Salton reports $27.8 million second quarter loss

By Matthew Henry

Lake Forest, ILLINOIS, USA : The US-based distributor of Russell Hobbs small appliances and the George Foreman grill, Salton Inc, has reported a fall in second quarter sales globally for the 2006 fiscal year over the same period in 2005.

The company reported a net loss of $27.8 million dollars, or $2.06 a share, for the second quarter of FY06 compared with a $2.8 million profit in the corresponding 2005 period.

 “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 Salton president and chief operating officer, William Rue.

The figures include a $28.1 million non-cash charge for recording a valuation allowance on a portion of its deferred tax assets.

Domestic sales in the US market fell $24.6 million to $230.4 million, while overseas sales declined by $17.7 million as a result of weak market conditions in the UK, inventory shortages and $5 million of unfavaorable currency fluctuations, said the company.

As cost reduction and restructuring activities continue during the year, the company is confident that it will bounce back and remain competitive in the marketplace.

“I am very encouraged by the performance in both sales and margins for the George Foreman product line, including the G5 Next Grilleration,” said Salton chief executive officer, Leonhard Dreimann.

“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.”
 

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