By Chris Tribbey | Posted: 06 Feb 2009
Add Navarre Corp. to the growing list of packaged media distributors buffeted by ongoing economic turbulence.
The Minneapolis-based distributor Feb. 6 reported a third quarter (ended Dec. 31, 2008) net loss of $47.7 million compared to net income of $4 million during the previous-year period. Revenues for the quarter topped $171 million compared to more than $217 million last year.
Navarre said cooled consumer confidence at retail meant it would exit the children's DVD market and would take a non- cash restructuring charge of about $8.8 million related to older licenses of children's properties.
In December, Navarre announced it would shutter operations of BCI Eclipse, due to rapidly changing conditions in the licensed and budget DVD markets. That move resulted in an $18.4 million write-off charge.
The company, which last month eliminated 50 positions, or 11% of its workforce, continues to streamline working capital expenses to reflect current market conditions.
This resulted in a $1.1 million cash restructuring charge for severance and is anticipated to result in approximately $4.2 million in cost savings in fiscal year 2010.
Key third-party DVD brands still distributed by Navarre include UFC, TNA Entertainment, Fall Thru, Retroactive, Sangin, Code Red, Lichtung Media, Marvelous Media and Xtreme Entertainment.
"We continue to manage our balance sheet through these troubled economic times,” said CEO Cary Deacon, in a statement. “We have coordinated with our lender to address these restructuring charges and have modified our credit agreement to provide adequate working capital and liquidity.”