Salton Reports Third Quarter Results; Company Improves Balance Sheet Through $34 Million Reduction in Net Debt in the Third Quarter and $134 Million Year to Date

Salton, Inc. (NYSE: SFP) announced today fiscal resultsfor its third quarter ended April 1, 2006. The Company reported netsales of $127.7 million for its fiscal 2006 third quarter compared tonet sales of $153.2 million for the fiscal 2005 third quarter. Netsales decreased domestically by $23.0 million. This decrease includes$5.7 million of tabletop product sales, as a result of the sale of thetabletop business in September, 2005 and approximately $2 million ofdiscontinued personal care product lines. The remaining $15.3 milliondecrease resulted primarily from post-holiday overstocks at retailers,volume and mix shifts as a result of price increases and plannedreductions from other discontinued product lines. Despite weakconsumer demand in the United Kingdom, foreign sales increased by $1.2million, which was offset by $3.7 million in unfavorable foreigncurrency fluctuations.

The Company's pre-tax loss from continuing operations improved by$13.1 million in the third quarter of fiscal 2006 compared to the sameperiod last year. Salton reported a net loss of $19.1 million, or$1.40 per share in the quarter, compared to a net loss of $22.5million, or $1.98 million per share for the same period in fiscal2005.

The Company's worldwide gross profit, as a percentage of netsales, was 20.3% for the third quarter of fiscal 2006, compared to20.5% for the year earlier period. While core domestic margins werestable, the sale of discontinued products at reduced prices as part ofthe Company's plan to eliminate certain business lines and rationalizeSKU's, had an unfavorable impact. Foreign gross margin percentagesdeclined slightly due to weak market conditions in the United Kingdom.In addition, Salton's business and its margins continue to be affectedby the high cost of steel, copper, corrugated and oil-based rawmaterials. Despite these challenges, the Company has continued todrive reductions in distribution and SG&A expenses. Distribution andSG&A declined nearly $17 million in the third quarter of fiscal 2006compared to the third quarter of fiscal 2005, primarily from theCompany's continued domestic cost improvements, an effort to alignexpenditures in Europe with reduced demand in a weak market andforeign currency fluctuations. Interest expense declined in thequarter by $4.5 million versus the same period last year.

For the nine months ended April 1, 2006, Salton reported net salesof $506.5 million, compared to $630.5 million for the first ninemonths of fiscal 2005. Net sales decreased domestically by $94.5million. This decrease includes $11.8 million of tabletop productsales as a result of the sale of the tabletop business in September,2005 and approximately $5.3 million of discontinued personal carelines. The remaining $77.4 million decrease resulted primarily fromdelays in production from suppliers and cautious customer orderingpatterns that impacted volume in the first quarter as well as in thefirst half of the second quarter followed by some overstocks atretailers in the third quarter and continued planned reductions ofdiscontinued product lines. Foreign sales declined by $29.6 millionand were impacted by weak consumer demand in the housewares sector inthe United Kingdom and $8.8 million of unfavorable foreign currencyfluctuations.

The Company's nine month pre-tax net loss from continuingoperations improved by $21.6 million in fiscal 2006 compared to fiscal2005. For the nine months ended April 1, 2006, Salton reported a netloss of $17.2 million, or $1.31 per share, which included a $28.1million non-cash charge, or $2.14 per share, for recording a valuationallowance on a portion of its deferred tax assets in the secondquarter, compared to a net loss of $23.0 million, or $2.02 per share,for the same nine months in fiscal 2005. The Fiscal 2006 net loss wasreduced primarily as a result of $27.8 million in gains associatedwith the sale of the Company's 52.6% ownership interest in AMAP and$21.7 million from the early retirement of debt associated with theCompany's Exchange Offer. These gains in net income were partiallyoffset by the $28.1 million valuation allowance recorded on a portionof the deferred tax assets.

The Company had approximately $294.9 million in indebtedness, netof $36.4 million of cash and accrued interest on senior secured notesat the end of the fiscal 2006 third quarter, compared to $429.3million as of July 2, 2005, net of $14.9 million of cash. As ofDecember 31, 2005 the Company had approximately $328.9 million net of$60.9 million of cash and accrued interest on senior secured notes.

"During the third quarter, we continued to pursue our plans toimprove the business and to make our operations more competitive forthe future," said William Rue, President and Chief Operating Officer."Our cost reduction programs have lowered domestic annual operatingexpenses by more than $65 million since inception at the beginning offiscal year 2005. These declines in distribution and selling, generaland administrative expenses helped to offset weaker sales, which werepartially due to our decision to reduce inventories and exit certainproduct lines in an effort to focus on our core business. We continueto face rising material costs in our products and, as a result,continuing margin pressure. We have implemented price increases inmany of our products and we are cautiously optimistic these increaseswill be accepted by our customers. In the interim however, this hasaffected volume until old lower cost inventory has worked throughretail channels. With a lower cost structure, reduced inventories andan improved balance sheet, Salton continues to focus and respond tothe many challenges it faces in our effort to return our business backto profitability."

Business Outlook:

"While we continued to face market and pricing challenges duringthe third quarter, I am excited by the Company's prospects, our focusremains to move our product mix to products that we can sellprofitably at good margins. Although we can not control the risingcosts of commodities, we will continue to drive efficienciesthroughout our operations, while maintaining the reputation forinnovation that has characterized Salton for nearly two decades." saidSalton CEO Leon Dreimann. "Customer response at the Housewares Showwas excellent, and the interest in many of the new products weintroduced is beginning to result in orders. Many of the 130 productswe launched at the event will be on retailers shelves for the HolidaySeason. In addition, we recently entered into an agreement withOmachron Science Inc. and Cropley Holdings Ltd. through which weacquired exclusive rights to proprietary technology enabling Salton tomanufacture and market a line of indoor and / or outdoor portablegrills which utilize a hydrogen flame in combination with electricheat to provide a new dimension to barbequing. The grills plug into aregular household outlet and utilize water and a novel electrolysisprocess to make a small but intense clean-burning hydrogen flameinexpensively and safely. The result is a great-tasting barbequeexperience without the harmful emissions associated with charcoal orpropane, thus making it ideal for use indoors, such as in apartmentsand condominiums, as well as homes. The response from selectedretailers who witnessed the product's performance at the HousewaresShow was overwhelming. Two Foreman grills using this revolutionarytechnology are targeted to be released in early 2007."

The Company will hold a conference call at 9 a.m. ET on Friday,May 12th. Mr. Dreimann, Chief Executive Officer, Mr. Rue, Presidentand Chief Operating Officer and William Lutz, Chief Financial Officerwill host the call. Interested participants should call (800) 968-9265when calling from the United States or (706) 679-3061 when callinginternationally. Please reference Conference I.D. Number 9184360.There will be a playback available until midnight, June 11, 2006. Tolisten to the playback, please call (800) 642-1687 when calling withinthe United States or (706) 645-9291 when calling internationally.Please use pass code 9184360 for the replay.

This call is also being webcast and can be accessed at Salton'sweb site at www.saltoninc.com until June 11, 2006. The conference callcan be found under the subheadings, "Stock Quotes" and then "AudioArchives."

About Salton, Inc.

Salton, Inc. is a leading designer, marketer and distributor ofbranded, high quality small appliances, electronics, home decor andpersonal care products. Its product mix includes a broad range ofsmall kitchen and home appliances, electronics for the home, timeproducts, lighting products, picture frames and personal care andwellness products. The Company sells its products under a portfolio ofwell 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 strongmarket position results from its well-known brand names, high qualityand innovative products, strong relationships with its customer baseand its focused outsourcing strategy.

Certain matters discussed in this press release areforward-looking statements that are subject to certain risks anduncertainties that could cause actual results to differ materiallyfrom those set forth in the forward-looking statements. These factorsinclude: Salton's ability to realize the benefits it expects from itsU.S. restructuring plan; Salton's substantial indebtedness andrestrictive covenants in Salton's debt instruments; Salton's abilityto access the capital markets on attractive terms or at all; Salton'srelationship and contractual arrangements with key customers,suppliers and licensors; pending legal proceedings; cancellation orreduction of orders; the timely development, introduction and customeracceptance of Salton's products; dependence on foreign suppliers andsupply and manufacturing constraints; competitive products andpricing; economic conditions and the retail environment; internationalbusiness activities; the risks related to intellectual propertyrights; the risks relating to regulatory matters and other risks anduncertainties detailed from time to time in Salton's Securities andExchange Commission Filings.
SALTON, INC.
CONSOLIDATED BALANCE SHEET

(Dollars in Thousands)
unaudited

ASSETS 4/1/06 7/2/05
------
CURRENT ASSETS:
---------------
Cash $ 10,908 $ 14,857
Compensating balances on deposit 39,265 34,355
Restricted cash 1,408 -
Accounts receivable, less allowance: 121,044 140,179
2006 - $8,885; 2005 - $7,695
Inventories 154,748 195,065
Assets held for sale - 998
Prepaid expenses and other current assets 16,070 16,048
Prepaid income taxes 1,344 -
Deferred income taxes 6,043 5,524
Current assets of discontinued operations - 101,927
-------- --------
Total current assets 350,831 508,953

Net Property, Plant and Equipment 42,029 50,227

Tradenames 179,169 180,041
Non-current deferred tax asset 2,488 49,275
Other assets 14,189 11,555
Non-current assets of discontinued operations - 7,737
-------- --------
TOTAL ASSETS $588,706 $807,788
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
--------------------
Revolving line of credit and other current
debt, including an adjustment of $10,971
and $0 for accrued interest on the senior
secured notes, respectively $ 30,215 $ 70,730
Senior subordinated notes due 2005 - Current - 45,990
Accounts payable 85,008 86,254
Accrued expenses 28,436 34,802
Accrued interest 6,246 13,589
0 0
Income Taxes Payable 1,695 4,375
Current liabilities of discontinued operations - 47,331
-------- --------
Total current liabilities 151,600 303,071

Non-current deferred income taxes 11,155 3,334
Senior subordinated notes due 2005 - 79,010
Senior subordinated notes due 2008, including an
adjustment of $2,079 and $7,082 to the carrying
value related to interest rate swap agreements,
respectively 61,756 156,387
Senior secured notes, including an adjustment
of $13,136 and $0 to the carrying value for
accrued interest, respectively 116,407 -
Series C preferred stock 8,646 -
Term loan and other notes payable 117,245 100,050
Other long term liabilities 19,530 20,283
Non-current liabilities of discontinued operations - 1,462
-------- --------
TOTAL LIABILITIES 486,340 663,597
Minority interest in discontinued operations - 24,263
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
2006-13,694,140 shares, 2005-11,376,292 shares 172 148
Treasury stock - at cost (65,793) (65,793)
Capital Contribution 0 0
Additional paid-in capital 62,835 55,441
Accumulated other comprehensive income 3,746 11,513
Retained Earnings 61,406 78,619
-------- --------
Total stockholders' equity 62,366 79,928
-------- --------
TOTAL LIABILITIES AND STOCKHOLDER EQUITY $588,706 $807,788
======== ========



SALTON, INC
CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands)
UNAUDITED

13 Weeks Ended 39 Weeks Ended
Apr 1, 2006 Apr 2, 2005 Apr 1, 2006 Apr 2, 2005
------------------------------------------------

Net Sales $ 127,657 $ 153,159 $ 506,461 $ 630,541
Cost of Sales 91,434 108,435 353,123 424,802
Total Distribution
Expense 10,374 13,331 33,589 42,840
----------- ----------- ----------- -----------
Gross Profit 25,849 31,393 119,749 162,899
Total Selling, General
& Administrative 37,022 50,982 131,012 163,217
Restructuring Costs 80 287 237 1,077
----------- ----------- ----------- -----------
Operating (Loss) (11,253) (19,876) (11,500) (1,395)
Interest Expense 8,351 12,855 28,596 38,605
Gain-Early settlement
of debt 0 0 (21,720) 0
----------- ----------- ----------- -----------
(Loss) from Continuing
Operations Before
Income Taxes (19,604) (32,731) (18,376) (40,000)
Income Taxes (540) (9,314) 28,388 (11,828)
----------- ----------- ----------- -----------
Net (Loss) from
Continuing Operations (19,064) (23,417) (46,764) (28,172)
Income from Discontinued
Operations, net of Tax 0 888 1,735 5,212
Gain on Sale of
Discontinued Operations,
net of Tax 0 - 27,816 -
----------- ----------- ----------- -----------
Net (Loss) $ (19,064)$ (22,529)$ (17,213)$ (22,960)
=========== =========== =========== ===========

Weighted avg common
shares outstanding 13,616,903 11,376,297 13,118,437 11,373,127
Weighted avg common &
common equiv share 13,616,903 11,376,297 13,118,437 11,373,127

Net (Loss) per common
share: Basic
(Loss) from
continuing
operations $ (1.40)$ (2.06)$ (3.56)$ (2.48)
Income from
discontinued
operations, net of
tax - 0.08 0.13 0.46
Gain on sale of
discontinued
operations - - 2.12 -
----------- ----------- ----------- -----------
Net (Loss) per common
share: Basic $ (1.40)$ (1.98)$ (1.31)$ (2.02)
=========== =========== =========== ===========

Net (Loss) per common
share: Diluted
(Loss) from
continuing
operations $ (1.40)$ (2.06)$ (3.56)$ (2.48)
Income from
discontinued
operations, net of
tax $ - $ 0.08 $ 0.13 $ 0.46
Gain on sale of
discontinued
operations $ - $ - $ 2.12 $ -
----------- ----------- ----------- -----------
Net (Loss) per common
share: Diluted $ (1.40)$ (1.98)$ (1.31)$ (2.02)
=========== =========== =========== ===========