Audiovox Corporation News
Audiovox Corporation Reports Fiscal 2008 Fourth Quarter and Year-End Results
Fiscal Year Results
The Company reported net sales for the fiscal year ended
Operating income for fiscal 2008 was
On a pro forma basis, excluding the impact of non-recurring charges, the Company would have reported net income of
Electronics sales, which include both mobile and consumer electronics were
As a percentage of net sales, Electronics represented 73.9% in fiscal 2008 compared to 94.8% in the comparable fiscal 2007 period and Accessories represented 26.1% compared to 5.2% in the same respective periods.
Gross margins increased by 140 basis points to 18.8% in fiscal 2008, as compared to 17.4% in the prior fiscal year. Gross margins were favorably impacted by higher margins generated from the recently acquired accessory companies, improved overall margins in the Company's core business and improved buying programs and inventory management. Gross margins were adversely impacted by increased warehouse and assembly costs as a result of incremental transition costs necessary to facilitate the acquisitions, as well as increased warranty and repair costs, freight and shipping costs and inventory provisions as a result of higher accessories sales.
Operating expenses were
Fiscal Fourth Quarter Results
The Company reported net sales for the fiscal 2008 fourth quarter of
Operating loss for the three months ended
On a pro forma basis for continuing operations, excluding the impact of non-recurring fourth quarter charges, the Company would have reported a break even for the quarter. On a pro forma basis for continuing and discontinued operations and excluding the impact of non-recurring fourth quarter charges, the Company would have reported a net loss of
Electronics sales, which include both mobile and consumer electronics were
As a percentage of net sales, Electronics represented 73.0% in the fiscal 2008 fourth quarter compared to 86.5% in the comparable fiscal 2007 quarter. In the period ended
Gross margins for both the fiscal 2008 and fiscal 2007 fourth quarters were 18.8%. In fiscal 2008, gross margins were favorably impacted by higher margins generated from the acquired accessory companies, the impact of which was partially offset by the Company's acquisition of Thomson's audio/video operations in
Operating expenses for the three months ended
Lavelle continued, "During the fourth quarter we assimilated additional overhead for the Thomson audio video and Technuity acquisitions during what is traditionally our weakest period. In addition, the period was further impacted by the economic conditions facing our customers and consumers, which affected Holiday sales as well as automobile sales that continue to suffer due to the state of the economy and rising fuel prices."
Lavelle concluded, "The acquisitions we made last year provide us with the strongest portfolio of brands we've ever had, give us added leverage at the retail level domestically and enhance our foundation internationally. Our focus this year is to fully consolidate the five acquisitions we made in 2007 and generate the types of returns this Company is capable of achieving. We enter fiscal 2009 on solid footing and I believe Audiovox will show substantial improvements in both our top and bottom line results over the coming year."
Conference Call Information
The Company will be hosting its conference call today,
About Audiovox
Audiovox is a recognized leader in the marketing of automotive entertainment, vehicle security and remote start systems, consumer electronics products and accessories. The company is number one in mobile video and places in the top ten of almost every category that it sells. Among the lines marketed by Audiovox are its mobile electronics products including mobile video systems, auto sound systems including satellite radio, vehicle security and remote start systems; consumer electronics products such as portable DVD players, Portable GPS, flat-panel TV's, extended range two-way radios, multi media products like digital picture frames and home and portable stereos as well as consumer accessories such as indoor/outdoor antennas, connectivity products, headphones, speakers, wireless solutions, remote controls, power & surge protectors and media cleaning & storage devices. The company markets its products through an extensive distribution network that includes power retailers, 12-volt specialists, mass merchandisers and an OE sales group. The company markets products under the Audiovox, Jensen, Acoustic Research, Advent, Code Alarm, Terk, and Prestige brands, as well as the recently- acquired rights from Thomson's America's consumer electronics accessory business to the RCA brand for Consumer Electronics accessories. The acquisition also includes the Recoton, Spikemaster, Ambico and Discwasher brands for use on any products and the Jensen, Advent, Acoustic Research and Road Gear brands for accessory products. Audiovox already owns Jensen, Advent, Acoustic Research and Road Gear brands for electronics products as part of prior acquisitions. For additional information, visit our web site at www.audiovox.com.
Safe Harbor Language
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 statements. 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 and accessories businesses; 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 Audiovox 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
Contact: Glenn Wiener, GW Communications Tel: 212-786-6011 / Email: gwiener@GWCco.com Audiovox Corporation and Subsidiaries Consolidated Balance Sheets February 29, 2008 and February 28, 2007 (In thousands, except share data) 2008 2007 Assets (as adjusted) Current assets: Cash and cash equivalents $39,341 $15,473 Short-term investments - 140,872 Accounts receivable, net 112,688 86,003 Inventory 155,748 104,972 Receivables from vendors 29,358 13,935 Prepaid expenses and other current assets 13,780 11,427 Income taxes receivable - 3,518 Deferred income taxes 7,135 2,492 Total current assets 358,050 378,692 Investment securities 15,033 13,179 Equity investments 13,222 11,353 Property, plant and equipment, net 21,550 18,019 Goodwill 23,427 17,514 Intangible assets 101,008 57,874 Deferred income taxes - 1,858 Other assets 746 631 Total assets $533,036 $499,120 Audiovox Corporation and Subsidiaries Consolidated Balance Sheets February 29, 2008 and February 28, 2007 (In thousands, except share data) 2008 2007 Liabilities and Stockholders' Equity (as adjusted) Current liabilities: Accounts payable $24,433 $34,344 Accrued expenses and other current liabilities 38,575 26,564 Income taxes payable 5,335 - Accrued sales incentives 10,768 7,410 Bank obligations 3,070 2,890 Current portion of long-term debt 82 1,524 Total current liabilities 82,263 72,732 Long-term debt 1,621 5,430 Capital lease obligation 5,607 5,676 Deferred compensation 4,406 7,573 Other tax liabilities 4,566 3,347 Deferred tax liabilities 6,057 - Other long term liabilities 5,003 - Total liabilities 109,523 94,758 Commitments and contingencies Stockholders' equity: Series preferred stock, $.01 par value; 1,500,000 shares authorized, no shares issued or outstanding - - Common stock: Class A, $.01 par value; 60,000,000 shares authorized, 22,414,217 and 22,005,346 shares issued, 20,593,660 and 20,312,299 shares outstanding at February 29, 2008 and February 28, 2007, respectively 224 220 Class B convertible, $.01 par value; 10,000,000 shares authorized, 2,260,954 shares issued and outstanding 22 22 Paid-in capital 274,282 271,056 Retained earnings 162,542 151,363 Accumulated other comprehensive income (loss) 4,847 (1,320) Treasury stock, at cost, 1,820,562 and 1,693,047 shares of Class A common stock at February 29, 2008 and February 28, 2007, respectively (18,404) (16,979) Total stockholders' equity 423,513 404,362 Total liabilities and stockholders' equity $533,036 $499,120 Audiovox Corporation and Subsidiaries Consolidated Statements of Operations Quarter and Year Ended February 29, 2008 and February 28, 2007 (In thousands, except share and per share data) Three Three Months Months Year Year Ended Ended Ended Ended February February February February 29, 2008 28, 2007 29, 2008 28, 2007 Net sales $131,269 $96,134 $591,355 $456,690 Cost of sales 106,595 78,039 480,027 377,371 Gross profit 24,674 18,095 111,328 79,319 Operating expenses: Selling 9,168 6,594 35,703 28,220 General and administrative 16,067 12,238 61,220 48,920 Engineering and technical support 2,973 1,838 9,983 7,256 Total operating expenses 28,208 20,670 106,906 84,396 Operating income (loss) (3,534) (2,575) 4,422 (5,077) Other income (expense): Interest and bank charges (40) (464) (2,127) (1,955) Equity in income of equity investees 663 514 3,590 2,937 Other, net 1,265 1,426 4,709 6,253 Total other income, net 1,888 1,476 6,172 7,235 Income (loss) from continuing operations before income taxes (1,646) (1,099) 10,594 2,158 Income tax (expense) benefit (139) 794 (3,848) 1,534 Net income (loss) from continuing operations (1,785) (305) 6,746 3,692 Net income (loss) from discontinued operations, net of tax (392) (180) 1,719 (756) Net income (loss) ($2,177) ($485) $8,465 $2,936 Net income (loss) per common share (basic): From continuing operations ($0.08) ($0.01) $0.29 $0.16 From discontinued operations ($0.02) ($0.01) $0.08 ($0.03) Net income (loss) per common share (basic) ($0.10) ($0.02) $0.37 $0.13 Net income (loss) per common share (diluted): From continuing operations ($0.08) ($0.01) $0.29 $0.16 From discontinued operations ($0.02) ($0.01) $0.08 ($0.03) Net income (loss) per common share (diluted) ($0.10) ($0.02) $0.37 $0.13 Weighted-average common shares outstanding (basic) 22,854,614 22,431,284 22,853,482 22,366,413 Weighted-average common shares outstanding (diluted) 22,863,670 22,431,284 22,876,112 22,557,272
This earnings release includes information presented on a pro forma basis. These pro forma financial measures are considered "non-GAAP" financial measures within the meaning of the Securities and Exchange Commission Regulation G. The Company believes that this presentation of pro forma results provide useful information to both management and investors by excluding specific items that the Company believes are not indicative of core operating results. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in
Audiovox Corporation and Subsidiaries
Reconciliation of GAAP Net (loss) income from continuing operations for the three months and year to date Period Ended
net (loss) income (In thousands, except share and per share data) (unaudited) Three Months Year Ended Ended February February 29, 2008 29, 2008 GAAP net (loss) income from continuing operations ($1,785) $6,746 Non-recurring Adjustments: Legal settlement 602 602 Transition expenses for acquisitions 500 741 Stock-based compensation benefit (231) (900) Amortization expense from acquisitions 497 1,328 1,368 1,771 Less: Tax benefits (534) (691) 834 1,080 Settlement of foreign tax audits 936 936 Non-recurring adjustments, net of tax 1,770 2,016 Pro forma net (loss) income from continuing operations (15) 8,762 GAAP net (loss) income from discontinued operations, net of tax (392) 1,719 Pro forma net (loss) income ($407) $10,481 GAAP net (loss) income from continuing operations per common share, diluted ($0.08) $0.29 Pro forma net (loss) income from continuing operations per common share, diluted $0.00 $0.38 GAAP net (loss) income per common share, diluted ($0.10) $0.37 Pro forma net (loss) income per common share, diluted ($0.02) $0.46 GAAP Weighted-average common shares outstanding, diluted 22,863,670 22,876,112 Pro forma Weighted-average common shares outstanding, diluted 22,863,670 22,876,112
SOURCE Audiovox Corporation
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