From Navarre's earnings report released this evening:"Discontinued operations includes the results of FUNimation Entertainment. Net income from discontinued operations during the third quarter was $1.8 million, as compared to $928,000 in the prior fiscal year. Strong earnings performance in discontinued operations resulted from solid year-over-year sales growth. Cash flow from discontinued operations contributed strongly to the company's year-over-year debt reduction.
The company has not yet received an adequate offer in connection with its efforts to sell FUNimation Entertainment. Although this sales process continues, if the company does not receive an adequate offer in the fourth quarter, it anticipates that these efforts will be halted."
The full report can be found here.
It's late and I'm tired, but I would add a couple things real quick:
1) Here's my blog entry from the last quarterly report.
2) Navarre's 'third quarter 2011' is actually the forth quarter, 2010 (Oct to Dec 2010). That's the holiday quarter and should be their best performing reporting period of the year.
3) 'Discontinued operations' is just financial lingo to separate out the Funimation business segment. It doesn't mean they are discontinuing Funimation, just that they are trying to sell the division and have to report it's earnings separately. This is required by GAAP if you are a public company.
4) Funi has pulled out every card in the deck over the last two quarters to get their revenue up in anticipation of a possible sale. I'm not sure $1.8 Million in quarterly revenue for the holiday quarter of a company that owns 60% of a national market can really be characterized as 'solid sales growth', but they certainly managed to beat their previous, and truly dismal year over year quarter, in 2009. I'm not knocking them here, 2009 was absolutely terrible for everyone.
5) One of Navarre's stated business objectives is now listed as "expanding our products and services beyond digitally downloadable products". That means they want to sell more stuff that can't be downloaded online. Hey, don't we all!
6) During that period I had made them an offer to swap companies, but apparently Gen's office was already bigger than mine and he doesn't like cold winters, so they didn't go for it. He also said something about "wouldn't give a squirt to be on the retail end right now", or something to that effect, but I probably misunderstood... HEH.
If anyone is interested, Navarre's earnings conference call will be at 11:00 a.m. EST tomorrow (Tuesday, Feb 1). The call can be accessed by dialing (866) 831-6243, and entering pass code "83066830" ten minutes prior to the start time. It will also be webcast live and can be accessed in the "Investors" section of their website here.
Listen in if you can, it might be very revealing. More later, I'm pooped.
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