D&M Reports Higher Sales, Lower Profits

KAWASAKI, JAPAN — D&M Holdings revenue grew 18 percent to $781 million during the first nine months of its 2007 fiscal year ending Dec. 31, but net income fell 6 percent to $21.1 million and operating profit fell 13 percent to $35.1 million.

Net income fell less than operating profit in part because of a third-quarter one-time extraordinary gain on the sale of D&M's Replay TV unit. The exchange rate used by the company was 107.35 yen to the U.S. dollar.

D&M operated in the black for the first nine months of its fiscal year despite a first-quarter net-income loss and operating loss.

For the nine-month period, revenues and operating profits from D&M's commercial AV brands were up, respectively, by 151 percent to $230.5 million and 31 percent to $13.9 million, largely because of the acquisition of Philips' OEM speaker business, now called D&M Premium Sound Solutions.

In the consumer A/V segment, nine-month revenues were down 3 percent to $550.5 million, and operating profit was down 29 percent to $21.2 million. The company attributed the segment's sales declines to falling sales of DVD players before releasing new Blu-ray players combined with larger than normal shipments in fiscal 2006 "required for the start of business with a U.S. mega-retailer [Circuit City]," the company said. D&M attributed the consumer-segment decline in operating profits to falling DVD sales and "additional product development expenses relating to advanced DVD products."

For the nine-month period, consumer A/V accounted for 70 percent of revenue and 60 percent of operating profit. The consumer segment includes Boston Acoustics, Denon, Escient, Marantz, McIntosh and Snell.