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Funimation's Parent Announces Third Quarter Results

Navarre Corporation, the parent company of the North American distributor Funimation, has announced its financial results for the third quarter of the 2009 fiscal year on Thursday. The third quarter ended on December 31, 2008. Navarre does not report Funimation's results separately, but it does report the results of its publishing segment, which includes the Funimation and Encore subsidiaries. (The BCI budget content licensing company was another subsidiary within Navarre's publishing segment, but Navarre is shutting BCI down.) Without BCI, the segment had US$23.4 million in net sales for the quarter before inter-company eliminations. This is a 12% dip from sales in the same period the previous year. Together, Funimation and Encore reaped an operating income of US$5.0 million in the quarter before restructuring charges, compared to US$6.1 million in the same quarter the previous year.

As a whole, the company had US$171.6 million in net sales, a decrease of US$46.0 million or 21.1% from the same quarter the previous year. That led to an operating loss of US$32.0 million, compared to an operating income of US$8.6 million in the same quarter the previous year. However, if the restructuring charges are taken out, Navarre ended up with an operating income of US$2.6 million this past quarter. The company cited the economic downturn as the main cause for the revenue decline, and said that its recent restructuring and workforce "reduction" cost US$1.1 million initially in severance, but will save US$4.2 million in the next fiscal year. BCI's closure, Navarre's closure of its children's DVD business, and "the impairment of goodwill and other intangible assets" resulted in US$33.4 million in additional restructuring charges.