SOURCE: Emerson Radio Corp.

February 12, 2010 09:00 ET

Emerson Radio Corp. Reports Fiscal 2010 Third Quarter Results

MOONACHIE, NJ--(Marketwire - February 12, 2010) - Emerson Radio Corp. (NYSE Amex: MSN) today reported financial results for its third quarter and nine months ended December 31, 2009.

Net revenues for the third quarter of fiscal 2010 decreased $12.1 million, or 20.1%, to $48.0 million as compared to net revenues in the third quarter of fiscal 2009 of $60.1 million, and net revenues for fiscal year 2010 to date decreased $2.0 million, or 1.2%, to $155.4 million as compared to net revenues of $157.4 million in the same period of fiscal 2009. The decrease in net revenues for the third quarter of fiscal 2010 as compared to the prior year was due to lower sales across all categories and is reflective of a lower level of cyclicality in the current fiscal year's revenue stream as compared to the prior year, when a majority of the Company's annual sales were recorded in the third fiscal quarter. The decrease in net revenues for the fiscal year 2010 to date versus the prior year was due to lower sales of audio and themed products, partially offset by higher sales of housewares products, which were up 13% versus prior year.

Operating income for the third quarter of fiscal 2010 was $4.6 million compared to an operating loss of $2.1 million for the third quarter of fiscal 2009 an improvement of $6.7 million. Operating income for the fiscal year 2010 to date was $9.4 million compared to an operating loss of $1.5 million for the same period of fiscal 2009, an improvement of $10.9 million. The increase in the third quarter and fiscal year to date operating income was driven by the Company's efforts to manage costs, as reflected in a nearly 25% year-over-year reduction in SG&A expenses for the third quarter and a 21.4% year-over-year reduction for the fiscal 2010 period to date.

Net income from continuing operations for the third quarter of fiscal 2010 was $3.4 million or $0.13 per diluted share compared to a net loss from continuing operations of $1.9 million, or $0.07 per diluted share, for the third quarter of fiscal 2009. Net income from continuing operations for fiscal year 2010 to date was $7.8 million or $0.29 per diluted share compared to a net loss from continuing operations of $2.0 million, or $0.07 per diluted share, for the same period in fiscal 2009.

Greenfield Pitts, Executive Vice President and Chief Financial Officer of Emerson Radio, commented, "We are pleased that fiscal 2010's financial results through the third quarter are reflective of our ongoing efforts to right size the Company's cost structure, while focusing on growing the home appliance category and brand licensing portfolio. Moving forward, we are continuing to focus on strategic and profitable revenue generation, realization of operating efficiencies and our cost containment efforts."

About Emerson Radio Corp.

Emerson Radio Corporation (NYSE Amex: MSN), founded in 1948, is headquartered in Parsippany, N.J. The Company designs, sources, imports and markets a variety of home appliance and consumer electronic products, and licenses its trademarks to others on a worldwide basis for a variety of 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 Statement of Operations
                                (Unaudited)
                  (in thousands, except per share data)



                                 Three months ended     Nine months ended
                                    December 31,          December 31,
                                  2009       2008       2009       2008
                                ---------  ---------  ---------  ---------

Net revenues:
Net revenues                    $  48,038  $  60,068  $ 155,411  $ 157,424
Net revenues-related party              -          -          -         15
                                ---------  ---------  ---------  ---------
                                   48,038     60,068    155,411    157,439
                                ---------  ---------  ---------  ---------

Costs and expenses:
Cost of sales                      39,298     55,612    132,602    140,434
Other operating costs and
 expenses                             708      2,058      2,563      4,769
Selling, general &
 administrative expenses            3,397      4,519     10,829     13,781
                                ---------  ---------  ---------  ---------
                                   43,403     62,189    145,994    158,984
                                ---------  ---------  ---------  ---------

                                ---------  ---------  ---------  ---------
Operating income (loss)             4,635     (2,121)     9,417     (1,545)

Interest (expense) income, net         (1)        21         21        227
Unrealized holding (losses) on
 trading securities                     -       (410)         -       (431)
Realized gains on trading
 securities                             -         91          -        623
                                ---------  ---------  ---------  ---------
Income (loss) from continuing
 operations before income taxes     4,634     (2,419)     9,438     (1,126)

Provision (benefit) for income
 taxes                              1,221       (506)     1,643        848

                                ---------  ---------  ---------  ---------
Income (loss) from continuing
 operations                         3,413     (1,913)     7,795     (1,974)

Loss from discontinued
 operations, net of tax benefit         -        176         55        357

                                ---------  ---------  ---------  ---------
Net income (loss)               $   3,413  $  (2,089) $   7,740  $  (2,331)
                                ---------  ---------  ---------  ---------

Basic net income (loss) per
 share
   Continuing operations        $    0.13  $   (0.07) $    0.29  $   (0.07)
   Discontinued operations              -      (0.01)         -      (0.02)
                                ---------  ---------  ---------  ---------
                                $    0.13  $   (0.08) $    0.29  $   (0.09)
                                ---------  ---------  ---------  ---------

Diluted net income (loss) per
 share
   Continuing operations        $    0.13  $   (0.07) $    0.29  $   (0.07)
   Discontinued operations              -      (0.01)         -      (0.02)
                                ---------  ---------  ---------  ---------
                                $    0.13  $   (0.08) $    0.29  $   (0.09)
                                ---------  ---------  ---------  ---------

Weighted average shares
 outstanding:
Basic                              27,130     27,130     27,130     27,130
Diluted                            27,133     27,130     27,131     27,130




                   Emerson Radio Corp. and Subsidiaries
                        Consolidated Balance Sheet
                              (in thousands)



                                                  December 31,   March 31,
                                                      2009         2009
                                                  ------------ ------------
                                                   (Unaudited)
ASSETS
Current assets:
  Cash and cash equivalents                       $     38,843 $     22,518
  Restricted cash                                            3        3,025
  Accounts receivable, net                              14,838       15,970
  Other receivables                                      1,263        1,587
  Due from affiliates                                       52           78
  Inventory, net                                        16,748       20,691
  Prepaid expenses and other current assets              2,738        2,190
  Deferred tax assets                                    3,936        4,872
                                                  ------------ ------------
      Total current assets                              78,421       70,931
Property, plant, and equipment, net                      3,585        1,139
Trademarks and other intangible assets, net              1,683          255
Due from affiliates                                        185          114
Investments in marketable securities                     6,031        6,031
Deferred tax assets                                      6,715        7,102
Other assets                                               235          472
                                                  ------------ ------------
      Total assets                                      96,855       86,044
                                                  ============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Short term borrowings                                 5,655        5,733
   Current maturities of long-term borrowings               56           85
   Accts payable and other current liabilities          21,899       18,929
   Due to affiliates                                        25           66
   Accrued sales returns                                 1,313        1,130
   Income taxes payable                                    159          155
                                                  ------------ ------------
      Total current liabilities                         29,107       26,098
Long-term borrowings                                        35           59
Deferred tax liabilities                                   103           87
Shareholders equity                                     67,610       59,800
                                                  ------------ ------------
      Total liabilities and shareholders' equity  $     96,855 $     86,044
                                                  ============ ============

Contact Information

  • CONTACT:
    Emerson Radio Corp.
    Greenfield Pitts
    Chief Financial Officer
    (212) 897-5441

    Investor Relations:
    Robert Maffei
    Investor Relations Manager
    (973) 428-2098