Salton (NYSE:SFP)
Historical Stock Chart
From Jun 2019 to Jun 2024
![Click Here for more Salton Charts. Click Here for more Salton Charts.](/p.php?pid=staticchart&s=NY%5ESFP&p=8&t=15)
Salton, Inc. (NYSE: SFP) announced today fiscal results
for its second quarter ended December 31, 2005. The Company reported
net sales 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, 2005, product delays that
impacted volume and the planned exit of several discontinued 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, 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 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 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, net
of cash and accrued interest 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 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 activities. As a result of these efforts, Salton is a
stronger company today," said William Rue, President and Chief
Operating Officer. "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 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(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 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 Show in March as we refocus
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, Chief Financial Officer will host
the call. Interested participants should call (800) 968-9265 when
calling from the United States or (706) 679-3061 when calling
internationally. Please reference Conference I.D. Number 5170973.
There will be a playback available until midnight, March 9, 2006. To
listen to the playback, please call (800) 642-1687 when calling within
the United States or (706) 645-9291 when calling internationally.
Please use pass code 5170973 for the replay.
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, 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(R), Mellitta(R), Russell Hobbs(R),
Farberware(R), Ingraham(R) and Stiffel(R). It believes its strong
market position results from its well-known brand names, high quality
and innovative products, strong relationships with its customer base
and its focused outsourcing strategy.
Certain matters discussed in this press release are
forward-looking statements 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 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; 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; competitive products and
pricing; economic conditions and the retail environment; international
business activities; the risks related to intellectual property
rights; the risks relating to regulatory matters and other risks and
uncertainties detailed from time to time in Salton's Securities and
Exchange Commission Filings.
-0-
*T
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
====================
*T