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Emerson Radio Corp. Reports Fiscal 2009 First Quarter Results PARSIPPANY, NJ--(MARKET WIRE)--Aug 14, 2008 -- Emerson Radio Corp. (MSN - News) today
reported financial results for its first quarter ended June
30, 2008. Net revenues for the first quarter of fiscal 2009 were $43.1 million, a decrease of $9.6 million compared to net revenues in the first quarter of fiscal 2008. The decrease in net revenues during the first quarter of fiscal 2009 was primarily due to lower sales of the Company's traditional audio products and iPod® accessories and lower themed product sales, partially offset by strong year-over-year increases in home appliance product sales. Operating loss for the first quarter of fiscal 2009 was $890,000 compared to operating income of $588,000 during the first quarter of fiscal 2008. The change in operating income (loss) was due to the lower level of net revenues in the first quarter of fiscal 2009, the reversal in the prior year's first quarter of inventory reserves related to the discontinuance of a themed product line, the startup costs in the current quarter of the Company's ASI joint venture formed in February 2008, and higher year-over-year quality assurance costs. Net loss for the first quarter of fiscal 2009 was $929,000, or $0.03 per diluted share, compared to net income of $442,000, or $0.02 per diluted share, for the first quarter of fiscal 2008. The first quarter of fiscal 2009 net loss was due primarily to the foregoing factors and movements in the Company's deferred tax balances, partly offset by $262,000 of realized and unrealized gains in the first quarter of fiscal 2009 on the valuation of the Company's auction rate preferred securities. "During the first quarter, our Home Appliance product category continued to experience strong consumer demand as sales increased, more than 17% compared to last year due to strong core product sales, the introduction of several new products and expanded distribution," said John Spielberger, President of North American Operations. "While the performance of our audio category is disappointing, we are taking continuous action to freshen our product lineup to meet evolving technology and consumer trends. Our themed product sales will see the launch during our second fiscal quarter of Hot Wheels children's electronics in multiple large retail outlets, and the introduction of U.B. Funkeys character-based computer speakers and USB Flash drives. We continue to move forward with our strategies and initiatives to reposition Emerson for growth through a focus on product re-design and profitable product extensions across all of our key categories." About Emerson Radio Corp. Emerson Radio Corporation (MSN - News), founded in 1948, is headquartered in Parsippany, N.J. The Company designs, markets and licenses, worldwide, a variety of consumer electronics and home appliances including microwaves and wine coolers, clock radios, full lines of televisions and other video products, and audio and home theater products. For more information, please visit Emerson Radio's Web site at www.emersonradio.com. Forward-Looking Statements This release contains "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current knowledge, assumptions, judgment and expectations regarding future performance or events. Although management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to be correct and you should be aware that actual results could differ materially from those contained in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, including the risk factors detailed in the Company's reports as filed with the Securities and Exchange Commission. The Company assumes no obligation to update the information contained in this news release.
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except earnings per share data)
Three months ended June 30,
--------------------------
2008 2007
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Net revenues
Net revenues $ 43,095 $ 52,603
Net revenues-related party 13 85
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43,108 52,688
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Costs and expenses:
Cost of sales 38,021 45,248
Other operating costs and expenses 1,131 1,796
Selling, general and administrative expenses
(exclusive of non-cash compensation shown
below) 4,828 4,977
Non-cash compensation, net of recoveries 18 79
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43,998 52,100
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Operating (loss) income (890) 588
Interest income, net 132 70
Interest income-related party -- 163
Realized/unrealized holding gains on trading
securities 262 --
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(Loss) income before income taxes and
minority interest (496) 821
Provision for income taxes 527 379
Minority interest in loss of consolidated
subsidiary 94 --
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Net (loss) income $ (929) $ 442
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Net (loss) income per share
Basic $ (0.03) $ 0.02
Diluted $ (0.03) $ 0.02
Weighted average shares outstanding
Basic 27,130 27,115
Diluted 27,130 27,141
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, March 31,
2008 2008(A)
------------ ------------
(Unaudited)
Cash and cash equivalents $ 16,569 $ 14,444
Restricted cash 2,000 --
Foreign exchange forward contracts -- 134
Accounts receivable 21,562 17,289
Due from affiliates 179 765
Inventory, net 26,593 24,854
Deferred tax assets 4,811 5,412
Other current assets 3,987 4,377
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Total current assets 75,701 67,275
Property, plant and equipment, net 1,863 1,902
Investments in marketable securities 10,510 11,948
Other assets 6,914 6,804
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Total assets $ 94,988 $ 87,929
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Current liabilities 31,053 22,978
Long-term borrowings 123 142
Other long term debt 65 57
Minority interest 39 133
Shareholders' equity 63,708 64,619
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Total liabilities and equity $ 94,988 $ 87,929
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(A) Reference is made to the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 2008 filed with the Securities and
Exchange Commission in July 2008 and amended in July 2008.Contact: CONTACT:
Emerson Radio Corp.
Greenfield Pitts
Chief Financial Officer
(212) 897-5441
Investor Relations:
Robert Maffei
Investor Relations Manager
(973) 428-2098
Brainerd Communicators
Brad Edwards or Denise Roche
(212) 986-6667
Media Relations:
Brainerd Communicators, Inc.
Scott Cianciulli
(212) 986-6667
Source: Emerson Radio Corp.
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