SOURCE: Emerson Radio Corp.

Emerson Radio Corp.

July 13, 2012 16:45 ET

Emerson Radio Corp. Reports Full Year Fiscal 2012 and Fourth Quarter Fiscal 2012 Results

HACKENSACK, NJ--(Marketwire - Jul 13, 2012) - Emerson Radio Corp. (NYSE MKT: MSN) (NYSE Amex: MSN) today reported financial results for its full year and fourth quarter ended March 31, 2012.

Net revenues for fiscal year 2012 were $163.3 million, a decrease of $37.5 million, or 18.7%, as compared to fiscal year 2011 net revenues of $200.8 million. The decline in year-over-year net revenues was driven by a $31.6 million, or 17.7%, decline in net sales of houseware products, which was the result of lower year-over-year sales of microwave ovens (due primarily to the discontinuation of one model by one of the Company's largest retail customers beginning in December 2010), toaster ovens, wine coolers and coffee makers, partly offset by higher year-over-year net sales of compact refrigerators, and a $5.0 million, or 32.2%, decline in net sales of audio products. Licensing revenues for fiscal year 2012 were $6.3 million, a $1.0 million, or 14.2% decrease from the $7.3 million of licensing revenues for the fiscal year 2011 due to lower year-over-year sales by the Company's licensees of branded products under license from the Company and fewer active licensees during fiscal 2012 as compared to fiscal 2011.

Net revenues for the fourth quarter of fiscal 2012 decreased by $14.2 million, or 34.6%, to $26.9 million as compared to net revenues in the fourth quarter of fiscal 2011 of $41.1 million. The decline in year-over-year net revenues for the fourth fiscal quarter was driven primarily by a $13.3 million, or 36.4%, decline in net sales of houseware products, which was the result of lower year-over-year net sales in all product categories, and a $0.5 million, or 18.1%, decline in net sales of audio products. Licensing revenues for the fourth quarter of fiscal 2012 were $1.5 million, a $0.5 million, or 23.8%, decrease from the $2.0 million of licensing revenue for the fourth quarter of fiscal 2011 due to lower year-over-year sales by the Company's licensees of branded products under license from the Company.

Operating income for the fiscal year 2012 was $11.9 million, a decrease of $7.0 million, or 37.2%, from operating income of $18.9 million for fiscal year 2011 due primarily to a combination of lower net revenues, higher product costs as a percent of net revenues and higher SG&A expenses. Operating income for the fourth quarter of fiscal 2012 was $1.9 million, as compared to operating income in the fourth quarter of fiscal 2011 of $3.2 million, a decrease of $1.3 million, or 42.0%, due to lower net revenues and higher SG&A expenses.

Net income for fiscal year 2012 was $10.6 million, as compared to $15.9 million for fiscal year 2011, a decrease of $5.3 million, or 33.2%. Diluted earnings per share for fiscal year 2012 were $0.39, as compared to $0.59 for fiscal year 2011, a decrease of $0.20 per diluted share, or 33.9%. Net income for the fourth quarter of fiscal 2012 was $2.4 million, as compared to $2.6 million for the fourth quarter of fiscal 2011, which included a one-time $1.8 million gain on a settlement of litigation. Diluted earnings per share for the fourth quarter of fiscal 2012 were $0.09, as compared to $0.10 for the fourth quarter of fiscal 2011, a decrease of $0.01, or 10.0%.

Duncan Hon, Chief Executive Officer of Emerson Radio, commented, "Our fiscal year 2012 performance was disappointing and a direct result of both the challenging and highly competitive sales environment within which we operate and higher year-over-year product costs that result from the continuing appreciation of the renminbi and increases in costs of production in China. Looking forward, we anticipate that these factors are likely to persist throughout fiscal year 2013."

About Emerson Radio Corp.
Emerson Radio Corp. (NYSE MKT: MSN) (NYSE Amex: MSN), incorporated in 1994, is headquartered in Hackensack, 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
(In thousands, except earnings per share data)
         
    Three Months Ended   Twelve Months Ended
    March 31,   March 31,
    2012     2011   2012   2011
                           
Net revenues:                          
Net product sales     25,385       39,166     156,975     193,530
Licensing revenue     1,511       1,983     6,276     7,311
Net revenues   $ 26,896     $ 41,149   $ 163,251   $ 200,841
                           
Costs and expenses:                          
Cost of sales     23,013       36,425     142,270     172,917
Other operating costs and expenses     357       58     1,352     1,636
Selling, general and administrative expenses     1,670       1,464     7,764     7,383
      25,040       37,947     151,386     181,936
Operating income     1,856       3,202     11,865     18,905
                           
Other income:                          
Gain on settlement of litigation     -       1,806     -     1,806
Realized gain on sale of marketable securities     -       -     828     966
Gain on sale of building     -       -     347     -
Interest income, net     30       8     70     32
                           
Income before income taxes     1,886       5,016     13,110     21,709
Provision (benefit) for income taxes     (477 )     2,384     2,476     5,791
Net income   $ 2,363     $ 2,632   $ 10,634   $ 15,918
                           
                           
Basic net income per share:     0.09       0.10     0.39     0.59
                           
Diluted net income per share:     0.09       0.10     0.39     0.59
                           
Weighted average shares outstanding:                          
  Basic     27,130       27,130     27,130     27,130
  Diluted     27,130       27,130     27,130     27,130

 

EMERSON RADIO CORP. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(In thousands except share data)  
   
    31-Mar-12     31-Mar-11  
   ASSETS                
Current Assets:                
Cash and cash equivalents   $ 44,960     $ 39,796  
Restricted cash     215       600  
Accounts receivable, net     12,134       10,929  
Other receivables     1,193       1,413  
Due from affiliates     1       --  
Inventory, net     11,269       8,515  
Prepaid expenses and other current assets     2,873       549  
Investments in marketable securities     --       4,725  
Deferred tax assets     2,304       2,825  
  Total Current Assets     74,949       69,352  
Property, plant, and equipment, net     260       2,921  
Trademarks, net     1,545       1,545  
Deferred tax assets     1,668       2,540  
Other assets     262       358  
  Total Assets   $ 78,684     $ 76,716  
    LIABILITIES AND SHAREHOLDERS' EQUITY                
Current Liabilities:                
Short-term borrowings     --     $ 2,466  
Current maturities of long-term borrowings     64       46  
Accounts payable and other current liabilities     9,152       14,408  
Due to affiliates     11       2  
Accrued sales returns     1,201       1,199  
Income taxes payable     107       196  
  Total Current Liabilities     10,535       18,317  
Long-term borrowings     72       150  
Deferred tax liabilities     177       158  
  Total Liabilities     10,784       18,625  
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 -- $0.01 par value, 75,000,000 shares authorized; 52,965,797 shares issued and 27,129,832 shares outstanding at March 31, 2012 and March 31, 2011, respectively     529       529  
Capital in excess of par value     98,785       98,785  
Accumulated other comprehensive (losses) income     (82 )     746  
Accumulated deficit     (10,418 )     (21,055 )
Treasury stock, at cost, 25,835,965 shares     (24,224 )     (24,224 )
  Total Shareholders' Equity     67,900       58,091  
  Total Liabilities and Shareholders' Equity   $ 78,684     $ 76,716  
                   

Contact Information

  • CONTACT:
    Investor Relations:
    Barry Smith
    Investor Relations Manager
    (973) 428-2004