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Small appliance maker Salton Inc. said that it would restate some of its financial results to reclassify a preferred share issue, but said the restatement will have no effect on its previously reported net income, earnings per share, or cash flows.
According to Reuters, Salton expects the reclassification of its Series A convertible preferred shares to result in a restatement of its financials for the quarters ended Oct. 2, 2004, Jan. 1, 2005, and April 2, 2005, as well as for the fiscal years ended June 29, 2002, June 28, 2003, and July 3, 2004.
In other news, an ad hoc committee of Salton noteholders, comprised of certain holders of the company's 10.75 percent senior subordinated notes due 2005 and 12.25 percent senior subordinated notes due 2008, has concluded that the terms of the company's proposed exchange offer is unacceptable and not in the best interests of the 2005 and 2008 notes.
The committee has advised Salton that the terms of the proposed offer contemplate an inappropriate transfer of value for less than fair consideration, is detrimental to the interests and recoveries of all creditors, and represents a "band-aid" approach to the company's need for a restructuring.
As a result, the committee believes that all creditors should oppose the exchange offer and seek terms that are fair, will provide reasonable compensation to creditors, and which do not use coercion to provide a windfall to equity holders. The committee said that it wants to meet with Salton to renegotiate the terms of the offer.
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