Exhibit 99.1
NEWS & INFORMATION
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FOR: | | EMERSON RADIO CORP. | | |
| | | 85 Oxford Drive | | |
| | | Moonachie, NJ 07074 | | |
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CONTACT: | | Emerson Radio Corp. or: | | Investor Relations: |
| | | Greenfield Pitts | | Robert Maffei |
| | | Chief Financial Officer | | Investor Relations Manager |
| | | (212) 897-5441 | | (973) 428-2098 |
Monday, August 16, 2010
EMERSON RADIO CORP. REPORTS FISCAL 2011 FIRST QUARTER RESULTS
MOONACHIE, N.J. — August 16, 2010 — Emerson Radio Corp. (NYSE AMEX: MSN) today reported financial results for its first quarter ended June 30, 2010.
Net revenues for the first quarter of fiscal 2011 increased $11.6 million, or 20.8%, to $67.2 million as compared to net revenues in the first quarter of fiscal 2010 of $55.6 million. The increase in net revenues for the first quarter of fiscal 2011 as compared to the prior year was due to higher houseware product sales, primarily microwave ovens and compact refrigerators, partially offset by decreased sales of audio products.
Operating income for the first quarter of fiscal 2011 was $7.4 million as compared to operating income in the first quarter of fiscal 2010 of $1.4 million, an increase of $6.0 million, or 418%. The increase in first quarter fiscal 2011 operating income over the prior year was driven by the increase in net revenues and lower selling, general and administrative expenses.
Net income from continuing operations for the first quarter of fiscal 2011 was $5.9 million as compared to $1.2 million for the first quarter of fiscal 2010, an increase of $4.7 million, or 406%. Diluted earnings per share for the first quarter of fiscal 2011 were $0.22 as compared to $.04 for the first quarter of fiscal 2010, an increase of $0.18 per diluted share, or 450%.
Greenfield Pitts, Executive Vice President and Chief Financial Officer of Emerson Radio, commented “We are pleased to begin fiscal 2011 with a strong first quarter financial result, which built upon the successes we achieved in fiscal 2010 and reflected higher houseware product sales, primarily microwave ovens and compact refrigerators, coupled with lower SG&A expenses; however, looking forward, we anticipate a much more challenging operating environment during the remainder of the fiscal year due to factory price increases on the products we import from China, higher freight rates to ship these products and a strengthening Chinese Renminbi, all of which could negatively impact our bottom line. We are managing these issues accordingly, and as we do so, will remain focused on generating profitable revenue streams, maintaining our strong customer and supplier relationships and keeping a tight control over expenses.”
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)
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| | | Three Months Ended | |
| | | June 30 | |
| | | 2010 | | | 2009 | |
Net revenues | | $ | 67,155 | | | $ | 55,599 | |
Costs and expenses: | | | | | | | | |
| Cost of sales | | | 57,523 | | | | 49,603 | |
| Other operating costs and expenses | | | 299 | | | | 778 | |
| Selling, general and administrative expenses | | | 1,929 | | | | 3,789 | |
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| | | | 59,751 | | | | 54,170 | |
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Operating income | | | 7,404 | | | | 1,429 | |
| Interest income, net | | | 10 | | | | 10 | |
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Income from continuing operations before income taxes | | | 7,414 | | | | 1,439 | |
| Provision for income taxes | | | 1,535 | | | | 278 | |
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Income from continuing operations | | | 5,879 | | | | 1,161 | |
| Loss from discontinued operations, net of tax benefit | | | — | | | | 55 | |
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Net income | | $ | 5,879 | | | $ | 1,106 | |
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Basic net income per share | | | | | | | | |
| Continuing operations | | $ | 0.22 | | | $ | 0.04 | |
| Discontinued operations | | | — | | | | — | |
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| Net | | $ | 0.22 | | | $ | 0.04 | |
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Diluted net income (loss) per share | | | | | | | | |
| Continuing operations | | $ | 0.22 | | | $ | 0.04 | |
| Discontinued operations | | | — | | | | — | |
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| Net | | $ | 0.22 | | | $ | 0.04 | |
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Weighted average shares outstanding: | | | | | | | | |
| Basic | | | 27,130 | | | | 27,130 | |
| Diluted | | | 27,131 | | | | 27,130 | |
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
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| | | June 30, 2010 | | | March 31, 2010 | |
| | | (Unaudited) | | | | | |
ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 7,314 | | | $ | 9,969 | |
| Restricted cash | | | 2,496 | | | | 5,083 | |
| Accounts receivable, net | | | 35,626 | | | | 20,350 | |
| Other receivables | | | 1,120 | | | | 1,037 | |
| Due from affiliates | | | 75 | | | | — | |
| Inventory, net | | | 29,055 | | | | 10,952 | |
| Prepaid expenses and other current assets | | | 534 | | | | 736 | |
| Deferred tax assets | | | 3,500 | | | | 3,383 | |
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Total current assets | | | 79,720 | | | | 51,510 | |
| Property, plant and equipment, net | | | 3,047 | | | | 3,131 | |
| Trademarks and other intangible assets, net | | | 1,576 | | | | 1,606 | |
| Due from affiliates | | | 144 | | | | 185 | |
| Investments in marketable securities | | | 6,031 | | | | 6,031 | |
| Deferred tax assets | | | 5,289 | | | | 6,588 | |
| Other assets | | | 203 | | | | 205 | |
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Total assets | | $ | 96,010 | | | $ | 69,256 | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Short-term borrowings | | $ | 5,625 | | | $ | 5,629 | |
| Current maturities of long-term borrowings | | | 25 | | | | 30 | |
| Accounts payable and other current liabilities | | | 41,476 | | | | 20,776 | |
| Due to affiliates | | | 36 | | | | 28 | |
| Accrued sales returns | | | 1,118 | | | | 957 | |
| Income taxes payable | | | 250 | | | | 174 | |
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Total current liabilities | | | 48,530 | | | | 27,594 | |
| Long-term borrowings | | | 128 | | | | 201 | |
| Deferred tax liabilities | | | 128 | | | | 119 | |
| 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 | | | (31,094 | ) | | | (36,976 | ) |
| Treasury stock - 25,835,965 shares, at cost | | | (24,224 | ) | | | (24,224 | ) |
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Total shareholders’ equity | | | 47,224 | | | | 41,342 | |
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Total liabilities and shareholders’ equity | | $ | 96,010 | | | $ | 69,256 | |
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