EXHIBIT 99.1
[EMERSON LOGO]
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NEWS & INFORMATION
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FOR: EMERSON RADIO CORP.
9 Entin Road
Parsippany, NJ 07054-0430
CONTACT: EMERSON RADIO CORP. OR: INVESTOR RELATIONS:
Guy A. Paglinco Laura Boorn
Vice President, Investor Relations Manager
Chief Financial Officer (972) 884-2302
(973) 428-2085
EPOCH FINANCIAL GROUP, INC.
Victor Thompson or
Todd Atenhan
(888) 917-5105
Thursday, February 3, 2005
FOR IMMEDIATE RELEASE
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EMERSON RADIO ANNOUNCES FISCAL 2005 THIRD QUARTER FINANCIAL RESULTS
CONSOLIDATED REVENUES INCREASE FOR FOURTH CONSECUTIVE QUARTER
CONSOLIDATED OPERATING INCOME INCREASES 255% AND 221% FOR THREE AND NINE MONTH
PERIODS
SPORTING GOODS SEGMENT REPORTS THIRD CONSECUTIVE QUARTER OF IMPROVED RESULTS
PARSIPPANY, NJ, February 3, 2005 -- Emerson Radio Corp. (AMEX:MSN), one of the
nation's largest volume consumer electronics distributors, today reported
consolidated financial results for the quarter ended December 31, 2004 (third
quarter of fiscal 2005).
Highlights of the results are as follows:
o Consolidated net revenues for the three and nine months ended December 31,
2004 increased by 24.0% and 19.7%, respectively.
o Consumer electronics segment revenues for the three and nine month periods
increased by 30.4% and 25.6%, respectively.
o Licensing revenues grew to $9.1 million for the nine months ended December
31, 2004.
o Sporting goods operating income improved to $503,000 for the nine months
ended December 31, 2004 from a loss of $2.4 million in the prior year.
o Consolidated income from continuing operations increased to $4.8 million
for nine months ended December 31, 2004 compared to a breakeven in the
prior year period.
o Diluted EPS of $0.17 for the nine month period as compared to $0.00 the
prior year period.
Emerson Radio News Release Page 2
CONSUMER ELECTRONICS SEGMENT
Net Revenues for the third quarter of fiscal 2005 increased 30.4% to $80.3
million from $61.6 million for the third quarter of fiscal 2004 and to $188.0
million for the nine month period ended December 31, 2004 from $149.7 million, a
25.6% increase from the prior year period. The increases in net revenues were
the result of increases in orders from our primary customers and the expansion
of our customer base. On a category basis, sales of Emerson(R) branded product
increased by 25.5% in the current quarter, while sales of Nickelodeon themed
products increased to $9.9 million for the quarter or a 120% increase from that
of the prior year period. License income increased by $2.4 million for the
quarter, achieving a new record of $9.1 million for the nine month period,
approximately 11.9% above that of the prior year period.
Earnings for the consumer electronics segment for the three month period ended
December 31, 2004 were $3.0 million as compared to $2.6 million in the same
period in the prior year, and increased to $4.7 million from $3.0 million for
the nine months ended December 31, 2004 as compared to the same nine month
period in the prior year.
Geoffrey P. Jurick, Chairman & Chief Executive Officer of Emerson Radio, stated,
"We are very pleased with the continued success of our consumer electronics
segment, which has had four consecutive quarters of revenue growth. This growth
has come not only by way of our major accounts which reflect the majority of the
increase, but also with the expansion of our customer base. We are very
encouraged by the growth of our Nickelodeon themed product category, which had a
strong holiday selling season, and should be well poised for the future due to
placements of many Nickelodeon themed SKUs with several major retailers. Our
licensing partners have continued to demonstrate increasing success with the
Emerson(R) brand as well as our HH Scott(R) brand which has been successful in
several European countries."
Sporting Goods Segment
Sport Supply Group's ("SSG") net revenues decreased 2.6% to $14.3 million for
the fiscal 2005 December quarter from $14.7 million for the fiscal 2004 December
quarter, and increased by 5.1% on a year-to-date basis to $62.7 million from
$59.7 million for the comparable period of fiscal 2004.
Operating income (loss) for the December quarter improved to a loss of $1.8
million as compared to a loss of $2.5 million in the prior year. On a year-to
date basis for fiscal 2005, operating income improved to $503,000 from a loss of
$2.4 million in the prior year.
Discussing SSG, Mr. Jurick continued, "While the December quarter is always the
weakest quarter for SSG, we are encouraged with the results of our turnaround
efforts initiated in the prior year as measured by operating income for the nine
month period and the management of SSG's balance sheet. The expected realization
of the implementation of various programs over the last several months permits
us to be optimistic about our current March quarter which traditionally has been
SSG's strongest quarter of the year."
Consolidated Results
As a result of the above noted segment results, consolidated net revenues for
the three and nine months ended December 31, 2004 increased by 24.0% to $94.6
million from $76.3 million, and by 19.7% to $250.7 million from $209.4 million,
respectively, as compared to the same periods in fiscal 2004. Consolidated
operating income for the three and nine months ended December 31, 2004 increased
by 255% to $3.2 million from $907,000, and by 221% to $9.5 million from $3.0
million, respectively, as compared to the same periods in fiscal 2004.
Consolidated net income for the three months ended December 31, 2004 decreased
by 30% to $2.0 million from $2.8 million mainly as a result of income from
discontinued operations that was present in the prior year's quarter and not in
the current period. Consolidated net income for the nine months ended December
31, 2004 increased by 56% to $4.8 million from $3.0 million for the same period
in fiscal 2004. Furthermore, cash flow continued to benefit due to the
application of substantial tax net operating losses in both segments.
EMERSEON RADIO NEWS RELEASE PAGE 3
Discussing the consolidated results, Mr. Jurick continued, "From a balance sheet
perspective, the sporting goods segment has performed solidly in managing its
balance sheet by reducing inventory and accounts receivable balances. Changes in
retailer preference to have just in time stocking programs is still evident in
the consumer electronics segment which has resulted in higher inventory and
accounts receivable levels than in the past. While these changes require us to
commit more working capital, Emerson's liquidity to fund these requirements has
given it the ability to generate substantial revenue growth over the last
several quarters."
Mr. Jurick stated, "Emerson's consolidated results for the December 2004 quarter
and on a nine month basis reflect further solid performances in both segments
and clearly demonstrate that the business plans in both segments are executing
as designed."
Mr. Jurick concluded, "While we continue to operate in competitive environments
in both our sporting goods and consumer electronics segments, we are confidently
expecting a fifth consecutive quarter of revenue growth. Based upon our fiscal
year-to-date results and the progress we are experiencing in our various
programs, we believe our consolidated March 2005 quarter revenues will improve
in excess of 25% over the same period last year, resulting in the March 2005
quarter being profitable."
This press release other than the historical information, consists of
"forward-looking statements" (as defined in the Private Securities Litigation
Reform Act of 1995) which are identified by the use of words such as "believes",
"expects", "projects", and similar expressions, such as the Company's revenues
for the quarter ended March 31, 2005. While these statements reflect the
Company's current beliefs and are based on assumptions that the Company believes
are reasonable, they are subject to uncertainties and risks that could cause
actual results to differ materially from anticipated results. These risks and
uncertainties are detailed from time to time in the Company's filings with the
Securities and Exchange Commission, including the Company's reports on Form
10-K, 10-Q and 8-K.
EMERSON RADIO CORP., founded in 1948, is headquartered in Parsippany, N.J. The
Company designs, markets and licenses, throughout the world, full lines of
televisions, and other video products, microwave ovens, clocks, radios, audio
and home theater products. Its 53.2% owned subsidiary, Sport Supply Group, Inc.
(Pink Sheets: SSPY) is a direct marketer of sports-related equipment and leisure
products to the institutional market, including schools, colleges, universities,
government agencies, military facilities, athletic clubs, athletic teams and
dealers, youth sports leagues and recreational organizations. Emerson's web site
is www.emersonradio.com.
(More - Table)
Emerson Radio News Release Page 4
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended
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December 31, December 31, December 31, December 31,
2004 2003 2004 2003
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NET REVENUES $ 94,679 $ 76,345 $ 250,738 $ 209,389
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COSTS AND EXPENSES:
Cost of sales 80,108 62,992 204,637 171,381
Other operating costs and expenses 1,127 1,414 4,057 3,963
Selling, general and administrative expenses 10,249 10,564 31,183 29,964
Acquisition costs (29) (19) (204) 595
Stock based costs -- 487 1,563 523
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91,455 75,438 241,236 206,426
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OPERATING INCOME 3,224 907 9,502 2,963
Interest expense, net (458) (322) (1,133) (1,144)
Minority interest in net (income) loss
of consolidated subsidiary 839 (272) (239) (190)
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INCOME BEFORE INCOME TAXES AND DISCONTINUED
OPERATIONS 3,605 313 8,130 1,629
Provision for income taxes 1,632 653 3,363 1,628
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INCOME (LOSS) FROM CONTINUING OPERATIONS 1,973 (340) 4,767 1
Income from discontinued operations,
net of tax -- 3,153 -- 3,048
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NET INCOME $ 1,973 $ 2,813 $ 4,767 $ 3,049
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BASIC NET INCOME (LOSS) PER SHARE
Continuing operations $ 0.07 $ (0.01) $ 0.18 $ --
Discontinued operations -- 0.11 -- 0.11
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$ 0.07 $ 0.10 $ 0.18 $ 0.11
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DILUTED NET INCOME (LOSS) PER SHARE
Continuing operations $ 0.07 $ (0.01) $ 0.17 $ --
Discontinued operations -- 0.11 -- 0.11
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$ 0.07 $ 0.10 $ 0.17 $ 0.11
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WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 27,103 27,189 26,938 27,388
Diluted 27,319 27,189 27,284 28,259
Emerson Radio News Release Page 5
EMERSON RADIO CORP. AND SUBSIDIARIES
SEGMENT INFORMATION
UNAUDITED
(IN THOUSANDS)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
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CONSUMER ELECTRONICS SEGMENT:
NET REVENUES $ 80,345 $ 61,632 $ 188,051 $ 149,722
OPERATING INCOME $ 5,019 $ 3,423 $ 8,999 $ 5,373
NET INCOME $ 2,987 $ 2,563 $ 4,672 $ 3,010
SPORTING GOODS SEGMENT:
NET REVENUES $ 14,334 $ 14,713 $ 62,687 $ 59,667
OPERATING INCOME (LOSS) $ (1,795) $ (2,516) $ 503 $ (2,410)
NET INCOME (LOSS) $ (1,853) $ 522 $ 334 $ 229
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED SUMMARY BALANCE SHEETS
UNAUDITED
(IN THOUSANDS)
December 31, March 31,
2004 2004
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Cash, cash equivalents and restricted cash $ 10,467 $ 9,319
Accounts receivable 35,052 19,948
Inventory 54,314 46,997
Other current assets 10,606 11,102
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TOTAL CURRENT ASSETS 110,439 87,366
Property and equipment 8,097 7,822
Other assets 20,403 23,481
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TOTAL ASSETS $ 138,939 $ 118,669
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Current liabilities $ 66,689 $ 40,637
Long-term borrowings 2,681 15,027
Minority interest 16,032 15,793
Stockholders' equity 53,537 47,212
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TOTAL LIABILITIES AND EQUITY $ 138,939 $ 118,669
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