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D&M Sets Nine-Month Operating Profit Record

2/22/2007 09:22:00 AM Eastern

Mahwah, N.J. — D&M Holdings reported operating profit of $36.5 million for the nine-months ending Dec. 31 in its fiscal year, a gain of 103 percent, the highest nine-month performance for the company in its history.

Consolidated revenue for the same period was $589.3 million, a gain of 6.5 percent over the previous year, despite the absence of sales from Rio, which was discontinued.

D&M stated that its profitability greatly improved compared with a year ago following sales growth from new distribution channels and market share gains in A/V receivers. Operations also benefited from full-year results from Boston Acoustics and the exit from the Rio business, the company said.

For the same nine-month period, net income was $19.9 million, down from $24.9 million the previous year, a 21 percent decrease. D&M said the 2005 performance was better due to an extraordinary gain at that time.

By business segment, the premium A/V area posted revenue for the first nine months of the fiscal year at $575.1 million, an 11 percent gain from the year-ago period, while operating profit was $35.7 million, a 47 percent gain. The result includes four months of operating results for Boston Acoustics. D&M noted that it showed strength in North America as it continued to expand distribution channels in its core A/V markets.

In its digital network segment for the first nine months of its fiscal year, revenue was $14.1 million, down 59 percent, but operating profit was $240,683, up from a loss of $6.6 million the same period in 2005, due to Rio-driven losses.

“We are pleased with our overall results through the nine months and were very satisfied with the market reactions to our products during the holiday season,” said Eric C. Evans, chairman of D&M Holdings. “We had a great third quarter, and we continue to focus on ways to improve our gross and operating margins. The acquisition of our new D&M Premium Sound Solutions company is proceeding smoothly and will favorably impact our fourth quarter results beyond our forecast.”

D&H did not break out third quarter results separately and the results in this report were converted from the Japanese yen.

D&M Holdings, whose U.S. headquarters is based here, owns the Denon, Marantz, McIntosh Laboratory, Boston Acoustics, Snell Acoustics, D&M Professional, D&M Premium Sound Solutions, Denon DJ, ReplayTV and Escient brands.