<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 10, 1999
REGISTRATION NO. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SALTON, INC.
(Exact name of registration as specified in its charter)
DELAWARE 36-3777824
(State or other jurisdiction of (I.R.S. Employer identification number)
incorporation or organization)
550 BUSINESS CENTER DRIVE
MOUNT PROSPECT, ILLINOIS 60056
(847) 803-4600
(address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
WILLIAM B. RUE
PRESIDENT AND CHIEF OPERATING OFFICER
550 BUSINESS CENTER DRIVE
MOUNT PROSPECT, ILLINOIS 60056
(847) 803-4600
(name, address, including zip code, and telephone number, including
area code, of agent for service)
---------------
Copies to:
Neal Aizenstein
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
(312) 876-8938
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number on the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act,
check the following box and list the Securities Act registration number of the
earlier effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
TITLE OF SHARES TO BE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
REGISTERED REGISTERED AGGREGATE PRICE PER AGGREGATE OFFERING REGISTRATION FEE
SHARE(1) PRICE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value....... 957,304 shares $ 31.80 $ 30,424,318 $ 8,032
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933 (based on the average
high and low sales prices on December 9, 1999).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
SUBJECT TO COMPLETION, -- _________________, 1999
- --------------------------------------------------------------------------------
The information in this prospectus is not complete and may be changed. The
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
- --------------------------------------------------------------------------------
PROSPECTUS
SALTON, INC.
Maximum of 957,304 Shares of Common Stock
---------------
This prospectus relates to a maximum of 957,304 shares of our common
stock. These shares may be offered and sold from time to time by the selling
stockholders named herein. The selling stockholders may offer their shares of
common stock through public or private transactions, on or off The New York
Stock Exchange, at prevailing market prices, or at privately negotiated prices.
The selling stockholders may include pledgees, donees, transferees, or other
successors in interest. We will provide specific terms of any offerings made
under this prospectus in prospectus supplements, if necessary.
We will not receive any of the proceeds from the sale of the common
stock. We will bear the costs relating to the registration of the common shares,
estimated to be approximately $50,000.
The common stock is traded on The New York Stock Exchange under the
symbol SFP. The closing sales price of the shares of common stock as reported on
The New York Stock Exchange on December 9, 1999 was $33 per share. The
selling stockholders will pay any sales commissions or underwriting discounts
and fees and expenses of their counsel incurred in connection with the sale of
shares through this prospectus.
------------------------------------
These securities have not been approved or disapproved by
the securities and exchange commission nor has the
commission passed upon the accuracy or
adequacy of this prospectus. Any
representation to the contrary
is a criminal offense.
The date of this Prospectus is __________, 1999
<PAGE> 3
TABLE OF CONTENTS
PAGE
The Company...........................................................
Unaudited Pro Forma Consolidated Financial Statements.................
Use of Proceeds.......................................................
Selling Stockholders..................................................
Plan of Distribution..................................................
Accounting Experts....................................................
Special Note Regarding Forward-Looking Statements.....................
Where You Can Find More Information...................................
Incorporation of Certain Documents by Reference.......................
EXPLANATORY NOTES
We have not authorized anyone to provide you with information or to
represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. The selling stockholders are
offering to sell, and seeking offers to buy, only the shares of common stock
where it is lawful to do so. The information contained in this prospectus is
prospectus or of any sale of the shares.
You should read carefully this entire prospectus, as well as the documents
incorporated by reference in this prospectus, before making an investment
decision. All references to "we," "our" or "Salton" in this prospectus mean
Salton, Inc. and its subsidiaries.
<PAGE> 4
THE COMPANY
We are a leading domestic designer, marketer and distributor of a broad
range of branded, high quality small appliances, tabletop products and personal
care products. We act as a marketing service provider by managing our brands and
product lines in a manner that allows our retail customers to differentiate
themselves to consumers. We have the leading domestic market share in toasters,
juice extractors, indoor grills, bread bakers, griddles, waffle makers and
buffet ranges/hotplates and a significant market share in other product
categories. We believe that our strong market share results from our well known
brand names, the breadth, quality and innovation of our product offerings and
our strong relationships and retailers and suppliers. We outsource most of our
production to independent manufacturers, primarily in the Far East.
Our portfolio of well-recognized owned and licensed brand names
includes Salton(R), Toastmaster(R), Maxim(R), Breadman(R), Juiceman(R), George
Foreman Grills(R), White-Westinghouse(R), Farberware(R), Melitta(R), Block(R),
Atlantis(R), Sasaki(R), Rejuvenique(R) and Ingraham(R). We are also a leading
designer and distributor of small appliances in the U.S. under such well-known
names as Kenmore(R) and Magic Chef(R).
We predominantly sell our products to mass merchandisers, department
stores, specialty stores and mail order catalogs. We also sell certain of our
products directly to consumers through paid half-hour television programs
referred to as "infomercials" and through our Internet website,
www.salton/maxim.com. Our customers include many premier domestic retailers,
including Kmart, Dayton Hudson (including Target and Mervyn's), Sears, Wal-Mart,
Federated Department Stores, May Company Department Stores, QVC, Bed Bath &
Beyond, Saks Inc. and Costco. We market and sell our products primarily in the
U.S. through our own sales force and a network of independent commissioned sales
representatives.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements
give effect to:
- the issuance of 109,090 shares of Salton common stock to the
former stockholders of TMI Acquisition Corp. in satisfaction of
Salton's obligation to pay TMI Acquisition Corp. certain amounts
based on future sales of Toastmaster(R) products; and
- Salton's pending acquisition of the right to use in perpetuity and
worldwide the name "George Foreman" in connection with the
marketing and sale of food preparation appliances for an aggregate
purchase price of $113,750,000 in cash, payable in five annual
installments of $22,750,000 commencing on the closing date, and
shares of Salton common stock valued at $23,750,000 at the
closing.
The unaudited pro forma condensed consolidated balance sheet data gives
effect to these transactions as if they had occurred on September 25, 1999. The
unaudited pro forma consolidated statements of operations data give effect to
these transactions as if they had occurred on (1) June 28, 1998 with respect to
the fiscal year ended June 26, 1999 and (2) June 27, 1999 with respect to the
thirteen weeks ended September 25, 1999.
<PAGE> 5
The unaudited pro forma consolidated financial information set forth below
reflects pro forma adjustments that are based upon available information and
certain assumptions that Salton believes are reasonable. In particular, the
number of shares of Salton common stock to be issued in connection with the
George Foreman transaction is based on an assumed price of $28.00 per share
at the closing of that transaction. The pro forma financial information is for
informational purposes only and does not purport to represent what Salton's
results of operations or financial position would have actually been had the
transactions to which pro forma effect is given been consummated as of the dates
or for the periods indicated.
<TABLE>
<CAPTION>
SALTON, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 25, 1999
(IN THOUSANDS)
-----------------------------------------------
HISTORICAL PRO FORMA
SALTON (1) ADJUSTMENTS AS ADJUSTED
---------- ----------- -----------
<S> <C> <C> <C>
Total Assets:
$ 16,644 (2)
(22,750) (3)
---------
Cash $ 8,336 (6,106) $ 2,230
Accounts Receivable, Net of Allowances 159,525 159,525
Inventories 155,965 155,965
Prepaid Expenses and Other Current Assets 8,521 8,521
Deferred Taxes 3,134 3,134
--------- --------- ---------
Total Current Assets $ 335,481 (6,106) 329,375
Property Plant and Equipment 46,520 46,520
Accumulated Depreciation (21,513) (21,513)
--------- --------- ---------
Net Property Plant and Equipment $ 25,007 25,007
(1,000) (4)
121,020 (3)
---------
Intangibles, Net and Other Assets 42,500 120,020 162,520
- - -
--------- --------- ---------
Total Assets $ 402,988 $ 113,914 $ 516,902
========= ========= =========
Total Liabilities
Accounts Payable $ 53,732 50 (3) $ 53,782
Accrued Expenses 28,264 89 (4) 28,353
Income Taxes 6,144 $ 5,924 (2) 12,068
Revolving Line of Credit and Other Current
Debt 67,196 67,196
Deferred Income Taxes - - -
--------- --------- ---------
Total Current Liabilities 155,336 6,063 161,399
Non-current Deferred Tax Liability 157 - 157
- -
(4,000) (4)
74,520 (3)
---------
Long Term Debt $ 182,013 70,520 252,533
-
--------- --------- ---------
Total Liabilities 337,506 76,583 414,039
Stockholders Equity
Preferred Stock
Common Stock 134 - 134
11,790 (3)
1,516 (4)
---------
Treasury Stock (43,308) 13,306 (30,002)
11,960 (3)
1,484 (4)
---------
Additional Paid in Capital 45,317 13,444 58,761
Accumulated other comprehensive income (49) - (49)
Retained Earnings 63,388 10,581 (5) 73,969
--------- --------- ---------
Total Liabilities 65,482 37,331 102,813
--------- --------- ---------
Total Liabilities & Stockholders Equity $ 402,988 $ 113,914 $ 516,902
========= ========= =========
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE> 6
SALTON, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER DATA
FISCAL YEAR ENDED JUNE 26, 1999
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
SALTON (1) ADJUSTMENTS AS ADJUSTED
----------- ----------- -----------
<S> <C> <C> <C>
Net sales $ 506,116 $ 506,116
Cost of Goods sold 285,526 285,526
Distribution expenses 21,621 21,621
----------- ----------- -----------
Gross profit 198,969 - 198,969
$ 8,068 (6)
(25) (6)
Selling General, and Administrative expenses 129,588 (38,096) (6)
50 (9)
(536) (8) 99,049
----------- ----------- -----------
Operating income 69,381 (30,539) 99,920
6,334 (7)
Interest expense 15,518 173 (7) 22,025
----------- ----------- -----------
Income before income taxes 53,863 (24,032) 77,895
Income taxes 19,320 8,553 (10) 27,873
----------- ----------- -----------
Net income $ 34,543 $ (15,479) $ 50,022
========== =========== ===========
Earnings per share: Basic $ 3.21 $ 4.27
Earnings per share: Diluted $ 2.37 $ 3.22
Weighted average common shares outstanding 10,760 11,718
Weighted average common and equivalent shares outstanding 14,562 15,519
EBITDA (11) $ 76,682 $ 115,264
EBITDA MARGIN (12) 15.2% 22.8%
Depreciation and amortization $ 7,301 $ 15,344
Capital Expenditures $ 5,390 $ 5,390
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE> 7
SALTON, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER DATA
THIRTEEN WEEKS ENDED SEPTEMBER 25, 1999
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
SALTON (1) ADJUSTMENTS AS ADJUSTED
---------- ----------- -----------
<S> <C> <C> <C>
Net sales $ 196,340 $ 196,340
Cost of goods sold 110,401 110,401
Distribution expenses 7,120 7,120
--------- -------- ---------
Gross profit 78,819 - 78,819
$ 2,017 (6)
(16,644) (6)
(6) (6)
50 (9)
Selling, general and administrative expenses 50,490 89 (8) 35,996
--------- -------- ---------
Operating income 28,329 (14,494) 42,823
1,584 (7)
Interest expense 5,477 7,061
--------- -------- ---------
Income before income taxes 22,852 (12,910) 35,762
Income taxes 8,954 4,595 (10) 13,549
--------- -------- ---------
Net income $ 13,898 $ (8,315) $ 22,213
========= ======== =========
Earnings per share: Basic $ 1.35 $ 1.98
Earnings per share: Diluted $ 0.95 $ 1.43
Weighted average common shares outstanding 10,290 11,247
Weighted average common and equivalent shares outstanding 14,574 15,531
EBITDA (11) $ 30,609 $ 47,114
EBITDA MARGIN (12) 15.6% 24.0%
Depreciation and amortization $ 2,280 $ 4,291
Capital Expenditures $ 2,311 $ 2,311
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE> 8
SALTON, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
The unaudited proforma consolidated financial statements have been adjusted for
the items set forth below.
(1) Represents the historical financial position of Salton as of September 25,
1999 and the consolidated results of operations for fiscal year ended
June 26, 1999 and the thirteen weeks ended September 25, 1999.
BALANCE SHEET
(2) Reflects the reversal of royalty payments of $16,644 on George Foreman
products, for the thirteen weeks ended September 25, 1999, and the
corresponding additional income taxes payable of $5,924 based upon an
assumed tax rate of 35.59%.
(3) Reflects the following in connection with Salton's pending acquisition of
the right to use in perpetuity and worldwide the name "George Foreman" in
connection with the marketing and sale of food preparation appliances (the
"Trademark"): (a) the first installment of cash payments of $22,750 due at
the closing date; (b) the recording of notes payable of $91,000 for the
remaining four annual cash installments, recorded at the aggregate present
value of $74,520 utilizing an 8.5% interest rate; (c) the issuance of
848,214 shares of common stock out of treasury shares at a carrying value
of $13.90 per share and the recording of additional paid-in-capital based
on the per share price of Salton common stock of $28 as of December 3,
1999; (d) the recording of an intangible asset of $121,020 for the
Trademark; and (e) the estimated expenses of $50 for accounting, legal,
printing and filing fees. The actual aggregate number of shares to be
issued will be determined by dividing $23,750 by the average of the closing
price of Salton common stock on the NYSE for the twenty trading days ending
on the third trading day preceding the closing date, per the agreement.
(4) Reflects the following in connection with the satisfaction of Salton's
obligation to the TMI Acquisition Corp.: (a) the reduction of the original
obligation by $4,000 based on the terms of the new agreement and the
related reduction in goodwill of $1,000; (b) the issuance of 109,090 shares
of common stock out of treasury shares at a carrying value of $13.90 per
share and the recording of additional paid-in-capital based on the per
share price of $27.50 in accordance with the agreement; and (c) the
recording of a liability and expense of $89 to reflect the agreement by
Salton to reimburse the former stockholders of TMI Acquisition Corp. in
cash to the extent that the selling price of any of the shares sold by such
stockholders during a specified period of time is less than $27.50 per
share and the agreement by such stockholders to pay Salton in cash to the
extent that such selling price exceeds $27.50 per share (the "Stock Price
Guarantee"), based on the common stock price on September 24, 1999 of
$26.6875.
(5) Reflects net impact on retained earnings of the aforementioned pro forma
adjustments.
STATEMENT OF OPERATIONS
(6) A. For fiscal year ended June 26, 1999:
(1) Reflects amortization of the Trademark of $8,068 on a straight-line
basis preliminarily over a 15-year useful life. The Company is in the
process of assessing the estimated useful life of the Trademark which
is not expected to be less than 10 years or greater than 20 years.
(2) Reflects the reduction in goodwill amortization expense of $25 (see
note (4)(a)).
(3) Reflects the reversal of royalty payments of $38,096 on George Foreman
products.
B. For the thirteen weeks ended September 25, 1999:
(1) Reflects amortization of the Trademark of $2,017 on a straight-line
basis preliminarily over a 15-year useful life. The Company is in the
process of assessing the estimated useful life of the Trademark which
is not expected to be less than 10 years or greater than 20 years.
(2) Reflects the reduction in goodwill amortization expense of $6 (see
note (4)(a)).
(3) Reflects the reversal of royalty payments of $16,644 on George Foreman
products.
<PAGE> 9
(7) A. For fiscal year ended June 26, 1999:
(1) Reflects the imputed interest expense associated with the notes
payable of $6,334 (see note (3)).
(2) Reflects interest on additional borrowings of $173 for the initial
cash payment for the Trademark.
B. For the thirteen weeks ended September 25, 1999
(1) Reflects the imputed interest expense associated with the notes
payable of $1,584.
(8) A. For fiscal year ended June 26, 1999:
(1) Reflects the change in the fair value of the Stock Price Guarantee
that is included in the agreement for the issuance of 109,090 shares of
Salton common stock to the former stockholders of TMI Acquisition Corp.
of $536 based on the closing price of Salton common stock on June
26, 1999 of $32.4167 per share.
B. For the thirteen weeks ended September 25, 1999:
(1) Reflects the change in the fair value of the Stock Price Guarantee
that is included in the agreement for the issuance of 109,090 shares of
Salton common stock to the former stockholders of TMI Acquisition Corp.
of $89 based on the closing price of Salton common stock on
September 24, 1999 of $26.6875.
(9) The estimated expenses of $50 for accounting, legal, printing and filing
fees.
(10) Income tax expense is adjusted to reflect the income tax effects of pro
forma adjustments based upon an assumed rate of 35.59%.
OTHER DATA
(11) EBITDA represents operating income plus depreciation and amortization.
EBITDA is presented because it is widely accepted measure to provide
information regarding a company's ability to pay interest, repay debt or
make capital expenditures. EBITDA should not be considered in isolation or
in accordance with generally accepted accounting principles, or as a
measure of a company's profitability or liquidity. Additionally, Salton's
calculation of EBITDA may differ from that performed by other companies,
and thus the amounts disclosed for EBITDA may not be directly comparable to
similarly titled measures disclosed by other companies.
(12) EBITDA margin represents EBITDA as a percentage of net sales.
<PAGE> 10
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
by this prospectus, nor will such proceeds be available for our use or benefit.
SELLING STOCKHOLDERS
All of the shares of Salton common stock registered for sale under this
prospectus were issued, or are to be issued, to (1) the former stockholders of
TMI Acquisition Corp. and (2) George Foreman, Sam Perlmutter and Michael
Srednick (the persons identified in clauses (1) and (2) are collectively
referred to herein as the "selling stockholders").
The former stockholders of TMI Acquisition Corp. acquired the shares
specified below from Salton in satisfaction of Salton's obligations to pay TMI
Acquisition Corp. certain amounts based on future sales of Toastmaster(R)
products. Under the terms of the transaction, (1) Salton agreed that in the
event the "selling price" (the transaction price less reasonable and customary
brokerage commissions) of any share sold by the former stockholders of TMI
Acquisition Corp. during a specified period of time is less than $27.50 per
share, Salton will pay to such stockholders the difference between $27.50 and
the selling price with respect to each such share; and (2) the former
stockholders of TMI agreed that in the event the selling price of any share
they sell during a specified period of time exceeds $27.50 per share, they will
pay Salton the difference between the selling price and $27.50 with respect to
each such share. In addition, the former stockholders of TMI have agreed to pay
Salton the excess value (based on the average closing price of Salton common
stock over a specified period of time) over $27.50 per share with respect to
each share which they continue to own after a specified period of time. Salton
agreed to register for resale the shares of common stock received by the
selling stockholders in connection with the transaction.
George Foreman, Sam Perlmutter and Michael Srednick will acquire the shares
specified below from Salton as partial consideration for their sale to Salton of
the right to use in perpetuity and worldwide the name "George Foreman,"
including pictures and likeness of George Foreman, in connection with the
marketing and sale of food preparation appliances. The aggregate purchase price
payable by Salton in this transaction is $113,750,000 in cash, payable in five
annual installments of $22,750,000 commencing on the closing date, and shares of
Salton common stock valued at $23,750,000 at the closing. Under the terms of the
transaction, Salton agreed to register for resale the shares of common stock
received by the selling stockholders in connection with the transaction. The
closing of this transaction is expected to occur in the first calendar quarter
of 2000. Prior to this transaction, Salton paid George Foreman, Sam Perlmutter
and Michael Srednick royalties based on the sale of "George Foreman" products
marketed and sold by Salton.
The term "selling stockholders" also includes any transferees, pledgees,
donees, or other successors in interest to the selling stockholders named in the
table below. To the extent required, we will name any additional selling
stockholders in a supplement to this prospectus.
The following table sets forth certain information with respect to the
beneficial ownership of our common stock by the selling stockholders as of
December 9, 1999 before giving effect to the sale of shares of common stock in
this offering. The selling stockholders have not had any position or office with
us or any of our affiliates within the past three years. Except as described
-2-
<PAGE> 11
in the preceding paragraphs under "Selling Stockholders," there is no
relationship between the selling stockholders and us or our affiliates in the
last three years. All of the shares owned by the selling stockholders may be
offered by such stockholders in this offering. We cannot assure you, however,
that the selling stockholders will sell any of the shares of our common stock
covered by this prospectus. The selling stockholders do not hold one or more
percent of the outstanding shares of our common stock.
The information included in this section is based upon information provided
by the selling stockholders.
Shares Shares
Beneficially Owned Beneficially Owned
Prior to After the
Name The Offering(1) Offering(1)(4)
---- --------------- --------------
0
Irwin Chafetz 3,927(2) 0
Irwin Chafetz Family Charitable Trust 105,163 0
George Foreman 357,142(3) 0
Sam Perlmutter 245,536(3) 0
Michael Srednick 245,536(3) 0
------- ------
Total 957,304 0
======= ======
(1) Unless otherwise noted, each person has sole voting and investment
power with respect to all shares listed opposite such person's name.
(2) Excludes the shares beneficially owned by the Irwin Chafetz Family
Charitable Trust. Mr. Chafetz is the trustee of the Trust and has sole
voting and investment power with respect to the shares owned by Trust.
(3) Based on the closing price of the shares of $28 on December 3, 1999.
The actual aggregate number of shares acquired by these persons will be
determined by dividing (x) $23,750,000 by (y) the average of the
closing prices of Salton common stock on the NYSE for the twenty
trading days ending on the third trading day preceding the closing
date; provided that each of Mr. Perlmutter and Mr. Srednick will in no
event receive less than 237,069 shares.
(4) The shares may be offered from time to time by the selling
stockholders. The selling stockholders are not obligated to sell all or
any portion of their shares, nor are they obligated to sell any of
their shares immediately pursuant to this prospectus. Because the
selling stockholders may sell all or some of their shares, no estimate
can be given as to the amount of common stock actually to be offered
for sale by the selling stockholders or as to the amount of common
stock that will be held by the selling stockholders upon the
termination of this offering.
-3-
<PAGE> 12
PLAN OF DISTRIBUTION
We are registering the shares of common stock covered by this prospectus
for the selling stockholders. To the extent required, we will identify any
additional selling stockholders in a supplement to this prospectus.
The selling stockholders will act independently of us in making decisions
with respect to the timing, manner and size of each sale. The selling
stockholders may sell the shares of common stock on The New York Stock Exchange,
in the over-the-counter market or in private transactions, at market prices
prevailing at the time of sale, at prices related to the prevailing market
prices, or at negotiated prices.
In addition, the selling stockholders may sell some or all of their shares
of common stock through:
- a block trade in which a broker-dealer may resell a portion of the
block, as principal, in order to facilitate the transaction;
- purchases by a broker-dealer, as principal, and resale by the
broker-dealers for its account; or
- ordinary brokerage transactions and transactions in which a broker
solicits purchasers.
The selling stockholders may enter into hedging transactions with respect
to their shares. For example, the selling stockholders may:
- enter into transactions involving short sales of the common shares by
broker-dealers;
- sell shares of common stock short and redeliver such shares to close
out short positions;
- enter into option or other types of transactions that require the
selling stockholders to deliver common shares to a broker-dealer, who
will then resell or transfer the common shares under this prospectus;
or
- loan or pledge the shares of common stock to a broker-dealer, who may
sell the loaned shares or, in the event of default, sell the pledged
shares.
The selling stockholders may negotiate and pay broker-dealers commissions,
discounts or concessions for their services. Broker-dealers engaged by the
selling stockholders may allow other broker-dealers to participate in resales.
However, the selling stockholders and any broker-dealers involved in the sale or
resale of the common shares may qualify as "underwriters" within the meaning of
the Securities Act of 1933. In addition, the broker-dealers' commissions,
discounts or concession may qualify as underwriters' compensation under the
Securities Act of 1933. If the selling stockholders or any broker-dealers
qualify as "underwriters," they will be subject to the prospectus delivery
requirements of the Securities Act of 1933.
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<PAGE> 13
In addition to selling their shares of common stock under this prospectus,
the selling stockholders may:
- agree to indemnify any broker-dealer or agent against certain
liabilities related to the selling of the shares of common stock,
including liabilities arising under the Securities Act of 1933;
- transfer their shares of common stock in other ways not involving
market makers or established trading markets, including directly by
gift, distribution, or other transfer; or
- sell their shares of common stock under Rule 144 of the Securities Act
of 1933 rather than under this prospectus, if the transaction meets
the requirements of Rule 144.
When a particular offering is made, if required, we will distribute to you
a prospectus supplement. This supplement will set forth the names of the selling
stockholders, the aggregate amount and type of shares being offered, the number
of such shares owned before and after the completion of any such offering, and,
to the extent required, the terms of the offering, including the name or names
of any underwriters, broker-dealers or agents, any discounts, commissions and
other terms constituting compensation from the selling stockholders and any
discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers. Any underwriters, brokers, dealers or agents who participate in
any sale of the shares may also perform services for us or our affiliates.
All expenses of the registration of the shares will be paid by us,
including, without limitation, all registration and filing fees, printing
expenses, expenses of compliance with blue sky laws, fees and disbursements of
our counsel and expenses of any audits incidental to this registration. The
selling stockholders will pay expenses related to any sales commissions or
underwriting discounts and fees and expenses of its counsel incurred in
connection with the sale of shares through this prospectus.
We have agreed to indemnify the selling stockholders and anyone who
controls the selling stockholders against certain liabilities and expenses
arising out of or based upon the information contained in this document,
including liabilities under federal securities laws.
EXPERTS
The consolidated financial statements and financial statement schedules of
Salton, Inc. as of June 26, 1999 and June 27, 1998 and for each of the three
years in the period ended June 26, 1999 have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report with respect thereto and
are incorporated herein by reference from Salton, Inc.'s Annual Report on Form
10-K in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
The financial statements of Toastmaster as of December 31, 1998 and for
each of the three years in the period ended December 31, 1998 have been
incorporated by reference in this prospectus and in the registration statement
in reliance on the report of KPMG LLP, independent
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<PAGE> 14
auditors, included in Salton Inc.'s Annual Report on Form 10-K for the fiscal
year ended June 26, 1999 and incorporated by reference in this prospectus.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This document contains or incorporates by reference a number of
forward-looking statements relating to Salton, Inc. within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to:
- our financial condition;
- our results of operations;
- our business plans;
- our business strategies, operating efficiencies or synergies,
competitive positions and growth opportunities for existing products;
- the plans and objectives of our management;
- the markets for our stock; and
- other matters.
We consider any statements that are not historical facts as
"forward-looking statements" for the purpose of the safe harbor provided by
Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933. These forward-looking statements are necessarily
estimates reflecting the best judgment of our senior management. They involve a
number of risks and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking statements. These
differences could be material; therefore, you should evaluate forward-looking
statements in light of various important factors, including those set forth or
incorporated by reference in this document.
Important factors that could cause actual results to differ materially from
estimates or forecasts contained in the forward-looking statements include,
among others:
- the integration of Toastmaster, including the failure to realize
anticipated revenue enhancements and cost savings;
- our relationship and contractual arrangements with key customers,
suppliers and licensors;
- the risks relating to pending legal proceedings
- cancellation or reduction of orders;
- the timely development, introduction and customer acceptance of our
products;
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<PAGE> 15
- dependence on foreign suppliers and supply and manufacturing
constraints;
- competitive products and pricing;
- economic conditions and the retail environment;
- the availability and success of future acquisitions;
- our degree of leverage;
- the risks related to intellectual property rights;
- year 2000 issues; and
- other factors both referenced and not reference in this prospectus.
Words such as "estimate," "project," "plan," "intend," "expect," "believe"
and similar expressions are intended to identify forward-looking statements.
These forward-looking statements are found at various places throughout this
document and the other documents incorporated by reference, including our Annual
Report on Form 10-K for the fiscal year ended June 26, 1999, including any
amendments, and our Quarterly Report on Form 10-Q for the quarterly period ended
September 25, 1999, including any amendments.
You should not place undue reliance on these forward-looking statements,
which speak only as of the date of such statements. We do not undertake any
obligation to publicly update or release any revisions to these forward-looking
statements to reflect events or circumstances after the date of this document or
to reflect the occurrence of unanticipated events.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934 and in accordance with those requirements file annual, quarterly and
special reports, proxy statements and other information with the Securities and
Exchange Commission. You may read and copy any reports, statements or other
information that we file with the Securities and Exchange Commission at the
Commission's public reference rooms at the following locations:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. Seven World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison
Washington, D.C. 20549 New York, NY 10048 Suite 1400
Chicago, Illinois 60661-2511
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms. These filings with the Commission are also available to
the public from commercial document retrieval services and at the Internet world
wide web site maintained by the Commission at "http://www.sec.gov." Reports,
proxy statements and other information concerning Salton are also available for
inspection at the offices of The Nasdaq National Market, which is located at
1735 K Street, N.W., Washington, D.C. 20006.
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<PAGE> 16
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission. As allowed by Commission rules, this
document does not contain all the information you can find in this registration
statement or the exhibits to the registration statement. You can get a copy of
the registration statement from the sources listed above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" information into
this document, which means that we can disclose important information to you by
referring you to other documents filed separately with the Commission. The
information incorporated by reference is considered part of this document,
except for any information superseded by information contained directly in this
document or in later filed documents incorporated by reference in this document.
This document incorporates by reference the documents set forth below that
we have previously filed with the Commission. These documents contain important
business and financial information about Salton that is not included in or
delivered with this document.
Period
------
Annual Report on Form 10-K Fiscal year ended June 26, 1999.
Quarterly Reports on Form 10-Q Quarter ended September 25, 1999.
Current Reports on Form 8-K Dated December 9, 1999.
We also incorporate by reference additional documents that may be filed
with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
prior to the termination of this offering. These include periodic reports, such
as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as well as proxy statements.
You can obtain any of the documents incorporated by reference through the
Commission or the Commission's Internet web site as described above. You may
also obtain them by requesting them from us in writing or by telephone at the
following address or phone numbers:
SALTON, INC..
550 Business Center Drive
Mount Prospect, Illinois 60056
(847) 803-4600
Documents incorporated by reference are available from us without charge,
excluding all exhibits, except that if we have specifically incorporated by
reference an exhibit in this document, the exhibit will also be provided without
charge.
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<PAGE> 17
You should rely only on the information contained or incorporated by
reference in this document. We have not authorized anyone to provide you with
information that is different from what is contained in this document. This
document is dated December 10, 1999. You should not assume that the information
contained in this document is accurate as of any date other than that date.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses expected to be incurred in
connection with the offering described in this Registration Statement. All of
such amounts (except the SEC registration fee and the New York Stock Exchange
listing fee) are estimated.
AMOUNT
------
SEC registration fee........................... $-
New York Stock Exchange listing fee............ *
Printing expenses.............................. *
Legal fees and expenses........................ *
Accounting fees and expenses................... *
Miscellaneous.................................. *
----
Total..................................... *
=====
-------------------------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") provides that
a corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding whether civil, criminal or investigative (other than an action by or
in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any action or proceeding, had no reasonable
cause to believe his conduct was unlawful. Section 145 further provides that a
corporation similarly may indemnify any such person serving in any such capacity
who was or is a party or is threatened to be made a part to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor, against expenses actually and reasonably
incurred in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that
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<PAGE> 18
the Delaware Court of chancery or such other court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation to include in its
certificate of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director: (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
unlawful payment of dividends and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Registrant's Restated Certificate of Incorporation (the "Certificate")
provides that Salton's directors shall not be liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director
except to the extent that exculpation from liabilities is not permitted under
the DGCL as in effect at the time such liability is determined. The Registrant's
Certificate further provides that the Registrant shall indemnify its directors
and officers to the fullest extent permitted by the DGCL.
The directors and officers of Salton are covered under directors' and
officers' liability insurance policies maintained by Salton.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed herewith or to be filed by amendment:
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
*5.1 -- Opinion of Sonnenschein Nath & Rosenthal.
23.1 -- Consent of Independent Accountants -- Deloitte & Touche LLP.
*23.2 -- Consent of Sonnenschein Nath & Rosenthal (included in Exhibit 5.1).
23.3 -- Consent of Independent Accountants -- KPMG LLP.
24.1 -- Power of Attorney (included on page II-3).
- ----------------
*To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration
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<PAGE> 19
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration
statement as of the time it was effective; and
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by any such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
or not such indemnification is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication to such
issue.
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<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Salton, Inc.
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago and the State of
Illinois, on the 10th day of December, 1999.
SALTON, INC.
By: /s/ LEONHARD DREIMANN
----------------------------
Leonhard Dreimann
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Leonhard Dreimann, William B. Rue, and David C.
Sabin, or any one of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place, and stead, in any and all capabilities, to sign any and all pre- or
post-effective amendments to this Registration Statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 10th day of December, 1999.
SIGNATURE
/s/ LEONHARD DREIMANN Chief Executive Officer and Director
- ----------------------------- (Principal Executive Officer)
Leonhard Dreimann
/s/ WILLIAM B. RUE President and Chief Operating Officer
- -----------------------------
William B. Rue
/s/ JOHN E. THOMPSON Senior Vice President and Chief Financial Officer
- ----------------------------- (Principal Accounting and Financial Officer)
John E. Thompson
/s/ DAVID C. SABIN Chairman of the Board and Director
- -----------------------------
David C. Sabin
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<PAGE> 21
/s/ FRANK DEVINE Director
- -----------------------------
Frank Devine
/s/ BERT DOORNMALEN Director
- -----------------------------
Bert Doornmalen
- ----------------------------- Director
Robert A. Bergmann
- ----------------------------- Director
Bruce G. Pollack
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<PAGE> 22
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
*5.1 -- Opinion of Sonnenschein Nath & Rosenthal.
23.1 -- Consent of Independent Accountants -- Deloitte & Touche LLP.
*23.2 -- Consent of Sonnenschein Nath & Rosenthal (included in Exhibit 5.1).
23.3 -- Consent of Independent Accountants -- KPMG LLP.
24.1 -- Power of Attorney (included on page II-3).
- -------------------
*To be filed by amendment.
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<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Salton, Inc. on Form S-3 of our report dated September 3, 1999, appearing in
the Annual Report on Form 10-K of Salton, Inc. for the year ended June 26,
1999. We also consent to the reference to us under the heading "Experts" in
such Prospectus, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
December 8, 1999
<PAGE> 1
EXHIBIT 23.3
Independent Auditors' Consent
The Board of Directors
Salton, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Salton, Inc. of our report dated March 16, 1999, with respect to the
consolidated balance sheets of Toastmaster Inc. as of December 31, 1998 and 1997
and the related consolidated statements of operations, stockholders' equity,
comprehensive income (loss), and cash flows for each of the years in the
three-year period ended December 31, 1998, which report appears in the Form 10-K
of Salton, Inc. for the year ended June 26, 1999, and to the reference to our
firm in this registration statement under the heading "Experts".
/s/ KPMG LLP
Kansas City, Missouri
December 10, 1999
