VOXX INTERNATIONAL CORP 
By HAUPPAUGE, N.Y., Jan. 9, 2012 /PRNewswire/ -- VOXX International Corporation (NASDAQ: VOXX), today announced financial results for its fiscal 2012, third quarter and nine months ended November 30, 2011.
Commenting on the Company's performance, Pat Lavelle, President and CEO stated, "Our business continued to gain traction across multiple markets, product lines and geographies, and I believe we're well positioned moving into 2012. We have a number of new products coming to market, new accounts at retail and with automotive OEMs, and several new programs and partnerships kicking off this year. The holiday season is over and while not overly robust, there was a pick-up in certain categories, which should continue into our fourth fiscal quarter, and hopefully into next year. We believe we're in a good position for organic growth and continued profitability in fiscal 2013."
Lavelle continued, "We're also pleased with our performance year to date, though we had budgeted for higher sales. Klipsch, our automotive business and international operations, have all performed at or ahead of plan, and each group has me excited about our prospects. Consumer weakness, however, primarily in the U.S. and at retail, led to a modest slowdown in our consumer accessories segments. On the positive side, the steps we took to improve margins and operating efficiencies, and to right size our expense structure, have resulted in bottom-line performance which is tracking ahead of our initial plan. As such, we believe our sales for the year will be in excess of $700 million and we're raising our EBITDA forecast to $44 million."
Net sales for the fiscal 2012 third quarter, were $206.8 million, an increase of 26.7% compared to net sales of $163.2 million in the comparable year ago period. For the nine month period ended November 30, 2011, net sales were $530.5 million, an increase of 25.5% as compared to net sales of $422.8 million for the comparable nine month period in fiscal 2011.
For the three and nine month periods ended November 30, 2011, Electronics sales were $165.9 million and $425.0, an increase of 35.3% and 36.0%, respectively over the comparable prior year periods. Accessories sales were $40.9 million and $105.5 million, an increase of 0.9% and a decrease of 4.4%, respectively. The Electronics Group was favorably impacted by the addition of Klipsch, and continued increases in the automotive OEM channel, driven by increases in domestic car sales and new OEM programs for remote start and mobile entertainment systems. Additionally, Accessories sales were up slightly for the quarter, primarily due to increased sales in international markets. Offsetting these improvements were lower sales of consumer electronics products and a decline in the audio category. As a percentage of net sales, Electronics represented 80.2% and 80.1% of the net sales for the three and nine month periods ended November 30, 2011, and Accessories represented 19.8% and 19.9% for the comparable three and nine month periods ended November 30, 2011.
The gross margin for the three months ended November 30, 2011 was 28.9%, an increase of 770 basis points as compared to 21.2% for the three months ended November 30, 2010. For the comparable nine month periods, the gross margin was 27.8% as compared to 21.1%, an increase of 670 basis points. Gross margins continue to increase throughout the year, driven by the shift in product mix more towards high-end audio and mobile OEM products. During the three and nine month periods, gross margins were also positively impacted by new product introductions, better margins in exciting product lines, lower sales in our fulfillment business, and reduced charges for required inventory provisions and a decline in warehouse and assembly expenses.
For the three and nine months ended November 30, 2011 and November 30, 2010, operating expenses were $41.4 million and $117.3 million, an increase of $12.2 million and $32.3 million, respectively. The increase was due primarily to expenses from our Klipsch acquisition, which accounted for approximately $9.8 million and $29.0 million for the three and nine months ended November 30, 2011. Additionally, this was partially related to an increase in compensation expense and non-recurring professional service fees associated with the Company's patent infringement case. These increases were partially offset by reductions in depreciation expense, headcount reductions in select groups and a benefit recorded related to put options. The Company continues to monitor its expense structure and identify synergies within its existing businesses.
The Company reported operating income of $18.4 million for the third quarter of fiscal 2012, compared to operating income of $5.4 million in the comparable year ago period. For the nine month period ended November 30, 2011, the Company reported operating income of $30.1 million as compared to operating income of $4.1 million for the period ended November 30, 2010, a $26.0 million improvement.
Net income for the three month period ended November 30, 2011 was $8.9 million or $0.38 per basic and diluted share as compared to net income of $3.9 million or earnings per basic and diluted share of $0.17 for the third quarter of fiscal 2011. For the nine months ended November 30, 2011, net income was $14.8 million or $0.64 per basic and diluted share as compared to net income of $5.6 million or earnings per basic share of $0.25 and per diluted share of $0.24 for the comparable nine month period ended November 30, 2010.
Adjusted net income for the three month period ended November 30, 2011 was $9.1 million or $0.39 per diluted share compared to $4.3 million or $0.19 per diluted share for the comparable year ago period. For the nine month period ended November 30, 2011, adjusted net income was $16.2 million or $0.70 per diluted share compared to $6.2 million or $0.27 per diluted share for the comparable nine month period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of fiscal 2012, was $18.7 million as compared to EBITDA of $8.0 million for the comparable period in fiscal 2011, an improvement of $10.7 million. Adjusted EBITDA for the same periods was $19.1 million and $8.5 million, respectively. For the nine month period ended November 30, 2011, EBITDA was $37.1 million as compared to EBITDA of $14.7 million, an improvement of $22.4 million. Adjusted EBITDA for the same periods was $39.4 million and $16.0 million, respectively. Adjusted EBITDA for the three and nine month periods excludes stock-based compensation and Klipsch acquisition costs.
A reconciliation of GAAP net income to Adjusted EBITDA can be found in the Company's Form 10-Q for the period ended November 30, 2011.
Non-GAAP Measures
Adjusted net income and adjusted EBITDA are not financial measures recognized by GAAP. Adjusted net income represents net income, computed in accordance with GAAP, before stock-based compensation expense, a tax refund, and costs relating to the Klipsch acquisition. Adjusted EBITDA represents net income, computed in accordance with GAAP, before interest expense, taxes, depreciation and amortization, stock-based compensation expense and costs relating to the Klipsch acquisition. Depreciation, amortization, and stock-based compensation expense are non-cash items. Adjusted net income per diluted share is calculated by dividing adjusted net income by diluted shares outstanding calculated in accordance with GAAP.
We present adjusted net income and related per diluted share amounts as well as adjusted EBITDA in this release because we consider them to be useful and appropriate supplemental measures of our performance. Adjusted net income and related per diluted share amounts as well as adjusted EBITDA 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 relating to the Klipsch acquisition and the tax refund 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 net income and adjusted EBITDA should not be assessed in isolation from or construed as a substitute for net income prepared in accordance with GAAP. Adjusted net income and adjusted EBITDA are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP.
Conference Call Information
The Company will be hosting its conference call on Tuesday, January 10, 2012 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: 866-383-8108; international: 617-597-5343; pass code: 22494010). 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: 92271941).
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, and now into 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 and TV remote controls and reception products. The Company's brands also hold leading market positions across a wide-spectrum of 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®, Omega®, Excalibur®, Prestige®, and SURFACE(TM). International brands include Klipsch®, Jamo®, Energy®, Mirage®, Mac Audio®, Magnat®, Heco®, Schwaiger®, Oehlbach® and Incaar(TM). 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 28, 2011.
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)
November 30, February 28,
2011 2011
---- ----
Assets (unaudited)
Current
assets:
Cash and
cash
equivalents $18,836 $98,630
Accounts
receivable,
net 163,476 108,048
Inventory,
net 147,785 113,620
Receivables
from
vendors 4,222 8,382
Prepaid
expenses
and
other
current
assets 8,967 9,382
Deferred
income
taxes 2,338 2,768
----- -----
Total
current
assets 345,624 340,830
Investment
securities 13,027 13,500
Equity
investments 14,730 12,764
Property,
plant
and
equipment,
net 23,199 19,563
Goodwill 87,366 7,373
Intangible
assets,
net 177,327 99,189
Deferred
income
taxes 11 6,244
Other
assets 3,718 1,634
----- -----
Total
assets $665,002 $501,097
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VOXX International Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share data)
November 30, February 28,
2011 2011
---- ----
Liabilities and Stockholders' Equity (unaudited)
Current liabilities:
Accounts payable $58,799 $27,341
Accrued expenses and other current
liabilities 54,004 36,500
Income taxes payable 4,990 1,610
Accrued sales incentives 21,226 11,981
Deferred income taxes 388 399
Current portion of long-term debt 4,293 4,471
----- -----
Total current liabilities 143,700 82,302
Long-term debt 67,659 5,895
Capital lease obligation 5,235 5,348
Deferred compensation 3,224 3,554
Other tax liabilities 1,788 1,788
Deferred tax liabilities 30,931 4,919
Other long-term liabilities 4,459 4,345
----- -----
Total liabilities 256,996 108,151
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, 22,630,837 shares
issued and 20,813,705 shares
outstanding at November 30, 2011 and
60,000,000 shares authorized,
22,630,837 shares issued and
20,813,005 shares outstanding
February 28, 2011 226 226
Class B convertible, $.01 par value;
10,000,000 shares authorized,
2,260,954 shares issued and
outstanding at November 30, 2011 and
February 28, 2011 22 22
Paid-in capital 278,625 277,896
Retained earnings 151,810 137,027
Accumulated other comprehensive
income (loss) (4,301) (3,849)
Treasury stock, at cost, 1,817,132
shares of Class A common stock at
November 30, 2011 and 1,817,832
shares of Class A common stock at
February 28, 2011 (18,376) (18,376)
------- -------
Total stockholders' equity 408,006 392,946
------- -------
Total liabilities and stockholders'
equity $665,002 $501,097
======== ========
VOXX International Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
Three Months Ended Nine Months Ended
November 30, November 30,
------------
2011 2010 2011 2010
---- ---- ---- ----
Net sales $206,803 $163,167 $530,465 $422,778
Cost of sales 146,960 128,570 383,072 333,650
------- ------- ------- -------
Gross profit 59,843 34,597 147,393 89,128
------ ------ ------- ------
Operating expenses:
Selling 12,620 9,498 35,723 25,951
General and administrative 24,740 16,674 68,159 50,034
Engineering and technical
support 4,021 3,023 11,839 9,052
Acquisition-related costs 25 - 1,607 -
--- --- ----- ---
Total operating expenses 41,406 29,195 117,328 85,037
------ ------ ------- ------
Operating income 18,437 5,402 30,065 4,091
------ ----- ------ -----
Other (expense) income:
Interest and bank charges (1,371) (471) (4,246) (1,392)
Equity in income of equity
investees 1,236 600 3,255 2,348
Other, net (3,308) 363 (4,054) 2,363
------ --- ------ -----
Total other (expense)
income, net (3,443) 492 (5,045) 3,319
------ --- ------ -----
Income before income taxes 14,994 5,894 25,020 7,410
Income tax expense 6,136 2,035 10,237 1,786
----- ----- ------ -----
Net income $8,858 $3,859 $14,783 $5,624
====== ====== ======= ======
Net income per common share
(basic) $0.38 $0.17 $0.64 $0.25
===== ===== ===== =====
Net income per common share
(diluted) $0.38 $0.17 $0.64 $0.24
===== ===== ===== =====
Weighted-average common
shares outstanding (basic) 23,074,030 22,934,211 23,073,983 22,904,746
========== ========== ========== ==========
Weighted-average common
shares outstanding
(diluted) 23,074,030 23,098,948 23,203,504 23,057,969
========== ========== ========== ==========
VOXX International and Subsidiaries
GAAP Net Income to Adjusted Net Income
For the Three and Nine Months Ended November 30, 2011
Reconciliation of GAAP to Adjusted Net Income Available to Common Shareholders
Three Months Ended Nine Months Ended
November 30, November 30,
2011 2010 2011 2010
---- ---- ---- ----
Net income $8,858 $3,859 $14,783 $5,624
Adjustments:
Klipsch acquisition costs 25 - 1,607 -
Stock Compensation 353 428 728 1,284
Discrete tax item - - - (750)
Tax effects of above adjustments (154) - (955) -
Pro forma net income $9,082 $4,287 $16,163 $6,158
====== ====== ======= ======
GAAP net income per common share, diluted $0.38 $0.17 $0.64 $0.24
Pro forma net income per common share, diluted $0.39 $0.19 $0.70 $0.27
Diluted weighted average number of shares (GAAP and pro forma) 23,074,000 23,098,948 23,203,504 23,057,969
Reconciliation of GAAP Net Income to Adjusted EBITDA
Three Months Ended Nine Months Ended
November 30, November 30,
2011 2010 2011 2010
---- ---- ---- ----
Net income $8,858 $3,859 $14,783 $5,624
Adjustments:
Interest expense, net 1,371 471 4,246 1,392
Depreciation and
amortization 2,401 1,682 7,829 5,874
Taxes 6,136 2,035 10,237 1,786
----- ----- ------ -----
EBITDA 18,766 8,047 37,095 14,676
Stock-based
compensation 353 428 728 1,284
Klipsch acquisition
costs 25 - 1,607 -
--- --- ----- ---
Adjusted EBITDA $19,144 $8,475 $39,430 $15,960
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SOURCE VOXX International Corporation
