SOURCE: Emerson Radio Corp.

Emerson Radio Corp.

November 14, 2011 16:20 ET

Emerson Radio Corp. Reports Fiscal 2012 Second Quarter Results

MOONACHIE, NJ--(Marketwire - Nov 14, 2011) - Emerson Radio Corp. (NYSE Amex: MSN) today reported financial results for its second quarter and six month period ended September 30, 2011.

Net revenues for the second quarter of fiscal 2012 were $41.4 million, a decrease of $10.6 million, or 20.4%, from the second quarter of fiscal 2011 net revenues of $52.0 million, principally driven by a decrease in sales of microwave ovens, audio products, toaster ovens and coffee makers, partially offset by increases in sales of compact refrigerators and wine coolers. Net revenues for the six month period of fiscal 2012 were $92.9 million, a decrease of $26.2 million, or 22.0%, from the six month period of fiscal 2011 net revenues of $119.1 million, principally driven by a decrease in sales of microwave ovens, audio products, toaster ovens and wine coolers, partially offset by increases in sales of compact refrigerators.

Operating income for the second quarter of fiscal 2012 was $1.7 million, a decrease of $1.6 million, or 49.0%, from the second quarter of fiscal 2011 operating income of $3.3 million. Operating income for the six month period of fiscal 2012 was $5.5 million, a decrease of $5.2 million, or 48.3%, from the six month period of fiscal 2011 operating income of $10.7 million. The decline in year-over-year operating income for both the second quarter and six month period of fiscal 2012 was driven by the lower year-over-year net sales, higher year-over-year landed product costs as a percent of selling price, and higher year-over-year selling, general and administrative expenses due primarily to an increase in legal fees.

Net income for the second quarter of fiscal 2012 was $1.8 million, a decrease of $1.4 million, or 45.3%, from the second quarter of fiscal 2011 net income of $3.2 million. Net income for the six month period of fiscal 2012 was $5.1 million, a decrease of $4.0 million, or 44.0%, from the six month period of fiscal 2011 net income of $9.1 million, and was aided by a realized gain of $0.8 million recorded in the first quarter of fiscal 2012 on the sale of a marketable security. Diluted earnings per share for the second quarter of fiscal 2012 were $0.06 as compared to $0.12 for the second quarter of fiscal 2011, a decrease of $0.06, or 50.0%. Diluted earnings per share for the six month period of fiscal 2012 were $0.19 as compared to $0.34 for the six month period of fiscal 2011, a decrease of $0.15, or 44.1%.

Duncan Hon, Chief Executive Officer of Emerson Radio, commented, "As expected, in the second quarter of fiscal 2012, we saw the continuation of the challenging and highly competitive sales environment that we faced in the first quarter, as well as higher product costs due to the continuing appreciation of the renminbi and increases in costs of production in China. These factors led to the year-over-year declines in net revenues and net income for the second quarter and six month periods. Looking forward, we continue to anticipate that these factors will persist throughout the remainder of the fiscal year. As always, we will remain focused on keeping our costs as low as possible and providing the consumer with the highest level of value in the marketplace on the products we offer."

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 Six Months Ended
September 30, September 30,
2011 2010 2011 2010
Net revenues:
Net revenues $ 41,380 $ 51,966 $ 92,904 $ 119,121
Costs and expenses:
Cost of sales 37,005 45,892 82,600 103,415
Other operating costs and expenses 302 712 689 1,011
Selling, general and administrative expenses 2,380 2,045 4,069 3,974
39,687 48,649 87,358 108,400
Operating income 1,693 3,317 5,546 10,721
Other income (expense):
Interest (expense) income, net (1 ) 4 30 14
Realized gain on sale of marketable security - - 828 -
Income before income taxes 1,692 3,321 6,404 10,735
(Benefit) provision for income taxes (71 ) 98 1,304 1,633
Net income 1,763 3,223 5,100 9,102
Net income per share:
Basic 0.06 0.12 0.19 0.34
Diluted 0.06 0.12 0.19 0.34
Weighted average shares outstanding:
Basic 27,130 27,130 27,130 27,130
Diluted 27,130 27,131 27,130 27,131
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
09/30/11 (Unaudited) 3/31/2011 (A)
ASSETS
Current Assets:
Cash and cash equivalents $ 31,938 $ 39,796
Restricted cash 667 600
Investment in marketable security - 4,725
Accounts receivable, net 16,264 10,929
Other receivables 1,012 1,413
Due from affiliates 9 -
Inventory, net 25,312 8,515
Prepaid expenses and other current assets 964 549
Deferred tax assets 2,193 2,825
Total current assets 78,359 69,352
Property, plant, and equipment, net 2,754 2,921
Trademarks, net 1,545 1,545
Deferred tax assets 2,080 2,540
Other assets 330 358
Total assets $ 85,068 $ 76,716
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings - $ 2,466
Current maturities of long-term borrowings 44 46
Accounts payable and other current liabilities 20,676 14,408
Due to affiliates 1 2
Accrued sales returns 1,586 1,199
Income taxes payable 117 196
Total current liabilities 22,424 18,317
Long-term borrowings 117 150
Deferred tax liabilities 162 158
Total liabilities 22,703 18,625
Shareholders' Equity:
Preferred shares -- $.01 par value, 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) income (82 ) 746
Accumulated deficit (15,953 ) (21,055 )
Treasury stock, at cost, 25,835,965 shares (24,224 ) (24,224 )
Total shareholders' equity 62,365 58,091
Total liabilities and shareholders' equity $ 85,068 $ 76,716
(A) Reference is made to the Company's Annual Report on Form 10-K for the fiscal year ended March 31 2011 filed with the Securities and Exchange Commission on July 14, 2011.

Contact Information

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

    EMERSON RADIO CORP.
    85 Oxford Drive
    Moonachie, NJ 07074