Navarre: Funimation's Sales Rise, Still Plans Split

posted on 2010-11-03 10:39 EDT
Parent company says decision to sell Funimation due 'in the coming months'

Funimation Entertainment parent company Navarre Corporation has released its second quarter results report for the company's fiscal year of 2011, which includes a 6% net sales increase from its continuing operations. However, Funimation Entertainment is not considered a "continuing operation," as the corporation intends to sell Funimation "in the coming months."

As in the past two quarters, Funimation is now listed as a "discontinued operation" — a financial term for a segment of a company that has been separated from the rest of the company, or has been approved for separation. Despite the connotations of the term, Funimation continues to operate as normal. Funimation's results are currently "classified as discontinued operations pursuant to GAAP" (generally accepted accounting practices).

The report does state, however, that Funimation "had a small net sales increase in the second quarter compared to the prior year's second quarter." Before its reclassification as a discontinued operation, Funimation's results were reported as a part of the corporation's publishing segment; in the second quarter of 2010, the segment reported a 26% decrease in sales, but the parent company reported an overall increase in net income.

In the report for the previous quarter (the first quarter of Navarre's fiscal year 2011), the company announced that it would make its final decision on Funimation by the third quarter of 2011. A report for that quarter will be due in February of 2011. Navarre CEO Cary L. Deacon commented in the latest report that the company's "previously announced efforts in connection with the potential sale of FUNimation Entertainment are continuing and [they] anticipate making a strategic decision regarding that business in the coming months."

Update: The ICv2 website reports that during Navarre's conference call, CEO Cary Deacon reminded the listeners that the company is still evaluating whether selling Funimation "makes sense at this time based on price levels and the indications of interest that we have." Deacon also stated that "FUNimation continues to be run as if we're going to own it" due to the possibility that the company will choose not to sell.

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