-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HvuWADs09TXqLIJCfl4413UvTLWHPCrdtX8cnXWdssLVpd/SD+WTYQO4lwf1S+NG 9tcCgFhJMw/XQQAhTAgNjg== 0001125282-06-004152.txt : 20060719 0001125282-06-004152.hdr.sgml : 20060719 20060719123929 ACCESSION NUMBER: 0001125282-06-004152 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060713 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060719 DATE AS OF CHANGE: 20060719 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMERSON RADIO CORP CENTRAL INDEX KEY: 0000032621 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD AUDIO & VIDEO EQUIPMENT [3651] IRS NUMBER: 223285224 STATE OF INCORPORATION: DE FISCAL YEAR END: 0402 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07731 FILM NUMBER: 06968854 BUSINESS ADDRESS: STREET 1: NINE ENTIN RD STREET 2: PO BOX 430 CITY: PARSIPPANY STATE: NJ ZIP: 07054-0430 BUSINESS PHONE: 9738845800 MAIL ADDRESS: STREET 1: NINE ENTIN RD CITY: PARSIPPANY STATE: NJ ZIP: 07054 FORMER COMPANY: FORMER CONFORMED NAME: MAJOR ELECTRONICS CORP DATE OF NAME CHANGE: 19770921 8-K 1 b414079_8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 13, 2006 EMERSON RADIO CORP. (Exact Name of Registrant as Specified in Charter) Delaware 001-07731 22-3285224 -------- --------- ---------- (State Or Other Jurisdiction (Commission (IRS Employer Of Incorporation) File Number) Identification No.) 9 Entin Road, Parsippany, New Jersey 07054 ------------------------------------ ----- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (973) 884-5800 Not Applicable -------------- (Former Address, if changed since Last Report) (Zip Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On July 13, 2006, Emerson Radio Corp. (the "Company") and Funai Corporation, Inc. ("Funai") entered into an amendment (the "Funai Amendment") to the License Agreement, effective January 1, 2001, between the Company and Funai, as amended (the "License Agreement"), pursuant to which the term of the License Agreement was extended until December 31, 2010. The License Agreement provides that Funai will manufacture, market, sell and distribute specified products bearing the Company logo trademark to customers in U.S. and Canadian markets. Under the terms of the agreement, the Company will receive non-refundable minimum annual royalty payments of $4.3 million each calendar year and a license fee on sales of products subject to the License Agreement in excess of the minimum annual royalties. On July 17, 2006, the Company issued a press release announcing the Funai Amendment. A copy of this press release is being filed as Exhibit 99.1 to this Current Report on Form 8-K. ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On July 17, 2006, the Company issued a press release regarding results for the year ended March 31, 2006. A copy of this press release is being furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information in this report under Item 2.02 is being furnished pursuant to Item 2.02 of Form 8-K, insofar as it discloses historical information regarding the Company's results of operations and financial condition as of, and for the year ended March 31, 2006. In accordance with General Instructions B.2 of Form 8-K, the information in this Current Report on Form 8-K under Item 2.02, including Exhibit 99.2, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS. On July 13, 2006, the Board of Directors of the Company appointed John Florian as the Principal Financial Officer and Secretary of the Company. Mr. Florian, 49, is presently the Corporate Controller, the Deputy Chief Financial Officer and Principal Accounting Officer of the Company. Mr. Florian has served as the Corporate Controller of Emerson since January 2005, as Deputy Chief Financial Officer since May 2006 and as Principal Accounting Officer since June 2006, and will retain those titles. From 2002 to 2004, Mr. Florian held the position of US Controller at DSM Nutritional Products, Inc., formerly Roche Vitamins Inc. and Hoffmann-LaRoche ("DSM"). From 2000 to 2002, he served as Director of Financial Accounting of DSM and, prior to 2000, Mr. Florian served as a Financial Management Analyst at DSM. Mr. Florian attended William Paterson College where he earned a BA in Accounting and is a member of the New Jersey State Society of Certified Public Accountants (NJSCPA). -2- As previously reported, Mr. Florian was appointed Deputy CFO on an at-will basis, in accordance with the terms set forth in an offer letter to him which he accepted in May 2006. In accordance with the offer letter, Mr. Florian receives an annual salary of $135,000 and other benefits consistent with the Company's standard employee benefit package, including medical and long term disability coverage, participation in the Company's 401K plan, vacation time and company holidays. Forward Looking Statements - -------------------------- This Current Report on Form 8-K, including Exhibit 99.1, contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, such as the Company's expected revenues for the fiscal quarter ending June 30, 2006. Forward-looking statements typically are identified by use of terms such as "may," "will," "should," "plan," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements are expressed differently. Forward-looking statements represent our management's judgment regarding future events. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. All statements other than statements of historical fact included in this Current Report on Form 8-K are forward-looking statements. The Company cannot guarantee the accuracy of the forward-looking statements, and you should be aware that the Company's actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including the statements under "Risk Factors" contained in the Company's reports filed with the Securities and Exchange Commission. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits Exhibit 10.1 - Amendment to License Agreement, dated July 13, 2006, between Emerson Radio Corp. and Funai Corporation, Inc. Exhibit 99.1 - Press release, dated July 17, 2006, announcing Amendment to License Agreement, dated July 13, 2006, between Emerson Radio Corp. and Funai Corporation, Inc. Exhibit 99.2 - Press release, dated July 17, 2006, regarding results for the year ended March 31, 2006 (Exhibit 99.1 is furnished as part of this Current Report on Form 8-K). -3- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EMERSON RADIO CORP. By: /s/ John J. Raab ------------------------------- Name: John J. Raab Title: Chief Operating Officer and Senior Executive Vice President Dated: July 19, 2006 EX-10.1 2 b414079_ex10-1.txt EXHIBIT 10.1 Exhibit 10.1 EIGHTH AMENDMENT TO LICENSE AGREEMENT This Eighth Amendment to License Agreement is dated effective as of June 22, 2006 and is made by and between Emerson Radio Corp. ("Licensor") and Funai Corporation, Inc. ("Licensee"). WHEREAS, Licensor and Licensee are parties to that License Agreement dated effective January 1, 2001, as amended (collectively, the "Agreement") which currently terminates on December 31, 2007; and WHEREAS, the parties hereto wish to extend the Agreement to December 31, 2010. NOW, THEREFORE, the parties agree to the following: 1. Amendment of Section 3 of the Agreement. Section 3 of the Agreement shall be amended to read in full as follows: "(a) Subject to the earlier expiration or termination of this Agreement as provided in Section 9 or otherwise, this Agreement shall be effective as of the Effective Date and expire as of the close of business on December 31, 2010 ("Initial Term"). The parties agree that each September, beginning September 2009, they shall meet and discuss a one-year extension of the then expiration date of the Agreement, and the minimum royalties and gross sales projections for any such extended term, provided (i) Licensee has paid to Licensor all Royalties and Minimum Royalties payable for each Contract Year as set forth herein on Fourth Amended Exhibit C of this Agreement, and (ii) Licensee has satisfied and/or complied with all of its obligations hereunder. Each successive renewal period shall hereinafter be referred to as a "Renewal Term". "Initial Term" and "Renewal Term" shall collectively be referred to as "Term". "(b) Notwithstanding any language herein to the contrary, should the parties not agree pursuant to Section 3(a) herein of an extension of the then expiration date of the Agreement or should the Agreement terminate, if at least one hundred twenty (120) days prior to the actual date of expiration or termination of this Agreement Licensor shall receive an offer from a third party for a license to use the Trademark on the Goods in the Territory, then in such case Licensor shall within ten (10) days thereafter notify Licensee in writing if it wishes to be granted by Licensor a license to use the Trademark on the Goods in the Territory pursuant to the same terms and conditions as those stated in such third party's offer. If Licensee so notifies Licensor in writing within thirty (30) days of its receipt of such notice that it is exercising such right of first refusal, then Licensor and Licensee shall enter into a formal written agreement signed by both parties and Licensor shall not grant such license to such third party or any other party. If Licensee does not timely notify Licensor that it is exercising such right of first refusal, then Licensor shall have the right to accept such offer from such third party and Licensee shall no longer have any rights pursuant to this Section 3(b), except that if Licensor shall in such case not agree to such offer from such third party, then Licensee's rights pursuant to this Section 3(b) shall continue to exist." 2. Capitalized Terms. All capitalized terms not defined herein shall have the same meaning as in the Agreement. 3. Counterparts/Telefax Signature. This Eighth Amendment and any future amendments may be executed in several counterparts that together shall constitute but one and the same amendment. A party's signature by telefax shall be treated as if such document were signed in the original. 4. All Other Provisions of the Agreement. All other provisions of the Agreement not amended herein shall continue to have their full force and effect. IN WITNESS WHEREOF, this Eighth Amendment has been executed by the duly authorized representative of each party effective as of the date first set forth above. EMERSON RADIO CORP. FUNAI CORPORATION, INC. "Licensor" "Licensee" By: /s/ John J. Raab By: /s/ Tomonori Hayashi -------------------------- ---------------------------- Name: John J. Raab Name: Tomonori Hayashi Title: COO & Senior Executive Title: Chairman & Chief Vice President Executive Officer -2- FOURTH AMENDED EXHIBIT C I. ANNUAL MINIMUM ROYALTY(IES) AND PAYMENT SCHEDULE ------------------------------------------------ A. FIRST CONTRACT YEAR (1/1/01-12/31/01): $4,300,000 Within 10 days of Licensee's signing $ 500,000 January 2, 2001 $ 250,000 April 30, 2001 $ 250,000 July 31, 2001 $ 1,000,000 October 31, 2001 $ 1,150,000 January 31, 2002 $ 1,150,000 ----------- Total $ 4,300,000 B. SECOND CONTRACT YEAR (1/1/02-12/31/02): $4,300,000 April 30, 2002 $ 1,000,000 July 31, 2002 $ 1,000,000 October 31, 2002 $ 1,150,000 January 31, 2003 $ 1,150,000 ---------- Total $ 4,300,000 C. THIRD CONTRACT YEAR (1/1/03-12/31/03): $4,300,000 April 30, 2003 $ 1,000,000 July 31, 2003 $ 1,000,000 October 31, 2003 $ 1,150,000 January 31, 2004 $ 1,150,000 ----------- Total $ 4,300,000 D. FOURTH CONTRACT YEAR (1/1/04-12/31/04): $4,300,000 April 30, 2004 $ 1,000,000 July 31, 2004 $ 1,000,000 October 31, 2004 $ 1,150,000 January 31, 2005 $ 1,150,000 ----------- Total $ 4,300,000 E. FIFTH CONTRACT YEAR (1/1/05-12/31/05): $4,300,000 April 30, 2005 $ 1,000,000 July 31, 2005 $ 1,000,000 October 31, 2005 $ 1,150,000 January 31, 2006 $ 1,150,000 ----------- Total $ 4,300,000 -3- F. SIXTH CONTRACT YEAR (1/1/06-12/31/06): $4,300,000 April 30, 2006 $1,000,000 July 31, 2006 $1,000,000 October 31, 2006 $1,150,000 January 31, 2007 $1,150,000 ---------- Total $4,300,000 G. SEVENTH CONTRACT YEAR (1/1/07-12/31/07): $4,300,000 April 30, 2007 $1,000,000 July 31, 2007 $1,000,000 October 31, 2007 $1,150,000 January 31, 2008 $1,150,000 ---------- Total $4,300,000 H. EIGHTH CONTRACT YEAR (1/1/08-12/31/08): $4,300,000 April 30, 2008 $1,000,000 July 31, 2008 $1,000,000 October 31, 2008 $1,150,000 January 31, 2009 $1,150,000 ---------- Total $4,300,000 I. NINTH CONTRACT YEAR (1/1/09-12/31/09): $4,300,000 April 30, 2009 $1,000,000 July 31, 2009 $1,000,000 October 31, 2009 $1,150,000 January 31, 2010 $1,150,000 ---------- Total $4,300,000 J. TENTH CONTRACT YEAR (1/1/10-12/31/10): $4,300,000 April 30, 2010 $1,000,000 July 31, 2010 $1,000,000 October 31, 2010 $1,150,000 January 31, 2011 $1,150,000 ---------- Total $4,300,000 -4- II. TOTAL MINIMUM SALES PROJECTIONS BY CONTRACT YEAR ------------------------------------------------ Year 1 - $215,000,000 US Year 2 - $215,000,000 US Year 3 - $215,000,000 US Year 4 - $215,000,000 US Year 5 - $215,000,000 US Year 6 - $215,000,000 US Year 7 - $215,000,000 US Year 8 - $215,000,000 US Year 9 - $215,000,000 US Year 10 - $215,000,000 US -5- EX-99.1 3 b414079_ex99-1.txt EXHIBIT 99-1 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: John D. Florian Robert Maffei Deputy Chief Financial Officer Investor Relations Manager (973) 428-2044 (973) 428-2098 EPOCH FINANCIAL GROUP, INC. Victor Thompson or Todd Atenhan (888) 917-5105 Monday, July 17, 2006 FOR IMMEDIATE RELEASE EMERSON RADIO ANNOUNCES THE RENEWAL OF LICENSE AGREEMENT WITH FUNAI CORPORATION PARSIPPANY, NJ -- July 17, 2006 -- Emerson Radio Corp. (AMEX: MSN) announced today that it has extended its license agreement with Funai Corporation, Inc. ("Funai") until December 31, 2010. This extension continues the licensing relationship that started in January 2001 and has already generated in excess of $2.5 billion in sales of Emerson(R) branded video products being distributed by Funai. The agreement continues with annual minimum royalty payments to be received by Emerson for licensing the Emerson(R) brand name to Funai. Under the terms of the license agreement, Funai manufactures, markets and distributes DVD players and recorders, a variety of televisions, including LCD (liquid crystal display) televisions, television combinations, dual decks, VCRs and VCR DVR recorders that bear the Emerson(R) brand name in North America. In announcing the license extension, Adrian Ma, the Chairman and Chief Executive Officer of Emerson, said "We are extremely pleased that Funai has again agreed to extend the term of the license by an additional three years following the December 2005 amendment that extended the term through December 2007. The license agreement with Funai represents an excellent combination of Emerson's strong brand presence and Funai's established leadership in the manufacturing and distribution of quality video products." Funai Corporation is a wholly owned subsidiary of Funai Electric Co., Ltd., of Japan, a leading supplier in the North American DVD market. Funai Corporation's web site is www.funai-corp.com. -1- Emerson Radio Corp. (AMEX:MSN - News), 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, clock radios, audio and home theater products. 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, including its Annual Report on Form 10-K for the year ended March 31, 2006. The Company assumes no obligation to update the information contained in this news release. -2- EX-99.2 4 b414079_ex99-2.txt EXHIBIT 99.2 EXHIBIT 99.2 [EMERSON LOGO] - ------------------------------------------------------------------------------- NEWS & INFORMATION - ------------------------------------------------------------------------------- FOR: EMERSON RADIO CORP. 9 Entin Road Parsippany, NJ 07054-0430 CONTACT: EMERSON RADIO CORP. OR: INVESTOR RELATIONS: John D. Florian Robert Maffei Deputy Chief Financial Officer Investor Relations Manager (973) 428-2044 (973) 428-2098 EPOCH FINANCIAL GROUP, INC. Victor Thompson or Todd Atenhan (888) 917-5105 Monday July 17, 2006 FOR IMMEDIATE RELEASE --------------------- YEAR-END RESULTS ---------------- EARNINGS PER SHARE FOR THE YEAR ENDED MARCH 31, 2006 $ 0.61 VS. PRIOR YEAR EARNINGS PER SHARE OF $ 0.22 PARSIPPANY, N.J. - JULY 17 2006 - Emerson Radio Corp. (AMEX:MSN) today announced that its earnings for the fiscal year ended March 31, 2006 ("fiscal 2006") totaled $16.6 million or $.61 per share. Of this amount, $3.7 million or $.13 per share represented income from continuing operations with the balance being attributable primarily to the gain realized by Emerson on the sale of its interest in Sport Supply Group, Inc., its previously consolidated partially owned subsidiary. For the fiscal year ended March 31, 2005 ("fiscal 2005"), Emerson earned $5.9 million or $.22 per share; all but $.8 million ($.03 per share) of which was attributable to continuing operations. -1- While net revenues for fiscal 2006 ($233.8 million) were relatively unchanged from those achieved in fiscal 2005 ($230.8 million), the revenue mix changed substantially. Themed product sales tripled in fiscal 2006 to $50.7 million largely due to increased Nickelodeon(R) branded product sales volume. On the other hand, Emerson(R) product sales fell 13.5% to $175.4 million in fiscal 2006 as compared to $202.9 million in fiscal 2005. In addition, licensing revenues decreased by $3.1 million to $7.7 million in fiscal 2006 compared to $10.8 million for fiscal 2005. Cost of sales, as a percentage of net revenues, increased from 85.9% in fiscal 2005 to 87.2% in fiscal 2006 primarily due to lower margins on both themed and Emerson(R) branded products. SG&A, as a percentage of net revenues, was 8.2% in fiscal 2006 as compared to 7.6% in fiscal 2005. Management Comments on Results of Operations Adrian Ma, Emerson's Chairman and Chief Executive Officer stated, "fiscal 2006 was an eventful and challenging year in many ways. We substantially strengthened our balance sheet and liquidity positions through the sale of our interest in Sport Supply Group from which we realized in cash $28.8 million after sale and disposition costs. In addition, we were able to consummate a new five year $45 million global financing agreement with Wachovia Bank, National Association. At March 31, 2006, Emerson had working capital of $60.2 million, virtually no debt and a substantial available line of credit." "As a consequence of our affiliation with The Grande Holdings Limited, a Hong Kong based group of companies engaged in a number of businesses including the manufacture, sale and distribution of audio, video and other consumer electronics and video products and the owner of approximately 46% of Emerson's outstanding shares, we have sharpened our strategic focus. We believe that we will be able to leverage Grande's direct sales force and relationship to expand the reach of our consumer electronic products and that Grande's substantial resources in manufacturing, brand marketing and global distribution will be critical in building Emerson into a first class worldwide electronics distribution network for branded products." "Moreover, we are extremely pleased that Funai has again extended its license agreement with Emerson through December 2010. We will continue to expand our licensing programs for the Emerson(R) and HH Scotts(R) names into new categories as well as new geographical territories. Through our relationship with Grande, we hope to benefit from cross licensing and marketing opportunities internationally, particularly in Europe and Asia." -2- "We now believe that we are well positioned for the future. We expect that our revenues for our first quarter of fiscal 2007 will increase significantly over the comparable period of fiscal 2006. Our iPod(R) compatible products are being widely accepted. And we are well along in building a global management team which should supplement our very loyal and capable United States based management." LATE 10-K FILING Emerson also reported that it was unable to timely file its Annual Report on Form 10-K with the Securities and Exchange Commission due to Emerson's former auditors not providing the consent needed by Emerson to file the report in time. Emerson expects to file its Annual Report on Form 10-K with the Securities and Exchange Commission today. 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. 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. -3- EMERSON REPORTS/4 EMERSON RADIO CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
Year Ended March 31 Three Months Ended March 31 ----------------------- --------------------------- 2006 2005 2006 2005 --------- --------- --------- --------- NET REVENUES $ 233,843 $ 230,783 $ 41,106 $ 42,732 --------- --------- --------- --------- COSTS AND EXPENSES: Cost of sales 204,010 198,221 36,433 38,211 Other operating costs and expenses 6,145 5,889 1,482 1,832 Selling, general and administrative expenses 19,097 17,436 4,287 3,810 Acquisition Costs 48 (454) 48 (250) Non cash compensation 374 249 114 81 --------- --------- --------- --------- 229,674 221,341 42,364 43,684 --------- --------- --------- --------- OPERATING INCOME (LOSS) 4,169 9,442 (1,258) (952) Interest expense (income) 785 1,346 (191) 382 --------- --------- --------- --------- INCOME (LOSS) BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS 3,384 8,096 (1,067) (1,334) Provision (benefit) for income taxes (328) 2,983 (1,966) (607) --------- --------- --------- --------- INCOME (LOSS) FROM CONTINUING OPERATIONS 3,712 5,113 899 (727) Income from discontinued operations, net of tax 12,918 792 -- 760 --------- --------- --------- --------- NET INCOME (LOSS) $ 16,630 $ 5,905 $ 899 $ 33 ========= ========= ========= ========= BASIC NET INCOME (LOSS) PER SHARE Continuing operations $ 0.13 $ 0.19 $ 0.02 $ (0.03) Discontinued operations 0.48 0.03 -- 0.03 --------- --------- --------- --------- $ 0.61 $ 0.22 $ 0.02 $ 0.00 ========= ========= ========= ========= DILUTED NET INCOME (LOSS) PER SHARE Continuing operations $ 0.13 $ 0.19 $ 0.02 $ (0.03) Discontinued operations 0.48 0.03 -- 0.03 --------- --------- --------- --------- $ 0.61 $ 0.22 $ 0.02 $ 0.00 ========= ========= ========= ========= WEIGHTED AVERAGE SHARES OUTSTANDING Basic 27,079 26,991 27,048 27,154 Diluted 27,172 27,264 27,048 27,154
-4- EMERSON REPORTS/5 EMERSON RADIO CORP. AND SUBSIDIARIES CONSOLIDATED SUMMARY BALANCE SHEETS (IN THOUSANDS)
March 31, March 31, 2006 2005 -------- -------- Cash and cash equivalents (includes cash securing bank loans of $3,000 and $5,620 respectively $ 20,517 $ 7,437 Accounts receivable 18,996 15,940 Inventory 33,003 38,156 Other current assets 9,471 8,510 Current assets related to discontinued operations -- 31,972 -------- -------- TOTAL CURRENT ASSETS 81,987 102,015 Property and equipment 2,500 2,292 Other assets 8,015 12,322 Non current assets related to discontinued operations -- 14,539 -------- -------- TOTAL ASSETS $ 92,502 $131,168 ======== ======== Current liabilities of continuing operations $ 21,772 $ 32,791 Current liabilities of discontinued operations -- 13,108 Long-term borrowings 575 11,960 Non current liabilities of discontinued operations -- 3,010 Minority interest -- 16,696 Stockholders' equity 70,155 53,603 -------- -------- TOTAL LIABILITIES AND EQUITY $ 92,502 $131,168 ======== ========
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