Small appliance maker Salton, Inc. announced its fiscal 2005 results for the first quarter ended Oct. 2, 2004. The company reported net sales of U.S. $274.1 million for the first quarter, versus $238.5 million for the first quarter of fiscal year 2004.
Salton reported a loss of $3.2 million, or $0.28 per share, versus a profit of $0.7 million, or $0.50 per diluted share for the same period of 2004. Net sales increased $35.6 million due to strength in international operations and $10.4 million in favorable currency effects. Domestic sales were relatively unchanged versus the year-earlier period.
According to the company, gross profit declined from 26.9 percent in the fiscal 2004 period to 23.1 percent in the first quarter of fiscal 2005. The decline was a result of higher cost of goods as a result of increased raw material and petroleum based costs and sales of excess and discontinued product lines in connection with the company's previously announced inventory reduction plan.
"Our domestic restructuring efforts are yielding results," said Leonhard Dreimann, Salton's CEO. "Were it not for rising product related costs, our earnings per share would have been positive in the quarter. We remain on plan to realize a minimum of $40 million in cost reductions during fiscal 2005."
Salton announced that it will be implementing price increases to cover rising material and petroleum costs. "The raw material increases and other manufacturing pressures in China are putting a strain on manufacturers and may ultimately reduce the number of manufacturers for this industry," Mr. Dreimann said. "The short and long-term effect is not known, but we remain concerned about potential product shortages."
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