Salton on New Strategies for Reducing Product Costs (SFP 4Q05 Conf Call Quotes)

Salton (ticker: SFP) engages in the design, marketing, sourcing, and distribution of small appliances, home décor, and personal care products. CEO Leon Dreimann discussed what some companies are doing to reduce product costs during management's Q4 2005 earnings results conference call:

….increases have slowed down in terms of most of the materials, with the exception of plastics and transportation costs all associated with fuel. The next set of increases is the floating exchange rate in China because the currency is strengthening for which nobody knows. To what degree that would be, that is an unknown factor but a very simple one to calculate. That currency will appreciate. We certainly would have increases to do with that and they will be passed on. It's a very unusual seeing in this industry that has been experienced over the last 12, 15 months associated with increases, it was just never there. But it has been now for 15 months and retailers have seen it from all of our competitors as well as ourselves. And they go to China, they go to other overseas markets, they source product directly and they use own their containers, they use their own trucks.

….there are ways of trying to change the type of materials used, move to materials that have been less affected. And just like there hybrid cars booming, there could be situations where instead of plastics, you would be better off selling products made with stainless-steel.

(Quotes are from the CCBN StreetEvents transcript.)

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