Appliance maker Maytag Corporation announced that its board of directors was unable to determine that the Whirlpool Corporation proposal to purchase shares of Maytag may reasonably be expected to lead to a financially superior transaction that is reasonably capable of being completed.
Maytag said that such a determination is a prerequisite under Maytag's existing merger agreement with the Ripplewood-led group for Maytag to furnish information to, and have discussions and negotiations with, Whirlpool and will continue to evaluate the proposal.
Maytag also said that its board of directors has not changed its recommendation of the existing Ripplewood-led transaction.
In other news, Maytag reported second-quarter consolidated sales of U.S. $1.23 billion, up 6.7 percent from sales of $1.15 billion in the same period last year. Net income for the second quarter was $3.5 million, or $0.04 per share, compared with a net loss of $41.1 million, or $0.52 per share, in the same period last year.
Maytag said second-quarter sales were up year-over-year in all major categories of the home appliances segment, including refrigeration, laundry, cooking, dishwashing, and floor care. Sales of commercial products declined versus a year ago, a result of continued weakness in the vending industry.
Maytag Chairman and CEO Ralph Hake said that sales of major appliances showed solid improvement during the quarter with refrigeration and cooking product sales up appreciably. "Sales of our French-Door bottom-freezers under the Jenn-Air, Maytag, and Amana brand names are strong. In cooking, all Jenn-Air products, including cooktops and wall ovens generated positive gains for the company. Also, Jenn-Air stainless steel dishwashers and Maytag's new Neptune front-load washers have generated encouraging consumer interest this quarter."
Mr. Hake noted that all floor care categories sold under the Hoover brand experienced significant year-over-year growth with market share gains in upright vacuums as the primary sales driver.
For the 6-month period, Maytag reported sales were $2.40 billion, up 1 percent from sales of $2.37 billion in the same period of 2004. Net income for the 6-month period was $11.2 million, or $0.14 per share. Maytag reported a net loss of $2.4 million, or $0.03 per share for the 6-month period.
Maytag reaffirmed that its earnings per share estimate for the full-year are expected to range from $0.45 to $0.55, including approximately $0.10 in restructuring charges.
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