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| 8-K - FORM 8-K - EMERSON RADIO CORP | d375490d8k.htm |
Exhibit 99.1
NEWS & INFORMATION
| FOR: | EMERSON RADIO CORP. | |
| 3 University Plaza, suite 405 | ||
| Hackensack, NJ 07601 | ||
| CONTACT: | Investor Relations: | |
| Barry Smith | ||
| Investor Relations Manager | ||
| (973) 428-2004 | ||
Friday, July 13, 2012
EMERSON RADIO CORP. REPORTS FULL YEAR FISCAL 2012 AND FOURTH QUARTER FISCAL 2012 RESULTS
HACKENSACK, N.J. – July 13, 2012 – Emerson Radio Corp. (NYSE MKT: MSN) today reported financial results for its full year and fourth quarter ended March 31, 2012.
Net revenues for fiscal year 2012 were $163.3 million, a decrease of $37.5 million, or 18.7%, as compared to fiscal year 2011 net revenues of $200.8 million. The decline in year-over-year net revenues was driven by a $31.6 million, or 17.7%, decline in net sales of houseware products, which was the result of lower year-over-year sales of microwave ovens (due primarily to the discontinuation of one model by one of the Company’s largest retail customers beginning in December 2010), toaster ovens, wine coolers and coffee makers, partly offset by higher year-over-year net sales of compact refrigerators, and a $5.0 million, or 32.2%, decline in net sales of audio products. Licensing revenues for fiscal year 2012 were $6.3 million, a $1.0 million, or 14.2% decrease from the $7.3 million of licensing revenues for the fiscal year 2011 due to lower year-over-year sales by the Company’s licensees of branded products under license from the Company and fewer active licensees during fiscal 2012 as compared to fiscal 2011.
Net revenues for the fourth quarter of fiscal 2012 decreased by $14.2 million, or 34.6%, to $26.9 million as compared to net revenues in the fourth quarter of fiscal 2011 of $41.1 million. The decline in year-over-year net revenues for the fourth fiscal quarter was driven primarily by a $13.3 million, or 36.4%, decline in net sales of houseware products, which was the result of lower year-over-year net sales in all product categories, and a $0.5 million, or 18.1%, decline in net sales of audio products. Licensing revenues for the fourth quarter of fiscal 2012 were $1.5 million, a $0.5 million, or 23.8%, decrease from the $2.0 million of licensing revenue for the fourth quarter of fiscal 2011 due to lower year-over-year sales by the Company’s licensees of branded products under license from the Company.
Operating income for the fiscal year 2012 was $11.9 million, a decrease of $7.0 million, or 37.2%, from operating income of $18.9 million for fiscal year 2011 due primarily to a combination of lower net revenues, higher product costs as a percent of net revenues and higher SG&A expenses. Operating income for the fourth quarter of fiscal 2012 was $1.9 million, as compared to operating income in the fourth quarter of fiscal 2011 of $3.2 million, a decrease of $1.3 million, or 42.0%, due to lower net revenues and higher SG&A expenses.
Net income for fiscal year 2012 was $10.6 million, as compared to $15.9 million for fiscal year 2011, a decrease of $5.3 million, or 33.2%. Diluted earnings per share for fiscal year 2012 were $0.39, as compared to $0.59 for fiscal year 2011, a decrease of $0.20 per diluted share, or 33.9%. Net income for the fourth quarter of fiscal 2012 was $2.4 million, as compared to $2.6 million for the fourth quarter of fiscal 2011, which included a one-time $1.8 million gain on a settlement of litigation. Diluted earnings per share for the fourth quarter of fiscal 2012 were $0.09, as compared to $0.10 for the fourth quarter of fiscal 2011, a decrease of $0.01, or 10.0%.
Duncan Hon, Chief Executive Officer of Emerson Radio, commented “Our fiscal year 2012 performance was disappointing and a direct result of both the challenging and highly competitive sales environment within which we operate and higher year-over-year product costs that result from the continuing appreciation of the renminbi and increases in costs of production in China. Looking forward, we anticipate that these factors are likely to persist throughout fiscal year 2013.”
About Emerson Radio Corp.
Emerson Radio Corp. (NYSE MKT: MSN), incorporated in 1994, is headquartered in Hackensack, 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
(In thousands, except earnings per share data)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net revenues: |
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| Net product sales |
25,385 | 39,166 | 156,975 | 193,530 | ||||||||||||
| Licensing revenue |
1,511 | 1,983 | 6,276 | 7,311 | ||||||||||||
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| Net revenues |
$ | 26,896 | $ | 41,149 | $ | 163,251 | $ | 200,841 | ||||||||
| Costs and expenses: |
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| Cost of sales |
23,013 | 36,425 | 142,270 | 172,917 | ||||||||||||
| Other operating costs and expenses |
357 | 58 | 1,352 | 1,636 | ||||||||||||
| Selling, general and administrative expenses |
1,670 | 1,464 | 7,764 | 7,383 | ||||||||||||
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| 25,040 | 37,947 | 151,386 | 181,936 | |||||||||||||
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| Operating income |
1,856 | 3,202 | 11,865 | 18,905 | ||||||||||||
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| Other income: |
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| Gain on settlement of litigation |
— | 1,806 | — | 1,806 | ||||||||||||
| Realized gain on sale of marketable securities |
— | — | 828 | 966 | ||||||||||||
| Gain on sale of building |
— | — | 347 | — | ||||||||||||
| Interest income, net |
30 | 8 | 70 | 32 | ||||||||||||
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| Income before income taxes |
1,886 | 5,016 | 13,110 | 21,709 | ||||||||||||
| Provision (benefit) for income taxes |
(477 | ) | 2,384 | 2,476 | 5,791 | |||||||||||
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| Net income |
$ | 2,363 | $ | 2,632 | $ | 10,634 | $ | 15,918 | ||||||||
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| Basic net income per share: |
0.09 | 0.10 | 0.39 | 0.59 | ||||||||||||
| Diluted net income per share: |
0.09 | 0.10 | 0.39 | 0.59 | ||||||||||||
| Weighted average shares outstanding: |
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| Basic |
27,130 | 27,130 | 27,130 | 27,130 | ||||||||||||
| Diluted |
27,130 | 27,130 | 27,130 | 27,130 | ||||||||||||
EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
| 31-Mar-12 | 31-Mar-11 | |||||||
| ASSETS |
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| Current Assets: |
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| Cash and cash equivalents |
$ | 44,960 | $ | 39,796 | ||||
| Restricted cash |
215 | 600 | ||||||
| Accounts receivable, net |
12,134 | 10,929 | ||||||
| Other receivables |
1,193 | 1,413 | ||||||
| Due from affiliates |
1 | — | ||||||
| Inventory, net |
11,269 | 8,515 | ||||||
| Prepaid expenses and other current assets |
2,873 | 549 | ||||||
| Investments in marketable securities |
— | 4,725 | ||||||
| Deferred tax assets |
2,304 | 2,825 | ||||||
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| Total Current Assets |
74,949 | 69,352 | ||||||
| Property, plant, and equipment, net |
260 | 2,921 | ||||||
| Trademarks, net |
1,545 | 1,545 | ||||||
| Deferred tax assets |
1,668 | 2,540 | ||||||
| Other assets |
262 | 358 | ||||||
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| Total Assets |
$ | 78,684 | $ | 76,716 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Current Liabilities: |
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| Short-term borrowings |
— | $ | 2,466 | |||||
| Current maturities of long-term borrowings |
64 | 46 | ||||||
| Accounts payable and other current liabilities |
9,152 | 14,408 | ||||||
| Due to affiliates |
11 | 2 | ||||||
| Accrued sales returns |
1,201 | 1,199 | ||||||
| Income taxes payable |
107 | 196 | ||||||
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| Total Current Liabilities |
10,535 | 18,317 | ||||||
| Long-term borrowings |
72 | 150 | ||||||
| Deferred tax liabilities |
177 | 158 | ||||||
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| Total Liabilities |
10,784 | 18,625 | ||||||
| Shareholders’ Equity: |
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| 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 — $0.01 par value, 75,000,000 shares authorized; 52,965,797 shares issued and 27,129,832 shares outstanding at March 31, 2012 and March 31, 2011, respectively |
529 | 529 | ||||||
| Capital in excess of par value |
98,785 | 98,785 | ||||||
| Accumulated other comprehensive (losses) income |
(82 | ) | 746 | |||||
| Accumulated deficit |
(10,418 | ) | (21,055 | ) | ||||
| Treasury stock, at cost, 25,835,965 shares |
(24,224 | ) | (24,224 | ) | ||||
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| Total Shareholders’ Equity |
67,900 | 58,091 | ||||||
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| Total Liabilities and Shareholders’ Equity |
$ | 78,684 | $ | 76,716 | ||||
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