D&M Holdings Inc. has filed with the Tokyo Stock Exchange results for the Q1 2005 (1 April through 30 June) and the reported consolidated revenue of JPY18.7 billion (US$169 million) is 2.5 percent lower when compared with the same period of the previous year.

The company reported an operating loss of JPY1.04 billion (US$9 million) for the first quarter. D&M Holdins says the majority of the operating loss can be attributed to the Rio business. The operating loss for Rio was JPY0.96 billion (US$8 million).

D&M Holdings Inc. is based in Tokyo and owns the Denon, Marantz, McIntosh Laboratory, D&M Professional, ReplayTV, Rio and Escient brands.

Based on these results, D&M Holdings has decided to exit the mass-market portable digital audio player business by 30 September 2005. The company's decision to shut down the Rio business followed a determination that the mass-market portable digital audio player market was not a strong enough strategic fit with the company's core and profitable premium consumer electronics brands to warrant additional investment in the category.

The original goal of strategic advantage with wholly owned and branded portable client devices was reconsidered in the context of the costs required to effectively scale and compete in this sector, where competition has grown intense.
Exiting this mass-market segment will enable D&M management to focus all of its resources on the core Premium AV business and advanced content server products.