Emerson Radio Corp. Reports Fiscal 2009 Third Quarter Results

PARSIPPANY, N.J., Feb. 13  /PRNewswire-FirstCall/ -- Emerson Radio Corp. (NYSE Alternext US, LLC: MSN) today reported financial results for its third quarter ended December 31, 2008.

Net revenues for the third quarter of fiscal 2009 were $60.3 million, a decrease of $15.5 million compared to net revenues in the third quarter of fiscal 2008. The decrease in net revenues during the third quarter of fiscal 2009 was primarily due to lower sales of the Company's traditional audio products and iPod(R) accessories, and Mattel(R) licensed themed products.

Operating loss for the third quarter of fiscal 2009 was $2.4 million compared to an operating loss of $1.7 million during the third quarter of fiscal 2008. Operating loss for the third quarter increased compared to the prior year primarily as a result of the lower revenue, coupled with softer margins in the fiscal 2009 third quarter, partially offset by lower SG&A expenses.

Net loss for the third quarter of fiscal 2009 was $2.1 million, or $0.08 per diluted share, compared to a net income of $1.1 million, or $0.04 per diluted share, for the third quarter of fiscal 2008.

"Emerson's fiscal third quarter results were negatively impacted by the continuing economic downturn and the resulting effect it had on our retail partners who tightened inventory levels to cope with slower sales. Management is mindful that the current economic slowdown may persist for several quarters, and we have taken steps to reduce costs and expenses of our operations, as evidenced by a 24% decline in SG&A and other operating costs in the third quarter of fiscal 2009 as compared to the third quarter of fiscal 2008. In addition, our balance sheet remains strong with almost $16 million in cash and no long-term debt," said John Spielberger, President of North American Operations. "Looking ahead, we will continue to look at all strategic options to improve efficiencies throughout the organization and further improve operations to better position the Company to drive sales.  This includes continuing to redesign products and working with our retail partners to gain shelf space for products with the Emerson brand - a respected name which consumers associate with value and reliability."

About Emerson Radio Corp.

Emerson Radio Corporation (NYSE Alternext US, LLC: MSN), founded in 1948, is headquartered in Parsippany, N.J. The Company designs, markets and licenses, worldwide, a variety of consumer electronics and home appliances including microwaves and wine coolers, clock radios, full lines of televisions and other video products, and audio and home theater products. For more information, please visit Emerson Radio's Web site at http://www.emersonradio.com/.

Forward Looking Statements

This release contains "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements reflect management's current knowledge, assumptions, judgment and expectations regarding future performance or events. Although management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to be correct and you should be aware that actual results could differ materially from those contained in the forward-looking statements.  Forward-looking statements are subject to a number of risks and uncertainties, including the risk factors detailed in the Company's reports as filed with the Securities and Exchange Commission.  The Company assumes no obligation to update the information contained in this news release.

                        EMERSON RADIO CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (Unaudited)
                    (In thousands, except earnings per share data)

                                   Three Months           Nine Months
                                       Ended                 Ended
                                    December 31,          December 31,
                                   2008      2007        2008      2007
  Net revenues
  Net revenues                   $60,247   $75,543    $158,434  $185,969
  Net revenues-related party           -       246          15       370
                                  60,247    75,789     158,449   186,339
  Costs and expenses:
  Cost of sales                   55,724    68,191     141,106   164,832
  Cost of sales-related party          -       232           -       232
  Other operating costs
   and expenses                    2,063     1,434       4,787     4,778
  Selling, general and
   administrative expenses
   (exclusive of reimbursement
   claim-related party)            4,851     7,651      14,475    17,748
  Reimbursement claim-related
   party                               -         -         313         -
                                  62,638    77,508     160,681   187,590
  Operating (loss)                (2,391)   (1,719)     (2,232)   (1,251)
  Gain on sale of building             -         -           -       854
  Gains on foreign exchange
   forward contracts                   -       515           -       515
  Interest income (expense), net       5       (76)        186       (72)
  Interest income-related party        -         -           -       163
  Unrealized holding (losses)
   on trading securities            (410)        -        (431)        -
  Realized gains on trading
   securities                         91         -         623         -
  (Loss) income before income
   taxes and minority interest    (2,705)   (1,280)     (1,854)      209
  Provision (benefit) for
   income taxes                     (616)   (2,394)        610     1,937
  Minority interest in loss
   of consolidated subsidiary          -         -        (133)        -
  Net (loss) income              ($2,089)   $1,114     ($2,331)  ($1,728)

  Net (loss) income per share:
      Basic                       ($0.08)    $0.04      ($0.09)   ($0.06)
      Diluted                     ($0.08)    $0.04      ($0.09)   ($0.06)

  Weighted average shares
   outstanding:
      Basic                       27,130    27,130      27,130    27,125
      Diluted                     27,130    27,136      27,130    27,125



                      EMERSON RADIO CORP. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                (In thousands)

                                          December 31,   March 31,
                                              2008        2008(A)
                                          (Unaudited)

  Cash and cash equivalents                  $15,681      $14,444
  Restricted cash                                 96            0
  Foreign exchange forward Contracts               -          134
  Accounts receivable (less allowances
   of $4,325 and $4,148, respectively)        17,031       17,289
  Due from affiliates                             78          765
  Inventory, net                              30,363       24,854
  Deferred tax assets                          4,654        5,412
  Other current assets                         3,982        4,377
       Total current assets                   71,885       67,275

  Property, plant and equipment, net           1,633        1,902
  Investments in marketable securities         7,090       11,948
  Other assets                                 6,948        6,804
       Total assets                          $87,556      $87,929

  Current liabilities                         25,112       22,978
  Long-term borrowings                            81          142
  Other long term debt                            81           57
  Minority interest                                -          133
  Shareholders' equity                        62,282       64,619
       Total liabilities and equity          $87,556      $87,929


(A) Reference is made to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2008 filed with the Securities and Exchange Commission in July 2008.  The Company filed a 10-K/A in July 2008. 

DATASOURCE: Emerson Radio Corp.



CONTACT:  Greenfield Pitts, Chief Financial Officer, [phone], or

Robert Maffei, Investor Relations Manager, [phone], both of Emerson

Radio Corp.; Investor Relations - Denise Roche, [phone], or Media

Relations - Scott Cianciulli, [phone]



Web Site:  http://www.emersonradio.com/ 

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