor cleaners. "While more progress needs to be made, we are seeing some positive results from implementation of our floor care strategy, which includes cost reduction efforts and new product launches in uprights, extractors and bare floor cleaners," Hake said.

Fourth quarter cash flow was favorably impacted by improvements in working capital levels, a result of lower inventories and higher accounts payable. Strong, positive cash flow enabled the company to increase cash and cash equivalents by approximately $107 million from the end of third quarter and approximately $158 million from the end of 2003.

Commenting on earnings expectations for 2005, Hake said the company is lowering its earnings guidance for 2005 as a result of lower revenue generation in the fourth quarter 2004 and recent distribution announcements that occurred in January. The company expects reported earnings per share in 2005 of $1.10 to $1.30, including about 5 cents in restructuring charges. Previously, the company noted that 2005 guidance for reported earnings per share were expected to be in the range of $1.50 to $1.60, including about 5 cents in restructuring charges.

"It's not business as usual for Maytag," Hake said. "We're a leaner organization that's becoming more responsive on all levels. We expect to benefit in the coming year from our 'One Company' cost reductions and our stream of innovative products, including the new Maytag 27-inch washer and dryer, Jenn-Air suite of reflective glass appliances, the FloorMate(TM) hard floor cleaner, and a premium upright introduction, among others. As we work through the first quarter, we also expect to benefit from favorable pricing initiatives, which were announced late last year."