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Navarre Corp. Reports Operating Results (10-Q)

November 13, 2009 | About:
10qk

10qk

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Navarre Corp. (NAVR) filed Quarterly Report for the period ended 2009-09-30.

Navarre Corporation is a major distributor of music, software, interactive CD-ROM products and DVD videos. They sell to major music and software retailers, wholesalers and rackjobbers. In addition, through their majority-owned subsidiary, NetRadio Corporation, they own and operate NetRadio Network, a leading audio content broadcaster on the Internet. Navarre Corp. has a market cap of $89.2 million; its shares were traded at around $2.46 with a P/E ratio of 24.6 and P/S ratio of 0.1. Navarre Corp. had an annual average earning growth of 15.2% over the past 5 years.

Highlight of Business Operations:

Consolidated net sales for the second quarter of fiscal 2010 were $122.4 million compared to $170.3 million for the second quarter of fiscal 2009, a decrease of 28.1%. The decrease in net sales was related to the wind down of BCI in fiscal 2009 which generated $4.1 million in net sales during the second quarter of fiscal 2009, a $13.8 million loss of sales to a large retailer that filed for bankruptcy and liquidated during fiscal 2009, a shift to fee-based value-added services, a weaker new release schedule and the overall deteriorating economic conditions.

Net income for the second quarter of fiscal 2010 was $2.3 million or $0.06 per diluted share compared to a net loss of $44.5 million or $1.23 per diluted share for the same period last year.

Consolidated net sales for the six months ended September 30, 2009 were $256.7 million compared to $312.3 million for the first six months of fiscal 2009, a decrease of 17.8%. The decrease in net sales was due to the wind down of BCI in fiscal 2009 which generated $8.4 million in net sales during the six months ended September 30, 2008, a $24.1 million loss of sales to a large retailer

Net income for the six months ended September 30, 2009 was $6.4 million or $0.18 per diluted share compared to a loss of $43.9 million or $1.21 per diluted share for the same period last year.

At September 30, 2009 and March 31, 2009, we had $19.9 million and $24.1 million, respectively, outstanding on the revolving credit facility and, based on the facilitys borrowing base and other requirements, $12.6 million and $16.2 million, respectively, was available.

Net sales for the distribution segment were $111.3 million (before inter-company eliminations) for the second quarter of fiscal 2010 compared to $158.5 million (before inter-company eliminations) for the second quarter of fiscal 2009, a decreased 29.7%. Net sales decreased in the software product group to $96.8 million during the second quarter of fiscal 2010 from $120.0 million for the same period last year due to loss of revenue from a large retailer that filed for bankruptcy and liquidated during fiscal 2009, a shift to fee-based value-added services and timing of annual software product revisions versus the prior year. DVD video net sales decreased to $8.4 million in the second quarter of fiscal 2010 from $14.9 million in second quarter of fiscal 2009, primarily due to shelf space reductions at retailer locations and the overall deteriorating economic conditions. Video games net sales decreased to $6.2 million in the second quarter of fiscal 2010 from $23.6 million for the same period last year, due to a lack of new releases versus the prior fiscal year. The Company believes future net sales results will be dependent upon the ability to continue to add new, appealing content and upon the strength of the retail environment and overall economic conditions.

Read the The complete Report

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