Emerson Posts Profitable Year, But 4th-Qtr. Loss

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Emerson Radio recorded a higher net loss in its fiscal fourth quarter, but remained marginally profitable on the year. Sales were down for both periods.

For the three months to April 2 Emerson reported a net loss of $1.37 million, up from the year-earlier deficit of $1.22 million, while sales, at $21.3 million, fell 45.3%. For fiscal 1999 Emerson earned $289,000, against a fiscal-1998 loss of $1.43 million, and sales were off slipped 2.5% to $158.7 million.

Emerson's results for the year were after $2 million in losses on investments, most of which came in the final quarter, offset by a gain of $1.5 million ($900,000 in the quarter) representing its equity in a sporting goods company. Excluding special items and interest expense, Emerson had operating income for the year of $3.28 million, against an operating profit of $524,000 in fiscal 1998.

In its filing with the SEC, Emerson said its revenue for the year included $3.63 million in licensing royalties. That was down from $5.6 million received in the preceding year, a drop Emerson attributed to the transition of its TV and VCR manufacturing and sales licensing pact from Orion of Japan to Korea's Daewoo.

Emerson said the decline in revenue also reflected lower unit sales of microwave ovens and home theater products, and noted that was offset in part by increased sales of audio products, particularly home and portable CD combinations. It reported that sales to Wal-Mart represented 52% of net revenue for the year, down from the year-earlier 53%, while the sales share accounted for by Target jumped to 24% from 15%. It also said more than 80% of its sales continued to come from imports shipped direct to its customers.

"I am very pleased with the improvement in the company's operating profit and return to profitability this year," said CEO Geoffrey Jurick. Emerson will continue to focus on providing customers with a higher-margin profit mix, Jurick said, and the current year will see more "new products such as DVD and high-end acoustical products through our HH Scott division."

Additionally, he noted that Emerson plans to get involved in E-commerce over the next several months.

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