Salton, Inc. announced fiscal results for its second quarter ended Dec. 30, 2006. The company reported net sales of U.S. $190.9 million in the second quarter of fiscal 2007 and a loss of $6.3 million, or $0.44 per share, versus net sales of $230.4 million in the second quarter of fiscal 2006 and a loss of $27.8 million, or $2.06 per share. The net loss reported in fiscal 2006 included a $28.1 million non-cash charge for recording a valuation allowance on a portion of Salton's deferred tax assets.
Net sales decreased domestically by $44.6 million. Foreign sales were generally stable, with continued growth in certain regions. Net sales in these operations increased by $5.2 million, helped by $6.9 million in favorable foreign currency fluctuations.
Gross profit for the second quarter declined from $64.4 million in fiscal 2006 to $49.8 million in fiscal 2007. These decreases are primarily a result of the decreases in net sales in the domestic business, coupled with rising prices from suppliers due to increased cost of raw materials.
Recently, Salton entered into a merger agreement with Applica Inc., in which SFP Merger Sub Inc., a subsidiary of Salton, will acquire APN Holding, the entity that recently acquired all of the outstanding common shares of Applica, Inc. The merger will make Applica Inc. a subsidiary of Salton, and is expected to create one of the largest U.S. public companies focused on the household small appliance industry. Salton estimates that the combined company will have consolidated annual sales of in excess of $1 billion.
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