Lake Mary, Fla. - Although the soft economy affected comparisons - accessories, audio and gaming products maker Recoton reported certain drops in both sales and Earnings Before Interest and Taxes (EBIT) for its consumer electronics accessories segment.
Blaming a decline in its OEM business and having to re-establish its CE accessories business in Europe, Recoton reported EBIT of $8.3 million for the fourth quarter, ended Dec. 31, for its accessories segment, down from $12.7 million year over year. Sales, however, moved up to $77.2 million in the fourth quarter, compared with $76 million in the same quarter in 2000.
For the 12 months, sales in Recoton's accessories segment dropped to $233.9 million, down from $238.3 million in 2000. EBIT for the segment slid to $24.8 million in 2001, compared with $27 million in 2000.
'We believe that the consumer electronic accessory segment will enjoy growth in both revenue and and profitability as consumers embrace new digital products,' said Robert L. Borchardt, chairman/CEO of Recoton. Borchardt pinpoints new opportunities that abound because of the prospective growth of digital TV and the convergence of audio, video and computers.
Despite the soft retail environment, Recoton's audio segment generated EBIT of $5.4 million in the fourth quarter, on sales of $67.3 million. This compares with EBIT of $6.8 million in the fourth quarter of 2000 and sales of $63.8 million for the same three months.
For the 12 months, the audio segment recorded EBIT of $14.7 million on sales of $222.9 million. This compares to the figures in 2000 of $19.2 million in EBIT and $233.4 million in sales.
Recoton's video game segment (InterAct) extended its EBIT loss to $6.5 million in the fourth quarter, compared with an EBIT loss of $1.3 million in the same three months of 2000. Sales in the video segment for the fourth quarter decreased to $61.2 million, compared with $69.8 million in the year-ago period.
Over the 12 months, the video game segment extended its EBIT loss to $17.2 million, up from an EBIT loss of $9.9 million in 2000. Sales in the segment reached $156.3 million for the 12 months, down from $177.6 million in the same period in 2000.
Recoton's consolidated net sales for the fourth quarter slipped to $205.7 million, down from $209.6 million in the same quarter in 2000. The company reported a net loss of $2.4 million for the fourth quarter, compared with net income of $2.5 million year over year.
For the 12 months, consolidated net sales dropped to $613.1 million, down from $649.3 million in the same period in 2000. The company extended its net loss to $7.6 million for the 12 months, up from a net loss of $4.8 million in the same 12 months in 2000.
Recoton also reported it has successfully completed negotiations with its lenders to modify certain debt covenants and obtain waivers of defaults, thus providing continuing financial stability for the company.