-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LbDDrdv0Y2huSZ0m4ysRCIN3yIJBDmco44nWhtB2ozDINR28Gw3fCY3ASiSZcvht ihliA1yskGzppshtp0C8+w== 0000899140-04-001211.txt : 20040920 0000899140-04-001211.hdr.sgml : 20040920 20040920162206 ACCESSION NUMBER: 0000899140-04-001211 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040920 DATE AS OF CHANGE: 20040920 GROUP MEMBERS: DANIEL S. LOEB SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SALTON INC CENTRAL INDEX KEY: 0000878280 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC HOUSEWARES & FANS [3634] IRS NUMBER: 363777824 STATE OF INCORPORATION: DE FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-42085 FILM NUMBER: 041037712 BUSINESS ADDRESS: STREET 1: 1955 FIELD COURT STREET 2: - CITY: LAKE FOREST STATE: IL ZIP: 60045 BUSINESS PHONE: 8478034600 MAIL ADDRESS: STREET 1: 1955 FIELD COURT CITY: LAKE FOREST STATE: IL ZIP: 60045 FORMER COMPANY: FORMER CONFORMED NAME: SALTON MAXIM HOUSEWARES INC DATE OF NAME CHANGE: 19930328 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: THIRD POINT MANAGEMENT CO LLC CENTRAL INDEX KEY: 0001040273 IRS NUMBER: 133922602 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 12 EAST 49TH ST STREET 2: 28TH FL CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2122247400 MAIL ADDRESS: STREET 1: 12 EAST 49TH ST STREET 2: 28TH FL CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D 1 s2647579b.txt INITIAL FILING ON SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934* Salton, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.01 par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 795757103 - -------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) Daniel S. Loeb Third Point Management Company L.L.C. 360 Madison Avenue, 24th Floor New York, NY 10017 (212) 224-7400 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Jack H. Nusbaum, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, NY 10019-6099 (212) 728-8000 September 10, 2004 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ------------------- ----------------- CUSIP No. 795757103 Page 2 of 9 Pages - ------------------- ----------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Daniel S. Loeb - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 900,000 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 900,000 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 900,000 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.9% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ----------- -------------------------------------------------------------------- SCHEDULE 13D - ------------------- ----------------- CUSIP No. 795757103 Page 3 of 9 Pages - ------------------- ----------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Third Point Management Company L.L.C. I.D. #13-3922602 - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 900,000 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 900,000 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 900,000 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.9% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ----------- -------------------------------------------------------------------- This Schedule 13D is being filed on behalf of Third Point Management Company L.L.C., a Delaware limited liability company (the "Management Company"), and Daniel S. Loeb, an individual ("Mr. Loeb" and, together with the Management Company, the "Reporting Persons"). This Schedule 13D relates to the common stock, $0.01 par value, of Salton, Inc., a Delaware corporation (the "Company"). Unless the context otherwise requires, references herein to the "Common Stock" are to such common stock of the Company. The Management Company is the investment manager or adviser to a variety of hedge funds and managed accounts (such funds and accounts, collectively, the "Funds"). The Funds directly own the Common Stock to which this Schedule 13D relates, and the Reporting Persons may be deemed to have beneficial ownership over such Common Stock by virtue of the authority granted to them by the Funds to vote and to dispose of the securities held by the Funds, including the Common Stock. Item 1. Security and Issuer. This statement on Schedule 13D relates to the Common Stock of the Company, and is being filed pursuant to Rules 13d-1 and 13d-5 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The address of the principal executive offices of the Company is 1955 Field Court, Lake Forest, Illinois, 60045. Item 2. Identity and Background. (a) This statement is filed by the Reporting Persons. Daniel S. Loeb is the managing member of the Management Company and controls the Management Company's business activities. The Management Company is organized as a limited liability company under the laws of the State of Delaware. (b) The address of the principal business and principal office of the Management Company and Mr. Loeb is 360 Madison Avenue, 24th Floor, New York, NY 10017. (c) The principal business of the Management Company is to serve as investment manager or adviser to the Funds, and to control the investing and trading in securities of the Funds. The principal business of Mr. Loeb is to act as the managing member of the Management Company. (d) None of the Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). 4 (e) None of the Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Loeb is a United States citizen. Item 3. Source and Amount of Funds or Other Consideration. The Funds expended an aggregate of approximately $ 4,321,369.81 of their own investment capital to acquire the 900,000 shares of Common Stock held by them (the "Shares"). The Shares were acquired in open market purchases. The Funds effect purchases of securities primarily through margin accounts maintained for them with Bear, Stearns Securities Corp. and Goldman, Sachs & Co. (the "Primary Brokers") which may extend margin credit to the Funds as and when required to open or carry positions in the margin accounts, subject to applicable Federal margin regulations, stock exchange rules and the firm's credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts. Item 4. Purpose of Transaction. The purpose of the acquisition of the Shares by the Funds is for investment. The Reporting Persons may cause the Funds to make further acquisitions of Common Stock from time to time or to dispose of any or all of the shares of Common Stock held by the Funds at any time. As further detailed in a letter, dated September 20, 2004, from Mr. Loeb as managing member of the Management Company, to Mr. Leonhard Dreimann, Chief Executive Officer of the Company, a copy of which is attached hereto as Exhibit 2, the Reporting Persons strongly oppose any restructuring scenario that would involve dilution to the Company's shareholders through issuance of equity, a convertible debt offering or exchange of equity for debt to current bondholders. The Reporting Persons believe that given the successful turnaround underway at the Company, and the significant asset value in its brands, the Company should instead demonstrate improved operating results and pursue a comprehensive refinancing through a global credit facility in order to repay its debentures due in December 2005 and meet its current operating needs. 5 The Reporting Persons are engaged in the investment business. In pursuing this business, the Reporting Persons analyze the operations, capital structure and markets of companies, including the Company, on a continuous basis through analysis of documentation and discussions with knowledgeable industry and market observers and with representatives of such companies (often at the invitation of management). From time to time, one or more of the Reporting Persons may hold discussions with third parties or with management of such companies in which the Reporting Persons may suggest or take a position with respect to potential changes in the operations, management or capital structure of such companies as a means of enhancing shareholder value. Such suggestions or positions may relate to one or more of the transactions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Exchange Act, including, without limitation, such matters as disposing of or selling all or a portion of the company or acquiring another company or business, changing operating or marketing strategies, adopting or not adopting certain types of anti-takeover measures and restructuring the company's capitalization or dividend policy. Except as set forth above, and in the letter attached hereto as Exhibit 2, the Reporting Persons do not have any present plans or proposals that relate to or would result in any of the actions required to be described in Item 4 of Schedule 13D. Each of the Reporting Persons may, at any time, review or reconsider its position with respect to the Company and formulate plans or proposals with respect to any of such matters, but has no present intention of doing so. Item 5. Interest in Securities of the Issuer. (a) As of the date of this Schedule 13D, the Management Company beneficially owns 900,000 shares of Common Stock. The Management Company shares voting and dispositive power over such holdings with Mr. Loeb and with the Funds. As of September 20, 2004, the Shares represented 7.9% of the total 11,371,197 shares of Common Stock outstanding at September 10, 2004 as reported in the Company's annual report on Form 10-K for the period ended July 3, 2004. None of the individual Funds owns a number of shares of Common Stock equal to or greater than 5% of such total Common Stock outstanding. (b) The Management Company and Mr. Loeb share voting and dispositive power over the 900,000 shares of Common Stock held directly by the Funds. (c) Schedule A hereto sets forth certain information with respect to transactions by the Funds, at the direction of the Reporting Persons, in the Common Stock during the past sixty days. All of the transactions set forth on Schedule A, except as may be otherwise noted therein, were effected in open market 6 purchases on the New York Stock Exchange through the Primary Brokers. Except as set forth above and on Schedule A, during the last sixty days there were no transactions in the Common Stock effected by the Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members. (d) Other than the Funds which directly hold the Shares, and except as set forth in this Item 5, no person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting Persons have entered into an agreement with respect to the joint filing of this statement, and any amendment or amendments hereto. By virtue of the relationships among the Reporting Persons and the Funds, as described in Item 2, the Reporting Persons and the Funds may be deemed to be a "group" under the Federal securities laws. Except as otherwise set forth in this Schedule 13D, each Reporting Person expressly disclaims beneficial ownership of any of the shares of Common Stock beneficially owned by any other Reporting Person or the Funds and the filing of this Statement shall not be construed as an admission, for the purposes of Sections 13(d) and 13(g) or under any provision of the Exchange Act or the rules promulgated thereunder or for any other purpose, that any Reporting Person is a beneficial owner of any such shares. Except as set forth herein, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 or between such persons and any other person with respect to any securities of the Company. Item 7. Material to be Filed as Exhibits. 1. Joint Filing Agreement, dated as of September 20, 2004, by and between the Reporting Persons. 2. Letter from the Management Company to the Chief Executive Officer of the Company, dated September 20, 2004. 7 Schedule A ---------- (Transactions by the Funds in Common Stock during the past sixty days) Date Shares Purchased Shares Sold Price Per Share ---- ---------------- ----------- --------------- - -------------------------------------------------------------------------------- 9/8/2004 5,000 5.0350 - -------------------------------------------------------------------------------- 9/10/2004 95,000 6.8383 - -------------------------------------------------------------------------------- 9/13/2004 120,000 6.8362 - -------------------------------------------------------------------------------- 9/14/2004 70,000 6.5693 - -------------------------------------------------------------------------------- 9/15/2004 20,000 6.9543 - -------------------------------------------------------------------------------- 9/16/2004 20,500 6.9798 - -------------------------------------------------------------------------------- 9/17/2004 49,500 6.9802 - -------------------------------------------------------------------------------- 9/20/2004 20,000 6.9443 - -------------------------------------------------------------------------------- SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: September 20, 2004 THIRD POINT MANAGEMENT COMPANY L.L.C. By: /s/ Daniel S. Loeb ------------------------------ Name: Daniel S. Loeb Title: Managing Member /s/ Daniel S. Loeb ------------------------------ Daniel S. Loeb [SIGNATURE PAGE TO SCHEDULE 13D WITH RESPECT TO SALTON, INC.] EX-1 3 s2647579c.txt JOINT FILING AGREEMENT Exhibit 1 --------- JOINT FILING AGREEMENT PURSUANT TO RULE 13d-1(k)(1) ---------------------------- The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that it knows or has reason to believe that such information is inaccurate. This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall constitute one and the same instrument. Dated: September 20, 2004 THIRD POINT MANAGEMENT COMPANY L.L.C. By: /s/ Daniel S. Loeb ------------------------------ Name: Daniel S. Loeb Title: Managing Member /s/ Daniel S. Loeb ------------------------------ Daniel S. Loeb [JOINT FILING AGREEMENT FOR SCHEDULE 13D WITH RESPECT TO SALTON, INC.] EX-2 4 s2647579d.txt LETTER FROM MANAGEMENT COMPANY Exhibit 2 --------- [THIRD POINT MANAGEMENT COMPANY L.L.C. LETTERHEAD] VIA FACSIMILE & U.S. MAIL September 20, 2004 VIA FACSIMILE & U.S. MAIL Mr. Leonhard Dreimann Chief Executive Officer Salton, Inc. 1955 Field Court Lake Forest, IL 60045 Facsimile (847) 803-1186 Dear Mr. Dreinmann: Our firm recently acquired 900,000 shares, representing approximately 7.9% of the outstanding shares of Salton, Inc. (the "Company" or "Salton"). In addition, we purchased significant stakes in the Company's debt securities as holders of both the 10 3/4% of 12/15/05 and the 12 1/4% of 4/15/08. Fortunately, for us, we purchased our debt holdings at a significant discount to both par and current trading levels following the announcement of disappointing third quarter results in May of 2004. Most or your bondholders and shareholders have not been so lucky. Your largest shareholder, Centre Partners, which holds two board seats, made a $40 million investment over 6 years ago in a non-interest bearing preferred security at a conversion price of $11.33, nearly 60% above last Friday's close. Some of your public investors have fared worse. In 2000, Salton traded at an average price of $34.20 after having reached a high of $60.875 in February of that year. The series of disappointments unleashed by this management team reached a crescendo on May 11, 2004 when the Company released (the "Release") disappointing quarterly sales and failed to comply with the consolidated fixed charge ratio contained in its senior secured revolving credit facility, after which your stock dipped to $2.50 per share and your bonds plunged into the 40s. A review of the Company's holder list compiled by Bloomberg through 13F filings made by certain institutional fund managers reveals that dozens of your institutional holders, fed up with management's blunders, and the prospect of bankruptcy, jettisoned their positions prior to the June 30th filing date. Following an exhaustive due diligence study, we analyzed Salton's bloated cost structure and concluded that the Company could achieve its goal of $40 million in cost savings offered in the Release. Accordingly, Third Point acquired a meaningful stake in the Company's debt and began acquiring stock all the while institutions such as Royce & Associates dry-heaved their stock holdings. We are pleased that Salton shares have risen nearly 100% from our early purchases. Notwithstanding the Company's past bungling, we are encouraged by recent results and your success in turning the Company around from its nadir. o We were impressed with the Company's swift action in resolving its short-term liquidity issues by obtaining a "vulture loan" from Silverpoint Finance LLC. o We were encouraged to see domestic sales expand for the first time since 2002 in the Company's fourth quarter earnings release. o We are pleased to learn that the $40 million in cost saving appear to be a fait accompli to recent statements made by management. Accordingly, we believe the Company has ample options to refinance its 10.75% bond maturity due December 15, 2005. However, we urge the Company only to consider options that maximize value for all stakeholders. Based on our independent due diligence and as confirmed by our meeting with you in New York on September 8th, Salton is a company with tremendous asset value: o We believe that the Foreman Grill business is worth at least $400 million. o The Company's 51 % stake in AMAP is worth at least $50 million in a "fire sale" scenario. o We understand that European sales are profitable and generate between $30 mm to $35 mm of EBITDA, which at a bargain price of 6X should be worth in excess of $180 million. o We also believe that Toastmaster, the UK warehouse facility and other assets could be worth in excess of $100 million for a total asset value north of $730 million. Given our view that the "sum of the parts" of Salton is worth significantly more than the $400 million of debt outstanding (assuming and average draw on the revolver), we strongly oppose any restructuring scenario that would involve dilution to your shareholders through either issuance of equity at these levels, a convertible debt offering or exchange of equity for debt to current bondholders. We believe that given the successful turnaround underway at Salton and the significant asset value in its brands (discussed above), the Company should wait and demonstrate improved operating results via continued cost-cutting initiatives and benefits from the new "grilleration" and pursue a comprehensive refinancing through a global credit facility to repay the debentures due in December 2005 and to meet its current operating needs. Sincerely, /s/ Daniel S. Loeb Daniel S. Loeb Managing Member -----END PRIVACY-ENHANCED MESSAGE-----