Small appliance maker Salton, Inc. announced net sales for the third quarter ended April 2, 2005 were U.S. $203.4 million versus $191.4 million for the same period in 2004.
The company said the increase was primarily due to a $3.3 million U.S. sales increase, led by an increase in the sale of George Foreman branded products and an $8.7 million increase in foreign sales driven primarily by increases in Amalgamated Appliances. The foreign sales increases include $7.8 million of foreign currency related gains.
Salton reported a net loss for the third quarter of fiscal 2005 of $22.5 million, or $-1.98 per share, versus a net loss of $58.0 million or $-5.14 per share for the third quarter of fiscal 2004.
For the 9 months ended April 2, 2005, the company reported net sales of $854.5 million, compared to $827 million for the prior-year period. For the 9 month period, Salton reported a net loss of $23.0 million, or $-2.02 per share, versus a 9 month fiscal 2004 loss of $44.9 million, or $-4.01 per share.
In addition, Salton announced that it has initiated a second cost reduction program, where it expects to remove an additional $25 million in costs from its U.S. operations. The company projects that $15 million of these cost savings will be realized in fiscal year 2006 and $10 million will be realized in fiscal year 2007. The cost savings will principally come from a rationalization of operations, brands and SKU's, and the costs related to them. The company had previously announced and is ahead of schedule to achieve $40 million in cost reductions from its U.S. operations.
"While our restructuring activities have improved our operating results, we continue to face margin pressure in the domestic market," said Leonhard Dreimann, CEO of Salton, Inc. "Higher raw materials and energy costs have increased the cost of our goods and caused a lower level of profitability in the U.S. We have no choice but to ultimately pass along most of these costs to our customers in the coming months. However, Salton, and many of its peers, continues to have relatively high levels of inventory, making it difficult to aggressively raise prices."
"Many of the new markets we have entered, such as Spain, Brazil, and Mexico have begun to positively contribute to our growth," Mr. Dreimann said. "Sales at AMAP continue to reach record levels. We have also implemented another series of cost reduction initiatives in the U.S. designed to make us more competitive. We believe that we can continue to reduce costs meaningfully, without materially impacting our sales."
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