Speed Commerce (SPDC) 8-K Navarre Corporation Reports Financial Results for First Quarter of Fiscal Year 2010

Exhibit 99.1

For Additional Information:
Navarre Investor Relations
763-535-8333
ir@navarre.com

NAVARRE CORPORATION REPORTS FINANCIAL RESULTS FOR
FIRST QUARTER OF FISCAL YEAR 2010

Company reports record first quarter operating income and EBITDA
with significant debt reduction

To host conference call on July 30, 2009 at 11:00 a.m. ET

MINNEAPOLIS, MN — July 29, 2009 — Navarre Corporation (Nasdaq: NAVR), a publisher and distributor of physical and digital home entertainment and multimedia products, today reported its financial results for the first quarter of its fiscal year 2010, ended June 30, 2009.

Financial Results for Fiscal Year 2010 First Quarter

• Net sales were $134.3 million, as compared to net sales of $142.0 million for the same period last year, a decrease of 5%.

• Earnings before interest, taxes, depreciation, amortization, and share-based compensation expense (EBITDA) was a first quarter record for the Company at $9.0 million; as compared to EBITDA of $5.3 million in the prior year’s first quarter, or an increase of 71%. (See “Use of Non-GAAP Financial Information” below)

• Operating income of $6.5 million was an all-time high for the Company during the first quarter, as compared to operating income of $2.8 million in the prior year, an increase of 137%. (See “Use of Non-GAAP Financial Information” below)

• Net income increased to $4.2 million, or $0.11 per diluted share, as compared to net income of $627,000, or $0.02 per diluted share, in the prior fiscal year.

• Debt, net of cash, on June 30, 2009 was $23.2 million; as compared to debt, net of cash, of $48.7 million on June 30, 2008, a reduction of $25.5 million or 52%.

Cary Deacon, Chief Executive Officer, commented, “While our industry continues to be impacted by the global economic crisis, we are extremely pleased to be able to report record first quarter operating income and EBITDA. Gross margins improved across all divisions of the company and were coupled with strong expense management. We achieved an excellent first quarter.”

Deacon continued, “The quarter beat our expectations in part due to FUNimation’s stronger than anticipated sales of anime DVD’s as well as a $1.75 million agency fee resulting from a royalty advance paid for the licensing of Dragon Ball Video Game rights to Bandai.”

Publishing Segment

The publishing segment includes the results of the wholly-owned subsidiaries FUNimation Entertainment, Encore and BCI. For the first quarter ended June 30, 2009, the publishing segment had net sales, before inter-company eliminations, of $24.9 million, a decrease of 9.3%, as compared to net sales of $27.4 million in the first quarter of the prior fiscal year. BCI, whose operations have been winding down since the third quarter of fiscal year 2009, generated nominal sales in the first quarter as compared to $4.4 million in net sales during the first quarter of the prior fiscal year. (See “Use of Non-GAAP Financial Information” below)

Operating income during the first quarter for the publishing segment was $6.1 million, as compared to operating income of $3.4 million in the first quarter of the prior year. The publishing segment’s operating income was positively impacted by FUNimation revenue from the licensing of North American video game rights to Bandai Namco in connection with the Dragon Ball Z brand.

Distribution Segment

The distribution segment includes the results of the wholly-owned subsidiary Navarre Distribution Services, which distributes PC software, DVD video, video games and accessories. For the first quarter ended June 30, 2009, the distribution segment’s net sales, before inter-company eliminations, were $121.4 million, as compared to net sales of $133.1 million for the same period last year, a decrease of 9%. (See “Use of Non-GAAP Financial Information” below)

Operating income in the distribution segment for the first quarter was $364,000, as compared to an operating loss of $691,000 in the first quarter of the prior fiscal year. Reduced operating expenses allowed the distribution segment to realize positive operating results despite the reduced sales volume.

Reid Porter, Chief Financial Officer, commented, “The work done last year in systems improvements and eliminating unprofitable product lines contributed to the gross margin expansion and lower operating expenses achieved in the quarter. Good working capital management, which included strong cash collections in the quarter, led to a significant debt reduction and interest expense savings versus the prior year. While we anticipate difficult market conditions and year-over-year sales shortfalls to continue for some time, we expect that our expense initiatives and stronger balance sheet will continue to offset much of the impact of lower sales.”

Outlook

In light of the continued impact of macro-economic conditions on the retail industry and in light of first quarter results, the company is updating its guidance for fiscal year 2010 as follows:

• Projected net sales has been reduced to range between $525 million and $575 million;

• The Company has increased its anticipated EBITDA range and now expects EBITDA to be between $21 million and $24 million; and

• Cash flow from operations is anticipated to be positive for fiscal year 2010 results.

Conference Call

The Company will host a conference call at 11:00 a.m. ET, Thursday, July 30, 2009, to discuss its fiscal year 2010 first quarter financial results. The conference call can be accessed by dialing (866) 730-5765, conference participant passcode “55107254”, ten minutes prior to the scheduled start time. In addition, this call will be simultaneously broadcast live over the internet and can be accessed in the “Investors” section of the Company’s web site located at www.navarre.com. Those wishing to access the call through the internet should go to the Company’s web site fifteen minutes prior to the start time to register and download any necessary software needed to listen to the call. A replay of the conference call will be available at the Company’s web site following the call’s completion.

Use of Non-GAAP Financial Information

In evaluating our financial performance and operating trends, management considers information concerning our net sales before inter-company eliminations, and earnings before interest, taxes, depreciation, amortization, and share-based compensation expense, are not calculated in accordance with generally accepted accounting principles (“GAAP”) in the United States of America. The Company’s management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods and for the evaluation of financial results. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method the Company uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these preliminary non-GAAP financial measures to the comparable preliminary GAAP results, which is attached to this release and can also be found on the Company’s web site at www.navarre.com.

About Navarre Corporation

Navarre^® Corporation is a publisher and distributor of physical and digital home entertainment and multimedia products, including PC software, DVD video, video games and accessories. Navarre licenses and publishes home entertainment and multimedia content through its wholly-owned FUNimation Entertainment^® and Encore^® subsidiaries and has established distribution relationships with customers across a wide spectrum of retail channels. Navarre was founded in 1983 and is headquartered in New Hope, Minnesota. Additional information regarding Navarre can be found athttp://www.navarre.com.

Safe Harbor

The statements in this press release that are not strictly historical are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbors provided therein. The forward-looking statements are subject to risks and uncertainties, and the actual results that the Company achieves may differ materially from these forward-looking statements due to such risks and uncertainties, including, but not limited to: difficult economic conditions that adversely affect the Company’s customers and vendors; the Company’s revenues being derived from a small group of customers; a pending

investigation by the U.S. Securities and Exchange Commission (the “SEC”) or litigation arising out of this investigation may subject the Company to significant costs; the seasonal nature of the Company’s business; the potential for the Company to incur significant additional costs and to experience operational and logistical difficulties in connection with its new ERP system; the Company’s dependence on significant vendors; uncertain growth in the publishing segment; the Company’s ability to meet significant working capital requirements related to distributing products; and the Company’s ability to compete effectively in the highly competitive distribution and publishing industries. In addition to these, a detailed statement of risks and uncertainties is contained in the Company’s reports to the Securities and Exchange Commission, including in particular the Company’s Form 10-K filings, as well as its other SEC filings and public disclosures.

Investors and shareholders are urged to read this press release carefully. The Company can offer no assurances that any projections, assumptions or forecasts made or discussed in this press release will be met, and investors should understand the risks of investing solely due to such projections. The forward-looking statements included in this press release are made only as of the date of this report and the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

Investors and shareholders may obtain free copies of the public filings through the website maintained by the SEC at http://www.sec.gov/ or at one of the SEC’s other public reference rooms in Washington D.C., New York, New York or Chicago, Illinois. Please contact the SEC at 1-800-SEC-0330 for further information with respect to the SEC’s public reference rooms.

NAVARRE CORPORATION
Consolidated Statements of Operations
(In thousands, except per share amounts)

	(Unaudited)
	Three Months Ended
	June 30,
	2009			2008
Net sales	$	134,306		$	142,025
Cost of sales (exclusive of depreciation and amortization)		110,742			119,899
Gross profit		23,564			22,126
Operating expenses:
Selling and marketing		5,155			5,715
Distribution and warehousing		2,076			2,884
General and administrative		8,028			8,453
Depreciation and amortization		1,789			2,321
Total operating expenses		17,048			19,373
Income from operations		6,516			2,753
Other income (expense):
Interest expense(1)		(719	)		(1,615	)
Interest income		7			15
Other income (expense), net		451			(98	)
Net income before income tax		6,255			1,055
Income tax expense		(2,094	)		(428	)
Net income	$	4,161		$	627
Earnings per common share:
Basic	$	0.11		$	0.02
Diluted	$	0.11		$	0.02
Weighted average shares outstanding:
Basic		36,237			36,186
Diluted		36,347			36,250

(1) Fiscal year 2009 first quarter interest expense includes approximately $490,000 of a non-cash write-off of debt acquisition costs.

NAVARRE CORPORATION
Consolidated Condensed Balance Sheet
(In thousands)

	(Unaudited)		(Unaudited)
	June 30,		June 30,		March 31,
	2009		2008		2009
Assets
Current assets:
Accounts receivables, net	$	57,314	$	88,528	$	72,817
Inventories		34,427		42,046		26,732
Other		20,976		26,129		23,199
Total current assets		112,717		156,703		122,748
Property and equipment, net		14,959		18,525		15,957
Other assets		44,975		127,961		44,464
Total assets	$	172,651	$	303,189	$	183,169
Liabilities and shareholders’ equity
Current liabilities:
Note payable — line of credit	$	23,229	$	48,731	$	24,133
Accounts payable		91,880		106,390		106,708
Other		14,755		15,612		14,040
Total current liabilities		129,864		170,733		144,881
Long-term liabilities:
Other		1,361		7,117		1,281
Total liabilities		131,225		177,850		146,162
Shareholders’ equity		41,426		125,339		37,007
Total liabilities and shareholders’ equity	$	172,651	$	303,189	$	183,169

NAVARRE CORPORATION
Consolidated Condensed Statements of Cash Flows
(In thousands)

	(Unaudited)
	Three Months Ended
	June 30,
	2009			2008
Net cash provided by (used in) operating activities	$	1,836		$	(9,947	)
Net cash used in investing activities		(666	)		(1,029	)
Net cash (used in) provided by financing activities		(1,170	)		6,531
Net decrease in cash		—			(4,445	)
Cash at beginning of period		—			4,445
Cash at end of period	$	—		$	—

NAVARRE CORPORATION
Supplemental Information
(In thousands)
(Unaudited)

Reconciliation of Net Sales Before Inter-Company Eliminations to GAAP Net Sales and Business
Segment Information

	Three Months Ended June 30,
	2009			%			2008			%
Net sales:
Publishing	$	24,865			17.0	%	$	27,418			17.1	%
Distribution		121,396			83.0	%		133,095			82.9	%
Net sales before inter-company eliminations		146,261						160,513
Inter-company eliminations		(11,955	)					(18,488	)
Net sales as reported	$	134,306					$	142,025
Income (loss) from operations:
Publishing	$	6,152					$	3,444
Distribution		364						(691	)
Consolidated income from operations	$	6,516					$	2,753

Reconciliation of Net Income to EBITDA

	Three Months Ended
	June 30,
	2009		2008
Net income, as reported	$	4,161	$	627
Interest expense (income), net		712		1,600
Income tax expense		2,094		428
Depreciation and amortization		1,789		2,321
Share-based compensation		257		288
EBITDA	$	9,013	$	5,264