Salton Reports Second Quarter Results.LAKE FOREST, Ill. -- Salton Salton may refer to:
See: New York Stock Exchange : SFP SFP Small Form-factor Pluggable (optical transceiver module) SFP Société Française de Physique (French Physics Society; Paris) Sfp Svenska Folkpartiet (Finnish: Swedish People~s Party) ) announced today fiscal results for its second quarter ended December December: see month. 31, 2005. The Company reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $230.4 million for its fiscal 2006 second quarter compared to net sales of $272.7 million for the fiscal 2005 second quarter. Net sales decreased domestically by $24.6 million, due to the sale of the tabletop business in September September: see month. , 2005, product delays that impacted volume and the planned exit of several discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: product lines, including personal care. Foreign sales declined by $17.7 million, as a result of weak market conditions in the United Kingdom, along with inventory shortages and $5 million of unfavorable foreign currency fluctuations. Salton reported a net loss of $27.8 million, or $2.06 per share, which included a $28.1 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , or $2.08 per share, for recording a valuation allowance on a portion of its deferred tax assets. This is compared to net income of $2.8 million, or $0.24 per share for the same period in fiscal 2005. The Company's worldwide gross margin, as a percentage of net sales, was 33.5% for the second quarter of fiscal 2006, compared to 34.6% for the year earlier period. The margins in the domestic core business lines have improved over the same period last year, however, foreign gross margin percentages have declined slightly due to the weak market conditions in the United Kingdom. In addition, Salton's business and its margins continue to be affected by the high cost of steel, corrugated cor·ru·gate v. cor·ru·gat·ed, cor·ru·gat·ing, cor·ru·gates v.tr. To shape into folds or parallel and alternating ridges and grooves. v.intr. and oil-based raw materials. Despite these challenges, the Company has continued to drive reductions in distribution and SG&A expenses, with declines of $15.7 million in the second quarter of fiscal 2006 compared to second quarter of fiscal 2005. This was primarily a result of the Company's domestic cost improvements. Interest expense declined in the quarter by $3.7 million versus the same period last year. For the six months ended December 31, 2005, Salton reported net sales of $378.8 million, compared to $477.4 million for the first six months of fiscal 2005. Salton reported net income of $1.9 million, or $0.14 per share, compared to a net loss of $0.4 million, or $0.04 per share, for the same six months in fiscal 2005. Fiscal 2006 net income increased primarily as a result of $27.8 million in gains associated with the sale of the Company's 52.6% ownership interest in AMAP AMAP Arctic Monitoring and Assessment Programme AMAP As Much As Possible AMAP As Many As Possible AMAP American Medical Accreditation Program AMAP Army Medical Action Plan AMAP Automotive and Manufacturing Advanced Practice and $21.7 million from the early retirement of debt associated with the Company's Exchange Offer. These gains in net income were partially offset by the $28.1 million valuation allowance recorded on a portion of the deferred tax assets. The Company had approximately $328.9 million in indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. , net of cash and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. on senior secured notes of $28.5 million at the end of the fiscal 2006 second quarter, compared to $429.3 million as of July July: see month. 2, 2005. During the second quarter, the Company repurchased $9.2 million in aggregate principal amount of the outstanding 2005 Notes for $9.1 million and repaid the remaining $36.6 million of outstanding 2005 Notes upon maturity. "Our results were impacted in the holiday season by our previous restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities. As a result of these efforts, Salton is a stronger company today," said William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack Rue rue, common name for various members of the family Rutaceae, a large group of plants distributed throughout temperate and tropical regions and most abundant in S Africa and Australia. Most species are woody shrubs or small trees; many are evergreen and bear spines. , President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "While our suppliers have resumed production levels, it was too late to meet some of the demand from our customers. Our cost reduction programs have lowered domestic annual operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. by $60 million since inception at the beginning of fiscal year 2005. We plan to continue our cost reduction efforts, however we continue to face rising material costs in our products and as a result, continuing margin pressure. We believe the extensive restructuring activities and cost reduction programs we have completed have positioned the Company to be competitive in the marketplace." Business Outlook: "I am very encouraged by the performance in both sales and margins for the George Foreman George Edward Foreman (born January 10, 1949) is an American two-time World Heavyweight Boxing Champion. He is the oldest man ever to win the heavyweight title, and also has been named one of the 25 greatest fighters of all time by Ring magazine. (R) product line, including the "G5" Next Grilleration, the latest in a line of removable plate grills developed by the Company and George Foreman," said Leonhard Dreimann, Chief Executive Officer. "Although our results were impacted by product shortages which carried over from the first quarter, and weak market conditions in the United Kingdom, which affected the entire industry, we are highly encouraged by the improvements in margins and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. domestically. The combination of our restructuring activities and cost increases at our suppliers has had an impact on the ability to develop new products. Even so, we are excited to be introducing new and innovative products at the Housewares house·wares pl.n. Cooking utensils, dishes, and other small articles used in a household, especially in the kitchen. Show in March as we refocus Verb 1. refocus - focus once again; The physicist refocused the light beam" focus - cause to converge on or toward a central point; "Focus the light on this image" 2. our efforts on strengthening our core business for future growth." The Company will hold a conference call today at 9 a.m. ET. Mr. Dreimann, Chief Executive Officer, Mr. Rue, President and Chief Operating Officer and William Lutz William Lutz is an American linguist specialising in doublespeak and the use of plain language. Lutz is widely published on the topic of doublespeak, or the manipulation of language, and has also worked with corporations and government in the use of 'plain language'. , Chief Financial Officer will host the call. Interested participants should call (800) 968-9265 when calling from the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or (706) 679-3061 when calling internationally. Please reference Conference I.D. Number 5170973. There will be a playback Playback could mean:
This call is also being webcast and can be accessed at Salton's web site at www.saltoninc.com until March 9, 2006. The conference call can be found under the subheadings, "Stock Quotes" and then "Audio Archives." About Salton, Inc. Salton, Inc. is a leading designer, marketer and distributor of branded, high quality small appliances Small appliance refers to a class of home appliances that are semi-portable or which are used on tabletops, countertops, or other platforms. Such items are contrasted with major appliances, which are typically fixtures that cannot be easily moved. , electronics, home decor and personal care products. Its product mix includes a broad range of small kitchen and home appliances, electronics for the home, time products, lighting products, picture frames and personal care and wellness products. The Company sells its products under a portfolio of well recognized brand names such as Salton(R), George Foreman(R), Westinghouse(TM), Toastmaster toast·mas·ter n. A man who proposes the toasts and introduces the speakers at a banquet. toastmaster Noun a person who introduces speakers and proposes toasts at public dinners Noun 1. (R), Mellitta(R), Russell Hobbs Russell Hobbs is a British manufacturer of household appliances in Failsworth, Oldham, Greater Manchester. History After working with REME in World War II and leaving in 1947 as a Major, Bill Russell (1920-2006) joined Morphy Richards and helped to design the pop-up (R), Farberware(R), Ingraham Ingraham may refer to: Surname
Certain matters discussed in this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These factors include: Salton's ability to realize the benefits it expects from its U.S. restructuring plan; Salton's substantial indebtedness and restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. in Salton's debt instruments; Salton's ability to access the capital markets on attractive terms or at all; Salton's relationship and contractual arrangements with key customers, suppliers and licensors; pending legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. ; cancellation or reduction of orders; the timely development, introduction and customer acceptance of Salton's products; dependence on foreign suppliers and supply and manufacturing constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. ; competitive products and pricing; economic conditions and the retail environment; international business activities; the risks related to intellectual property rights; the risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc regulatory matters and other risks and uncertainties detailed from time to time in Salton's Securities and Exchange Commission Filings.
SALTON, INC
CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands)
UNAUDITED
13 Weeks Ended 26 Weeks Ended
Dec 31, 2005 Jan 1, 2005 Dec 31, 2005 Jan 1, 2005
---------------------------------------------------
Net Sales $ 230,388 $ 272,698 $ 378,804 $ 477,382
Cost of Sales 153,318 178,381 261,690 316,367
Total Distribution
Expense 12,667 16,574 23,215 29,509
---------------------------------------------------
Gross Profit 64,403 77,743 93,899 131,506
Total Selling,
General &
Administrative 53,391 65,380 93,804 112,234
Impairment Loss on
Goodwill and
Intangible Assets 181 - 186 -
Restructuring
Costs 40 118 157 790
---------------------------------------------------
Operating (Loss)
Income 10,791 12,245 (248) 18,482
Interest Expense 9,196 12,872 20,245 25,751
Gain-Early
settlement of
debt (65) 0 (21,721) 0
---------------------------------------------------
(Loss) Income from
Continuing
Operations Before
Income Taxes 1,660 (627) 1,228 (7,269)
Income Taxes 29,473 (318) 28,928 (2,515)
---------------------------------------------------
Net (Loss) Income
from Continuing
Operations (27,813) (309) (27,700) (4,754)
Income (Loss) from
Discontinued
Operations, net
of Tax 0 3,066 1,735 4,324
Gain on Sale of
Discontinued
Operations, net
of Tax 0 - 27,816 -
---------------------------------------------------
Net Income (Loss) $ (27,813) $ 2,757 $ 1,851 $ (430)
===================================================
Weighted avg
common shares
outstanding 13,522,498 11,372,138 12,869,204 11,371,542
Weighted avg
common & common
equiv share 13,522,498 11,372,138 12,869,204 11,371,542
Net income(loss)
per common share:
Basic
Income(loss)
from
continuing
operations $ (2.06) $ (0.03) $ (2.15) $ (0.42)
Income from
discontinued
operations,
net of tax - 0.27 0.13 0.38
Gain on sale of
discontinued
operations - - 2.16 -
---------------------------------------------------
Net income(loss)
per common share:
Basic $ (2.06) $ 0.24 $ 0.14 $ (0.04)
===================================================
Net income(loss)
per common share:
Diluted
Income(loss)
from
continuing
operations $ (2.06) $ (0.03) $ (2.15) $ (0.42)
Income from
discontinued
operations,
net of tax $ - $ 0.27 $ 0.13 $ 0.38
Gain on sale of
discontinued
operations $ - $ - $ 2.16 $ -
---------------------------------------------------
Net income(loss)
per common share:
Diluted $ (2.06) $ 0.24 $ 0.14 $ (0.04)
===================================================
SALTON, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
UNAUDITED
ASSETS 12/31/05 7/2/05
-------
CURRENT ASSETS:
----------------
Cash $ 32,364 $ 14,857
Compensating balances on deposit 39,028 34,355
Accounts Receivable, less allowance: 189,607 140,179
2006 - $8,779; 2005 - $10,130
Inventories 155,174 195,065
Asset held for sale - 998
Prepaid expenses and other current assets 15,835 16,048
Prepaid income taxes 1,410
Deferred income taxes 5,939 5,524
Current assets of discontinued operations - 101,927
--------------------
Total current assets 439,357 508,953
Net Property, Plant and Equipment 44,537 50,227
Tradenames 178,822 180,041
Non-current deferred tax asset 1,934 49,275
Other assets 13,698 11,555
Non-current assets of discontinued operations - 7,737
--------------------
TOTAL ASSETS $ 678,348 $807,788
====================
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
CURRENT LIABILITIES:
---------------------
Revolving line of credit and other current
debt, including an adjustment of $9,721 and
$0 for accrued interest on the senior secured
notes, respectively $ 83,042 $ 70,730
Senior subordinated notes-current 0 45,990
Accounts payable 84,829 86,254
Accrued expenses 48,033 48,391
Income Taxes Payable 1,488 4,375
Current liabilities of discontinued operations - 47,331
--------------------
Total current liabilities 217,392 303,071
Non-current deferred income taxes 11,155 3,334
Term loan and other notes payable 117,524 100,050
Senior subordinated notes due 2005 - 79,010
Senior subordinated notes due 2008, including an
adjustment of $2,328 and $7,082 to the carrying
value related to interest rate swap agreements,
respectively 61,981 156,387
Second lien notes, including an adjustment of
$18,756 and $0 to the carrying value for accrued
interest, respectively 122,046 -
Series C preferred stock 8,370 -
Other long term liabilities 19,870 20,283
Non-current liabilities of discontinued
operations - 1,462
--------------------
TOTAL LIABILITIES 558,338 663,597
Minority interest in discontinued operations - 24,263
Convertible Preferred Stock, $.01 par value:
authorized, 2,000,000 shares, 40,000 shares
issued 40,000 40,000
STOCKHOLDERS' EQUITY:
----------------------
Common stock, $.01 par value; authorized
40,000,000 shares; issued and outstanding
2006-13,520,761 shares, 2005-11,376,292
shares 170 148
Treasury stock - at cost (65,793) (65,793)
Additional paid-in capital 62,363 55,441
Accumulated other comprehensive income 2,800 11,513
Retained Earnings 80,470 78,619
--------------------
Total stockholders' equity 80,010 79,928
--------------------
TOTAL LIABILITIES AND STOCKHOLDER EQUITY $ 678,348 $807,788
====================
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