SOURCE: Emerson Radio Corp.

February 14, 2011 19:30 ET

Emerson Radio Corp. Reports Fiscal 2011 Third Quarter Results

MOONACHIE, NJ--(Marketwire - February 14, 2011) - Emerson Radio Corp. (NYSE Amex: MSN) today reported financial results for its third quarter and nine months ended December 31, 2010.

Net income from continuing operations for the third quarter of fiscal 2011, aided by a $1.0 million realized gain on the sale of a trading security, was $4.2 million versus $3.4 million for the third quarter of fiscal 2010, an increase of $0.8 million, or 22.6%. Diluted earnings per share for the third quarter of fiscal 2011 was $0.15 as compared to $0.13 for the third quarter of fiscal 2010, an increase of $0.02, or 15.4%. Net income from continuing operations for the nine month period of fiscal 2011 was $13.3 million versus $7.8 million for the nine month period of fiscal 2010, an increase of $5.5 million, or 70.4%. Diluted earnings per share for the nine month period of fiscal 2011 was $0.49 as compared to $.29 for the nine month period of fiscal 2010, an increase of $0.20 per diluted share, or 69%.

Operating income for the third quarter of fiscal 2011 was $5.0 million as compared to operating income in the third quarter of fiscal 2010 of $4.6 million, an increase of $0.4 million, or 7.5%. The increase in third quarter fiscal 2011 operating income over the prior year was driven by lower SG&A expenses and other operating costs, partially offset by lower net revenues. Operating income for the nine month period of fiscal 2011 was $15.7 million, an increase of $6.3 million, or 66.8%, over operating income of $9.4 million for the nine month period of fiscal 2010. The increase in operating income for the nine month period of fiscal 2011 versus the prior year period was due to lower SG&A expenses and other operating costs, as well higher net revenues.

Net revenues for the third quarter of fiscal 2011 decreased by $7.4 million, or 15.5%, to $40.6 million as compared to net revenues in the third quarter of fiscal 2010 of $48.0. Our third quarter fiscal 2011 net sales of houseware products, driven by decreases in microwave ovens, toaster ovens and coffee makers, which were partially offset by increases in compact refrigerators and wine coolers, decreased by $4.0 million, or 11.0%, versus the third quarter of fiscal 2010. Our third quarter fiscal 2011 net sales of audio products declined by $2.7 million, or 31.3%, versus the third quarter of fiscal 2010. The third quarter of fiscal 2011 net sales comparative to prior year was also adversely affected by $1.2 million due to the absence of themed products sales in the current quarter, partially offset by a $0.5 million increase in year-over-year licensing revenues. Net revenues for the nine month period of fiscal 2011 were $159.7 million, an increase of $4.3 million, or 2.8%, over the nine month period of fiscal 2010 net revenues of $155.4. Our net sales during the nine month period of fiscal 2011 of houseware products, driven by increases in compact refrigerators, microwave ovens, and wine coolers, partially offset by decreases in toaster ovens and coffee makers, increased by $21.8 million, or 18.0% over the nine month period of fiscal 2010, and were partially offset by lower year-over-year net sales of audio products and the absence during the nine month period of fiscal 2011 of themed products sales. Our licensing revenues for the nine months of fiscal 2011 were up 8.2%, or $0.4 million.

Adrian Ma, Chief Executive Officer of Emerson Radio, commented, "Despite a challenging quarter, our operating income, net income and earnings per share for both the third fiscal quarter and the fiscal year-to-date period were all higher than the prior year levels, due to our lower year-over-year level of SG&A and operating costs, a realized gain on the par value sale during the quarter of an auction rate security, as well as the higher year-to-date net revenues achieved."

About Emerson Radio Corp.

Emerson Radio Corporation (NYSE Amex: MSN), founded in 1948, is headquartered in Moonachie, N.J. The Company designs, sources, imports and markets a variety of houseware 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 STATEMENTS OF OPERATIONS
                                (Unaudited)
              (In thousands, except earnings per share data)


                                    Three Months Ended  Nine Months Ended
                                          31-Dec              31-Dec
                                    ------------------- -------------------
                                      2010      2009      2010      2009
                                    --------- --------  --------- --------
Net revenues                           40,571   48,038    159,692  155,411
Costs and expenses:
Cost of sales                          33,077   39,298    136,492  132,602
Other operating costs and expenses        567      708      1,578    2,563
Selling, general and administrative
 expenses                               1,945    3,397      5,919   10,829
                                    --------- --------  --------- --------
                                       35,589   43,403    143,989  145,994
                                    --------- --------  --------- --------
Operating income                        4,982    4,635     15,703    9,417
Interest income, net                       10       (1)        24       21
Realized gains on trading
 securities                               966        -        966        -
                                    --------- --------  --------- --------
Income from continuing operations
 before income taxes                    5,958    4,634     16,693    9,438
Provision for income taxes              1,774    1,221      3,407    1,643
                                    --------- --------  --------- --------
Income from continuing operations       4,184    3,413     13,286    7,795
Loss from discontinued operations,
 net of tax benefit                         -        -          -      (55)
                                    --------- --------  --------- --------
Net income                              4,184    3,413     13,286    7,740
                                    ========= ========  ========= ========

Basic net income per share
   Continuing operations            $    0.15 $   0.13  $    0.49 $   0.29
   Discontinued operations                  -        -          -        -
                                    --------- --------  --------- --------
   Net                              $    0.15 $   0.13  $    0.49 $   0.29
                                    ========= ========  ========= ========

Diluted net income (loss) per share
   Continuing operations            $    0.15 $   0.13  $    0.49 $   0.29
   Discontinued operations                  -        -          -        -
                                    --------- --------  --------- --------
   Net                              $    0.15 $   0.13  $    0.49 $   0.29
                                    ========= ========  ========= ========

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







                   EMERSON RADIO CORP. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                     (In thousands except share data)                      


                                                    31-Dec-10   31-Mar-10
                                                    ----------  ----------
                                                    (Unaudited)

   ASSETS
Current assets:
   Cash and cash equivalents                        $   18,727  $    9,969
   Restricted cash                                         591       5,083
   Accounts receivable, net                              8,197      20,350
   Other receivables                                     1,001       1,037
   Due from affiliates                                      70          --
   Inventory, net                                       24,240      10,952
   Prepaid expenses and other current assets               457         736
   Deferred tax assets                                   3,300       3,383
                                                    ----------  ----------
      Total current assets                              56,583      51,510
Property, plant and equipment, net                       2,857       3,131
Trademarks and other intangible assets, net              1,545       1,606
Due from affiliates                                          0         185
Investments in marketable securities                     3,897       6,031
Deferred tax assets                                      4,185       6,588
Other assets                                               864         205
                                                    ----------  ----------
      Total assets                                  $   69,931  $   69,256
                                                    ==========  ==========
   LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Short-term borrowings                            $    2,478  $    5,629
   Current maturities of long-term borrowings               10          30
   Accounts payable and other current liabilities       11,315      20,776
   Due to affiliates                                         3          28
   Accrued sales returns                                   893         957
   Income taxes payable                                    393         174
                                                    ----------  ----------
      Total current liabilities                         15,092      27,594
Long-term borrowings                                        65         201
Deferred tax liabilities                                   144         119
                                                    ----------  ----------
Total liabilities                                       15,301      27,914
Shareholders' equity:
   Preferred shares - 10,000,000 shares authorized;
    3,677 shares issued and outstanding;
    liquidation preference of $3,677,000                 3,310       3,310
   Common shares - $.01 par value, 75,000,000
    shares authorized; 52,965,797 shares issued and
    27,129,832 shares outstanding                          529         529
   Capital in excess of par value                       98,785      98,785
   Accumulated other comprehensive losses                  (82)        (82)
   Accumulated deficit                                 (23,688)    (36,976)
   Treasury stock - 25,835,965 shares, at cost         (24,224)    (24,224)
                                                    ----------  ----------
      Total shareholders' equity                        54,630      41,342
                                                    ----------  ----------
      Total liabilities and shareholders' equity    $   69,931  $   69,256
                                                    ==========  ==========

Contact Information

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

    EMERSON RADIO CORP.
    85 Oxford Drive
    Moonachie, NJ 07074