Breaking News

Tweet TWEET

VOXX International Corporation Reports Fiscal 2013 Third Quarter Results

   VOXX International Corporation Reports Fiscal 2013 Third Quarter Results

PR Newswire

HAUPPAUGE, N.Y., Jan. 9, 2013

HAUPPAUGE, N.Y., Jan. 9, 2013 /PRNewswire/ -- VOXX International Corporation
(NASDAQ: VOXX), today announced financial results for its fiscal 2013 third
quarter ended November 30, 2012.

Fiscal Third Quarter Highlights:

  oSales increased 17.5%, driven by the Hirschmann acquisition and increases
    in mobile OEM and in accessories.
  oGross margins of 28.8% ahead of internal projections due to product mix
    and increases in select categories; operating expenses, excluding
    Hirschmann decreased by $2.1 million or 5.1%.
  oCompany reports net income of $13.2 million or $0.56 per diluted share, up
    $4.3 million.
  oEBITDA of $25.8 million, increased $6.6 million; Adjusted EBITDA of $25.7
    million, increased $3.5 million.
  oFiscal 2013 nine-month Adjusted EBITDA of $49.1 million, up $7.0 million;
    Company reaffirms FY13 Adjusted EBITDA guidance of $61 million on strength
    of 3Q performance.

Commenting on the Company's performance, Pat Lavelle, President and CEO
stated, "From a bottom-line perspective, we had one of the best quarters in
our history and our business performed well, especially considering continued
weakness in the international markets. Our domestic operations met plan with
sales reaching targets and gross margins slightly ahead of internal
projections. We've also placed greater emphasis on managing our core overhead
and saw expenses, less Hirschmann, decline by over 5%. What we can control,
we're controlling and we're on track to deliver the Adjusted EBITDA guidance
we gave last quarter."

Lavelle continued, "Domestically, we had strong placement at retail driven by
new products and through new channels. We also saw increases in our mobile
OEM business on the heels of programs with Ford and Nissan which began last
quarter. While overall retail sales during the Holiday season were lighter
than anticipated, we're hoping the recently passed legislation will provide
some clarity for consumers and give them confidence moving into 2013. With
modest improvements in Germany and China, coupled with continued strength in
our core domestic markets, we should be well positioned to improve on our
performance next year, especially with new products coming to market in the
2^nd half of the calendar year. The reception we've received so far at the
Consumer Electronics Show this week has been nothing short of spectacular."

Fiscal Third Quarter Performance
Net sales for the fiscal 2013 third quarter were $243.0 million, an increase
of 17.5% compared to net sales of $206.8 million in the comparable year ago
period.

Electronics sales were $201.5 million and $165.9 million for the comparable
fiscal third quarters, an increase of 21.4%. Driving this increase was
primarily the addition of Hirschmann sales, which accounted for $39.5 million
during the fiscal 2013 third quarter. Excluding the impact of Hirschmann,
Electronics sales declined approximately $3.9 million or 2.4% with the
declines primarily in consumer products, mobile audio and in the international
markets. Offsetting this decline were increases in mobile OEM sales,
particularly at Invision on the strength of new OEM programs with Ford and
Nissan for rear-seat entertainment, higher sales of headphones and sound bars,
and new product offerings. For the three months ended November 30, 2012,
Electronics sales represented 82.9% of net sales as compared to 80.2% in the
comparable prior year period.

Accessories sales for the fiscal 2013 third quarter were $41.6 million, an
increase of 1.7% as compared to sales of $40.9 million in the comparable prior
year period. The Accessories group was favorably impacted by higher domestic
sales of new wireless speakers, digital antennas and both portable power lines
and power supply systems. This growth was partially offset by declines
internationally. Accessories represented 17.1% of net sales for the three
months ended November 30, 2012 as compared to 19.8% in the comparable prior
year period.

The gross margin for the three months ended November 30, 2012 was 28.8%, a
decrease of 10 basis points as compared to 28.9% for the fiscal 2012 third
quarter, though margins did come in ahead of internal projections. This
slight year-over-year decline was principally due to unfavorable swings
between hedged costs and related sales, as well as lower sales of higher
margin car speakers at Audiovox Germany. This was offset by higher margins in
select consumer, accessories and mobile product categories, the addition of
Hirschmann sales, and as a result of exiting some lower margin products. The
Company reiterated its prior gross margin guidance of 28.0% for the fiscal
year.

Operating expenses for the fiscal 2013 third quarter were $50.2 million, an
increase of $8.8 million over $41.4 million reported in the fiscal 2012 third
quarter. As a percentage of net sales, operating expenses increased to 20.6%
as compared to 20.0% for the periods ended November 30, 2012 and November 30,
2011, respectively. The increase in operating expenses was primarily driven
by the addition of Hirschmann, which accounted for $10.9 million, as well as
increases advertising expenses. Offsetting this were reductions in
depreciation expense, sales commissions and professional fees, not considering
Hirschmann, headcount reductions in select groups, and lower occupancy costs
due to the purchase of the Klipsch headquarters. Excluding the addition of
Hirschmann expenses, operating expenses declined $2.1 million for the
comparable quarters or 5.1%.

The Company reported operating income of $19.8 million for the fiscal 2013
third quarter compared to operating income of $18.4 million in the comparable
year ago period, an increase of $1.4 million or 7.3%. Net income for the
quarter ended November 30, 2012 was $13.2 million or net income per diluted
share of $0.56 as compared to net income of $8.9 million and net income per
diluted share of $0.38 for the period ended November 30, 2011.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for
the fiscal 2013 third quarter, was $25.8 million as compared to EBITDA of
$19.2 million for the comparable period in fiscal 2012, an improvement of $6.6
million. Taking into account stock-based compensation, Klipsch settlement
recoveries and Asia restructuring charges, the Company reported Adjusted
EBITDA of $25.7 million as compared to $22.2 million in the comparable
year-ago period. Fiscal 2012 third quarter also includes a $2.6 million net
settlement charge related to the patent infringement suit. The Company
reported Diluted Adjusted EBITDA per common share of $1.09 as compared to
$0.96 for the same periods as noted above.

Nine Month Comparisons
Net sales for the fiscal 2013 nine month period ended November 30, 2012 were
$628.8 million, an increase of 18.5% compared to net sales of $530.5 million
in the comparable year ago period. Electronics sales were $510.6 million and
$425.0 million for the comparable nine month periods, an increase of 20.1%.
Driving this increase was primarily the addition of Hirschmann sales, which
accounted for $115.7 million, higher sales to mobile OEMs and increases in
sales of headphones and sound bars, as well as new product offerings.
Offsetting this growth were declines in consumer products, as part of the
Company's strategy to exit certain lower margin categories, lower sales of
mobile audio and security products in the aftermarket and declines of car
speaker sales in Europe. Through the first nine months of fiscal 2013,
Electronics sales represented 81.2% vs. 80.1% for the comparable nine-month
period last year.

Accessory sales increased by $12.7 million or by 12.0%, driven primarily by
the continued increase in domestic sales of new wireless speakers, digital
antennas and both portable power lines and power supply systems, partially
offset by declines internationally. As a percentage of net sales, Accessories
represented 18.8% vs. 19.9% for the comparable nine-month periods ended
November 30, 2012 and November 30, 2011, respectively.

The gross margin for the nine months ended November 30, 2012 was 27.9%, an
increase of 10 basis points as compared to 27.8% for the same period last
year. The increase in gross margins was principally due to higher sales of
OEM related products, higher margins of select consumer accessories products
including wireless Bluetooth speakers, headphones and sound bars, as well as
the Hirschmann acquisition. These increases were partially offset by the
unfavorable swings between hedged costs and related sales, increased freight
costs and slower car speaker sales at Audiovox Germany, and the shift in the
Company's warehouse facilities in Asia.

Operating expenses for the fiscal 2013 nine month period were $145.4 million,
an increase of $28.1 million over $117.3 million reported in the comparable
fiscal 2012 period. This increase was primarily driven by the addition of
Hirschmann expenses, which accounted for $32.1 million, as well as higher
advertising expenses. Excluding the addition of Hirschmann expenses,
operating expenses declined $4.0 million for the comparable nine month
periods, or 3.4%.

The Company reported operating income of $29.7 million for the fiscal 2013
nine month period compared to operating income of $30.1 million in the
comparable year ago period. Net income for the nine-month period ended
November 30, 2012 was $12.2 million or net income per diluted share of $0.52
as compared to net income of $14.8 million and net income per diluted share of
$0.64 for the nine-month period ended November 30, 2011. Net income decreased
versus the comparable year primarily as a result of expenses associated with
the patent lawsuit and losses on forward exchange contracts, partially offset
by decreased tax provisions and the addition of the Hirschmann acquisition.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for
the fiscal 2013 nine month period, was $36.4 million as compared to EBITDA of
$37.2 million for the comparable period in fiscal 2012. Taking into account
stock-based compensation, net settlement charges related to the patent
litigation, Asia restructuring charges, settlement recoveries at Klipsch,
acquisition related costs, and losses on foreign exchange contracts as a
result of the Hirschmann acquisition, the Company reported Adjusted EBITDA of
$49.1 million as compared to $42.1 million in the comparable year-ago period,
an improvement of $7.0 million. Diluted adjusted EBITDA per common share for
the fiscal 2013 nine month period was $2.08 as compared to $1.82 for the same
period in fiscal 2012.

Non-GAAP Measures
Adjusted EBITDA and diluted adjusted EBITDA per common share are not financial
measures recognized by GAAP. Adjusted EBITDA represents net income, computed
in accordance with GAAP, before interest expense, taxes, depreciation and
amortization, stock-based compensation expense, litigation settlements,
restructuring charges and costs and foreign exchange gains or losses relating
to our acquisitions. Depreciation, amortization, and stock-based compensation
expense are non-cash items. Diluted adjusted EBITDA per common share
represents the Company's diluted earnings per common share based on adjusted
EBITDA.

We present adjusted EBITDA and diluted adjusted EBITDA per common share in
this Form 10-Q because we consider them to be useful and appropriate
supplemental measures of our performance. Adjusted EBITDA and diluted adjusted
EBITDA per common share help us to evaluate our performance without the
effects of certain GAAP calculations that may not have a direct cash impact on
our current operating performance. In addition, the exclusion of costs and
foreign exchange gains or losses relating to our acquisitions, litigation
settlements and restructuring charges allows for a more meaningful comparison
of our results from period-to-period. These non-GAAP measures, as we define
them, are not necessarily comparable to similarly entitled measures of other
companies and may not be appropriate measures for performance relative to
other companies. Adjusted EBITDA should not be assessed in isolation from or
construed as a substitute for EBITDA prepared in accordance with GAAP.
Adjusted EBITDA and diluted adjusted EBITDA per common share are not intended
to represent, and should not be considered to be more meaningful measures
than, or an alternative to, measures of operating performance as determined in
accordance with GAAP.

Conference Call Information
The Company will be hosting its conference call on Thursday, January 10, 2013
at 10:00 a.m. EST. Interested parties can participate by visiting
www.voxxintl.com, and clicking on the webcast in the Investor Relations
section or via teleconference (toll-free number: 866-314-5050; international:
617-213-8051; pass code: 69980504). For those who will be unable to
participate, a replay will be available approximately one hour after the call
has been completed and will last for one week thereafter (replay number:
888-286-8010; international replay: 617-801-6888; pass code: 50534816).

About VOXX International Corporation
VOXX International Corporation (NASDAQ:VOXX) is the new name for Audiovox
Corporation, a company that was formed over 45 years ago as Audiovox that has
grown into a worldwide leader in many automotive and consumer electronics and
accessories categories, as well as premium high-end audio. Through its wholly
owned subsidiaries, VOXX International proudly is recognized as the #1 premium
loudspeaker company in the world, and has #1 market positions in automotive
video entertainment and remote starts, digital TV tuners and digital antennas.
The Company's brands also hold #1 market share for TV remote controls and
reception products and leading market positions across a wide-spectrum of
other consumer and automotive segments.

Today, VOXX International is a global company….with an extensive distribution
network that includes power retailers, mass merchandisers, 12-volt specialists
and most of the world's leading automotive manufacturers.  The company has an
international footprint in Europe, Asia, Mexico and South America, and a
growing portfolio, which is now comprised of over 30 trusted brands. Among the
key domestic brands include Klipsch®, RCA®, Invision®, Jensen®, Audiovox®,
Terk®, Acoustic Research®, Advent®, Code Alarm®, CarLink®, Excalibur® and
Prestige®. International brands include Hirschmann Car Communication®,
Klipsch®, Jamo®, Energy®, Mirage®, Mac Audio®, Magnat®, Heco®, Schwaiger®,
Oehlbach® and Incaar™. The Company continues to drive innovation throughout
all of its subsidiaries, and maintains its commitment to exceeding the needs
of the consumers it serves. For additional information, please visit our Web
site at www.voxxintl.com.

Safe Harbor Statement
Except for historical information contained herein, statements made in this
release that would constitute forward-looking statements may involve certain
risks and uncertainties. All forward-looking statements made in this release
are based on currently available information and the Company assumes no
responsibility to update any such forward-looking statement. The following
factors, among others, may cause actual results to differ materially from the
results suggested in the forward-looking statements. The factors include, but
are not limited to risks that may result from changes in the Company's
business operations; our ability to keep pace with technological advances;
significant competition in the mobile and consumer electronics businesses as
well as the accessories business; our relationships with key suppliers and
customers; quality and consumer acceptance of newly introduced products;
market volatility; non-availability of product; excess inventory; price and
product competition; new product introductions; the possibility that the
review of our prior filings by the SEC may result in changes to our financial
statements; and the possibility that stockholders or regulatory authorities
may initiate proceedings against VOXX International Corporation and/or our
officers and directors as a result of any restatements. Risk factors
associated with our business, including some of the facts set forth herein,
are detailed in the Company's Form 10-K for the fiscal year ended February 29,
2012.

Company Contact :
Glenn Wiener, GW Communications
Tel: 212-786-6011 / Email: gwiener@GWCco.com 





VOXX International Corporation and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share data)
                                          November30, 2012  February29, 2012
Assets                                    (unaudited)
Current assets:
Cash and cash equivalents                 $    18,193        $    13,606
Accounts receivable, net                  184,621            142,585
Inventory, net                            170,252            129,514
Receivables from vendors                  1,573              4,011
Prepaid expenses and other current        12,162             13,549
assets
Income tax receivable                     —                  698
Deferred income taxes                     5,192              3,149
Total current assets                      391,993            307,112
Investment securities                     13,566             13,102
Equity investments                        16,958             14,893
Property, plant and equipment, net        65,871             31,779
Goodwill                                  158,340            87,366
Intangible assets, net                    193,614            175,349
Deferred income taxes                     806                796
Other assets                              9,154              3,782
Total assets                              $    850,302       $    634,179
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable                          $    67,359        $    43,755
Accrued expenses and other current        57,963             52,679
liabilities
Income taxes payable                      3,014              5,432
Accrued sales incentives                  21,907             18,154
Deferred income taxes                     378                515
Current portion of long-term debt         25,633             3,592
Total current liabilities                 176,254            124,127
Long-term debt                            167,987            34,860
Capital lease obligation                  5,849              5,196
Deferred compensation                     4,687              3,196
Other tax liabilities                     4,739              2,943
Deferred tax liabilities                  41,858             34,220
Other long-term liabilities               13,732             7,840
Total liabilities                         415,106            212,382
Commitments and contingencies
Stockholders' equity:
Preferred stock                           —                  —
Common stock                              249                250
Paid-in capital                           286,092            281,213
Retained earnings                         174,898            162,676
Accumulated other comprehensive loss      (7,683)            (3,973)
Treasury stock                            (18,360)           (18,369)
Total stockholders' equity                435,196            421,797
Total liabilities and stockholders'       $    850,302       $    634,179
equity





VOXX International Corporation and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

(In thousands, except share and per share data)

(unaudited)
                      Three Months Ended            Nine Months Ended
                       November 30,            November 30,
                      2012             2011         2012             2011
Net sales             $      243,036   $  206,803   $      628,787   $  530,465
Cost of sales         173,087          146,960      453,656          383,072
Gross profit          69,949           59,843       175,131          147,393
Operating expenses:
Selling               13,515           12,620       38,227           35,723
General and           29,650           24,740       84,466           68,159
administrative
Engineering and       6,938            4,021        21,042           11,839
technical support
Acquisition-related   56               25           1,707            1,607
costs
Total operating       50,159           41,406       145,442          117,328
expenses
Operating income      19,790           18,437       29,689           30,065
Other (expense)
income:
Interest and bank     (2,286)          (1,371)      (6,223)          (4,246)
charges
Equity in income of   1,180            1,236        3,730            3,255
equity investees
Other, net            776              (3,308)      (9,223)          (4,054)
Total other
(expense) income,     (330)            (3,443)      (11,716)         (5,045)
net
Income before income  19,460           14,994       17,973           25,020
taxes
Income tax expense    6,258            6,136        5,751            10,237
Net income            $      13,202    $  8,858     $      12,222    $  14,783
Other comprehensive
income (loss):
Foreign currency
translation           1,469            (2,408)      (3,723)          (1,696)
adjustments
Derivatives
designated for        (93)             806          7                81
hedging
Reclassification
adjustment of
other-than-temporary

impairment loss       —                (8)          —                1,177
(gain) on
available-for-sale
investment

into net income
Unrealized holding
gain (loss) on
available-for-sale
investment            —                (3)          6                (14)
securities arising
during the period,
net of tax
Other comprehensive
income (loss), net    1,376            (1,613)      (3,710)          (452)
of tax
Comprehensive income  $      14,578    $  7,245     $      8,512     $  14,331
Net income per        $      0.56      $  0.38      $      0.52      $  0.64
common share (basic)
Net income per
common share          $      0.56      $  0.38      $      0.52      $  0.64
(diluted)
Weighted-average
common shares         23,434,965       23,074,030   23,377,859       23,073,983
outstanding (basic)
Weighted-average
common shares         23,536,140       23,074,030   23,593,040       23,203,504
outstanding
(diluted)





Reconciliation of GAAP Net Income to Adjusted EBITDA

(In thousands, except share and per share data)

(unaudited)
                        Three Months Ended          Nine Months Ended
                         November 30,         November 30,
                       2012            2011        2012            2011
Net income              $      13,202   $  8,858    $      12,222   $  14,783
Adjustments:
Interest expense and    2,286           1,371       6,223           4,246
bank charges
Depreciation and        4,024           2,880       12,173          7,936
amortization
Income tax expense      6,258           6,136       5,751           10,237
EBITDA                  25,770          19,245      36,369          37,202
Stock-based             63              353         190             728
compensation
Net settlement charges  —               2,596       8,365           2,596
related to MPEG suit
Klipsch settlement      (215)           —           (1,015)         —
recovery
Asia restructuring      —               —           789             —
charges
Acquisition related     56              25          1,707           1,607
costs
Loss on foreign
exchange as a result    —               —           2,670           —
of Hirschmann
acquisition
Adjusted EBITDA         $      25,674   $  22,219   $      49,075   $  42,133
Diluted earnings per    $      0.56     $  0.38     $      0.52     $  0.64
common share
Diluted adjusted
EBITDA per common       $      1.09     $  0.96     $      2.08     $  1.82
share

SOURCE VOXX International Corporation

Website: http://www.voxxintl.com
 
Press spacebar to pause and continue. Press esc to stop.