EMERSON RADIO CORP
For the period ended Mar 31, 2025. Filed Jun 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Jun 27, 2025
MSN$0.29-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-03-31; filed 2024-06-27.
0001437749-24-021403
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-03-31; filed 2025-06-27.
0001437749-25-021421
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 53 previous paragraphs and 62 current paragraphs.
31 unchanged; 18 reworded; 13 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Fair Value Measurements. The Company reports financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis in accordance with ASC Topic 820Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement.
Current report
The levels of the fair value hierarchy are as follows:
Current report
Level 1: Quoted price in an active market for identical assets or liabilities.
Current report
Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable.
Current report
Level 3: Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)
Current report
The carrying amounts of the Company’s financial instruments, such as cash, short term investments accounts receivable and accounts payable approximate fair values due to the short-term nature of these instruments.
Current report
Recent Accounting Pronouncements
Current report
Accounting Standards Update 2023-07 Segment Reporting (Topic 280): "Improvements to Reportable Segment Disclosures"(Issued October 2023)
Current report
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): "Improvements to Reportable Segment Disclosures" ("ASU 2023-07") to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this guidance did not have any impact on the Company's segment reporting.
Current report
Accounting Standards Update 2024-03 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): "Disaggregation of Income Statement Expenses"(Issued November 2024)
Current report
In November 2024, the FASB issued ASU No. 2024-03 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.
Current report
Accounting Standards Update 2023-09 Income Taxes (Topic 740)****: "Improvements to Income Tax Disclosures" Income Statement Expenses"(Issued December 2023)
Current report
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
Removed paragraphs (4)
Previous report
Income from governmental assistance program — During fiscal 2024, the Company recorded income of nil related to a governmental assistance program. During fiscal 2023, the Company recorded income of approximately $34,000 received from the Hong Kong government under a program called the Employment Support Scheme ("ESS"). See “Note 15 - Governmental Assistance Program” in the Notes to the Consolidated Financial Statements.
Previous report
Accounting Pronouncements
Previous report
Accounting Standards Update 2016-13“Financial Instruments–** Credit Losses**”** (Issued June 2016)**
Previous report
In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses” to introduce new guidance for the accounting for credit losses on instruments within its scope. ASU 2016-13 requires among other things, the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2022. The adoption did not have a material impact on its financial statements.
Reworded paragraphs (18)
Previous wording
Net product sales — Net product sales are comprised primarily of the sales of houseware and audio products which bear the Emerson® brand name. Net product sales for fiscal 2024 were $8.7 million as compared to $6.1 million for fiscal 2023, an increase of $2.6 million, or 42.8%. The Company’s sales were highly concentrated among three customers - Walmart, Amazon and Fred Meyer - representing in the aggregate approximately 85.8% and 90.2% of the Company’s total gross product sales in fiscal 2024 and fiscal 2023, respectively. The increase in net product sales during fiscal 2024 compared to fiscal 2023 was primarily driven by increased consumer demand for all of the Company’s products. Net product sales may be periodically impacted by adjustments made to the Company’s sales allowance and marketing support accrual to record unanticipated customer deductions from accounts receivable or to reduce the accrual by any amounts which were accrued in the past but not taken by customers through deductions from accounts receivable within a certain time period. In the aggregate, these adjustments had the effect of increasing net product sales and operating income by approximately $20,000 and $45,000 for fiscal 2024 and fiscal 2023, respectively. The major elements which contributed to the overall increase in net product sales were as follows:
Current wording
Net product sales — Net product sales are comprised primarily of the sales of houseware and audio products which bear the Emerson® brand name. Net product sales for fiscal 2025 were $10.4 million as compared to $8.7 million for fiscal 2024, an increase of $1.7 million, or 20.4%. In fiscal 2025, the Company’s sales were highly concentrated among three customers - Amazon, Walmart and Big Lots - representing in the aggregate approximately 81.2% of the Company’s total gross product sales. In fiscal 2024, the Company’s sales were highly concentrated among three customers - Walmart, Amazon and Fred Meyer - representing in the aggregate approximately 85.8% of the Company’s total gross product sales. The increase in net product sales during fiscal 2025 compared to fiscal 2024 was primarily driven by increased sales of microwave ovens. Net product sales may be periodically impacted by adjustments made to the Company’s sales allowance and marketing support accrual to record unanticipated customer deductions from accounts receivable or to reduce the accrual by any amounts which were accrued in the past but not taken by customers through deductions from accounts receivable within a certain time period. In the aggregate, these adjustments had the effect of increasing net product sales and operating income by approximately $38,000 and $20,000 for fiscal 2025 and fiscal 2024, respectively. The major elements which contributed to the overall increase in net product sales were as follows:
Previous wording
Business operations — The Company expects to continue to expand its existing distribution channels and to develop and promote new products with retailers in the U.S and Mexico. The Company is also continuing to invest in products and marketing activities to expand its sales through internet and ecommerce channels. These efforts require investments in appropriate human resources, media marketing and development of products in various categories in addition to the traditional home appliances and audio products on which the Company has historically focused. The Company also is continuing its efforts to identify strategic courses of action related to its licensing activities, including seeking new licensing relationships. The Company has engaged each of LMCA and GLSL as an agent to assist in identifying and procuring potential licensees.
Current wording
Business operations — The Company expects to continue to expand its existing distribution channels and to develop and promote new products with retailers in the U.S, Canada and Mexico. The Company is also continuing to invest in products and marketing activities to expand its sales through internet and ecommerce channels. These efforts require investments in appropriate human resources, media marketing and development of products in various categories in addition to the traditional home appliances and audio products on which the Company has historically focused. The Company also is continuing its efforts to identify strategic courses of action related to its licensing activities, including seeking new licensing relationships. The Company has engaged each of LMCA and GLSL as an agent to assist in identifying and procuring potential licensees.
Previous wording
Legal Proceedings — On October 10, 2023, the US District Court for the District of Delaware granted final judgment in favor of the Company in its trademark infringement lawsuit against air conditioning and heating products provider Emerson Quiet Kool and wholesaler Home Easy (the “defendants”). Among other things, the court order issues an injunction and directs the US Patent and Trademark Office to cancel the defendants’existing and proposed "Emerson Quiet Kool" trademarks and prohibits defendants from registering or applying to register, or using the same mark or any other mark or name containing the word "Emerson" going forward. The total judgment awarded to the Company has increased from approximately $6.5 million to approximately $10.4 million, inclusive of disgorgement of wrongful profits, attorney's fees and enhanced damages. The aggregate award to the Company also includes the $4.1 million of advanced deposits previously paid to the Company. The $4.1 million of advanced deposits was reduced by approximately $1 million of incurred legal fees. The remaining balance of $3.1 million was released by the Company to other income during the quarter ended September 30, 2023. Like any judgement, there is no guarantee that the Company will be able to collect the entire judgement or if it is able to collect, how soon it will be able to do so. The defendants have filed separate bankruptcy petitions in the US Bankruptcy Court for the District of New Jersey, and there is no guarantee that those bankruptcy proceedings will not have any effect on the ability of the Company to collect the judgement. The Company is not currently a party to any other legal proceedings other than litigation matters, in most cases involving ordinary and routine claims incidental to its business. Management cannot estimate with certainty the Company’s ultimate legal and financial liability with respect to such pending litigation matters. However, management believes, based on its examination of such matters, that the Company’s ultimate liability will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Current wording
Legal Proceedings — On October 10, 2023, the US District Court for the District of Delaware granted final judgment in favor of the Company in its trademark infringement lawsuit against air conditioning and heating products provider Emerson Quiet Kool and wholesaler Home Easy (the “defendants”). Among other things, the court order issues an injunction and directs the US Patent and Trademark Office to cancel the defendants’ existing and proposed "Emerson Quiet Kool" trademarks and prohibits defendants from registering or applying to register, or using the same mark or any other mark or name containing the word "Emerson" going forward. The total judgment awarded to the Company has increased from approximately $6.5 million to approximately $10.4 million, inclusive of disgorgement of wrongful profits, attorney's fees and enhanced damages. The aggregate award to the Company also includes the $4.1 million of advanced deposits previously paid to the Company. The $4.1 million of advanced deposits was reduced by approximately $1 million of incurred legal fees. The remaining balance of $3.1 million was released by the Company to other income during the quarter ended September 30, 2023. Like any judgement, there is no guarantee that the Company will be able to collect the entire judgement or if it is able to collect, how soon it will be able to do so. The defendants have filed separate bankruptcy petitions in the US Bankruptcy Court for the District of New Jersey, and there is no guarantee that those bankruptcy proceedings will not have any effect on the ability of the Company to collect the judgement. In addition, in connection with those bankruptcy proceedings, the Chapter 7 trustee of Home Easy has filed a complaint seeking the return of the $4.1 million of advanced deposits previously paid to the Company and the outcome of such litigation remains uncertain. The Company is not currently a party to any other legal proceedings other than litigation matters, in most cases involving ordinary and routine claims incidental to its business. Management cannot estimate with certainty the Company’s ultimate legal and financial liability with respect to such pending litigation matters. However, management believes, based on its examination of such matters, that the Company’s ultimate liability will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Previous wording
Licensing revenue — Licensing revenue in fiscal 2024 was approximately $218,000 as compared to approximately $372,000 for fiscal 2023, a decrease of $154,000, or 41.5%. The decrease was primarily due to the expiration of a license agreement on December 31, 2022. This was partially offset by the license revenue generated from a new license agreement signed in fiscal 2024.
Current wording
Licensing revenue — Licensing revenue in fiscal 2025 was approximately $336,000 as compared to approximately $218,000 in fiscal 2024, an increase of $118,000, or 54.1%. The increase was primarily due to one of the Company's licensees exceeding their guaranteed minimum royalties. Also contributing was the license revenue generated from a license agreement signed in fiscal 2024.
Previous wording
Royalty income—The Company recorded royalty income in fiscal 2024 of $175,000 as compared to $730,000 in fiscal 2023. The royalty income was derived from inventory sell-off agreements made with customers of Emerson Quiet Kool.
Current wording
Royalty income—The Company recorded royalty income in fiscal 2025 of nil as compared to $175,000 in fiscal 2024. The Company's royalty income in fiscal 2024 was derived from inventory sell-off agreements made with customers of Emerson Quiet Kool.
Previous wording
Net revenues —The Company’s net revenues were approximately $9.1 million for fiscal 2024 as compared to $7.2 million for fiscal 2023, an increase of $1.9 million, or 26.4%, which was driven primarily by the increase in audio and houseware product net sales, offset by the decreases in royalty income and licensing revenue.
Current wording
Net revenues —The Company’s net revenues were approximately $10.8 million for fiscal 2025 as compared to $9.1 million for fiscal 2024, an increase of $1.7 million, or 18.9%, which was driven primarily by an increase in houseware product sales and an increase in licensing revenue partially offset by decreases in audio product sales and royalty income.
Previous wording
Cost of sales — Cost of sales includes the components described in Note "1 - Significant Accounting Policies-“Cost of Sales” in the Notes to the Consolidated Financial Statements. In absolute terms, cost of sales increased approximately $2.4 million, or 47.9%, to $7.5 million in fiscal 2024 as compared to $5.1 million in fiscal 2023. The increase in absolute terms for fiscal 2024 as compared to fiscal 2023 was primarily related to the increase in net product sales and by higher year-over-year gross cost of sales as a percentage of gross sales. The increase in gross cost of sales as a percentage of gross sales for fiscal 2024 as compared to fiscal 2023 was primarily related to the change in the product mix of audio products compared to houseware products.
Current wording
Cost of sales — Cost of sales includes the components described in Note "1 - Significant Accounting Policies-“Cost of Sales” in the Notes to the Consolidated Financial Statements. In absolute terms, cost of sales increased approximately $2.4 million, or 31.7%, to $9.9 million in fiscal 2025 as compared to $7.5 million in fiscal 2024. The increase in absolute terms for fiscal 2025 as compared to fiscal 2024 was primarily related to the increase in net product sales partially offset by lower year-over-year gross cost of sales as a percentage of gross sales. The increase in gross cost of sales as a percentage of gross sales for fiscal 2025 as compared to fiscal 2024 was primarily related to the change in the product mix of audio products compared to houseware products.
Previous wording
Selling, general and administrative expenses (“SG&A”) — SG&A, as a percentage of net revenues, was 54.7% in fiscal 2024 as compared to 58.5% in fiscal 2023. In fiscal 2024 SG&A, in absolute terms, was approximately $5.0 million and in fiscal 2023 SG&A, in absolute terms, was approximately $4.2 million, an increase of $0.8 million, or 18.3%. In fiscal 2024 and fiscal 2023, the Company identified approximately $216,000 and $784,000, respectively, in legal fees incurred in the pursuit of $4.1 million in advanced deposits from Emerson Quiet Kool. The Company applied those legal fees against the advanced deposit of $4.1 million which was reduced to $3.1 million. In September 2023, the remaining balance of $3.1 million was taken to income after a judgement affirmation by the U.S. Court of Appeals for the Third Circuit. See "Settlement of litigation" below and "Note 11 - Legal Proceedings" in the Notes to the Consolidated Financial Statements. Legal fees during fiscal 2024 were approximately $729,000 as compared to approximately $479,000 during fiscal 2023. The Company incurred an increase in compensation costs of approximately $254,000, an increase in auditing fees of approximately $92,000, an increase in advertising expense of approximately $84,000, an increase in bad debt expense of approximately $60,000 and an increase in sales commissions of approximately $40,000.
Current wording
Selling, general and administrative expenses (“SG&A”) — SG&A, as a percentage of net revenues, was 60.4% in fiscal 2025 as compared to 54.7% in fiscal 2024. In fiscal 2025 SG&A, in absolute terms, was approximately $6.5 million and in fiscal 2024 SG&A, in absolute terms, was approximately $5.0 million, an increase of $1.5 million, or 31.3%. In fiscal 2025 and fiscal 2024, the Company identified approximately nil and $216,000, respectively, in legal fees incurred in the pursuit of $4.1 million in advanced deposits from Emerson Quiet Kool. The Company applied those legal fees against the advanced deposit of $4.1 million which was reduced to $3.1 million. In September 2023, the remaining balance of $3.1 million was taken to income after a judgement affirmation by the U.S. Court of Appeals for the Third Circuit. See "Settlement of litigation" below and "Note 11 - Legal Proceedings" in the Notes to the Consolidated Financial Statements. Legal fees during fiscal 2025 were approximately $312,000 as compared to approximately $729,000 during fiscal 2024. The Company incurred an increase in bad debt expense of approximately $1,033,000, an increase in compensation costs of approximately $683,000, an increase of commission expense of approximately $79,000, an increase in advertising costs of approximately $43,000, an increase in auditing fees of approximately $39,000 and an increase in travel and entertainment expense of approximately $39,000.
Previous wording
Interest income, net — Interest income, net, was approximately $1,155,000 in fiscal 2024 as compared to approximately $702,000 in fiscal 2023, resulting from an increase in interest rates earned on the Company’s term deposits during fiscal 2024.
Current wording
Interest income, net — Interest income, net, was approximately $887,000 in fiscal 2025 as compared to approximately $1,155,000 in fiscal 2024, resulting from reduced amounts deposited and a decrease in interest rates earned on the Company’s term deposits during fiscal 2025.
Previous wording
Provision for income tax expense** **— The Company recorded approximately $90,000 of income tax expense during fiscal 2024 and recorded its non-income based state taxes of approximately $9,000 to S,G&A according to ASU 2019-12. In fiscal 2023, the Company recorded no income tax expense and recorded its non-income based state taxes of approximately $7,000 to S,G&A according to ASU 2019-12. See Note 5 “Income Taxes” in the Notes to the Consolidated Financial Statements.
Current wording
Provision for income tax expense** **— The Company recorded approximately $3,000 of income tax expense during fiscal 2025 and recorded its non-income based state taxes of approximately $8,000 to S,G&A according to ASU 2019-12. In fiscal 2024, the Company recorded $90,000 income tax expense and recorded its non-income based state taxes of approximately $9,000 to S,G&A according to ASU 2019-12. See Note 5 “Income Taxes” in the Notes to the Consolidated Financial Statements.
Previous wording
Net income (loss) — As a result of the foregoing factors, the Company recorded net income of approximately $766,000 for fiscal 2024 as compared to a net loss of $1.36 million for fiscal 2023.
Current wording
Net income (loss) — As a result of the foregoing factors, the Company recorded a net loss of approximately $4,731,000 for fiscal 2025 as compared to net income of approximately $766,000 for fiscal 2024.
Previous wording
As of March 31, 2024, the Company had cash and cash equivalents of approximately $19.9 million as compared to approximately $25.3 million at March 31, 2023. Working capital increased to $26.6 million at March 31, 2024 as compared to $26.4 million at March 31, 2023. The decrease in cash and cash equivalents of approximately $5.3 million is set out in “Cash Flows” below.
Current wording
As of March 31, 2025, the Company had cash and cash equivalents of approximately $1.2 million as compared to approximately $19.9 million at March 31, 2024. Working capital decreased to $21.1 million at March 31, 2025 as compared to $26.6 million at March 31, 2024. The decrease in cash and cash equivalents of approximately $18.7 million is detailed further in “Cash Flows” below.
Previous wording
Net cash used by operating activ ities was approximately $5.3 million for fiscal 2024, compared to approximately $0.3 million for fiscal 2023, resulting from a $3.3 million decrease in advanced deposits, a $3.1 million increase in inventory and a $0.4 million decrease in income taxes payable partially offset by$0.8 million of income generated during the period, a $0.5 million increase in accounts payable and other current liabilities and a $0.2 million decrease in licensing receivable.
Current wording
Net cash used by operating activities was approximately $3.6 million for fiscal 2025, compared to approximately $5.3 million for fiscal 2024, resulting from the $4.7 million loss generated during the period, an increase of $1.2 million in accounts receivable, a decrease of $0.5 million in income taxes payable, a decrease of $0.3 million in accounts payable and other current liabilities and a decrease of $0.3 million in right-of-use assets, partially offset by a decrease of $2.1 million in inventory, an increase of $1.1 million in asset valuation allowances and a decrease of $0.1 million in long term operating lease liabilities.
Previous wording
Net cash used by investing activities was approximately $119,000 for fiscal 2024, compared to nil for fiscal 2023, primarily due to additions to property and equipment.
Current wording
Net cash used by investing activities was approximately $15.1 million for fiscal 2025, compared to $119,000 for fiscal 2024, due to purchases of investments of $16.3 million and additions to property and equipment of $195,000, partially offset from proceeds of investments of $1.4 million.
Previous wording
Net cash used by financing activities was approximately $1,000 for fiscal 2024 and approximately $2,000 for fiscal 2023 due to reductions in the Company's finance lease liabilities.
Current wording
Net cash used by financing activities was approximately $6,000 for fiscal 2025 compared to net cash provided of approximately $1,000 for fiscal 2024 due to additions to the Company's finance lease liabilities.
Previous wording
Letters of Credit* *— The Company utilizes the services of one of its banks to issue secured letters of credit on behalf of the Company, as needed, on a 100% cash collateralized basis. At March 31, 2024 and March 31, 2023, the Company had no letters of credit outstanding.
Current wording
Letters of Credit* *— The Company may occasionally utilize the services of one of its banks to issue secured letters of credit on behalf of the Company, as needed, on a 100% cash collateralized basis. At March 31, 2025 and March 31, 2024, the Company had no letters of credit outstanding.
Previous wording
Historically, a significant percentage of the Company’s product sales were made under the Direct Import Program. The direct importation of product by the Company to its customers can significantly benefit the Company’s liquidity because this inventory does not need to be financed by the Company. In fiscal 2024, approximately 12% of the Company’s product sales were imported directly to the Company’s customers. In fiscal 2023, approximately 16% of the Company’s product sales were imported directly to the Company’s customers.
Current wording
Historically, a significant percentage of the Company’s product sales were made under the Direct Import Program. The direct importation of product by the Company to its customers can significantly benefit the Company’s liquidity because this inventory does not need to be financed by the Company. In fiscal 2025, approximately 11% of the Company’s product sales were imported directly to the Company’s customers. In fiscal 2024, approximately 12% of the Company’s product sales were imported directly to the Company’s customers.
Previous wording
The following ASU was issued by the FASB which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates.
Current wording
The following ASUs were issued by the FASB which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates.