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Earnings Briefs

D&M High-End A/V Sales Rise 11
Tokyo — D&M Holdings, which owns the Denon, Marantz, Boston Acoustics, Escient and ReplayTV brands, among others, reported an 11 percent increase in revenue for its Premium AV segment during its fiscal nine months, reaching $525.3 million, up from $475.1 million in the same period the previous year. Premium AV includes Boston Acoustics, purchased in August 2005. Operating profit for the segment, which includes established brands for the premium home theater, audio-video consumer electronics and networked digital entertainment markets, rose 13 percent, to $24.7 million for the nine months, ended Dec. 31, compared with $21.8 million year-on-year. Revenue in the digital network segment at D&M for the nine months was lower year-over-year, due to the shutdown of D&M’s Rio business. Sales were $34.9 million for the period, compared with $106.9 million in the first nine months of 2004. Digital network recorded a $6.7 operating loss in the nine months, compared with an operating loss of $12 million the previous year. Consolidated D&M revenue dropped 3.7 percent in the nine months, due to the Rio shutdown, coming in at $560.2 million, from $582 million in the same period the prior year. Operating income about doubled, to $18.1 million, from $9.9 million, due to a solid contribution from Boston Acoustics and improved performance from Escient and ReplayTV.

Kodak Digital, Film Imaging Segment Sales Slide
Rochester, N.Y. — The digital and film imaging system at Eastman Kodak reported a 3 percent decline in sales during the company’s fiscal fourth quarter, coming in at $2.51 billion, compared with $2.59 billion in the year-ago three months. Net sales in the United States were $1.3 billion for the fourth quarter, ended Dec. 31, an 11 percent increase over the $1.2 billion reported in 2004. Net worldwide sales of consumer digital capture products, part of the digital strategic product group subset of the imaging system, increased year-on-year sales 41 percent in the fourth quarter. The product group includes consumer digital cameras, accessories, memory products and royalties. Net worldwide sales of Picture Maker kiosks/media increased 23 percent in the fourth quarter, compared with the same three months in 2005. Overall digital products and services sales soared 45 percent in the fourth quarter, to $2.7 billion. Digital sales accounted for 54 percent of total revenue for all of 2005. Consolidated Kodak sales in the fourth quarter jumped 12 percent, to $4.1 billion, from $3.8 billion, while consolidated net loss for the year-ending three months hit $52 million, down from $59 million in the same quarter the previous year. The loss was due mainly to restructuring costs. For the 12 months, Kodak consolidated sales climbed 6 percent, to $14.3 billion, up from $13.5 billion year-over-year. The company reported a net loss of $1.4 billion for the year, compared with net income of $556 million for all of 2004.

Dolby Laboratories Rev Rises 8%
San Francisco — Fiscal first quarter revenue at Dolby Laboratories climbed 8 percent, hitting $91 million, up from $84.3 million in the same three months the prior year. Net income for the quarter, ended Dec. 31, hit $17.3 million, compared with $10.4 million year-on-year. Net income for the most recent fourth quarter includes a $6.4 million charge, plus compensation charges of $5.1 million, compared with $2.9 million in the same three months of the previous fiscal year. Operating income in the first quarter came in at $24.4 million, up from $18.1 million in the same period a year earlier.

UTStarcom Preliminary Sales, Earnings Results Precede Investigation
Alameda, Calif. — Broadband, wireless and handset solutions maker UTStarcom has filed its preliminary financial results for the fourth quarter of 2005, reporting sales of $685.5 million and a net loss of $20.6 million. Gross profit margin for the fourth quarter was 12.1 percent, while total operating expenses were $142.3 million. Included in the total is $11 million in restructuring costs. The company reported $473.7 million in total debt. Results for the quarter remain preliminary while UTStarcom is subject to finalization pending the completion of an investigation by independent counsel with regard to circumstances surrounding the premature recognition of revenue on a contract with a customer in India, and other related issues. UTStarcom recognized about $22 million in revenue on the contract, with total gross margin of less than $1 million. This revenue was recognized during several of the quarters from 2003 through 2005. At the conclusion of this investigation, the company’s audit committee will assess the findings and will evaluate the materiality of any adjustments to determine in previously issued financial statements need to be adjusted.

Brightpoint Q4 Sales Rise 33%
Plainfield, Ind. — Brightpoint, which distributes globally wireless devices and provides logistic services to the wireless industry, reported fourth quarter sales of $630.6 million, a 33 percent increase over the $474.1 million recorded in the year-ago period. Net income for the fourth quarter, ended Dec. 31, hit $8.9 million, up from $7.5 million in the last three months of 2004. Brightpoint, which said it handled 42.1 million wireless devices in 2005, an increase of 57 percent over 2004, reported 12 month revenue of $2.1 billion, a 21 percent climb over the $1.8 billion recorded year-on-year. However, year-end net income slipped to $10.4 million, from $13.8 million. Net income in 2005 included a $13.8 million non-cash impairment charge. Fourth quarter gross margin decreased from 7.1 percent year-over-year, to 6.9 percent, while expenses increased 48 percent from the fourth quarter of 2004, to the same three months in 2005.

Tracfone Improves Q4 Revenue 23%, Earnings Dip
Mexico City — Wireless operator America Movil, which owns a U.S. subsidiary called Tracfone, said Tracafone posted fourth quarter U.S. revenue of $275 million, a 23 percent increase over the same three months the previous year. However, earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter, ended Dec. 31, was negative, coming in at a loss of $25 million for the three months, compared with $2 million in positive EBITDA for the same quarter in 2004. For the 12 months, Tracfone U.S. revenue jumped 25.7 percent, hitting $990 million, up from $787 million the prior year. EBITDA for the 12 months was $80 million, 66.8 percent above the $48 million recorded in 2004. Prepaid U.S. subscribers rose 39.6 percent in the fourth quarter, to 6.1 million up from 4.4 million a year ago. The fourth quarter was notably strong, accounting for 58 percent of net additions of the year. Average revenue per subscriber was $14 in the fourth quarter, the same as the previous year’s last three months. Churn rose to 4.8 percent in the fourth quarter, compared with 4.4 percent year-on-year. Minutes of use per subscriber were 66 in the fourth quarter, up 9.2 percent from the year-ago 61.