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Technology Stocks : MUSIC STOCKS: HIGH-TECH AND INTERNET- Winners and losers. -- Ignore unavailable to you. Want to Upgrade?

To: Rande Is who wrote (5)	4/23/1998 7:20:00 AM
From: Rande Is	Respond to of 179

[NAVR] Online Investor, April 22, 1998 "Stock of the Day" Discussing the recent run-up of internet stocks the article states: Navarre followed a similar path then, and it's going for another ride now. The company came public in 1993 at a split-adjusted $3 and traded at $5 prior to its 1996 acquisition of NetRadio. That Spring, Navarre shot up as high as $18. Insider selling by top executives took the wind out of its sails, as did a general unraveling of the micro-cap speculative frenzy that summer. The business also ran into trouble that year, as a slowdown in music sales and losses from the NetRadio operation sent the company into a year-long skid of unprofitability. The company returned to profitability in its fiscal third quarter ended Dec. 1997, thanks to continued growth in its computer software business and a rebound in its music business. The company distributes prerecorded music, software and CD-ROMs to a retailers such as Tower Records and the Good Guys. The company works with a number of independent music labels, so the NetRadio webcasting venture offers a way to give artists on these independent labels greater exposure, and naturally the potential for online sales. So far, NetRadio has been an expensive tool for promotion, resulting in a $1.5 million drag on pre-tax net income for the first nine months of FY97. Even so, the company managed to break back into profitability in Q3 '97, earning 8 cents per share. Sales last year topped $200 million, so it's not as if the company is all hype and no action. But Navarre's core business is music and software distribution, and the Internet part merely plays an unproven, unprofitable supporting role. Good historical prospective. I like that they have become profitable despite the internet developmental costs.