HAUPPAUGE, N.Y., Oct. 11, 2016 /PRNewswire/ -- VOXX
International Corporation (NASDAQ: VOXX), a leading global
manufacturer and distributor of automotive and consumer lifestyle
products, today announced its financial results for its Fiscal 2017
second quarter ended August 31,
2016.
Commenting on the Company's Fiscal 2017 performance,
Pat Lavelle, President and CEO
stated, "We reported year-over-year growth during the second
quarter and remain on track to drive growth in our business this
Fiscal year. While our Automotive segment is expected to be
down slightly, most of it is timing related and we have new
programs slated to begin towards the end of our Fiscal year.
We were also awarded another $45
million in new contracts during the second quarter, bringing
the total value of OEM awards received over the past three quarters
to approximately $380 million.
Our Consumer Accessories and Premium Audio segments posted strong
growth, with new product introductions driving improvements, and
load-in's for the all-important holiday season are looking
good. With gross margins holding and continued cost controls
in place, we expect Fiscal 2017 to show improved top- and
bottom-line performance this year."
Fiscal 2017 Second Quarter Comparisons (for the three months
ended August 31, 2016 and
August 31, 2015)
Net sales for the Fiscal 2017 second quarter were $159.3 million, an increase of $5.1 million or 3.3% as compared to $154.2 million reported in the comparable
year-ago period.
- Automotive segment sales were $79.9
million and $84.3 million for
the Fiscal 2017 and Fiscal 2016 second quarters, respectively,
representing a decline of $4.4
million or 5.3%. The Company previously sold all inventory
and licensed its Jensen Mobile business during Fiscal 2016, which
impacted net sales by $3.0 million
during the quarter. The remaining decline was primarily due to
lower OEM sales domestically as certain North American contracts
reached the end of life. This was partially offset by an increase
in tuner and antenna sales internationally at VOXXHirschmann.
- Premium Audio segment sales were $34.9
million and $30.2 million for
the Fiscal 2017 and Fiscal 2016 second quarters, respectively, an
increase of $4.7 million or 15.5%.
The increase in sales was primarily related to the introduction of
several new products, including HD wireless and Bluetooth speakers,
soundbars with wireless subwoofers, as well as higher sales of home
entertainment speakers and headphones.
- Consumer Accessories segment sales were $44.3 million and $39.1
million for the Fiscal 2017 and Fiscal 2016 second quarters,
respectively, an increase of $5.1
million or 13.2%. This increase was due to higher sales of
reception products, sales of the new 360Fly 4K Action Camera, the
launch of the Company's Project Nursery baby monitors in the second
quarter of Fiscal 2017, and higher sales internationally.
Gross margins for the Fiscal 2017 second quarter were 29.2%,
consistent with the Fiscal 2016 second quarter. Automotive segment
gross margins were 31.3%, an increase of 60 basis points due
primarily to a shift in product mix given lower fulfillment
sales. Premium Audio segment gross margins were 32.9%, an
increase of 30 basis points due primarily to the introduction of
new product lines. Consumer Accessories segment gross margins were
22.2%, a decrease of 80 basis points, primarily due to a shift in
product mix domestically, partially offset by higher margins
internationally.
Operating expenses for the Fiscal 2017 second quarter were
$47.3 million, an improvement of
$4.5 million or 8.7%, as compared to
the Fiscal 2016 second quarter. The Fiscal 2016 second
quarter included $6.2 million of
intangible asset impairment charges and EyeLock's expenses in the
Fiscal 2017 second quarter totaled $4.1
million. Excluding the impact of the intangible asset
impairment charges and EyeLock related expenses, core operating
expenses declined by $2.4 million as
the Company continues to institute various cost controls to improve
bottom-line performance.
The Company reported an operating loss of $0.8 million as compared to an operating loss of
$6.9 million in the Fiscal 2016
second quarter. Net income attributable to VOXX International
Corporation for the three months ended August 31, 2016 was $3.0
million or $0.12 per basic and
diluted share, as compared to a net loss of $4.4 million or a net loss per basic and diluted
share of $0.18 in the comparable
prior year period.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the Fiscal 2017 second quarter was $6.7 million as compared to an EBITDA loss of
$1.7 million reported in the Fiscal
2016 second quarter, an improvement of $8.4
million. Adjusted EBITDA was $6.9 million as compared to $4.8 million for the comparable Fiscal 2017 and
2016 second quarter periods.
Six-Month Comparisons (for the six-month periods ended
August 31, 2016 and August 31, 2015)
Net sales for the Fiscal 2017 six-month period were $314.7 million compared to $318.6 million reported in the comparable
year-ago period, a decrease of $3.8
million or 1.2%. Excluding the impact of the sale of the
Jensen inventory in the prior year and subsequent licensing of the
Jensen brand, the Company would have reported an increase in net
sales of $2.5 million.
- Automotive segment sales of $161.3
million declined by approximately $13.0 million for the comparable six-month
period, though Jensen accounted for $6.3
million of the decline. The remainder was primarily
due to declines in the North American market, offset by higher OEM
sales internationally.
- Premium Audio segment sales for the Fiscal 2017 six month
period were $67.0 million, an
increase of $7.5 million or 12.6% as
compared to the six-month period in Fiscal 2016. The increase was
driven by the introduction of several new products over the past
few quarters.
- Consumer Accessories segment sales of $86.0 million for the Fiscal 2017 six-month
period increased $2.1 million or 2.5%
as compared to the six-month period in Fiscal 2016. Higher
sales of reception products, 360 Fly 4K Action Cameras and Project
Nursery related products, as well as higher sales internationally,
more than offset declines in other product categories.
The gross margin for the six-month period in Fiscal 2017 came in
at 29.4% as compared to 29.2% for the same period last year, an
increase of 20 basis points. Automotive segment gross margins
of 30.6% increased 10 basis points; Premium Audio segment gross
margins of 33.8% increased 150 basis points; and Consumer
Accessories segment gross margins declined by 50 basis points,
again, due to product mix.
Operating expenses for the Fiscal 2017 six-month period were
$100.5 million as compared to
operating expenses of $100.7 million
in the comparable year-ago period, a decrease of $0.1 million. EyeLock related expenses for the
Fiscal 2017 six-month period were $8.5
million, with approximately $4.1
million associated with engineering and technical support as
the Company continues to build out its solutions portfolio and
drive next-generation technology. Excluding the impact of
EyeLock related expenses and the $6.2
million in intangible asset impairment charges recorded in
the Company's Fiscal 2016 second quarter, core operating expenses
declined by $2.4 million.
The Company reported an operating loss for the Fiscal 2017
six-month period of $7.9 million as
compared to an operating loss of $7.6
million in the Fiscal 2016 six-month period, a change of
$0.3 million. Net loss
attributable to VOXX International Corporation for the Fiscal 2017
six-month period was $1.3 million, or
a loss of $0.05 per basic and diluted
share, as compared to a net loss of $5.1
million or a net loss per basic and diluted share of
$0.21.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the Fiscal 2017 six-month period was $6.9 million as compared to EBITDA of
$3.0 million reported in the
comparable Fiscal 2016 period. Adjusted EBITDA was
$7.2 million as compared to
$9.7 million for the comparable
Fiscal 2017 and 2016 six-month periods.
Non-GAAP Measures
EBITDA, Adjusted EBITDA and diluted adjusted EBITDA per common
share are not financial measures recognized by GAAP. Adjusted
EBITDA represents net loss, computed in accordance with GAAP,
before interest and bank charges, taxes, depreciation and
amortization, stock-based compensation expense, and impairment
charges. Depreciation, amortization, stock-based
compensation, and impairment charges 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 certain costs
or gains relating to certain non-recurring events 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 net income (loss) 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 alternatives to,
measures of operating performance as determined in accordance with
GAAP.
The Company will be hosting its conference call on Thursday, October 13, 2016 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: 91741268). 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: 91741268).
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,
the Company 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®, myris®, Code Alarm®, Car Connection®, 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 29,
2016.
Company Contact:
Glenn Wiener
GW Communications (for VOXX)
Tel: 212-786-6011
Email: gwiener@GWCco.com
- Tables to Follow –
VOXX International
Corporation and Subsidiaries
|
Consolidated
Balance Sheets
|
|
(In
thousands)
|
|
August 31,
2016
|
|
February 29,
2016
|
Assets
|
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,851
|
|
|
$
|
11,767
|
|
Accounts receivable,
net
|
|
81,092
|
|
|
87,055
|
|
Inventory,
net
|
|
160,833
|
|
|
144,028
|
|
Receivables from
vendors
|
|
1,800
|
|
|
2,519
|
|
Prepaid expenses and
other current assets
|
|
17,993
|
|
|
17,256
|
|
Income tax
receivable
|
|
4,501
|
|
|
1,426
|
|
Total current
assets
|
|
271,070
|
|
|
264,051
|
|
Investment
securities
|
|
10,314
|
|
|
10,206
|
|
Equity
investments
|
|
21,958
|
|
|
21,949
|
|
Property, plant and
equipment, net
|
|
80,054
|
|
|
79,422
|
|
Goodwill
|
|
105,591
|
|
|
104,349
|
|
Intangible assets,
net
|
|
181,858
|
|
|
185,022
|
|
Deferred income
taxes
|
|
23
|
|
|
23
|
|
Other
assets
|
|
2,106
|
|
|
2,168
|
|
Total
assets
|
|
$
|
672,974
|
|
|
$
|
667,190
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
71,268
|
|
|
$
|
55,790
|
|
Accrued expenses and
other current liabilities
|
|
38,453
|
|
|
50,748
|
|
Income taxes
payable
|
|
1,742
|
|
|
4,081
|
|
Accrued sales
incentives
|
|
12,864
|
|
|
12,439
|
|
Current portion of
long-term debt
|
|
10,840
|
|
|
8,826
|
|
Total current
liabilities
|
|
135,167
|
|
|
131,884
|
|
Long-term debt, net
of debt issuance costs
|
|
92,936
|
|
|
88,169
|
|
Capital lease
obligation
|
|
1,178
|
|
|
1,381
|
|
Deferred
compensation
|
|
4,237
|
|
|
4,011
|
|
Other tax
liabilities
|
|
5,142
|
|
|
4,997
|
|
Deferred income tax
liabilities
|
|
28,819
|
|
|
30,374
|
|
Other long-term
liabilities
|
|
10,586
|
|
|
10,480
|
|
Total
liabilities
|
|
278,065
|
|
|
271,296
|
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred
stock:
|
|
|
|
|
No shares issued or
outstanding
|
|
—
|
|
|
—
|
|
Common
stock:
|
|
|
|
|
Class A, $.01 par
value; 60,000,000 shares authorized, 24,067,444 shares issued and
21,899,370 shares outstanding at both August 31, 2016 and February
29, 2016
|
|
256
|
|
|
256
|
|
Class B Convertible,
$.01 par value, 10,000,000 authorized, 2,260,954 shares issued and
outstanding
|
|
22
|
|
|
22
|
|
Paid-in
capital
|
|
294,721
|
|
|
294,038
|
|
Retained
earnings
|
|
153,659
|
|
|
154,947
|
|
Non-controlling
interest
|
|
5,200
|
|
|
8,524
|
|
Accumulated other
comprehensive loss
|
|
(37,773)
|
|
|
(40,717)
|
|
Treasury stock, at
cost, 2,168,074 shares of Class A Common Stock at both August 31,
2016 and February 29, 2016
|
|
(21,176)
|
|
|
(21,176)
|
|
Total stockholders'
equity
|
|
394,909
|
|
|
395,894
|
|
Total liabilities and
stockholders' equity
|
|
$
|
672,974
|
|
|
$
|
667,190
|
|
VOXX International
Corporation and Subsidiaries
|
Consolidated
Statements of Operations and Comprehensive Income
(Loss)
|
(In
thousands, except share and per share data)
|
(unaudited)
|
|
|
|
Three Months
Ended
August 31,
|
|
Six Months
Ended
August 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net sales
|
|
$
|
159,262
|
|
|
$
|
154,174
|
|
|
$
|
314,718
|
|
|
$
|
318,557
|
|
Cost of
sales
|
|
112,769
|
|
|
109,199
|
|
|
222,124
|
|
|
225,539
|
|
Gross
profit
|
|
46,493
|
|
|
44,975
|
|
|
92,594
|
|
|
93,018
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling
|
|
11,115
|
|
|
10,680
|
|
|
23,779
|
|
|
23,718
|
|
General and
administrative
|
|
24,903
|
|
|
26,303
|
|
|
51,974
|
|
|
53,994
|
|
Engineering and
technical support
|
|
11,291
|
|
|
8,652
|
|
|
24,770
|
|
|
16,731
|
|
Intangible asset
impairment charges
|
|
—
|
|
|
6,210
|
|
|
—
|
|
|
6,210
|
|
Total
operating expenses
|
|
47,309
|
|
|
51,845
|
|
|
100,523
|
|
|
100,653
|
|
Operating
loss
|
|
(816)
|
|
|
(6,870)
|
|
|
(7,929)
|
|
|
(7,635)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest and bank
charges
|
|
(1,870)
|
|
|
(1,625)
|
|
|
(3,565)
|
|
|
(3,192)
|
|
Equity in income of
equity investees
|
|
1,545
|
|
|
1,457
|
|
|
3,353
|
|
|
3,075
|
|
Other, net
|
|
184
|
|
|
191
|
|
|
(328)
|
|
|
467
|
|
Total other
income (expense), net
|
|
(141)
|
|
|
23
|
|
|
(540)
|
|
|
350
|
|
Loss before income
taxes
|
|
(957)
|
|
|
(6,847)
|
|
|
(8,469)
|
|
|
(7,285)
|
|
Income tax
benefit
|
|
(2,261)
|
|
|
(2,453)
|
|
|
(3,653)
|
|
|
(2,177)
|
|
Net income
(loss)
|
|
1,304
|
|
|
(4,394)
|
|
|
(4,816)
|
|
|
(5,108)
|
|
Less: net loss
attributable to non-controlling interest
|
|
(1,716)
|
|
|
—
|
|
|
(3,528)
|
|
|
—
|
|
Net income (loss)
attributable to Voxx International Corporation
|
|
$
|
3,020
|
|
|
$
|
(4,394)
|
|
|
$
|
(1,288)
|
|
|
$
|
(5,108)
|
|
Other comprehensive
(loss) income:
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
|
(680)
|
|
|
1,764
|
|
|
3,516
|
|
|
(1,033)
|
|
Derivatives designated for hedging
|
|
(21)
|
|
|
(977)
|
|
|
(512)
|
|
|
(1,641)
|
|
Pension
plan adjustments
|
|
6
|
|
|
(53)
|
|
|
(52)
|
|
|
(1)
|
|
Unrealized
holding loss on available-for-sale investment securities, net of
tax
|
|
(3)
|
|
|
—
|
|
|
(8)
|
|
|
(4)
|
|
Other comprehensive (loss) income, net of tax
|
|
(698)
|
|
|
734
|
|
|
2,944
|
|
|
(2,679)
|
|
Comprehensive income
(loss) attributable to Voxx International Corporation
|
|
$
|
2,322
|
|
|
$
|
(3,660)
|
|
|
$
|
1,656
|
|
|
$
|
(7,787)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share attributable to Voxx International Corporation
(basic)
|
|
$
|
0.12
|
|
|
$
|
(0.18)
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.21)
|
|
Net income (loss) per
common share attributable to Voxx International Corporation
(diluted)
|
|
$
|
0.12
|
|
|
$
|
(0.18)
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.21)
|
|
Weighted-average
common shares outstanding (basic)
|
|
24,160,324
|
|
|
24,193,606
|
|
|
24,160,324
|
|
|
24,173,733
|
|
Weighted-average
common shares outstanding (diluted)
|
|
24,242,447
|
|
|
24,193,606
|
|
|
24,160,324
|
|
|
24,173,733
|
|
VOXX International
Corporation and Subsidiaries
|
Reconciliation of
GAAP Net Income (Loss) to Adjusted EBITDA
|
|
|
|
Three Months
Ended
August 31,
|
|
Six Months
Ended
August 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income (loss)
attributable to Voxx International Corporation
|
|
$
|
3,020
|
|
|
$
|
(4,394)
|
|
|
$
|
(1,288)
|
|
|
$
|
(5,108)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Interest expense and
bank charges (1)
|
|
1,722
|
|
|
1,625
|
|
|
3,310
|
|
|
3,192
|
|
Depreciation and
amortization (1)
|
|
4,247
|
|
|
3,558
|
|
|
8,490
|
|
|
7,055
|
|
Income tax
benefit
|
|
(2,261)
|
|
|
(2,453)
|
|
|
(3,653)
|
|
|
(2,177)
|
|
EBITDA
|
|
6,728
|
|
|
(1,664)
|
|
|
6,859
|
|
|
2,962
|
|
Stock-based
compensation
|
|
188
|
|
|
257
|
|
|
363
|
|
|
487
|
|
Intangible asset
impairment charges
|
|
—
|
|
|
6,210
|
|
|
—
|
|
|
6,210
|
|
Adjusted
EBITDA
|
|
$
|
6,916
|
|
|
$
|
4,803
|
|
|
$
|
7,222
|
|
|
$
|
9,659
|
|
Diluted income (loss)
per common share
|
|
$
|
0.12
|
|
|
$
|
(0.18)
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.21)
|
|
Diluted adjusted
EBITDA per common share
|
|
$
|
0.29
|
|
|
$
|
0.20
|
|
|
$
|
0.30
|
|
|
$
|
0.40
|
|
|
(1) For purposes of
calculating Adjusted EBITDA for the Company, interest expense and
bank charges, as well as depreciation and amortization added back
to Net Income (Loss) have been adjusted in order to exclude the
non-controlling interest portion of these expenses attributable to
EyeLock LLC.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/voxx-international-corporation-reports-its-fiscal-2017-second-quarter-results-300342954.html
SOURCE VOXX International Corporation