<PAGE> 1
FOR: Salton, Inc.
APPROVED BY: William B. Rue
President and Chief Operating Officer
(847) 803-4600
FOR IMMEDIATE RELEASE
---------------------
CONTACT: Investor Relations:
Cheryl Schneider/Hulus Alpay
Press: Greg Tiberend/Ellen Paz
Morgen-Walke Associates
(212) 850-5600
SALTON, INC. REPORTS RECORD FISCAL 2000 FOURTH QUARTER AND
YEAR-END RESULTS
-- ANNUAL NET SALES INCREASE 65.4%--
-- ANNUAL NET INCOME INCREASES 165.8%--
Mt. Prospect, IL, September 7, 2000 -- Salton, Inc. (NYSE: SFP), today
reported its fiscal 2000 fourth quarter and year-end results for the period
ended July 1, 2000.
Net income of $0.98 and $5.91 reported for the quarter and year-end
respectively reflect a $900,000 reduction or approximately $0.06 per diluted
share impact related primarily to the conversion of its Laurinburg, North
Carolina manufacturing facility to a distribution facility. The Company also
expects a future reduction to occur in the first half of fiscal 2001 to reflect
the conversion of its manufacturing facility located in Macon, Missouri to a
distribution facility.
For the quarter ended July 1, 2000, net sales increased 31.7% to a
record $176.1 million, compared to $134.7 million in the same period last year.
Net income increased 122.3% to $15.3 million, compared to $6.9 million in the
same quarter a year ago. Including the above mentioned $0.06 per diluted share
impact, diluted earnings per share increased to a record $0.98 per diluted share
from $0.48 per diluted share in the prior year's period. The weighted average
common and common equivalent shares outstanding for the quarter were 15,692,755,
compared to 14,391,275 in last year's comparable quarter.
For the year ended July 1, 2000, net sales increased 65.4% to a record
$837.3 million, compared to $506.1 million in the same period last year. Net
income increased 165.8% to a record $91.8 million, compared to $34.5 million a
year earlier. Including the above mentioned $0.06 per diluted share impact,
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SALTON, INC. REPORTS RECORD FISCAL 2000 FOURTH QUARTER AND PAGE: 2
YEAR-END RESULTS
diluted earnings per share increased to a record $5.91 per diluted share,
compared to $2.37 per diluted share in the prior year's period. The weighted
average common and common equivalent shares outstanding for the full year were
15,525,991 compared to 14,561,964 a year earlier. All share amounts and per
share amounts have been adjusted to reflect the George Foreman name acquisition
as of July 1, 1999.
Subsequent to year-end, the Company reached an agreement to satisfy
$22,750,000 of payment obligations, which otherwise would have been due on June
30, 2001, that it incurred in connection with its acquisition of the "George
Foreman" name by issuing 621,074 shares of its common stock to George Foreman
and other venture participants. Salton has agreed under certain circumstances to
pay an amount of cash and/or issue additional shares of common stock if the
shares issued to George Foreman and the others are sold for less than $36.625
per share during a specified one-year period. George Foreman and the others have
agreed under certain circumstances to pay Salton in cash 50% of the excess over
$22,750,000 of the aggregate sales proceeds plus the market value of any shares
retained at the end of such one year period. Also subsequent to year-end, Salton
made its regularly scheduled payment in cash to George Foreman in accordance
with their agreement. The effect of these payments is to reduce the debt owed to
George Foreman and the other venture participants by $42,750,000.
Leonhard Dreimann, Chief Executive Officer of Salton, stated, "The
past year has been a period of tremendous growth for Salton as evidenced by the
introduction of a host of innovative and revolutionary products throughout our
many product lines. Strong consumer demand has resulted in our record financial
performance including the impact related to the conversion of our Laurinburg,
North Carolina facility. This impact, coupled with several long-standing
initiatives, reflect the continued evolution of Salton into a pure-play
marketing company, with diminishing focus on manufacturing. This transition has
been underway since we acquired Toastmaster(R) in January of 1999 and we believe
it has helped position the Company for future growth."
Mr. Dreimann continued, "Our record sales this quarter were driven by
several factors including the introduction of our George Foreman(R) line of
indoor-outdoor electric barbecue grills, as well as continued strong sales of
the George Foreman(R) line of grills. Also contributing to the quarter's
impressive sales performance were increased sales in our core products lines
such as Farberware(R) products, Juiceman(R) juicer extractors and Toastmaster(R)
products, including toaster ovens that feature a
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SALTON, INC. REPORTS RECORD FISCAL 2000 FOURTH QUARTER AND PAGE: 3
YEAR-END RESULTS
removable liner for easy cleaning."
Commenting on the current quarter, Mr. Dreimann noted, "We have
recently announced several key acquisitions that will allow Salton to further
expand its current product offerings while capitalizing on the Company's core
marketing strengths. These acquisitions include: Sonex(R) International
Corporation, a designer and distributor of electrically operated toothbrushes
which employ ultra high frequency sonic waves for cleaning, flossers and related
products; the acquisition of the trademarks, other intellectual property assets
and molds of The Stiffel Company, a premier designer of lamps and related
products; and the execution of a non-binding letter of intent to acquire the
Relaxor brand business and inventory from JB Research, Inc. These acquisitions
will further broaden our already extensive line of product offerings that our
consumers have demanded. We also look for future growth to come from the
introduction of the Ultravection(TM) oven in the second half of fiscal 2001. We
believe that this product has the potential to revolutionize the oven market
because of its unique features including the ability to utilize three methods of
heat transfer--radiant, conduction and convection heat, allowing for food to
achieve greater moisture retention, ideal for cooking fish, steaks, pastries,
poultry and seafood."
ABOUT SALTON, INC.
Salton, Inc. is a leading domestic designer, marketer and distributor of a broad
range of branded, high quality small appliances, tabletop products and personal
care/time products. Its portfolio of well-recognized owned and licensed brand
names includes Salton(R), Toastmaster(R), Maxim(R), Breadman(R), Juiceman(R),
Juicelady(R), George Foreman Grills(R), White-Westinghouse(R), Farberware(R),
Melitta(R), Block(R) China, Atlantis(R), Sasaki(R), Rejuvenique(R), Ingraham(R),
Calvin Klein(R), Sonex (R), and Stiffel(R).
Certain matters discussed in this news 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: the Company's 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 the Company's products;
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; the Company's
degree of leverage; the risks related to intellectual property rights; risks
relating to regulatory matters and other risks and uncertainties detailed from
time to time in the Company's Securities and Exchange Commission filings.
(Tables Follow)
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SALTON, INC.
STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PERIOD YEAR TO DATE
------ ------------
7/1/00 6/26/99 7/1/00 6/26/99
------ ------- ------ -------
<S> <C> <C> <C> <C>
NET SALES $ 176,095 $ 134,704 $ 837,302 $ 506,116
Cost of goods sold 95,035 71,152 467,250 285,526
Distribution expenses 11,309 7,100 37,639 21,621
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GROSS PROFIT 69,751 56,452 332,413 198,969
Selling, general and administrative expenses 39,465 38,756 156,749 129,588
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OPERATING INCOME 30,286 17,696 175,664 69,381
Interest expense 6,396 5,619 28,761 15,518
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INCOME BEFORE INCOME TAXES 23,890 12,077 146,903 53,863
Income taxes 8,578 5,189 55,087 19,320
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NET INCOME $ 15,312 $ 6,888 $ 91,816 $ 34,543
========================= =========================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 11,344,640 10,095,202 11,221,379 10,760,455
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 15,692,755 14,391,275 15,525,991 14,561,964
NET INCOME PER COMMON SHARE : BASIC $ 1.35 $ 0.68 $ 8.18 $ 3.21
NET INCOME PER COMMON SHARE : DILUTED $ 0.98 $ 0.48 $ 5.91 $ 2.37
</TABLE>
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SALTON, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS
-------- JULY 1, JUNE 26,
2000 1999
CURRENT ASSETS:
Cash $ 7,606 $ 11,240
Accounts receivable, net of allowances 129,850 96,179
Inventories 219,230 144,124
Prepaid expenses and other current assets 10,146 6,350
Deferred tax assets 3,713 3,134
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TOTAL CURRENT ASSETS 370,545 261,027
Net Property, Plant and Equipment 34,643 24,651
Non-current deferred tax asset
Intangibles, net and other non-current assets 159,088 42,638
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TOTAL ASSETS $564,276 $328,316
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Accounts payable $ 35,113 $ 40,997
Accrued expenses 21,028 21,865
Income taxes payable 4,578 --
Revolving line of credit and other current debt 112,280 32,229
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TOTAL CURRENT LIABILITIES 172,999 95,091
Non-Current Deferred Tax Liability 2,529 157
Long-term Debt 214,940 182,329
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TOTAL LIABILITIES 390,468 277,577
STOCKHOLDERS' EQUITY:
TOTAL STOCKHOLDERS' EQUITY 173,808 50,739
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TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $564,276 $328,316
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