Navarre Q1 income drops 66.7%

Revenue lifts 3.6% on record number of sales

By Susanne Ault -- Video Business, 7/31/2006

JULY 31 | Amid weakness at retail, indie supplier Navarre Corp. posted mixed results for its fiscal 2007 first quarter.

The company earned $634,000 in net income for the three months ended June 30. That marks a 66.7% drop from the amount Navarre brought in during the comparable fiscal 2006 period.

At the same time, Navarre jumped 3.6% to $146.3 million in revenue, which represents a record amount of first-quarter sales for the distributor.

Navarre-operated anime label Funimation proved a bright spot. Titles performing better than expected included Full Metal Alchemist, Dragon Ball Z, Samurai 7 and Desert Punk. Helping spur consumer excitement, Funimation Channel TV programming launched earlier this year and delivers anime content to about 28 million households in the U.S.

BCI, another Navarre label property, recorded slightly lower sales than the prior year, but that was mostly due to certain first-quarter releases shifting into the second quarter, the company said.

He-Man and the Masters of the Universe and Pride Fighting Championship continue to be strong BCI franchises.

Overall, Navarre’s publishing unit, including Funimation, BCI and software maker Encore, reached $26 million in sales, virtually flat from last year’s period.

“We are pleased that we were able to post record net sales for the first quarter in spite of a soft retail environment in the categories that we serve,” Navarre chair and CEO Eric Paulson said. “Funimation’s net sales continue to improve, and we are optimistic with the upcoming release schedule. We are also pleased with the contribution of BCI as we realized benefits from the move to more front-of-line product.”