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Emerson Sales Jump 76% In Fiscal 2nd Quarter

12/04/2000 02:00:00 AM Eastern

PARSIPPANY, N.J. -During its fiscal second quarter, sales of core consumer electronics, along with youth and toy-related products, helped push Emerson Radio Corp. to its fifth consecutive quarter of year-over-year revenue growth and its eighth consecutive quarter of earnings improvement.

In the second quarter ended Sept. 30, net revenue soared 76 percent to $98 million, compared with $55.5 million in fiscal second-quarter 1999. Emerson Radio said this jump resulted primarily from increases in unit sales of audio and microwave oven products, which were primarily offset by a reduction in unit sales of DVD.

Net income totaled $5.1 million in the second quarter, compared with $855,000 in the year-ago three months.

Gross margins increased to 13 percent in the second quarter, up 200 basis points from the 11 percent recorded in the same period in 1999. Selling, general and administrative expenses as a percent of revenue declined 90 basis points to 5.5 percent, down from 6.4 percent in the second quarter last year.

Operating income rose sharply to $6.4 million, compared with $1.7 million in the year-ago three months.

"A number of audio products first introduced last quarter continue to be well received by our customers, and certain of these models succeeded in penetrating the high-end specialty catalog and dealer distribution channels," said chairman/CEO Geoffrey P. Jurick. "We continue to make strong advances in our microwave oven product line in which we already command a 14 percent market share."

For the six months, Emerson said net revenue was $179.8 million, up 82 percent over the $99 million recorded in the year-ago six-month period. The company attributed this growth to increased unit sales of audio and microwave oven products.

Net income for the six months increased to $8.2 million, compared with $1.3 million in the year-ago six months. Gross margin for the period was 12.9 percent, 150 basis points above the 11.4 percent recorded in the same period in 1999 due to a higher-margin product mix. Operating income rose dramatically to $10.4 million, up from $2.2 million in the same six months in 1999.

Emerson is optimistic, due in part to its expected January 2001 entry into the digital product category through a licensing agreement with Funai Corp. This expands Emerson's existing video licensing agreement to include digital technology products and introduction of digital TV, projection TV and set-top boxes.