EXHIBIT 99.1
[EMERSON LOGO]
================================================================================
NEWS & INFORMATION
- --------------------------------------------------------------------------------
FOR: EMERSON RADIO CORP.
9 Entin Road
Parsippany, NJ 07054-0430
CONTACT: EMERSON RADIO CORP. OR: INVESTOR RELATIONS:
Guy A. Paglinco Robert Maffei
Vice President, Investor Relations Manager
Chief Financial Officer (973) 428-2098
(973) 428-2413
EPOCH FINANCIAL GROUP, INC.
Victor Thompson or
Todd Atenhan
(888) 917-5105
Thursday, June 30, 2005
FOR IMMEDIATE RELEASE
YEAR-END RESULTS
EMERSON RADIO CORP. ANNOUNCES EARNINGS PER SHARE FOR THE YEAR ENDED MARCH 31,
2005 $ 0.22 VS. PRIOR YEAR LOSS OF $ 0.04 PER SHARE
NET REVENUES FOR FISCAL 2005 GROWS BY $50.8 MILLION TO $320.7 MILLION
EMERSON RADIO CORP. JOINS RUSSELL MICROCAP INDEX
PARSIPPANY, N.J. - June 30, 2005 - Emerson Radio Corp. (AMEX:MSN) today
announced audited consolidated results for the fiscal fourth quarter and fiscal
2005 year ended March 31, 2005.
Emerson Radio News Release Page 2
CONSOLIDATED YEAR-END RESULTS
Net revenues for fiscal 2005 were $320.7 million, a 21.6% increase from the
prior fiscal year end revenues of $263.8 million. The increase in net revenues
amounted to approximately $50.8 million, or 28.3%, in the consumer electronics
segment, and $6.1 million, or 7.3%, in the sporting goods segment. Cost of sales
remained relatively flat at 81.8% for fiscal 2005 vs. 81.7% for fiscal 2004.
Selling, general and administrative expenses ("SG&A") decreased to 12.9% of
consolidated net revenues in fiscal 2005 from 15.9% of consolidated net revenues
in fiscal 2004. Operating income reached $11.3 million for fiscal 2005 as
compared to an operating loss of $1.0 million for fiscal 2004. Net income of
approximately $5.9 million, or $ 0.22 diluted earnings per share was generated
for fiscal 2005 as compared to a net loss of $1.1 million or $ 0.04 dilutive
loss per share for fiscal 2004.
CONSUMER ELECTRONICS
Net revenues for fiscal 2005 were $230.8 million as compared to $180.0 million
for fiscal 2004, an increase of $50.8 million, or 28.3%. The change in revenues
was attributable to an increase in Emerson(R) branded product sales of $44.3
million to $202.9 million in fiscal 2005 as compared to $158.5 million in fiscal
2004; and an increase in themed product sales to $17.1 million in fiscal 2005 as
compared to $10.4 million in fiscal 2004, or an increase of $6.7 million (63.7%)
due to increased Nickelodeon branded product sales volume. Licensing revenues
decreased by $169,000 on a year over year basis to $10.8 million in fiscal 2005
from $11.0 million in fiscal 2004. Cost of sales, as a percentage of net
revenues, increased from 85.4% in fiscal 2004 to 85.9% in fiscal 2005 primarily
due to slightly lower gross margins on both themed and Emerson(R) branded
products. SG&A, as a percentage of net revenues, was 7.6% in fiscal 2005 as
compared to 8.8% in fiscal 2004. Operating income was $9.4 million in fiscal
2005 as compared to $3.1 million in fiscal 2004. The consumer electronics
segment generated net income of $5.1 million in fiscal 2005 as compared to
$60,000 in fiscal 2004.
Emerson Radio New Release Page 3
SPORTING GOODS
Net revenues for fiscal 2005 were $90.0 million, as compared to fiscal 2004 net
revenues of $83.9 million. Cost of sales, as a percentage of net revenues,
decreased to 71.2% for fiscal 2005 as compared to 73.7% for fiscal 2004. SG&A
expenses for fiscal 2005 decreased by $2.3 million (8.7%) as compared to fiscal
2004. As a percentage of net revenues, SG&A decreased to 26.5% in fiscal 2005
from 31.2% in fiscal 2004. Income from continuing operations was $1.6 million
for fiscal 2005 as compared to an operating loss of $4.6 million for fiscal
2004. Net income of $1.7 million was reported for fiscal 2005 as compared to a
net loss of $1.9 million for fiscal 2004.
Management Comments on Results of Operations
Geoffrey P. Jurick, Emerson's Chairman and Chief Executive Officer stated, "We
are very pleased with the rebound our consumer electronics segment has exhibited
this past fiscal year, resulting in five consecutive quarters of revenue growth.
While the majority of the growth that Emerson experienced has come from its
major accounts, the overall customer base has experienced expansion. The
Nickelodeon themed product category continues its success, which has now
expanded to Dora the Explorer TM brand for which we also see strong demand going
forward.
While licensing revenues were relatively unchanged during the past fiscal year
at approximately $10.8 million, we are continuing to expand our licensing
program for the Emerson(R) and HH Scott(R) brand names into new categories as
well as to additional territories. We are very encouraged about the potential of
the most recent addition to our licensing program - Petters Consumer Brands LLC.
Our business model which includes direct sales and brand licensing continues to
provide solid results. This combination generated total sales of Emerson (R)
branded products exceeding $870 million for fiscal 2005. We continue to expect
enormous potential in licensing yet underutilized product categories and
untapped geographic markets".
Emerson Radio New Release Page 4
Mr. Jurick, commented with regards to the sporting goods segment ("SSG"), "SSG
achieved significant improvements from the prior year in virtually all measures
of financial performance for the year-ended March 31, 2005. SSG's fiscal 2005
results reflect organic revenue growth, margin improvement, operating cost
reductions and a significant improvement in operating income as compared to a
net loss last year. SSG's $1.7 million net income in the current year represents
a $3.6 million improvement from the $1.9 million net loss last year. It is
important to note that the March 26, 2004 net loss included a $2.7 million gain
that was recorded as a result of the sale of the Company's subsidiary Athletic
Training Equipment Company. Excluding this one-time gain, net income for the
year ended March 31, 2005 improved by $6.3 million".
Mr. Jurick continued, "In summary, the past year has been very encouraging. Both
segments have demonstrated significant improvements, while managing their
respective balance sheets. Changes in the consumer electronics industry now
require more working capital for inventory and accounts receivable needs, but
this need has been addressed with the recent completion of a new three year
$42.5 million syndicated credit facility led by PNC Bank, the proceeds of which
can be used for working capital needs, general corporate purposes, and share
repurchases. With our newly established banking facilities in place, we are
confident that both entities are financially and operationally strong to
continue the progress that has been made in the past year. While our outlook for
revenues over the next six months is encouraging, revenues for the June 2005
quarter will be less than revenues recorded in the quarter ending June 30, 2004.
This amounts to a shift in revenues from the early buy-ins by one of our major
accounts in the June quarter of fiscal 2005, into the September quarter of
fiscal 2006".
Emerson Radio New Release Page 5
EMERSON RADIO CORP. JOINS RUSSELL MICROCAP INDEX
Geoffrey P. Jurick, stated that "Emerson Radio Corp. joined the Russell Microcap
Index when Russell Investment Group reconstituted its family of U.S. indexes on
June 24, 2005". The Russell Microcap Index, is comprised of the smallest 1,000
securities in the small-cap Russell 2000(R) Index plus the next 1,000 companies,
based on a ranking of all U.S. equities by market capitalization. Mr. Jurick
commented, "We are pleased to be included in this Index as it should provide our
company greater visibility and provide enhanced liquidity for our shareholders".
Emerson Radio Corp. (AMEX:MSN), 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, microwaves, clocks, radios, audio and
home theater products. Its 53.2% owned subsidiary, Sport Supply Group, Inc.
(OTC: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
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 REPORTS/6
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Year Ended Three Months Ended
------------------------- -------------------------
March 31, March 31, March 31, March 31,
2005 2004 2005 2004
--------- --------- --------- ---------
NET REVENUES $ 320,704 $ 263,774 $ 69,966 $ 54,385
--------- --------- --------- ---------
COSTS AND EXPENSES:
Cost of sales 262,285 215,454 57,648 44,074
Other operating costs and expenses 5,889 5,254 1,832 1,291
Selling, general and administrative expenses 41,304 42,021 10,121 12,057
Acquisition costs (recovered) incurred (454) 1,553 (250) 958
Stock based compensation 377 523 90 --
--------- --------- --------- ---------
309,401 264,806 69,441 58,380
--------- --------- --------- ---------
OPERATING INCOME (LOSS) 11,303 (1,032) 525 (3,995)
Interest expense, net (1,562) (1,342) 428 (198)
Minority interest in net (income) loss of
consolidated subsidiary (903) 789 (720) 979
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 8,838 (1,585) (623) (3,214)
Provision (benefit) for income taxes
2,983 2,150 (607) 522
--------- --------- --------- ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS 5,855 (3,735) (17) (3,736)
Income from discontinued operations, net of tax 50 2,661 50 (387)
Cumulative effect of change in accounting
Principle -- -- -- --
--------- --------- --------- ---------
NET INCOME (LOSS) $ 5,905 $ (1,074) $ 33 $ (4,123)
========= ========= ========= =========
BASIC NET INCOME (LOSS) PER SHARE
Continuing operations $ 0.22 $ (0.14) $ -- $ (0.14)
Discontinued operations -- 0.10 -- (0.01)
--------- --------- --------- ---------
$ 0.22 $ (0.04) $ -- $ (0.15)
========= ========= ========= =========
DILUTED NET INCOME (LOSS) PER SHARE
Continuing operations $ 0.22 $ (0.14) $ 0.00 $ (0.14)
Discontinued operations -- 0.10 0.00 (0.01)
--------- --------- --------- ---------
$ 0.22 $ (0.04) $ 0.00 $ (0.15)
========= ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 26,991 27,227 27,154 26,741
Diluted 27,264 27,227 27,154 26,741
EMERSON REPORTS/7
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED SUMMARY BALANCE SHEETS
(IN THOUSANDS)
March 31, March 31,
2005 2004
--------- ---------
Cash and cash equivalents
(includes cash securing bank
loans of $5,620 and $2,950
respectively $ 8,574 $ 9,319
Accounts receivable 29,634 19,948
Inventory 53,517 46,997
Other current assets 10,290 11,102
-------- --------
TOTAL CURRENT ASSETS 102,015 87,366
Property and equipment 8,275 7,822
Other assets 20,878 23,481
-------- --------
TOTAL ASSETS $131,168 $118,669
-------- --------
Current liabilities $ 45,899 $ 40,637
Long-term borrowings 14,970 15,027
Minority interest 16,696 15,793
Stockholders' equity 53,603 47,212
-------- --------
TOTAL LIABILITIES AND EQUITY $131,168 $118,669
-------- --------