Wednesday July 15, 9:38 pm Eastern Time
Note: this is a correction for a previous article.
Company Press Release
Correction -- Navarre Corporation
In CGW067, Navarre Corporation Returns to Profitability, moved earlier today, we are advised by the company that the tabular material issued was incorrect. Complete, corrected release follows.
Navarre Corporation Returns to Profitability
Sales and gross margins for computer software and music show dramatic increase and Navarre's Net Radio subsidiary increases revenue through CDPoint(TM) and SoftwarePoint(TM) sales
MINNEAPOLIS, July 15 /PRNewswire/ -- Navarre Corporation (Nasdaq: NAVR - news), a leading national distributor of music, computer software and interactive CD- ROM products, today reported a profit of $27,000 for 1999's first fiscal quarter ended June 30 compared to a loss of $1,060,000 for the same period last year. Net sales for the first quarter fiscal 1999 were $53,217,000, a 33.7% increase over the $39,798,000 for the same period last year. Eric Paulson, Navarre's chairman and chief executive officer stated, ''We are encouraged by the progress of the Company as we have moved through the difficult transition of the consolidation of our customer base. I am extremely pleased with the performance of both our computer products division and our music division and their ability to generate new sales through improved content and our expanded customer base. This growth is attributable in part to the Company's increased financial capacity resulting from its May 1998 $20 million private offering of preferred stock.''
Gross margins for the quarter were $7,069,000 or 13.3% of net sales compared to $4,275,000 or 10.7% of net sales for the same period last year. Operating expenses as a percent of net sales was 12.0% for the quarter compared to 14.2% for the same period last year. Income from operations for the quarter ended June 30, 1998 increased by over $2,000,000 from a loss of $1,330,000 in the prior year's first quarter to $697,000 for the quarter ended this year. EBITDA for the quarter ended June 30 increased by 249.1% over the same period last year.
Paulson also stated, ''The computer products division sales increased by 36.0% for the quarter ended June 30 as compared to the same period last year. Software has added a number of new customers including barnesandnoble.com and has signed additional publishers for both exclusive and non-exclusive distribution.''
Music sales improved by 29.2% for the quarter. This included the initial shipments of the Company's new hit, ''G Funk Classics Vol. 1 & 2'' by Nate Dogg. Paulson commented, ''This record is the first from our newly distributed label, Celestial Breakaway. It has already exceeded our sales expectations and we anticipate continued momentum in the coming months.''
Paulson also stated, ''Net Radio, the Company's Internet subsidiary has become the world's largest on-demand webcaster of originally programmed audio content. With the advent of our LCP (listen/click/purchase) technology, we have now begun to convert our 20 million page viewers and 3 million audio visits per month to impulse purchasers through our new electronic commerce store CDPoint(TM) (http://www.cdpoint.net).
Subsequent to the quarter end, we have also launched SoftwarePoint(TM) (http://www.softwarepoint.com) which we believe will become a significant software e-commerce store on the Internet.
Navarre Corporation's four major business segments are: The computer products division which publishes and distributes quality consumer software to retailers nationwide. This division has the leading marketshare in several key categories of consumer software. The independent music distribution is the major distributor of independent music labels in the United States; A.R.M. distributes major label music to non-traditional retail outlets nationally; the wholly-owned subsidiary NetRadio Network (http://www.netradio.net) is the premier Internet radio network featuring 160 channels or originally programmed audio content. NetRadio network sells audio CD's and computer software direct to consumers through its CDPoint(TM) (http://www.cdpoint.com) and SoftwarePoint(TM) (http://www/softwarepoint.com).
For further information, please visit Navarre's Web site at (http://www/navarre.com).
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Navarre Corporation
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