Exhibit 99.1
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NEWS & INFORMATION
FOR: | EMERSON RADIO CORP. | |||||
9 Entin Road | ||||||
Parsippany, NJ 07054-0430 | ||||||
CONTACT: | Emerson Radio Corp. | or: | Investor Relations: | |||
Greenfield Pitts | Robert Maffei | |||||
Chief Financial Officer | Investor Relations Manager | |||||
(212) 521-4344 | (973) 428-2098 | |||||
Brainerd Communicators | ||||||
Brad Edwards or | ||||||
Jonathan Schaffer | ||||||
(212) 986-6667 |
Friday, June 29, 2007
EMERSON RADIO CORP. REPORTS FISCAL 2007 FOURTH QUARTER AND FULL YEAR RESULTS
PARSIPPANY, N.J. — June 29, 2007 — Emerson Radio Corp. (AMEX:MSN) today reported financial results for its fourth quarter and fiscal year ended March 31, 2007.
Net revenues for the fiscal year ended March 31, 2007, increased 21.6% to $284.4 million compared to $233.8 million last year, driven by strong sales of Emerson® branded products including the Company’s iPod accessories line and housewares category. Net income from continuing operations amounted to $3.5 million, or $0.13 per diluted share in fiscal 2007, compared to $3.7 million, or $0.13 per diluted share last year. In fiscal 2006, the Company reported a gain on the sale of its interest in Sport Supply Group, which was subsequently accounted for as discounted operations.
Net revenues for the fourth quarter of fiscal 2007 were $40.2 million, compared to $41.1 million during the same period last year. Revenue growth from branded products was offset in the period by lower sales of
the Company’s traditional audio products and the phase-out of its license agreement for Nickelodeon® themed products.
Net loss for the fourth quarter of fiscal 2007 was $4.6 million, or $0.17 per diluted share, compared to net income of $0.9 million, or $0.02 per diluted share, in the prior year period. The Company’s operating loss for this year’s final quarter was $5.2 million, compared to $1.2 million during the same period last year. In addition to the impact of lower revenues in the quarter, the increased operating loss was a result of the following: (i) an inventory adjustment of $2.2 million due to the non-renewal of the Company’s themed product license with Nickelodeon®; (ii) a severance payment of $400,000; (iii) legal and related costs of $300,000 associated with the review by the Audit Committee in the third fiscal quarter of certain transactions and internal controls; (iv) accrued vacation costs of $300,000, and (v) a write-off of costs totaling $150,000 associated with a proposed transaction that was not consummated.
Mr. Eduard Will, Emerson Radio Corp. President — North American Operations, commented, “Fiscal 2007 was a strong year for Emerson, highlighted by 22% revenue growth as our branded products, particularly in housewares and iPod® accessories, gained momentum. Within the housewares category, we are now the second largest supplier of microwaves in the United States through our network of top mass merchandisers and other retail partners, and we are building on this strength with newer lines of housewares products including wine coolers that are showing early success. In the audio category, sales of our iPod® accessories demonstrated solid growth, and we expanded our product portfolio through our non-exclusive license to produce and sell HD Radio digital audio receivers.
“In fiscal 2008, technology-driven consumer electronics advances should continue to fuel opportunity for Emerson to leverage its strong distribution network and key retail relationships to broaden its product lines and drive sales,” continued Mr. Will. “Key opportunities are expected to include small appliances; the launch of our HD Radio digital audio receivers in North America during the new fiscal year; expansion into the flat panel television market; and new licensing agreements for traditional audio products, including Mattel Barbie™.
About Emerson Radio Corporation
Emerson Radio Corporation (AMEX:MSN), founded in 1948, is headquartered in Parsippany, N.J. The Company designs, markets and licenses, worldwide, full lines of televisions and other video products, microwaves, clocks, radios, audio and home theater products. Emerson’s web site is 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, including the Company’s ability to obtain a waiver from its lender and its ability to maintain its AMEX listing. 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 REPORTS/4
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended March 31 | Three Months Ended March 31 | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net revenues | ||||||||||||||||
Net revenues | $ | 284,166 | $ | 233,843 | $ | 39,998 | $ | 41,106 | ||||||||
Net revenues-related party | 233 | — | 233 | — | ||||||||||||
284,399 | 233,843 | 40,231 | 41,106 | |||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales | 215,175 | 204,010 | 37,255 | 36,433 | ||||||||||||
Cost of sales-related party | 32,890 | — | (200 | ) | — | |||||||||||
Other operating costs and expenses | 6,492 | 6,145 | 2,137 | 1,482 | ||||||||||||
Selling, general and administrative expenses | 22,269 | 19,097 | 6,061 | 4,287 | ||||||||||||
Acquisition Costs | 190 | 48 | 169 | 48 | ||||||||||||
Non-cash compensation | 192 | 374 | 54 | 114 | ||||||||||||
277,208 | 229,674 | 45,476 | 42,364 | |||||||||||||
Operating income (loss) | 7,191 | 4,169 | (5,245 | ) | (1,258 | ) | ||||||||||
Interest expense (income) | 692 | 785 | 128 | (191 | ) | |||||||||||
Interest income-related party | (638 | ) | — | (638 | ) | — | ||||||||||
Income (loss) before income taxes and discontinued operations | 7,137 | 3,384 | (4,735 | ) | (1,067 | ) | ||||||||||
Provision (benefit) for income taxes | 3,679 | (328 | ) | (113 | ) | (1,966 | ) | |||||||||
Income (loss) from continuing operations | 3,458 | 3,712 | (4,622 | ) | 899 | |||||||||||
Income from discontinued operations, net of tax | — | 12,918 | — | — | ||||||||||||
Net income (loss) | $ | 3,458 | $ | 16,630 | $ | (4,622 | ) | $ | 899 | |||||||
Basic net income (loss) per share | ||||||||||||||||
Continuing operations | $ | 0.13 | $ | 0.13 | $ | (0.17 | ) | $ | 0.02 | |||||||
Discontinued operations | — | 0.48 | — | — | ||||||||||||
$ | 0.13 | $ | 0.61 | $ | (0.17 | ) | $ | 0.02 | ||||||||
Diluted net income (loss) per share | ||||||||||||||||
Continuing operations | $ | 0.13 | $ | 0.13 | $ | (0.17 | ) | $ | 0.02 | |||||||
Discontinued operations | — | 0.48 | — | — | ||||||||||||
$ | 0.13 | $ | 0.61 | $ | (0.17 | ) | $ | 0.02 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 27,087 | 27,079 | 27,110 | 27,048 | ||||||||||||
Diluted | 27,127 | 27,172 | 27,110 | 27,131 |
EMERSON REPORTS/5
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED SUMMARY BALANCE SHEETS
(In thousands)
CONSOLIDATED SUMMARY BALANCE SHEETS
(In thousands)
March 31, | March 31, | |||||||
2007 | 2006 | |||||||
Cash and cash equivalents (includes cash securing bank loans of $3,000) | $ | 4,851 | $ | 20,517 | ||||
Accounts receivable | 19,375 | 18,996 | ||||||
Due from affiliates | 24,690 | — | ||||||
Inventory | 32,463 | 33,003 | ||||||
Deferred tax assets | 5,737 | 4,350 | ||||||
Other current assets | 4,912 | 5,121 | ||||||
Total current assets | 92,028 | 81,987 | ||||||
Property and equipment | 2,492 | 2,500 | ||||||
Other assets | 4,888 | 8,015 | ||||||
Total assets | $ | 99,408 | $ | 92,502 | ||||
Current liabilities of continuing operations | $ | 24,845 | $ | 21,772 | ||||
Long-term borrowings | 651 | 575 | ||||||
Other long term debt | 25 | — | ||||||
Stockholders’ equity | 73,887 | 70,155 | ||||||
Total liabilities and equity | $ | 99,408 | $ | 92,502 | ||||