Small appliance and personal care product maker Salton, Inc. announced its results for the second fiscal quarter ended Dec. 27, 2003. The company reported net sales of U.S. $397.1 million for the quarter versus $339.3 million for the same period in fiscal 2003. The increase in net sales was due primarily to continued expansion of the company's international operations, which offset a 17.5- percent decline in the domestic market, Salton said.
The company reported a net income of $12.3 million, $0.81 per diluted share, versus a net income of $25.0 million or $1.64 per diluted share for the second quarter of fiscal 2003.
Gross profit margins in the second fiscal quarter of 2004 were 31.1 percent of net sales, compared to 26.9 percent of net sales in the first fiscal quarter of 2004. The company said its results were impacted by an additional $13 million in advertising expenditures in the quarter in connection with marketing efforts for the One:One(TM) single-cup pod-operated coffee makers and the Westinghouse Beyond(TM) Unplugged(TM) upright vacuum cleaner. The results also reflect an additional $3 million in advertising expenditures to launch George Foreman products in South Africa and Brazil, and introduce new George Foreman products in Australia.
For the 6 months ended Dec. 27, 2003, Salton reported net sales of $635.6 million versus $539.3 million for the same period in fiscal 2003. Salton reported net income of $13.1 million, or $0.86 per diluted share, versus net income of $28.9 million, or $1.92 per diluted share, for the first 6 months of fiscal 2003.
"Our financial results were impacted by increased advertising spending in the quarter surrounding the launch of new products and geographic expansion," said Leonhard Dreimann, Salton CEO. "While our lower sourcing costs have made our products highly competitive, the transition to new, lower cost factories and other supply issues in the Quarter resulted in product shortages and lost sales we estimate exceeded $45 million. These supplier-related issues have now been largely resolved."
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