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SECURITY: SFP (Common)
EXCHANGE: New York Stock Exchange CURRENCY: US Dollar
Salton, Inc. is a leading
designer, marketer and distributor of a broad range of branded, high quality
small appliances under well-recognized brand names such as Salton(R), George
Foreman(TM), Toastmaster(R), Breadman(R), Juiceman(R), Farberware(R), Melitta(R),
Russell Hobbs(R), Kenmore(R), Cooks Essential(R), Tower(R), Haden(R), Pifco(R)
and Westinghouse(R). Salton also designs and markets tabletop products,
time products, lighting products and personal care and wellness products
under brand names such as Block China(R), Atlantis(R) Crystal, Sasak(R),
Calvin Klein(R), Ingraham(R), Westclox(R), Big Ben(R), Timex(R) Timers,
Stiffel(R), Ultrasonex(TM), Relaxor(R), Carmen(R), Salton(R), and Andrew
Collinge
Salton,
Inc. Enters Into Exclusivity Agreement
LAKE
FOREST, Ill.--(BUSINESS WIRE)--Nov. 16, 2006--Salton, Inc. (NYSE:SFP) announced
today that the company has entered into an exclusivity agreement with Harbinger
Capital Partners Master Fund I, Ltd. (Harbinger). The agreement provides
that Salton will not on or prior to December 15, 2006 solicit or, subject
to certain exceptions, otherwise negotiate any acquisition proposal involving
Salton with any person other than Harbinger. Salton and Harbinger are currently
in discussions with respect to a possible combination of Salton and Applica,
which is party to a definitive agreement to be acquired by certain affiliates
of Harbinger . Harbinger has agreed to use its commercially reasonable
efforts to complete its due diligence and negotiate customary commitment
letters in respect of financing for the combined companies, in each case
on or prior to December 15, 2006.
Salton
emphasized that there can be no assurance that any transaction will occur
or, if one is undertaken, of its potential terms or timing. Salton may
not update its progress or disclose developments with respect to potential
strategic initiatives unless the Board of Directors has approved a definitive
course of action or transaction.
Salton
Announces First Quarter Results
Gross
Profit Margin Up, with Operating Income Improving $11 Million
LAKE
FOREST, Ill.--(BUSINESS WIRE)--Nov. 14, 2006--Salton, Inc. (NYSE: SFP)
announced today fiscal results for its first quarter ended September 30,
2006. The Company reported net sales of $138.3 million in the first quarter
of fiscal 2007 and a loss of $10.0 million, or $(0.70) per share, versus
net sales of $148.4 million in the first quarter of fiscal 2006 and net
income of $29.7 million, or $1.83 per diluted share. The net income reported
in fiscal 2006 included a pretax gain of $21.7 million resulting from the
early settlement of debt associated with the Company's private debt exchange
offer and a $27.8 million gain associated with the sale of its 52.6% ownership
interest in the South African subsidiary, AMAP.
The
decrease in sales in the first quarter of fiscal 2007 was primarily due
to the sale of the tabletop business, other planned product discontinuation,
and some inventory shortages that resulted from the Company's liquidity
constraints at the beginning of the quarter. The liquidity constraints
that impacted the fiscal 2007 first quarter results were resolved during
the quarter as a result of the company receiving an amendment from the
lenders under its senior secured credit facility. Foreign sales increased
by $6.5 million, of which $2.5 million was a result of favorable foreign
exchange rate fluctuations.
Gross
profit for the first quarter of fiscal 2007 increased from $29.5 million
(19.9%) in 2006 to $34.4 million (24.9%) in 2007. This increase is primarily
a result of a more favorable product mix including fewer closeouts and
a higher percentage of core products in 2007. Additional improvements of
$0.9 million resulted from a domestic decline in distribution expenses
primarily as a result of the Company's U.S. cost reduction programs. In
addition to improved mix, as a percent of sales, gross margins on the core
business lines showed an increase in spite of material cost increases on
plastics, copper, steel and corrugated materials.
Selling,
general and administrative expenses decreased to $33.5 million for first
quarter of fiscal 2007 compared to $40.4 million for first quarter of fiscal
2006. U.S. operations reduced selling, general and administrative expenses
by $5.4 million, while foreign operations reduced selling, general and
administrative expenses by $1.5 million primarily in the European market
as costs were realigned globally with current sales volumes. The Company
reported operating income of $0.1 million in the first quarter of fiscal
2007, compared to an operating loss of $11.0 million in the first quarter
of fiscal 2006.
Salton
Announces Fourth Quarter and Year-End Results
LAKE
FOREST, Ill.--(BUSINESS WIRE)--Oct. 16, 2006--Salton, Inc. (NYSE: SFP)
announced today fiscal results for its fourth quarter and year ended July
1, 2006. The Company reported net sales of $129.5 million and a loss of
$50.8 million or ($3.57) per share for its fiscal 2006 fourth quarter compared
to net sales of $151.2 million and a loss of $28.8 million or ($2.53) per
share for the fiscal 2005 fourth quarter. Net sales decreased domestically
by $29.7 million. This decrease includes $5.4 million of reductions, as
a result of the sale or discontinuance of certain product lines. The remaining
$24.3 million decrease resulted primarily from volume and mix shifts as
a result of price increases, other planned product line changes and close
outs of discontinued product lines. Despite continued weak consumer demand
in the United Kingdom, foreign sales increased by $8.0 million. The loss
in the 2006 fourth quarter included a pretax charge of $21.9 million for
non-cash intangible asset impairments associated with certain trade names
and a $3.4 million non-cash valuation allowance against certain foreign
deferred tax assets. The loss in the 2005 fiscal fourth quarter included
a pretax charge of $3.0 million for non-cash intangible asset impairments.
Salton's
sales were $636.0 million for the year ended July 1, 2006 compared to $781.7
million in fiscal 2005, a reduction of $145.7 million. Domestic sales declined
by $124.2 million due to the impact of the sale of the tabletop product
lines in September 2005, inventory shortages, vendor and customer uncertainty,
post-holiday overstocks at retailers and planned product discontinuation.
Foreign sales, particularly in the United Kingdom, were impacted by a continuing
weak retail market, resulting in a decline of $16.1 million in 2006. In
addition, Salton incurred $5.5 million in unfavorable foreign currency
fluctuation.
Gross
profit declined from $187.5 million (24%) in fiscal 2005 to $144.4 million
(22.7%) in fiscal 2006, primarily a result of global raw material cost
increases and additional costs associated with inventory reduction programs.
These added costs were partially offset by a $10.6 million decline in distribution
expenses.
Selling,
general and administrative expenses decreased to $172.1 million in 2006
compared to $207.8 million for 2005 in connection with previously announced
cost reduction initiatives. It is expected that further restructuring activities
will continue in fiscal 2007, resulting in additional distribution and
SG&A expense reductions. Net interest expense was $37.0 million for
fiscal 2006 compared to $51.7 million for fiscal 2005 as a result of lower
levels of indebtedness and the debt exchange completed in August, 2005.
The
Company had approximately $293 million in indebtedness, net of approximately
$44 million of cash, swap valuation and accrued interest on senior secured
notes at the end of the fiscal 2006 year-end, compared to $429.3 million
as of July 2, 2005, net of approximately $21.9 million of cash and swap
valuation
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