Business News
Franklin Electronic Publishers Reports Year End Results
Wednesday 03. June 2009 - Franklin Electronic Publishers, Incorporated (NYSE AMEX Equities US: FEP), a world leader in electronic handheld information, today reported results for its fiscal year ended March 31, 2009. The Company reported a net loss of $7,128,000, or $.86 per share, for the fiscal year ended March 31, 2009 compared with net income of $2,535,000, or $.31 per share, last year.
The current year’s loss includes non-cash one-time charges of $4,119,000 as well as other one-time charges of $1,404,000. The non-cash charges related to impairment to the carrying value of goodwill allocated to the Company’s data conversion subsidiary, Kreutzfeldt Electronic Publishing GmbH (KEP) in Germany, impairment of the value of Franklin’s licensed Rolodex(R) Electronics trademark, the partial write-down of future tax benefits related to the Company’s deferred tax asset and inventory valuation adjustment related to the current economic climate. The other one-time charges related to severance accruals as a result of the reduction in the Company’s global workforce and other operating cost reductions and costs related to the liquidation of the Company’s subsidiary KEP. Excluding the impact of the one-time charges, the Company’s net loss for the fiscal year 2009 would have been $1,605,000.
Sales for the fiscal year decreased 19% to $46,025,000 compared to $57,081,000 reported during last year. Sales in all business operations have experienced declines, with the exception of the Company’s Proximity Division which experienced increased sales primarily due to increased technology licensing revenue during the year. Additionally, several sales orders totaling approximately $700,000, scheduled to ship in our fiscal fourth quarter, were shifted to ship in the first quarter of fiscal 2010 at the request of our customers. Overseas sales were negatively impacted by $611,000 due to the strength of the U.S. dollar, primarily in relation to the Euro.
Total revenue for the fiscal year ended March 31, 2009 of $46,775,000 included $750,000 reflected as “other operating revenue” that the Company received as a result of a settlement with a licensing partner. Last year’s revenue included $3,500,000 that the Company received from two distribution partners, Seiko Instruments, Inc (SII) and Seiko U.K. Ltd.
The Company reported a loss for the fourth quarter of fiscal 2009 of $6,467,000, or $.78 per share, primarily from the aforementioned one-time charges, compared with a loss of $1,057,000, or $.13 per share for the same period in the prior year. For the three months ended March 31, 2009, sales were $8,063,000 compared with $11,383,000 in the same period in the prior year.
Barry Lipsky, Franklin’s President and Chief Executive Officer, stated, “This has been an extremely difficult year. A lack of consumer confidence continued to plague the retail sector into our fiscal fourth quarter which contributed to our shortfall in sales. In published reports by the U.S. Commerce Department, retail sales during the first calendar quarter of 2009, our fiscal fourth quarter, declined 8.8% compared to the same period last year. Included in this decline, were the two key categories affecting Franklin, consumer electronics and book. Both were especially hit hard during two months of the quarter; consumer electronics declined by 11.3% in February and book declined 10% in March compared to the prior year. While we continue to maintain focus on the execution of our strategic initiatives, we have been diligent in our efforts to streamline costs and announced a 22% reduction in our global workforce during the fourth quarter of fiscal 2009 which, combined with other operating costs reductions, we expect will generate savings of approximately $3,600,000 in future periods. We continued to generate cash and have finished the year with cash on hand in excess of $12,000,000 and remained debt free.” Mr. Lipsky added, “Our efforts to streamline our business are enabling us to operate more efficiently and preserve cash and liquidity to carry us through this challenging economic cycle.”