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Navarre Q4 Gains Can’t Offset Fiscal-Year Loss

1 Jun, 2009 By: Chris Tribbey

Navarre Corp. reported higher fiscal fourth-quarter earnings June 1, compared to fiscal fourth-quarter 2008, with a net profit of $3.2 million, up from $1 million.

However, declining DVD sales contributed to a fiscal-year 2009 (ended March 31) net loss of more than $88 million, compared to profit of $7.1 million in fiscal-year 2008. Sales of Funimation, BCI and Encore DVDs were down 25 % during the quarter, to $22 million, with BCI DVDs contributing only $400,000. Navarre announced in February that it was shutting down BCI Eclipse operations. DVD sales for the fiscal year were $102.8 million, down 12.4%.

“Sales continued to be soft during the fourth quarter as the retail environment remained difficult, due in part to the bankruptcy of Circuit City,” said CFO Reid Porter. “However, our sales shortfall compared to the prior year began to improve late in the quarter, and this trend has continued into the April period.”

CEO Cary Deacon called the quarter’s results “positive” and said he was “optimistic and excited about … opportunities for this upcoming fiscal year." For fiscal-year 2010, he said the company expects net sales between $550 million and $600 million, down from the net sales of $631 million for 2009.

“While the economy is still very unstable, we feel it would be in the best interest of our stakeholders to provide guidance around management’s view of FY 2010,” he said.

Navarre will hold a conference call to discuss its earning at 8 a.m. PST June 2.

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