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Salton, Inc. (NYSE: SFP) announced today its fiscal results for its fourth quarter and year ended July 2, 2005. The Company reported net sales of $216.5 million for its fiscal 2005 fourth quarter compared to net sales of $249.7 million for the fiscal 2004 fourth quarter. Salton reported a loss of $28.8 million, or ($2.53) per share, versus a loss of $50.2 million, or ($4.42) per share for the same period in fiscal 2004. Net sales decreased domestically by $20.0 million as a result of uncertainty among one of our large suppliers and a few customers due to the Company's ongoing restructuring activities which impacted product availability and demand. Foreign sales declined by $13.2 million, including $2.6 million of foreign currency gains. The foreign sales were impacted by concerns surrounding the Company's restructuring activities and a general softness in regional sales.

The loss in the 2005 fiscal fourth quarter included a pretax charge of $3.0 million for intangible asset impairments. The loss in the 2004 fiscal fourth quarter included pretax charges of $38.8 million for restructuring charges, intangible asset impairments, loss on early retirement of debt and tooling write-offs.

For the full fiscal year, the Company reported net sales of $1,071.0 million versus $1,076.7 million in fiscal 2004. Domestic sales decreased $66.0 million and were offset by $19.2 million in foreign increases and $41.1 million of foreign currency gains. For the fiscal 2005 full-year, the Company had a net loss of $51.8 million, or $(4.55) per share, compared to a net loss of $95.2 million, or $(8.45) per share.

The loss in the 2005 fiscal year included a pretax loss of $3.2 million for intangible asset impairments and $1.0 million for restructuring charges resulting from the 2004 restructuring plan. The loss in the 2004 fiscal year included pretax charges of $73.2 million for restructuring charges, intangible asset impairments, loss on early retirement of debt and tooling write-offs

The Company's business and its margins continue to be affected by the high cost of steel, corrugated and oil-based raw materials. Despite these challenges, operating expenses, including distribution costs, declined $37.7 million in fiscal 2005 from fiscal 2004. This included a domestic cost improvement of $62.8 million offset by foreign cost increases of $25.1 million due to the European expansion, AMAP growth and $8.4 million of currency increases. This operating cost reduction was offset by an increase of $13.1 million in interest expense.

Salton also announced that it has completed the sale of its 52.6% ownership interest in AMAP for proceeds, net of expenses, of approximately $80 million. In addition to the sale of AMAP, subsequent to the end of its fiscal year, the Company:

-- completed a private debt exchange offer for the Company's outstanding senior subordinated debt which reduced the Company's total interest-bearing debt by approximately $66.0 million and reduced 2005 maturities by approximately $75.0 million;

-- sold certain tabletop assets to Lifetime Brands, Inc. for $14.2 million;

-- entered into an amendment and waiver to its senior credit facility which, among other things: (1) permits the sale of its 52.6% ownership interest in AMAP; (2) provides for certain mandatory prepayments out of the proceeds of the Company's sale of certain tabletop assets and the sale of AMAP; (3) provides for certain additional term loans; and (4) revises certain financial covenants; and

-- completed a private debt exchange of $4.1 million of second lien notes due March 31, 2008 for $4.0 million of senior subordinated notes due 2005.

"Since May 2004, the Company has taken significant steps to reduce the costs of its domestic operations and most recently to improve its liquidity through an exchange offer with holders of its 2005 and 2008 bonds and selected asset sales," said William Rue, President and Chief Operating Officer. "These important achievements during the year make Salton a stronger company. Through our cost reduction programs, we have significantly reduced domestic expenses by more than $50.0 million. At the same time, we have invested for future growth in selected markets. As a result, we believe the Company is well positioned for a return to profitability."

Business Outlook:

"Now that we have completed many of our restructuring activities, the response from our customers and suppliers has been positive," said Leonhard Dreimann, Chief Executive Officer. "We will continue to seek additional ways to reduce expenses and to divest the Company of products or businesses that do not fit into its growth plans. While we believe that we have addressed many of the issues within the Company's control, our first fiscal quarter's results, like many of our customers, will be impacted by Hurricanes Katrina and Rita and the high cost of oil. Despite these disruptions, we feel that the Company is now in a position to move forward. Salton has a long established reputation for innovation and exciting new products such as the George Foreman(R) "G5" Next Grilleration, the latest in a line of removable plate grills developed by the Company and George Foreman. That, coupled with other new product introductions, positions Salton to continue down the road to recovery."

Mr. Dreimann, Mr. Rue, and David Mulder, Executive Vice President, Chief Administrative Officer and Senior Financial Officer will host a conference call at 9 am eastern time today to discuss financial results and the business outlook. Interested participants should call (800) 968-9265 when calling within the United States or (706) 679-3061 when calling internationally. Please reference Conference I.D. Number 9907076. There will be a playback available, beginning at 10 pm eastern time today, until midnight, October 30, 2005. To listen to the playback, please call (800) 642-1687 when calling within the United States or (706) 645-9291 when calling internationally. Please use pass code 9907076 for the replay. This call is being webcast and can be accessed at Salton's Web site at www.saltoninc.com until October 14, 2005. The conference call can be found under the subheadings, "Stock Quotes" and then "Audio Archives."

About Salton, Inc.

Salton, Inc. is a leading designer, marketer and distributor of branded, high quality small appliances, electronics, home decor and personal care products. Its product mix includes a broad range of small kitchen and home appliances, electronics for the home, tabletop products, time products, lighting products, picture frames and personal care and wellness products. The company sells its products under a portfolio of well recognized brand names such as Salton(R), George Foreman(R), Westinghouse (TM), Toastmaster(R), Melitta(R), Russell Hobbs(R), Farberware(R), Ingraham(R) and Stiffel(R). It believes its strong market position results from its well-known brand names, high quality and innovative products, strong relationships with its customer base and its focused outsourcing strategy.

Certain matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These factors include: Salton's ability to repay 10-3/4% Subordinated Notes due December 15, 2005 that remain outstanding after Salton's private exchange offer; Salton's ability to realize the benefits it expects from its U.S. restructuring plan; Salton's substantial indebtedness and restrictive covenants in Salton's debt instruments; Salton's ability to access the capital markets on attractive terms or at all; Salton's relationship and contractual arrangements with key customers, suppliers and licensors; pending legal proceedings; cancellation or reduction of orders; the timely development, introduction and customer acceptance of Salton's products; dependence on foreign suppliers and supply and manufacturing constraints; competitive products and pricing; economic conditions and the retail environment; the availability and success of future acquisitions; international business activities; the risks related to intellectual property rights; the risks relating to regulatory matters and other risks and uncertainties detailed from time to time in Salton's Securities and Exchange Commission Filings.

SALTON, INC CONSOLIDATED INCOME STATEMENTS (Dollars in Thousands)

QUARTER 4 FY05 FY04 FY05 FY04 ------------ ------------ ------------ ------------ Net Sales $ 216,536 $ 249,717 $ 1,071,012 $ 1,076,735 Cost of Sales 163,355 204,410 761,254 751,011 Total Distribution Expense 13,917 17,824 66,848 72,088 ----------- ----------- ----------- ----------- Gross Profit 39,264 27,483 242,910 253,636 Total Selling, General & Administrative 52,975 62,650 240,857 273,257 Intangible Loss on Goodwill and Intangible Assets 2,968 6,531 3,211 40,855 Restructuring Costs (62) 1,798 1,015 1,798 ----------- ----------- ----------- ----------- Operating (Loss) (16,617) (43,496) (2,173) (62,274) Interest Expense 13,087 10,398 53,332 40,192 Loss-Early settlement of debt 0 5,049 5,049 ----------- ----------- ----------- ----------- Loss Before Taxes (29,704) (58,943) (55,505) (107,515) Income Tax Benefit (2,885) (11,793) (10,107) (20,089) Minority Interest, Net of Tax 2,008 3,092 6,389 7,746 ----------- ----------- ----------- ----------- Net (Loss) ($28,827) ($50,242) ($51,787) ($95,172) =========== =========== =========== ===========

Weighted avg common shares outstanding 11,376,295 11,370,282 11,373,919 11,258,157 Weighted avg common & common equiv share 11,376,295 11,370,282 11,373,919 11,258,157

Net (loss) per common share: Basic (2.53) (4.42) (4.55) (8.45) Net (loss) per common share: Diluted (2.53) (4.42) (4.55) (8.45)

SALTON, INC. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)

ASSETS 7/2/05 7/3/04 ------ CURRENT ASSETS: --------------- Cash $50,791 $43,217 Compensating balances on deposit 34,355 34,000 Accounts Receivable, less allowance: 166,089 180,391 2005 - $10,130; 2004 - $15,839 Inventories 233,414 253,627 Asset held for sale 998 0 Prepaid expenses and other current assets 17,086 21,267 Deferred income taxes 6,220 19,631 -------------------- Total current assets 508,953 552,133

Net Property, Plant and Equipment 54,230 81,152

Tradenames 181,515 184,421 Non-current deferred tax asset 49,275 22,024 Other assets 13,815 15,516 -------------------- TOTAL ASSETS $807,788 $855,246 ====================

LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: -------------------- Revolving line of credit and other current debt $70,730 $48,667 Senior subordinated notes-current 45,990 0 Accounts payable 117,209 137,671 Accrued expenses 57,725 56,997 Income Taxes Payable 11,417 8,805 -------------------- Total current liabilities 303,071 252,140

Non-current deferred income taxes 3,334 4,324 Term loan and other notes payable 101,512 100,761 Senior subordinated notes due 2005 79,010 125,000 Senior subordinated notes due 2008, including an adjustment of $2,827 and $9,581 to the carrying value related to interest rate swap agreements, respectively 156,387 158,642 Other long term liabilities 20,283 17,288 -------------------- TOTAL LIABILITIES 663,597 658,155 Minority Interest 24,263 23,515 Convertible Preferred Stock, $.01 par value: authorized, 2,000,000 shares, 40,000 shares issued 40,000 40,000 STOCKHOLDERS' EQUITY: --------------------- Common stock, $.01 par value; authorized 40,000,000 shares; issued and outstanding 2005- 11,376,292 shares, 2004-11,370,282 shares 148 148 Treasury stock - at cost (65,793) (65,793) Additional paid-in capital 55,441 56,147 Accumulated other comprehensive income 11,513 12,668 Retained Earnings 78,619 130,406 -------------------- Total stockholders' equity 79,928 133,576 -------------------- TOTAL LIABILITIES AND STOCKHOLDER EQUITY $807,788 $855,246 ====================