HAUPPAUGE, N.Y., May 13, 2015 /PRNewswire/ -- VOXX International
Corporation (NASDAQ: VOXX), today announced financial results for
its Fiscal 2015 fourth quarter and year-ended February 28, 2015.
Fourth Quarter Results (three months ended February 28, 2015 and February 28, 2014)
Net sales for the Fiscal 2015 fourth quarter were $169.9 million compared to $187.1 million reported in the comparable
year-ago period, a decline of $17.2
million or 9.2%. Net sales were primarily impacted by
four major factors: the Euro conversion, the West Coast port
closure, the change in the Company's Mexico distribution model, and domestic sales
that were negatively impacted by poor weather. Taking into
account the impact of the Euro conversion alone (weighted average
of 1.176 vs. 1.366) net sales were down $8.2
million or 4.6%. Additionally, the port closure
negatively impacted fiscal 2015 fourth quarter sales by
approximately $4 million. On a
segment basis:
|
Q4 2015
|
Q4 2014
|
Q4 2015 vs. Q4
2014
(Euro
impact)
|
Q4 2014
USD
(Revised
Consolidated)
|
Q4 2015 vs. Q4
2014
(w/ Euro
conversion)
|
Total Net
Sales
|
$169.9
|
$187.1
|
($9.1)
|
$178.1
|
($8.2)
|
Automotive
|
$90.9
|
$93.9
|
($6.1)
|
$87.8
|
$3.1
|
Premium
Audio
|
$37.3
|
$42.7
|
($1.7)
|
$41.0
|
($3.7)
|
Consumer
Accessories
|
$41.5
|
$50.2
|
($1.3)
|
$48.9
|
($7.4)
|
Corporate
|
$0.2
|
$0.4
|
-
|
$0.4
|
($0.2)
|
The gross margin for the Fiscal 2015 fourth quarter was 29.1%,
an increase of 80 basis points as compared to 28.3% for the same
period last year. All three business segments posted
increases in gross margin due to product mix shifts and better
margins associated with new product launches and programs
(Automotive – 28.2% vs. 27.8%; Premium Audio – 33.6% vs. 32.8%;
Consumer Accessories – 26.5% vs. 24.5%).
Operating expenses for the Fiscal 2015 fourth quarter were
$50.2 million as compared to
operating expenses of $112.4 million
in the comparable year-ago period. The 2014 fiscal fourth
quarter included non-cash impairment charges of $57.6 million and excluding this impact,
operating expenses were down approximately $4.7 million or 8.6%. This year-over-year
improvement was primarily driven by a $2.1
million decrease in selling expenses, a $2.9 million decline in general and
administrative costs, excluding the impairment charge, and a
$0.9 million decline in engineering
expenses, offset by $1.3 million of
restructuring charges.
The Company reported an operating loss of $0.7 million as compared to an operating loss of
$59.6 million in the fiscal 2014
fourth quarter. Excluding the impairment charges, operating
loss for the Fiscal 2014 fourth quarter was $2.0 million, a year-over-year improvement of
approximately $1.3 million. Net
loss for the Fiscal 2015 fourth quarter was $14.4 million or a net loss per diluted share of
$0.60 as compared to a net loss of
$49.0 million or a net loss per
diluted share of $2.01 for the
comparable year-ago period.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the Fiscal 2015 fourth quarter was ($6.2) million as compared to EBITDA of
($53.4) million reported in the
Fiscal 2014 fourth quarter. Adjusted EBITDA was $5.2 million as compared to $3.8 million for the comparable Fiscal 2015 and
2014 fourth quarter periods.
Commenting on the Company's fourth quarter performance,
Pat Lavelle, President and Chief
Executive Officer stated, "Our results this quarter were
disappointing as there were a number of factors which hampered our
top-line, the biggest of which were the Euro conversion and West
Coast port closure. On the positive side, our gross margins
continued to increase and the steps we took to curtail our expenses
in light of lower sales volumes helped drive our operating
performance. Additionally, we won a number of new programs in
our Automotive segment, expanded our Premium Audio distribution
driven by new product launches, and made inroads in reaching the
enterprise segment for our myris biometrics product offering.
All of these developments should help drive results over the next
several years."
Year-end Results (periods ended February
28, 2015 and February 28,
2014)
Net sales in Fiscal 2015 were $757.5
million compared to $809.7
million reported in the comparable year-ago period, a
decline of 6.5%. Taking into account the impact of the Euro
conversion (weighted average of 1.29 vs. 1.33) net sales were down
$40.2 million or 5.0%.
|
F' 2015
|
F' 2014
|
F' 2015 vs. F'
2014
(Euro
impact)
|
F' 2014
USD
(Revised
Consolidated)
|
F' 2015 vs. F'
2014
(w/ Euro
conversion)
|
Total Net
Sales
|
$757.5
|
$809.7
|
($12.0)
|
$797.7
|
($40.2)
|
Automotive
|
$396.4
|
$412.5
|
($8.0)
|
$404.5
|
($8.1)
|
Premium
Audio
|
$165.8
|
$189.2
|
($2.4)
|
$186.8
|
($21.0)
|
Consumer
Accessories
|
$194.1
|
$206.3
|
($1.6)
|
$204.7
|
($10.6)
|
Corporate
|
$1.2
|
$1.7
|
-
|
$1.7
|
($0.5)
|
- In addition to the Euro conversion impact, the Automotive
segment experienced decreases in sales from its OEM manufacturing
lines as a result of the temporary suspension of programs from one
OEM customer, which subsequently resumed in the Fiscal 2015 third
quarter and due to higher load-in sales from an OEM program in the
prior fiscal year. Additionally, lower satellite radio and
portable DVD sales, as well as suspended sales in Venezuela contributed to the year-over-year
decline. Offsetting these declines were higher sales of
remote start products and higher sales of devices for the Company's
new Car Connection product lines.
- Premium Audio sales declined primarily due to the Euro
conversion, and lower sales for some of the Company's audio product
lines, offset by increases in the Company's Commercial and Custom
Installation business.
- Consumer Accessories sales declined primarily due to lower
sales of digital voice recorders, clock radios and lower comparable
sales in Mexico, offset by higher
sales of wireless and Bluetooth speakers, improved sales in
Europe and the launch of the
Company's new Singtrix product, which was introduced in the Fiscal
2015 fourth quarter.
The gross margin for the year ended February 28, 2015 was 29.6%, an increase of 120
basis points as compared to 28.4% for the prior Fiscal year.
This increase was driven by improved margins in the Automotive and
Consumer Accessories segment, up 200 basis points and 90 basis
points, respectively, offset by a 30 basis point decline in the
Premium Audio segment.
Operating expenses for the year ended February 28, 2015 were $207.3 million as compared to operating expenses
of $267.6 million reported in the
comparable year-ago period, a decline of $60.3 million. In Fiscal 2014, the Company
recorded non-cash impairment charges of $57.6 million and excluding this impact,
operating expenses were down $2.7
million, or 1.3%. Driving the improvement in operating
expenses were lower selling, general and administrative expenses
due to lower sales commissions and other profit based compensation,
advertising expense, and due to in-sourcing of IT functions, offset
by higher engineering expenses as a result of higher salary and
benefit expenses at VOXXHirschmann to support various customer and
prospective programs.
The Company reported operating income of $16.6 million for the year ended February 28, 2015 as compared to an operating
loss of $37.4 million reported in
Fiscal 2014. Lower sales volumes were partially offset by
higher gross margins and lower overhead, thus contributing to the
year-over-year improvement.
The Company reported total other expenses for the year ended
February 28, 2015 of $15.9 million as compared to total other income
of $10.7 million in the comparable
period last year. In Fiscal 2015, the Company recorded
$7.4 million in charges representing
the devaluation loss related to its Venezuelan bonds, resulting in
a net Venezuela currency
devaluation and translation loss for the year ended February 28, 2015 of $7.1
million as well as a $9.3
million charge related to the impairment of investment
properties located in Venezuela. Additionally, Other, net,
decreased primarily as a result of Fiscal 2014 events that were not
repeated in Fiscal 2015, such as $5.6
million received in a class action settlement and
$0.9 million related to Klipsch
recoveries. Additionally, interest and bank charges were
$6.9 million and $7.4 million for the year ended February 28, 2015 and February 28, 2014, respectively.
The Company reported a net loss of $0.9
million or a net loss per diluted share of $0.04 as compared to a net loss of $26.6 million or a net loss per diluted share of
$1.10 for the year ended February 28, 2015 and February 28, 2014, respectively.
EBITDA in Fiscal 2015 was $23.1
million as compared to an EBITDA loss of $3.1 million reported in Fiscal 2014.
Adjusted EBITDA for Fiscal 2015 was $41.5
million as compared to Adjusted EBITDA of $46.5 million for the comparable year-ago
period.
Mr. Lavelle continued, "Despite the impact the Euro conversion
is expected to have on our results, we anticipate our first quarter
revenues will grow in US and Euro denominated business. We're
executing our strategy and have taken more costs out of our
operations to help drive bottom-line performance. Our balance
sheet continues to improve and we remain active in the M&A
markets. Our management team and Board remain committed to
enhancing shareholder value and we believe the steps we've taken
this past year will position us well for the future."
Non-GAAP Measures
Adjusted EBITDA and diluted adjusted earnings per common share
are not financial measures recognized by GAAP. Adjusted EBITDA
represents net income (loss), computed in accordance with GAAP,
before interest expense and bank charges, taxes, depreciation and
amortization, stock-based compensation expense, certain foreign
currency remeasurements, relocation and restructuring charges,
impairment charges, certain recoveries, settlements and costs and
foreign exchange gains or losses relating to our acquisitions.
Depreciation, amortization, stock-based compensation, and
impairment expenses are non-cash items. Diluted adjusted earnings
per common share represent the Company's diluted earnings per
common share based on adjusted EBITDA.
We present adjusted EBITDA and diluted adjusted earnings per
common share in this Form 10-K because we consider them to be
useful and appropriate supplemental measures of our performance.
Adjusted EBITDA and diluted adjusted earnings 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 relating
to the Company's acquisitions, restructuring, relocations,
remeasurements, impairments, stock-based compensation, settlements
and recoveries 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 an appropriate measure
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 earnings per common share 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.
Form 10-K Filing and Conference Call Information
The Company intends to file its Form 10-K for the period ended
February 28, 2015 with the Securities
and Exchange Commission by close of business tomorrow, May 14, 2015, within the SEC deadline.
Additionally, the Company will be hosting its conference call on
Thursday, May 14, 2015 at
10:00 a.m. ET. 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: 877-303-9079; international:
970-315-0461 / conference ID: 36388186). For those unable to
join, a replay will be available approximately four hours after the
call has been completed and will last for one week (replay number:
855-859-2056; international replay: 404-537-3406; conference ID:
36388186).
About VOXX International Corporation
VOXX International Corporation (NASDAQ:VOXX) has grown into a
worldwide leader in many automotive and consumer electronics and
accessories categories, as well as premium high-end audio.
Today, VOXX International Corporation has 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 now comprises over 30 trusted brands. Among the
key domestic brands are Klipsch®, RCA®, Invision®, Jensen®,
Audiovox®, Terk®, Acoustic Research®, Advent®, Code Alarm®,
CarLink®, 808®, AR for Her®, and Prestige®. International brands
include Hirschmann Car Communication®, Klipsch®, Jamo®, Energy®,
Mirage®, Mac Audio®, Magnat®, Heco®, Schwaiger®, Oehlbach® and
Incaar™. 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
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 automotive, premium audio
and consumer 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; foreign currency fluctuations and concerns
regarding the European debt crisis; restrictive debt covenants; 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,
2015.
Company Contact:
Glenn Wiener, President
GW Communications
Tel: 212-786-6011
Email: gwiener@GWCco.com
VOXX International
Corporation and Subsidiaries
Consolidated
Balance Sheets
February 28, 2015
and February 28, 2014
(In thousands,
except share data)
|
|
|
February 28,
2015
|
|
February 28,
2014
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
8,448
|
|
|
$
|
10,603
|
|
Accounts receivable,
net
|
102,766
|
|
|
147,054
|
|
Inventory
|
156,649
|
|
|
144,339
|
|
Receivables from
vendors
|
3,622
|
|
|
2,443
|
|
Investment
securities, current
|
275
|
|
|
—
|
|
Prepaid expenses and
other current assets
|
26,370
|
|
|
15,897
|
|
Income tax
receivable
|
1,862
|
|
|
2,463
|
|
Deferred income
taxes
|
1,723
|
|
|
3,058
|
|
Total current
assets
|
301,715
|
|
|
325,857
|
|
Investment
securities
|
12,413
|
|
|
14,102
|
|
Equity
investments
|
21,648
|
|
|
20,628
|
|
Property, plant and
equipment, net
|
69,783
|
|
|
83,222
|
|
Goodwill
|
105,874
|
|
|
117,938
|
|
Intangible assets,
net
|
158,455
|
|
|
174,312
|
|
Deferred income
taxes
|
717
|
|
|
760
|
|
Other
assets
|
6,908
|
|
|
10,331
|
|
Total
assets
|
$
|
677,513
|
|
|
$
|
747,150
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
71,403
|
|
|
$
|
55,373
|
|
Accrued expenses and
other current liabilities
|
51,744
|
|
|
64,403
|
|
Income taxes
payable
|
3,067
|
|
|
3,634
|
|
Accrued sales
incentives
|
14,097
|
|
|
17,401
|
|
Deferred income
taxes
|
1,060
|
|
|
9
|
|
Current portion of
long-term debt
|
6,032
|
|
|
5,960
|
|
Total current
liabilities
|
147,403
|
|
|
146,780
|
|
Long-term
debt
|
79,455
|
|
|
103,222
|
|
Capital lease
obligation
|
733
|
|
|
6,114
|
|
Deferred
compensation
|
4,650
|
|
|
5,807
|
|
Other tax
liabilities
|
5,157
|
|
|
11,060
|
|
Deferred tax
liabilities
|
34,327
|
|
|
34,963
|
|
Other long-term
liabilities
|
9,648
|
|
|
9,620
|
|
Total
liabilities
|
281,373
|
|
|
317,566
|
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred
stock:
|
|
|
|
No shares issued or
outstanding (see Note 9)
|
—
|
|
|
—
|
|
Common
stock:
|
|
|
|
Class A, $.01 par
value; 60,000,000 shares authorized, 24,003,240 and 23,988,240
shares issued, 21,873,790 and 22,172,968 shares outstanding at
February 28, 2015 and February 28, 2014, respectively
|
255
|
|
|
255
|
|
Class B Convertible,
$.01 par value, 10,000,000 authorized, 2,260,954 shares issued and
outstanding
|
22
|
|
|
22
|
|
Paid-in
capital
|
292,427
|
|
|
290,960
|
|
Retained
earnings
|
157,629
|
|
|
158,571
|
|
Accumulated other
comprehensive loss
|
(33,235)
|
|
|
(1,873)
|
|
Treasury stock, at
cost, 2,129,450 and 1,815,272 shares of Class A Common Stock at
February 28, 2015 and February 28, 2014, respectively
|
(20,958)
|
|
|
(18,351)
|
|
Total stockholders'
equity
|
396,140
|
|
|
429,584
|
|
Total liabilities and
stockholders' equity
|
$
|
677,513
|
|
|
$
|
747,150
|
|
VOXX International
Corporation and Subsidiaries
Consolidated
Statements of Operations and Comprehensive Income
(Loss)
Years Ended
February 28, 2015, February 28, 2014 and February 28,
2013
(In thousands,
except share and per share data)
|
|
|
Year
Ended
|
|
Year
Ended
|
|
Year
Ended
|
|
February 28,
2015
|
|
February 28,
2014
|
|
February 28,
2013
|
Net sales
|
$
|
757,498
|
|
|
$
|
809,709
|
|
|
$
|
835,577
|
|
Cost of
sales
|
533,628
|
|
|
579,461
|
|
|
598,755
|
|
Gross
profit
|
223,870
|
|
|
230,248
|
|
|
236,822
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
|
54,136
|
|
|
55,725
|
|
|
51,976
|
|
General and
administrative
|
114,849
|
|
|
118,852
|
|
|
114,653
|
|
Engineering and
technical support
|
37,157
|
|
|
34,161
|
|
|
26,971
|
|
Goodwill impairment
charge
|
—
|
|
|
32,163
|
|
|
—
|
|
Intangible and
long-lived asset impairment charges
|
—
|
|
|
25,398
|
|
|
—
|
|
Restructuring
expense
|
1,134
|
|
|
1,324
|
|
|
—
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
1,526
|
|
Total operating
expenses
|
207,276
|
|
|
267,623
|
|
|
195,126
|
|
Operating income
(loss)
|
16,594
|
|
|
(37,375)
|
|
|
41,696
|
|
Other (expense)
income:
|
|
|
|
|
|
Interest and bank
charges
|
(6,851)
|
|
|
(7,394)
|
|
|
(8,288)
|
|
Equity in income of
equity investee
|
5,866
|
|
|
6,070
|
|
|
4,880
|
|
Venezuela currency
devaluation, net
|
(7,104)
|
|
|
177
|
|
|
(477)
|
|
Impairment of
Venezuela investment properties (Note 1(p))
|
(9,304)
|
|
|
—
|
|
|
—
|
|
Other, net
|
1,495
|
|
|
11,867
|
|
|
(2,156)
|
|
Total other
(expenses) income, net
|
(15,898)
|
|
|
10,720
|
|
|
(6,041)
|
|
|
|
|
|
|
|
Income (loss) from
operations before income taxes
|
696
|
|
|
(26,655)
|
|
|
35,655
|
|
Income tax expense
(benefit)
|
1,638
|
|
|
(58)
|
|
|
13,163
|
|
Net (loss)
income
|
(942)
|
|
|
(26,597)
|
|
|
22,492
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income:
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(33,170)
|
|
|
5,575
|
|
|
(1,281)
|
|
Derivatives
designated for hedging, net of tax
|
3,258
|
|
|
(648)
|
|
|
(174)
|
|
Pension plan
adjustments, net of tax
|
(1,423)
|
|
|
(288)
|
|
|
(1,031)
|
|
Unrealized holding
loss on available-for-sale investment securities arising during the
period, net of tax
|
(27)
|
|
|
(15)
|
|
|
(38)
|
|
Other comprehensive
(loss) income, net of tax
|
(31,362)
|
|
|
4,624
|
|
|
(2,524)
|
|
Comprehensive (loss)
income
|
$
|
(32,304)
|
|
|
$
|
(21,973)
|
|
|
$
|
19,968
|
|
Net (loss) income per
common share (basic)
|
$
|
(0.04)
|
|
|
$
|
(1.10)
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
Net (loss) income per
common share (diluted)
|
$
|
(0.04)
|
|
|
$
|
(1.10)
|
|
|
$
|
0.95
|
|
Weighted-average
common shares outstanding (basic)
|
24,330,361
|
|
|
24,109,270
|
|
|
23,415,570
|
|
Weighted-average
common shares outstanding (diluted)
|
24,330,361
|
|
|
24,109,270
|
|
|
23,617,101
|
|
VOXX International
Corporation and Subsidiaries
Reconciliation of
GAAP Net (Loss) Income to Adjusted EBITDA
(In thousands,
except share and per share data)
|
|
|
|
Fiscal
|
|
Fiscal
|
|
Fiscal
|
|
|
2015
|
|
2014
|
|
2013
|
Net (loss)
income
|
|
$
|
(942)
|
|
|
$
|
(26,597)
|
|
|
$
|
22,492
|
|
Adjustments:
|
|
|
|
|
|
|
Interest expense and
bank charges
|
|
6,851
|
|
|
7,394
|
|
|
8,288
|
|
Depreciation and
amortization
|
|
15,565
|
|
|
16,183
|
|
|
16,446
|
|
Income tax expense
(benefit)
|
|
1,638
|
|
|
(58)
|
|
|
13,163
|
|
EBITDA
|
|
23,112
|
|
|
(3,078)
|
|
|
60,389
|
|
Stock-based
compensation
|
|
521
|
|
|
641
|
|
|
435
|
|
Venezuela bond
remeasurement
|
|
7,396
|
|
|
—
|
|
|
—
|
|
Impairment of
long-lived assets in Venezuela
|
|
9,304
|
|
|
—
|
|
|
—
|
|
Circuit City
recovery
|
|
—
|
|
|
(940)
|
|
|
—
|
|
Net legal
settlements
|
|
—
|
|
|
(4,443)
|
|
|
1,661
|
|
Unanticipated
customer settlement payment
|
|
—
|
|
|
(4,370)
|
|
|
—
|
|
Asia warehouse
relocation
|
|
—
|
|
|
(208)
|
|
|
789
|
|
Restructuring
charges
|
|
1,134
|
|
|
1,324
|
|
|
—
|
|
Goodwill impairment
charges
|
|
—
|
|
|
32,163
|
|
|
—
|
|
Intangible and
long-lived asset impairment charges
|
|
—
|
|
|
25,398
|
|
|
—
|
|
Acquisition related
costs
|
|
—
|
|
|
—
|
|
|
1,526
|
|
Loss/(gain) on
foreign exchange as a result of Hirschmann acquisition
|
|
—
|
|
|
—
|
|
|
2,670
|
|
Adjusted
EBITDA
|
|
$
|
41,467
|
|
|
$
|
46,487
|
|
|
$
|
67,470
|
|
Diluted (loss)
earnings per common share
|
|
$
|
(0.04)
|
|
|
$
|
(1.10)
|
|
|
$
|
0.95
|
|
Diluted adjusted
EBITDA per common share
|
|
$
|
1.70
|
|
|
$
|
1.93
|
|
|
$
|
2.86
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/voxx-international-corporation-reports-fiscal-2015-financial-results-300082944.html
SOURCE VOXX International Corporation