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Navarre Corp. Reports Operating Results (10-K)

June 11, 2010 | About:
10qk

10qk

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Navarre Corp. (NAVR) filed Annual Report for the period ended 2010-03-31.

Navarre Corp. has a market cap of $76.1 million; its shares were traded at around $2.09 with a P/E ratio of 7 and P/S ratio of 0.1. NAVR is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

The aggregate market value of the registrants Common Stock, no par value per share, held by non-affiliates of the registrant as of September 30, 2009 was approximately $73,292,600 (based on the closing price of such stock as quoted on The NASDAQ Global Market of $2.20 on such date).

On May 31, 2007, the Company sold its wholly-owned subsidiary, Navarre Entertainment Media, Inc. (NEM) to an unrelated third party. NEM operated the Companys independent music distribution activities. The Company has presented the independent music distribution business as discontinued operations. As part of this transaction, the Company recorded a gain during fiscal 2008 of $6.1 million ($4.6 million net of tax), which included severance and legal costs of $339,000 and other direct costs to sell of $842,000. The gain is included in Gain on sale of discontinued operations in the Consolidated Statements of Operations. For the fiscal year ended March 31, 2008, net sales for NEM were $5.2 million. This transaction divested the Company of all of its independent music distribution activities.

According to The NPD Group, the leading North American provider of consumer and retail market research information for manufacturers and retailers, the computer software industry achieved $2.9 billion in sales on a trailing 12 month basis ended December 31, 2009 compared to $3.3 billion in 2008. During fiscal 2010, we distributed approximately $430.0 million of software product. We, like the industry, experienced a sales decrease during this time period.

We presently have relationships with computer software publishers such as Symantec Corporation, Kaspersky Lab, Inc., Roxio (a division of Sonic Solutions) and Webroot Software, Inc. These relationships are important to our distribution business and during the fiscal year ended March 31, 2010, each of these publishers accounted for more than $20.0 million in revenues. In the case of Symantec, net sales accounted for approximately $102.9 million, $104.0 million and $95.0 million in the fiscal years ended March 31, 2010, 2009 and 2008, respectively.

According to The NPD Group, sales in the video game and accessories industry were $19.3 billion in 2009 compared to $21.0 billion in 2008. During fiscal 2010, we distributed approximately $27.3 million of video game product. According to industry sources, the installed base of video game consoles in North America is expected to grow to approximately 302.2 million users by 2014 compared to 170.5 million users in December 2009.

According to industry sources, U.S. home video industry sales totaled $20.0 billion in 2009 compared to $21.0 billion in 2008. During fiscal 2010, we distributed approximately $71.1 million of home video product. We, like the industry, experienced a sales decrease during this time period.

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