Emerson Radio Corp. Reports Fiscal 2014 Third Quarter Results
HACKENSACK, NJ--(Marketwired - Feb 14, 2014) - Emerson Radio
Corp. (NYSEMKT: MSN) today reported financial results for its third
quarter and nine month period ended December 31, 2013.
As reported by the Company in a Form 8-K filed with the SEC on
October 19, 2012, the Company was informed by one its major
customers, that, commencing with the Spring of 2013, this customer
would discontinue purchasing from Emerson two microwave oven
products that had been sold by the Company to this customer.
Emerson continued shipping these two products throughout the
remainder of Fiscal 2013 (the year ended March 31, 2013), with
sales of such products declining through the fourth quarter of
Fiscal 2013. During Fiscal 2013, these two microwave oven products
comprised, in the aggregate, approximately $36.1 million, or 29.7%,
of the Company's net product sales. Emerson anticipates that the
full impact of this customer's decision will be realized by the
Company in Fiscal 2014, which began on April 1, 2013. As previously
disclosed by the Company, the complete loss of, or significant
reduction in, business with either of the Company's key customers
will have a material adverse effect on the Company's business and
results of operations. Accordingly, this customer's decision has
had a material adverse effect on the Company's business and results
of operations in the quarter ended December 31, 2013. There can be
no assurance that the Company will be able to increase sales of any
products at levels sufficient to offset the adverse impact of this
customer's decision, if at all.
As a result of the above, during the third quarter and nine
month periods of fiscal 2014, sales of these two products by the
Company were nil as compared to approximately $8.0 million and
$32.0 million during the third quarter and nine month periods of
fiscal 2013, respectively.
Net revenues for the third quarter of fiscal 2014 were $20.9
million, a decrease of $3.8 million, or 15.4%, as compared to the
third quarter of fiscal 2013 net revenues of $24.7 million. The
decline in year-over-year net revenues was driven by lower
year-over-year net product sales, slightly offset by higher
year-over-year licensing revenues.
Net product sales for the third quarter of fiscal 2014 were
$18.4 million, as compared to $22.6 million for the third quarter
of fiscal 2013, a decrease of $4.2 million, or 18.4%. The lower
year-over-year net product sales were principally driven by a $4.0
million, or 18.4%, decline in net sales of houseware products,
which was the result of lower year-over-year sales of microwave
ovens and wine coolers, partly offset by higher year-over-year
sales of compact refrigerators. Emerson continues to confront
increasing pricing pressure, which is a trend that management
expects to continue.
Licensing revenue in the third quarter of fiscal 2014 was $2.4
million, as compared to $2.0 million in the third quarter of fiscal
2013, an increase of $0.4 million, or 18.0%, principally on higher
year-over-year licensing revenue earned from the Company's largest
licensee.
Net revenues for the nine month period of fiscal 2014 were $63.8
million, a decrease of $41.6 million, or 39.4%, as compared to the
nine month period of fiscal 2013 net revenues of $105.4 million.
The decline in year-over-year net revenues was caused by lower
year-over-year net product sales and lower year-over-year licensing
revenues.
Net product sales for the nine month period of fiscal 2014 were
$59.2 million, as compared to $99.8 million for the nine month
period of fiscal 2013, a decrease of $40.6 million, or 40.7%. The
lower year-over-year net product sales were principally driven by a
$40.1 million, or 41.5%, decline in net sales of houseware
products, which was the result of lower year-over-year sales of all
products offered by the Company in the category, which is comprised
of microwave ovens, compact refrigerators and wine coolers.
Licensing revenue in the nine month period of fiscal 2014 was
$4.7 million, as compared to $5.6 million in the nine month period
of fiscal 2013, a decrease of $0.9 million, or 16.7%, principally
on lower year-over-year licensing revenue earned from the Company's
largest licensee due to lower year-over-year sales of products by
this licensee bearing the Emerson ® brand name.
Operating income for the third quarter of fiscal year 2014 was
$1.1 million, a decrease of $0.9 million, or 46.0%, from operating
income of $2.0 million for the third quarter of fiscal year 2013,
due to the lower year-over-year net revenue and higher
year-over-year SG&A expenses, primarily due to higher legal
fees resulting from a lawsuit that was settled by the Company in
December 2013.
Operating income for the nine month period of fiscal year 2014
was $2.6 million, a decrease of $6.0 million, or 69.6%, from
operating income of $8.6 million for the nine month period of
fiscal year 2013, due to the lower year-over-year net revenue,
higher year-over-year SG&A expenses, primarily due to higher
legal fees and tax consulting fees, partially offset by lower
compensation costs and the impairment write-down in September 2012
of a non-strategic trademark.
Net loss for the third quarter of fiscal 2014 was $1.4 million,
as compared to net income $1.7 million for the third quarter of
fiscal 2013, a decrease of $3.1 million, or 181.6%, due primarily
to the payment of a $4 million settlement by the Company in
December 2013 of a lawsuit, and the year-over-year decrease in
operating income. Net income for the nine month period of fiscal
2014 was $0.4 million, as compared to $7.5 million for the nine
month period of fiscal 2013, a decrease of $7.1 million, or 95.0%,
due primarily to the year-over-year decrease in operating income
and the settlement by the Company in December 2013 of a lawsuit.
Diluted loss per share for the third quarter of fiscal year 2014
was $0.05, as compared to diluted earnings per share of $0.06 for
the third quarter of fiscal year 2013, a decrease of $0.11 per
diluted share, or 183.3%. Diluted earnings per share for the nine
month period of fiscal year 2014 were $0.01, as compared to $0.28
for the nine month period of fiscal year 2013, a decrease of $0.27
per diluted share, or 96.4%.
Duncan Hon, Chief Executive Officer of Emerson Radio, commented,
"Our third quarter and nine month fiscal 2014 revenues and net
income declined significantly as compared to the prior year due
primarily to the decision by one of our major customers to
discontinue purchasing, effective Spring 2013, from the Company two
microwave oven products sold throughout fiscal year 2013 by the
Company to this customer, the last shipments of which were made in
February and March 2013, the payment of a $4 million settlement by
the Company in December 2013 of a lawsuit and intense competition
within all of our product categories. We expect these factors to
affect our year-over-year comparisons throughout the remainder of
fiscal 2014. The Company continues to seek to implement pricing and
product strategy initiatives to improve the Company's results of
operations, although there can be no assurance that such
initiatives will be successfully implemented or have the desired
effects on the Company's results of operations and financial
condition."
About Emerson Radio
Corp. Emerson Radio Corp. (NYSEMKT: 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 |
(Unaudited) |
(In thousands, except earnings per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2013 |
|
|
2012 |
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net product sales |
|
$ |
18,443 |
|
|
$ |
22,608 |
|
$ |
59,182 |
|
|
$ |
99,783 |
Licensing revenue |
|
|
2,414 |
|
|
|
2,046 |
|
|
4,665 |
|
|
|
5,597 |
Net revenues |
|
|
20,857 |
|
|
|
24,654 |
|
|
63,847 |
|
|
|
105,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
15,986 |
|
|
|
20,484 |
|
|
52,605 |
|
|
|
88,759 |
Other operating costs and expenses |
|
|
361 |
|
|
|
253 |
|
|
683 |
|
|
|
1,046 |
Selling, general and administrative expenses |
|
|
3,216 |
|
|
|
1,926 |
|
|
7,729 |
|
|
|
5,671 |
Impairment of trademark |
|
|
219 |
|
|
|
-- |
|
|
219 |
|
|
|
1,326 |
|
|
|
19,782 |
|
|
|
22,663 |
|
|
61,236 |
|
|
|
96,802 |
Operating income |
|
|
1,075 |
|
|
|
1,991 |
|
|
2,611 |
|
|
|
8,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on settlement of litigation |
|
|
(4,000 |
) |
|
|
-- |
|
|
(4,000 |
) |
|
|
-- |
Interest income, net |
|
|
98 |
|
|
|
132 |
|
|
441 |
|
|
|
230 |
(Loss) income before income taxes |
|
|
(2,827 |
) |
|
|
2,123 |
|
|
(948 |
) |
|
|
8,808 |
(Benefit) provision for income taxes |
|
|
(1,446 |
) |
|
|
430 |
|
|
(1,324 |
) |
|
|
1,328 |
Net (loss) income |
|
$ |
(1,381 |
) |
|
$ |
1,693 |
|
$ |
376 |
|
|
$ |
7,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.05 |
) |
|
|
0.06 |
|
|
0.01 |
|
|
|
0.28 |
|
Diluted |
|
|
(0.05 |
) |
|
|
0.06 |
|
|
0.01 |
|
|
|
0.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (Unaudited) |
|
(In thousands except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/13 |
|
|
3/31/13 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
18,698 |
|
|
$ |
21,412 |
|
Restricted cash |
|
|
-- |
|
|
|
70 |
|
Short term investments |
|
|
37,226 |
|
|
|
45,235 |
|
Accounts receivable, net |
|
|
10,278 |
|
|
|
7,883 |
|
Other receivables |
|
|
1,735 |
|
|
|
969 |
|
Due from affiliates |
|
|
-- |
|
|
|
1 |
|
Inventory |
|
|
5,683 |
|
|
|
3,454 |
|
Prepaid expenses and other current assets |
|
|
2,603 |
|
|
|
1,873 |
|
Deferred tax assets |
|
|
1,567 |
|
|
|
1,685 |
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets |
|
|
77,790 |
|
|
|
82,582 |
|
Property, plant, and equipment, net |
|
|
210 |
|
|
|
258 |
|
Trademarks, net |
|
|
-- |
|
|
|
219 |
|
Deferred tax assets |
|
|
2,579 |
|
|
|
1,121 |
|
Other assets |
|
|
19 |
|
|
|
104 |
|
|
|
|
|
|
|
|
|
|
|
Total
Assets |
|
$ |
80,598 |
|
|
$ |
84,284 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Current maturities of long-term borrowings |
|
|
43 |
|
|
|
43 |
|
Accounts payable and other current liabilities |
|
|
4,701 |
|
|
|
7,790 |
|
Accrued sales returns |
|
|
1,106 |
|
|
|
965 |
|
Income taxes payable |
|
|
169 |
|
|
|
1,281 |
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities |
|
|
6,019 |
|
|
|
10,079 |
|
Capital lease obligations |
|
|
15 |
|
|
|
30 |
|
Deferred tax liabilities |
|
|
207 |
|
|
|
194 |
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities |
|
|
6,241 |
|
|
|
10,303 |
|
Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares -$.01 par value, 10,000,000 shares
authorized at December 31, 2013 and March 31, 2013, respectively;
3,677 shares issued and outstanding at December 31, 2013 and March
31, 2013, respectively; liquidation preference of $3,677,000 at
December 31, 2013 and March 31, 2013, respectively |
|
|
3,310 |
|
|
|
3,310 |
|
|
|
|
|
|
|
|
|
|
Common shares -- $.01 par value, 75,000,000 shares
authorized, 52,965,797 shares issued at December 31, 2013 and March
31, 2013, respectively; 27,129,832 shares outstanding at December
31, 2013 and March 31, 2013, respectively |
|
|
529 |
|
|
|
529 |
|
Additional paid-in capital |
|
|
98,785 |
|
|
|
98,785 |
|
Accumulated deficit |
|
|
(4,043 |
) |
|
|
(4,419 |
) |
Treasury stock, at cost, 25,835,965 shares |
|
|
(24,224 |
) |
|
|
(24,224 |
) |
|
|
|
|
|
|
|
|
|
|
Total
Shareholders' Equity |
|
|
74,357 |
|
|
|
73,981 |
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders' Equity |
|
$ |
80,598 |
|
|
$ |
84,284 |
|
|
|
|
|
|
|
|
|
|
CONTACT: Investor Relations: Barry Smith Investor Relations
Manager (973) 428-2004
EMERSON RADIO CORP. 3 University Plaza, suite 405 Hackensack, NJ
07601
Emerson Radio (AMEX:MSN)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Emerson Radio (AMEX:MSN)
Gráfica de Acción Histórica
De May 2023 a May 2024