Salton negotiating amendments to financial covenants due to non-compliance issues

By Sara Rosenberg

New York, May 11 - Salton Inc. is in talks with senior lenders about amending its senior secured revolver to modify financial covenants due to non compliance issues in the third quarter ended March 27.

In the quarter, the company failed to comply with the consolidated fixed charge ratio contained in the revolving credit agreement and anticipates non-compliance with certain financial covenants in April and May, according to a company news release.

However, senior lenders have entered into a forbearance agreement regarding the financial covenant problems until June 10.

"Our third quarter loss was impacted by significant promotional activity and lower sales in the U.S., which offset continued strength internationally," explained Leonhard Dreimann, chief executive officer, in the release. "We had to aggressively support our domestic retailers in order to maintain and regain shelf space. This led to higher marketing expenses and price concessions to retailers. However, we are determined to return our domestic operations to profitability and are immediately taking steps to do so.

"We have identified areas within our U.S. operations where we can eliminate costs. We have begun a rigorous evaluation of all of our business units and realize the immediate need to align our cost structure to support the current annual domestic business."

Salton is a Lake Forest, Ill., designer, marketer and distributor of branded, high quality small appliances, home decor and personal care products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.