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Emerson Q3 CE Sales Up 35.8%

Parsippany, N.J. – A surge in licensing revenue and an increase in unit sales of audio and theme products helped Emerson Radio post $72.8 million in its fiscal third quarter, a 35.8 percent increase, however net income dropped

However, third-quarter net income for the CE segment dropped to $4.6 million from the $6.2 million reported in the same three months in 2001. Sales for the same period last year were $53.6 million Last year the quarter benefited from a $2.9 million one-time gain from the favorable settlement of litigation.

CE operating margin in the third quarter continued to run ahead of the comparable period in 2001, improving to 9.2 percent, an increase of 120 basis points over the 8 percent posted in the third quarter of the previous year. CE operating income was $6.7 million for the three months, ending Dec. 31, up from $4.3 million year over year – primarily due to solid revenue growth and continued cost containment.

Additionally, third-quarter Selling, General and Administrative expenses for the third quarter decreased 200 basis points, to 7.4 percent, from 9.4 percent in the prior-year three months. This was due primarily to reductions in advertising costs and salaries.

Emerson’s licensing revenue also climbed in the past year, up 50 percent, to $7.5 million for the nine months, from $5 million in the first nine months of 2001. Licensing operating income increased to $20.5 million year to date, up from $13.2 million in the first nine months of the previous year.

Consolidated Emerson third-quarter revenue increased 29.3 percent, to $91.3 million in the year-ago third quarter. Net income for the three months was $3.3 million, down from $4.1 million in the same quarter a year earlier. Last year’s results include the $2.9 million gain.

For the nine months, Emerson consolidated revenue jumped 13.2 percent, hitting $293.6 million, up from $259.3 million year over year. Net income for the period rose 7.5 percent, to $11.9 million, up from $11.1 million the previous year.

Emerson forecasts that full-year fiscal 2003 revenue is expected to increase by about 13 percent, to $358 million, compared with fiscal 2002 revenue of $318 million. Objectives for the current year as a whole remain improved margin and revenue growth.