HAUPPAUGE, N.Y., July 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
first quarter ended May 31, 2016.
Net sales for the Fiscal 2017 first quarter were $155.5 million, a decrease of $8.9 million as compared to $164.4 million reported in the comparable
year-ago period. The average Euro for the Fiscal 2017 and
Fiscal 2016 first quarters was $1.13
and $1.09, respectively, and
positively impacted net sales by approximately $1.8 million. Additionally, the sale of
inventory and subsequent licensing of the Jensen 12-volt audio
business impacted net sales by $3.0
million. Excluding the impact of the Euro conversion
and sale of the Jensen car audio business, net sales were down
$7.7 million or approximately
4.7%.
- Automotive segment sales were $81.4
million and $90.0 million for
the Fiscal 2017 and Fiscal 2016 first quarters, respectively,
representing a decline of $8.6
million. The Jensen sale impacted net sales by $3.0 million and the remaining decline was
primarily due to lower OEM sales in North
America, and lower aftermarket sales of remote starts and
satellite radio products. This was partially offset by an increase
in tuner and antenna sales at Hirschmann, as a new OEM program
began during the quarter.
- Premium Audio segment sales were $32.1
million and $29.3 million for
the Fiscal 2017 and Fiscal 2016 first quarters, respectively, an
increase of $2.8 million. The
increase in sales was primarily related to the introduction of new
products, including HD wireless speakers, soundbars with wireless
subwoofers and an increase in headphone sales. Strong domestic
performance was partially offset by a decline in European
sales.
- Consumer Accessories segment sales were $41.7 million and $44.7
million for the Fiscal 2017 and Fiscal 2016 first quarters,
respectively, a decline of $3.1
million. This was primarily related to lower sales of
wireless speakers due to stronger load-in's in the Fiscal 2016
first quarter and declines across select categories, partially
offset by higher sales of antenna products and 360Fly action
cameras, as well as an increase in net sales internationally.
Pat Lavelle, President and CEO of
VOXX International stated, "While we reported a net loss for the
quarter, it was anticipated and we outperformed our Q1 plan.
As we stated last quarter, many of the product load-in's for our
Consumer Accessories and Premium Audio segments are slated for our
second and third fiscal quarters and as such, we are anticipating
growth in these categories for the Fiscal year. New digital
technologies within Premium Audio have enabled us to reverse the
declining sales trend and we reported a 10% increase in segment
sales and at higher gross margins. Our Consumer Accessories
business should be aided by the launch of our new 360Fly 4K action
camera, strength in our RCA and Terk reception business and the
introduction of Project Nursery, a line of high-end projectors,
cameras and displays designed for the nursery. Lastly, our
Automotive segment is expected to be flat to down modestly this
year, though with the new awards we announced last quarter, coupled
with $40 million in new programs
awarded in Q1, and our pipeline of booked business, we should
generate growth in Fiscal 2018 and in the following years."
The gross margin for the Fiscal 2017 first quarter came in at
29.7% as compared to 29.2% for the same period last year, an
increase of 50 basis points ("bps"). The increase in gross
profit margin was primarily due to higher margins in the Premium
Audio segment, given the introduction of new product lines and a
shift in product mix. Automotive segment gross margins were
30.0% and declined by 30 bps; Premium Audio segment gross margins
were 34.6% and increased 250 bps; and Consumer Accessories segment
gross margins were 24.7%, consistent with the Fiscal 2016 first
quarter.
Operating expenses for the Fiscal 2017 first quarter were
$53.2 million, a $4.4 million increase as compared to $48.8 million in the Fiscal 2016 first
quarter. Excluding the addition of operating expenses
associated with EyeLock, LLC ("EyeLock"), the Company's majority
owned subsidiary and most recent acquisition, operating expenses
were flat for the comparable periods.
In addition to expenses associated with EyeLock, the Company
increased its investments in research and development initiatives
associated with its Automotive and Premium Audio segments and
received fewer reimbursements of engineering expenses ("NRE") at
Hirschmann. The Company also incurred increases in
depreciation and amortization expenses during the three months
ended May 31, 2016 as a result of
intangible assets acquired in conjunction with the EyeLock
acquisition and the addition of the Company's new manufacturing
facility and executive offices in Lake Nona, FL. As an offset
to these operating expense increases, the Company has experienced
decreases in salary, payroll and benefits expenses, and lower
advertising expenses for the three months ended May 31, 2016.
The Company reported an operating loss of $7.1 million as compared to an operating loss of
$0.8 million in the Fiscal 2016 first
quarter. Net loss was $4.3
million or a loss of $0.18 per
diluted share as compared to a net loss of $0.7 million and a net loss per diluted share of
$0.03 in the comparable prior year
period. Excluding the impact of EyeLock, the Company would
have reported a net loss for the Fiscal 2017 first quarter of
$1.5 million as compared to a net
loss of $0.7 million for the
corresponding year-ago period.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the Fiscal 2017 first quarter was $0.1 million as compared to EBITDA of
$4.6 million reported in the Fiscal
2016 first quarter. Adjusted EBITDA was $0.3 million as compared to $4.9 million for the comparable Fiscal 2017 and
2016 first quarter periods.
Lavelle continued, "Gross margins showed improvement during the
quarter and we believe we're on track to deliver higher margins
this Fiscal year. Expenses are expected to be down, even with
the addition of EyeLock and increased investments in R&D to
drive new technologies across each of our segments. With that
said, we continue to focus on cost controls and believe the Company
remains positioned for profitability this Fiscal year."
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 and stock-based compensation expense.
Depreciation, amortization and stock-based compensation 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 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 Tuesday, July 12, 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: 43499872). 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: 43499872).
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
VOXX International
Corporation and Subsidiaries Consolidated Balance
Sheets
|
|
(In
thousands)
|
|
May 31,
2016
|
|
February 29,
2016
|
Assets
|
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
8,558
|
|
|
$
|
11,767
|
|
Accounts receivable,
net
|
|
78,894
|
|
|
87,055
|
|
Inventory,
net
|
|
150,638
|
|
|
144,028
|
|
Receivables from
vendors
|
|
1,894
|
|
|
2,519
|
|
Prepaid expenses and
other current assets
|
|
16,437
|
|
|
17,256
|
|
Income tax
receivable
|
|
1,605
|
|
|
1,426
|
|
Total current
assets
|
|
258,026
|
|
|
264,051
|
|
Investment
securities
|
|
10,054
|
|
|
10,206
|
|
Equity
investments
|
|
22,221
|
|
|
21,949
|
|
Property, plant and
equipment, net
|
|
79,932
|
|
|
79,422
|
|
Goodwill
|
|
105,729
|
|
|
104,349
|
|
Intangible assets,
net
|
|
184,020
|
|
|
185,022
|
|
Deferred income
taxes
|
|
23
|
|
|
23
|
|
Other
assets
|
|
2,197
|
|
|
2,168
|
|
Total
assets
|
|
$
|
662,202
|
|
|
$
|
667,190
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
57,848
|
|
|
$
|
55,790
|
|
Accrued expenses and
other current liabilities
|
|
43,446
|
|
|
50,748
|
|
Income taxes
payable
|
|
1,807
|
|
|
4,081
|
|
Accrued sales
incentives
|
|
12,630
|
|
|
12,439
|
|
Current portion of
long-term debt
|
|
10,989
|
|
|
8,826
|
|
Total current
liabilities
|
|
126,720
|
|
|
131,884
|
|
Long-term debt, net
of debt issuance costs
|
|
91,923
|
|
|
88,169
|
|
Capital lease
obligation
|
|
1,301
|
|
|
1,381
|
|
Deferred
compensation
|
|
4,034
|
|
|
4,011
|
|
Other tax
liabilities
|
|
5,092
|
|
|
4,997
|
|
Deferred tax
liabilities
|
|
28,839
|
|
|
30,374
|
|
Other long-term
liabilities
|
|
10,441
|
|
|
10,480
|
|
Total
liabilities
|
|
268,350
|
|
|
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 May 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
|
|
294,373
|
|
|
294,038
|
|
Retained
earnings
|
|
150,639
|
|
|
154,947
|
|
Non-controlling
interest
|
|
6,813
|
|
|
8,524
|
|
Accumulated other
comprehensive loss
|
|
(37,075)
|
|
|
(40,717)
|
|
Treasury stock, at
cost, 2,168,074 shares of Class A Common Stock at both May 31, 2016
and February 29, 2016
|
|
(21,176)
|
|
|
(21,176)
|
|
Total stockholders'
equity
|
|
393,852
|
|
|
395,894
|
|
Total liabilities and
stockholders' equity
|
|
$
|
662,202
|
|
|
$
|
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
May 31,
|
|
|
2016
|
|
2015
|
Net sales
|
|
$
|
155,456
|
|
|
$
|
164,383
|
|
Cost of
sales
|
|
109,355
|
|
|
116,340
|
|
Gross
profit
|
|
46,101
|
|
|
48,043
|
|
Operating
expenses:
|
|
|
|
|
Selling
|
|
12,664
|
|
|
13,038
|
|
General and
administrative
|
|
27,071
|
|
|
27,691
|
|
Engineering and
technical support
|
|
13,479
|
|
|
8,079
|
|
Total
operating expenses
|
|
53,214
|
|
|
48,808
|
|
Operating
loss
|
|
(7,113)
|
|
|
(765)
|
|
Other (expense)
income:
|
|
|
|
|
Interest and bank
charges
|
|
(1,695)
|
|
|
(1,567)
|
|
Equity in income of
equity investees
|
|
1,808
|
|
|
1,618
|
|
Other, net
|
|
(512)
|
|
|
276
|
|
Total
other (expense) income, net
|
|
(399)
|
|
|
327
|
|
Loss before income
taxes
|
|
(7,512)
|
|
|
(438)
|
|
Income tax (benefit)
expense
|
|
(1,392)
|
|
|
276
|
|
Net loss
|
|
$
|
(6,120)
|
|
|
$
|
(714)
|
|
Less: net loss
attributable to non-controlling interest
|
|
(1,812)
|
|
|
—
|
|
Net loss attributable
to Voxx International Corporation
|
|
$
|
(4,308)
|
|
|
$
|
(714)
|
|
Other comprehensive
income (loss):
|
|
|
|
|
Foreign currency
translation adjustments
|
|
4,196
|
|
|
(2,797)
|
|
Derivatives
designated for hedging
|
|
(491)
|
|
|
(664)
|
|
Pension plan
adjustments
|
|
(58)
|
|
|
52
|
|
Unrealized holding
loss on available-for-sale investment securities arising during the
period, net of tax
|
|
(5)
|
|
|
(4)
|
|
Other comprehensive
income (loss), net of tax
|
|
3,642
|
|
|
(3,413)
|
|
Comprehensive loss
attributable to Voxx International Corporation
|
|
$
|
(666)
|
|
|
$
|
(4,127)
|
|
|
|
|
|
|
Net loss per common
share attributable to Voxx International Corporation
(basic)
|
|
$
|
(0.18)
|
|
|
$
|
(0.03)
|
|
Net loss per common
share attributable to Voxx International Corporation
(diluted)
|
|
$
|
(0.18)
|
|
|
$
|
(0.03)
|
|
Weighted-average
common shares outstanding (basic)
|
|
24,160,324
|
|
|
24,153,859
|
|
Weighted-average
common shares outstanding (diluted)
|
|
24,160,324
|
|
|
24,153,859
|
|
|
|
|
|
VOXX International
Corporation and Subsidiaries Reconciliation of GAAP Net
Loss to Adjusted EBITDA (In thousands, except share
and per share data) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
May 31,
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Net loss attributable
to Voxx International Corporation
|
|
$
|
(4,308)
|
|
|
$
|
(714)
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
bank charges (1)
|
|
1,588
|
|
|
1,567
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (1)
|
|
4,243
|
|
|
3,497
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(1,392)
|
|
|
276
|
|
|
|
|
|
|
|
|
EBITDA
|
|
131
|
|
|
4,626
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
175
|
|
|
230
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
306
|
|
|
$
|
4,856
|
|
|
|
|
|
|
|
|
Diluted loss per
common share
|
|
$
|
(0.18)
|
|
|
$
|
(0.03)
|
|
|
|
|
|
|
|
|
Diluted adjusted
EBITDA per common share
|
|
$
|
0.01
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For purposes of
calculating Adjusted EBITDA for the Company, interest expense and
bank charges and depreciation and amortization added back to Net
Loss have been adjusted in order to exclude the non-controlling
interest portion of these expenses attributable to EyeLock
LLC.
|
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SOURCE VOXX International Corporation