HACKENSACK, NJ--(Marketwire -07/13/12)- Emerson Radio Corp. (MSN) (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. (MSN) (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:
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:
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
--------- --------- --------- ---------
25,040 37,947 151,386 181,936
--------- --------- --------- ---------
Operating income 1,856 3,202 11,865 18,905
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Other income:
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
--------- --------- --------- ---------
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
========= ========= ========= =========
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:
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
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ASSETS
Current Assets:
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
----------- -----------
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
----------- -----------
Total Assets $ 78,684 $ 76,716
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
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
----------- -----------
Total Current Liabilities 10,535 18,317
Long-term borrowings 72 150
Deferred tax liabilities 177 158
----------- -----------
Total Liabilities 10,784 18,625
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 -- $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)
----------- -----------
Total Shareholders' Equity 67,900 58,091
----------- -----------
Total Liabilities and Shareholders' Equity $ 78,684 $ 76,716
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Investor Relations:
Barry Smith
Investor Relations Manager
(973) 428-2004
