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Emerson 2002 CE Profit Soars

7/15/2002 02:11:00 PM Eastern

Parsippany, N.J. - A recovering economy and retailer restocking initiatives helped Emerson Radio report a year over year revenue increase in the fourth quarter.

In the three months, ended March 31 - traditionally its weakest season for consumer electronics, according to the company - Emerson's CE business increased about 18 percent, to $28.8 million, up from $23.7 million in the same quarter in 2001.

Emerson reported its fourth quarter and year-end financials in mid-July.

For the 12 months, Emerson posted a $21.6million net profit for its CE sector, despite net declining about 18 percent, to $214.9 million, down from $264.3 million.

The company attributed the profit to better gross margins, a reduction in SG & A expenses and a one time litigation settlement. The sales dip was blamed on a slowdown in the economy and decreased unit sales of audio products and microwave ovens, which was partially offset by an increase in licensing revenue.

CE gross margin increased 150 basis points for the 12 months, hitting 16.3 percent, compared with 14.8 percent in the previous year.

'The economic slowdown, beginning in the early part of calendar 2001, adversely affected our top line performance,' said Geoffrey P. Jurick, chairman/CEO.

'Emerson's brand presence is being further established through entry into new distribution channels both here and abroad, thus providing optimism as we look toward fiscal 2003,' said Jurick.

'This is further confirmed by Emerson's fourth quarter, compared with the same period in the prior year. We view the current year revenue decline as temporary and fully expect a solid increase in the upcoming fiscal year.' he said.

Overall fourth quarter revenue at Emerson - which does about half its business in sports-related equipment - reached $59.1 million, up from $56.1 million. Net income for the three months jumped to $8.3 million, up from $782,000 year over year.For the 12 months, overall revenue dropped to $318.5 million, down from $377.4 million in the previous year. Net income, however, rose to $19.4 million, compared with $12.7 million a year earlier.