Maytag on track to meet cost cut plan

Maytag on track to meet cost cut plan
 
Date November 19, 2004
Section(s) Local News
Brief  
 
NEW YORK (PRNewswire-FirstCall) — Maytag Corporation today presented its strategies for improved performance during a conference with financial analysts in New York City, saying that Maytag is a much different company than it was just a year ago.

Chairman and CEO Ralph F. Hake commented, “Through our One Company restructuring initiative, we have laid the foundation for a much reduced cost structure, improved profitability, enhanced customer responsiveness and accelerated decision-making that will positively impact our overall competitiveness.”

Hake said that the One Company initiative announced in June, which integrated Maytag Appliances, Hoover floor care and Maytag‘s corporate headquarters, will transform the organization into a faster, leaner and more unified Maytag. Earlier this week, Maytag announced the implementation of a pay freeze and a voluntary separation program designed to cut costs.

“While this initiative brings with it many changes, our strategy remains a constant,” Hake said. “Innovative products, preferred brands, best-in-class quality and best-in-class costs are the key to future profitable growth.”

At the conference, Maytag executives outlined plans to achieve improved earnings in 2005, expected by the company to be in the range of $1.50 to $1.60 per share, including 5 cents per share in restructuring and related charges. This shows marked improvement over full-year 2004 earnings per share.

Hake told analysts that Maytag is on track to achieve $150 million in annual savings from the One Company restructuring.

“An additional $30 million in annual savings is expected as a result of our new refrigeration strategy now in place,” he said.

Maytag has broadened its focus beyond North America as the company expands global sourcing opportunities.

“We will achieve cost improvement and become more market-responsive as a result of accelerated global procurement, the start-up of a China design center to supplement existing R &D resources, and product supply partnerships with Asian companies,” Hake said.

George Moore, Maytag‘s executive vice president and chief financial officer, pointed out that aggressive cost-saving initiatives and appliance pricing increases have been implemented to help offset steel and fuel cost increases, which continue to pressure profitability.

“Net debt levels have decreased, and we have consistently generated strong cash flows,” Moore said.

The company demonstrated its commitment to product innovation by citing the numerous launches over the past year, including:

* Maytag, Amana and Jenn-Air French door bottom-freezer refrigerators

* Maytag Double Oven ranges

* Jenn-Air Dual-Fuel ranges

* Jade wall ovens

* Neptune Top Load washers

* Neptune Drying Center

* Maytag compact front load laundry

* Maytag and Jenn-Air stainless steel tall-tub dishwashers

* Hoover Agility extractors

* SkyBox by Maytag Rookie mini refrigerators with customizable front panels

* Dixie-Narco ice cream venders and snack venders.

Among planned, upcoming product launches are Jenn-Air glass front refrigerators and dishwashers, additions to Maytag high efficiency laundry offerings, Jade residential cooking products and refrigeration, Jenn- Air small appliances, additions to the popular SkyBox by Maytag line, Hoover extractors, hard surface cleaners and high-end vacuum cleaners.

Maytag‘s investment community conference was webcast over the Internet. A replay of the conference will remain available online through Nov. 23 on the Corporate News Center of Maytag‘s Web site, http://www.maytagcorp.com , under “CEO Presentations.”

Maytag Corporation is a $4.8 billion home and commercial appliance company focused in North America and in targeted international markets. The corporation’s primary brands are Maytag, Hoover, Jenn-Air, Amana, Dixie-Narco and Jade.

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