ORLANDO, Fla., July 10, 2018 /PRNewswire/ -- VOXX
International Corporation (NASDAQ: VOXX), a leading manufacturer
and distributor of automotive and consumer technologies for global
markets, today announced its financial results for its Fiscal 2019
first quarter ended May 31,
2018.
Pat Lavelle, President and CEO
of VOXX International Corporation stated, "The steps we
have taken to realign operations and lower fixed costs are taking
hold as losses were reduced year-over-year and further improvements
are expected. While sales declined, this was anticipated. New
programs and product launches across the segments should result in
top-line growth in the second half of the year. Additionally, lower
inventory positions and improved gross margins, particularly in the
Premium Audio segment, should favorably impact the bottom-line. As
such, we expect VOXX to return to profitability in the Fiscal 2019
third quarter and finish the year profitable on an operating and
net income basis."
Lavelle continued, "Demand for our next-generation EVO rear-seat
infotainment system is building and holds significant potential for
our Automotive segment, as our OEM customers are rolling EVO out on
new vehicles and inbound interest has intensified. We're gearing up
for the launch of our new Klipsch Reference and Reference Premier
speaker lines, as well as the launch of other Klipsch audio
solutions. Our Consumer Accessories segment has expanded its
distribution in the healthcare space, and we anticipate top-line
improvements as a result in the second half of Fiscal 2019 and
beyond, coupled with EyeLock products soon coming to market. Our
balance sheet remains strong and our business outlook is
improving."
Fiscal 2019 and Fiscal 2018 First Quarter Results
Comparisons
Net sales for the Fiscal 2019 first quarter ended May 31, 2018 were $100.9 million as
compared to net sales of $114.8 million in the comparable
year-ago period, a decline of $14.0 million or 12.2%.
- Fiscal 2019 first quarter Automotive segment sales were
$39.6 million as compared to
$37.0 million for the comparable
Fiscal 2018 first quarter, an increase of $2.6 million or 7.1%. The year-over-year increase
was primarily driven by new rear-seat infotainment headrest
programs, offset by lower aftermarket sales. The Company
anticipates continued top-line increases in its OEM business
throughout the year based on new EVO rear-seat infotainment
programs that launched in the Fiscal 2018 third quarter and new
vehicles soon coming to market, as well as a new remote start
program with Subaru.
- Fiscal 2019 first quarter Consumer Accessories segment sales
were $28.7 million as compared to
$39.9 million in the comparable
Fiscal 2018 first quarter, a decrease of $11.2 million or 28.0%. The year-over-year
decrease was driven primarily by lower volume of wireless speakers,
reception and hook-up products, and lower sales internationally,
offset by a slight increase in Project Nursery baby products and a
new line of music systems. A new distribution program in support of
United Healthcare's Motion Program is anticipated to positively
contribute to net sales in the second half of Fiscal 2019.
- Fiscal 2019 Premium Audio segment sales were $32.4 million as compared to $37.7 million for the comparable Fiscal 2019
first quarter, a decrease of $5.3
million or 14.2%. This decline was primarily driven by a
combination of lower international sales and a decision to limit
certain promotional programs, thus improving gross margins.
The gross margin for the Fiscal 2019 first quarter came in at
27.4% as compared to 26.3% for the same period last year. The
year-over-year improvement of 110 basis points was related to a
significant increase in gross margins in the Premium Audio segment
(34.1% vs. 27.0%) resulting from higher margin product sales in the
first quarter of Fiscal 2019, the decision to pass on certain
retail promotions, and lower margins associated with Fiscal 2018
first quarter promotions. Offsetting this increase were lower gross
margins in the Automotive segment (25.2% vs. 27.9%), due primarily
to headrest programs in the comparable first quarter periods, and
in the Consumer Accessories segment (22.8% vs. 23.8%), primarily as
a result of product mix shifts.
Total operating expenses for the Fiscal 2019 first quarter
were $32.7 million as compared to $39.3
million in the Fiscal 2018 first quarter, a reduction of
$6.5 million or 16.7%. The
year-over-year improvement was primarily related to steps taken in
the prior fiscal year to reduce fixed expenses and ongoing steps to
improve operating efficiencies, as well as a recovery of
professional fees from prior year periods. When comparing the
Fiscal 2019 and Fiscal 2018 first quarter periods, selling expenses
declined by $1.7 million or 13.8%,
general and administrative expenses declined by $4.1 million or 20.2%, and engineering &
technical support expenses declined by $0.7
million or 11.2%.
The Company reported an operating loss of $5.0 million in the Fiscal 2019 first quarter as
compared to an operating loss of $9.1
million for the comparable Fiscal 2018 period, a
year-over-year improvement of $4.1
million. Total other income, net for the Fiscal 2019 first
quarter was $1.4 million as compared to total other
expense, net of $1.0 million in the
comparable year-ago period. Interest and bank charges declined by
approximately $0.7 million due to a lower average
outstanding balance on the Company's Credit Facility compared to
the prior year period.
Net loss from continuing operations was $2.6 million in the Fiscal 2019 first
quarter as compared to a net loss from continuing operations of
$2.7 million in the corresponding
year-ago period. Net loss from discontinued operations, net of tax,
was $2.2 million in the Fiscal 2018
first quarter and there was no income or losses reported in the
comparable Fiscal 2019 period. Net loss attributable to VOXX
International Corporation in the Fiscal 2019 first quarter was
$0.9 million as compared to a net
loss attributable to VOXX International Corporation of $3.0 million in the comparable year-ago period,
an improvement of $2.1 million. This
resulted in a loss per basic and diluted share of $0.04 in the Fiscal 2019 first quarter compared
to a loss per basic and diluted share of $0.13 in the Fiscal 2018 first quarter.
The Company reported earnings before interest, taxes,
depreciation and amortization ("EBITDA") of $1.3
million and Adjusted EBITDA of $1.5 million for the
Fiscal 2019 first quarter. This compares to an EBITDA loss
of $1.3 million and an Adjusted EBITDA loss of $1.1
million for the comparable year-ago period.
Discontinued Operations
On August 31, 2017, the Company completed its sale
of Hirschmann Car Communication GmbH and its subsidiaries
(collectively, "Hirschmann") to a subsidiary of TE
Connectivity Ltd. The consideration received by the Company
was €148.5 million. The purchase price, at the exchange rate as of
the close of business on the Closing Date, approximated $177.0
million and is subject to adjustment based upon the final working
capital. The Hirschmann subsidiary group, which was previously
included within the Automotive segment, qualified to be presented
as a discontinued operation in accordance with ASC 205-20 beginning
in the Company's second quarter ended August 31, 2017 and
is reflected as such during the three months ended May 31, 2018 and 2017.
Balance Sheet Update
As of May 31, 2018, the Company had
cash and cash equivalents of $49.8
million as compared to cash and cash equivalents of
$51.7 million as of February 28, 2018. Total debt as of May 31,
2018 was $18.6 million, as compared
to total debt of $18.9 million
reported as of February 28, 2018.
Total long-term debt as of May 31,
2018 was $10.6 million as compared to $11.1
million as of February 28, 2018.
Further details can be found in Footnote 16 of the Company's Form
10-Q which was just recently filed with the Securities and
Exchange Commission.
Conference Call and Webcast Information
VOXX
International will be hosting its conference call
on Wednesday, July 11, 2018 at 10:00 a.m. Eastern.
Interested parties can participate by
visiting www.voxxintl.com, and clicking on the webcast in the
Investor Relations section or via teleconference (toll-free:
877-303-9079; international: 970-315-0461 / conference ID:
7882457).
Non-GAAP Measures
EBITDA, Adjusted EBITDA and Diluted
Adjusted EBITDA per common share are not financial measures
recognized by GAAP. EBITDA represents net income (loss)
attributable to VOXX International Corporation, computed in
accordance with GAAP, before interest expense and bank charges,
taxes, and depreciation and amortization. Adjusted EBITDA
represents EBITDA adjusted for 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 EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA
per common share 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 certain costs
or gains relating to 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 an appropriate measure for performance relative to other
companies. EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per
common share should not be assessed in isolation from, 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.
About VOXX International Corporation
VOXX
International Corporation (NASDAQ: VOXX) has grown into a
worldwide leader in the Automotive, Consumer Electronics and
Accessories, and Premium Audio industries. Today, the Company has
an extensive distribution network that includes power retailers,
mass merchandisers, 12-volt specialists and many of the world's
leading automotive manufacturers. The Company has an international
footprint and a growing portfolio, which comprises over 30 trusted
domestic and global brands. Among the Company's brands are VOXX
Automotive, Klipsch®, RCA®, Invision®, Rosen®, Audiovox®, Terk®,
Acoustic Research®, Advent®, Code Alarm®, 808®, Prestige®, EyeLock,
Jamo®, Energy®, Mirage®, Mac Audio®, Magnat®, Heco®, Schwaiger®,
and Oehlbach®. 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, 2018.
Company Contact:
Glenn Wiener, President
GW Communications
Tel: 212-786-6011
Email: gwiener@GWCco.com
VOXX International
Corporation and Subsidiaries
|
Consolidated
Balance Sheets
|
(In thousands,
except share and per share data)
|
|
|
|
May 31,
2018
|
|
February 28,
2018
|
Assets
|
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
49,827
|
|
|
$
|
51,740
|
|
Accounts receivable,
net
|
|
65,608
|
|
|
81,116
|
|
Inventory,
net
|
|
118,344
|
|
|
117,992
|
|
Receivables from
vendors
|
|
1,717
|
|
|
493
|
|
Prepaid expenses and
other current assets
|
|
17,228
|
|
|
14,007
|
|
Income tax
receivable
|
|
646
|
|
|
511
|
|
Total current
assets
|
|
253,370
|
|
|
265,859
|
|
Investment
securities
|
|
3,373
|
|
|
4,167
|
|
Equity
investments
|
|
22,227
|
|
|
21,857
|
|
Property, plant and
equipment, net
|
|
63,835
|
|
|
65,259
|
|
Goodwill
|
|
54,785
|
|
|
54,785
|
|
Intangible assets,
net
|
|
148,275
|
|
|
150,320
|
|
Deferred tax
assets
|
|
24
|
|
|
24
|
|
Other
assets
|
|
15,050
|
|
|
13,373
|
|
Total
assets
|
|
$
|
560,939
|
|
|
$
|
575,644
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
34,357
|
|
|
$
|
34,700
|
|
Accrued expenses and
other current liabilities
|
|
32,660
|
|
|
36,350
|
|
Income taxes
payable
|
|
317
|
|
|
2,587
|
|
Accrued sales
incentives
|
|
10,854
|
|
|
14,020
|
|
Current portion of
long-term debt
|
|
8,010
|
|
|
7,730
|
|
Total current
liabilities
|
|
86,198
|
|
|
95,387
|
|
Long-term debt, net
of debt issuance costs
|
|
8,153
|
|
|
8,476
|
|
Capital lease
obligation
|
|
852
|
|
|
699
|
|
Deferred
compensation
|
|
2,769
|
|
|
3,369
|
|
Deferred income tax
liabilities
|
|
11,579
|
|
|
12,217
|
|
Other tax
liabilities
|
|
2,163
|
|
|
2,191
|
|
Other long-term
liabilities
|
|
3,085
|
|
|
3,187
|
|
Total
liabilities
|
|
114,799
|
|
|
125,526
|
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred
stock:
|
|
|
|
|
No shares issued or
outstanding (see Note 20)
|
|
—
|
|
|
—
|
|
Common
stock:
|
|
|
|
|
Class A, $.01 par
value, 60,000,000 shares authorized, 24,106,194 shares issued
and
21,938,100 shares outstanding at both May 31, 2018 and February 28,
2018
|
|
242
|
|
|
256
|
|
Class B Convertible,
$.01 par value, 10,000,000 shares authorized, 2,260,954 shares
issued and outstanding
|
|
22
|
|
|
22
|
|
Paid-in
capital
|
|
296,502
|
|
|
296,395
|
|
Retained
earnings
|
|
193,734
|
|
|
194,673
|
|
Accumulated other
comprehensive loss
|
|
(15,740)
|
|
|
(14,222)
|
|
Treasury stock, at
cost, 2,168,094 shares of Class A Common Stock at both May 31,
2018
and February 28, 2018
|
|
(21,176)
|
|
|
(21,176)
|
|
Total VOXX
International Corporation stockholders' equity
|
|
453,584
|
|
|
455,948
|
|
Non-controlling
interest
|
|
(7,444)
|
|
|
(5,830)
|
|
Total stockholders'
equity
|
|
446,140
|
|
|
450,118
|
|
Total liabilities and
stockholders' equity
|
|
$
|
560,939
|
|
|
$
|
575,644
|
|
VOXX International
Corporation and Subsidiaries
|
Unaudited
Consolidated Statements of Operations and Comprehensive (Loss)
Income
|
(In thousands,
except share and per share data)
|
|
|
|
Three Months
Ended
May 31,
|
|
|
2018
|
|
2017
|
Net sales
|
|
$
|
100,855
|
|
|
$
|
114,823
|
|
Cost of
sales
|
|
73,178
|
|
|
84,679
|
|
Gross
profit
|
|
27,677
|
|
|
30,144
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling
|
|
10,694
|
|
|
12,409
|
|
General and
administrative
|
|
16,112
|
|
|
20,197
|
|
Engineering and
technical support
|
|
5,911
|
|
|
6,654
|
|
Total
operating expenses
|
|
32,717
|
|
|
39,260
|
|
Operating
loss
|
|
(5,040)
|
|
|
(9,116)
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Interest and bank
charges
|
|
(1,100)
|
|
|
(1,792)
|
|
Equity in income of
equity investees
|
|
1,814
|
|
|
1,803
|
|
Other, net
|
|
661
|
|
|
(1,007)
|
|
Total other
income (expense), net
|
|
1,375
|
|
|
(996)
|
|
|
|
|
|
|
Loss from continuing
operations before income taxes
|
|
(3,665)
|
|
|
(10,112)
|
|
Income tax benefit
from continuing operations
|
|
(1,113)
|
|
|
(7,428)
|
|
Net loss from
continuing operations
|
|
(2,552)
|
|
|
(2,684)
|
|
|
|
|
|
|
Net loss from
discontinued operations, net of tax (Note 2)
|
|
—
|
|
|
(2,222)
|
|
Net loss
|
|
(2,552)
|
|
|
(4,906)
|
|
Less: net loss
attributable to non-controlling interest
|
|
(1,613)
|
|
|
(1,875)
|
|
Net loss attributable
to VOXX International Corporation
|
|
$
|
(939)
|
|
|
$
|
(3,031)
|
|
|
|
|
|
|
Other comprehensive
(loss) income:
|
|
|
|
|
Foreign
currency translation adjustments
|
|
(2,020)
|
|
|
7,359
|
|
Derivatives designated for hedging
|
|
442
|
|
|
(1,052)
|
|
Pension
plan adjustments
|
|
36
|
|
|
(120)
|
|
Unrealized
holding gain (loss) on available-for-sale investment securities,
net of tax
|
|
24
|
|
|
(4)
|
|
Other comprehensive (loss) income, net of tax
|
|
(1,518)
|
|
|
6,183
|
|
Comprehensive (loss)
income attributable to VOXX International Corporation
|
|
$
|
(2,457)
|
|
|
$
|
3,152
|
|
|
|
|
|
|
Loss per share -
basic:
|
|
|
|
|
Continuing operations
|
|
$
|
(0.04)
|
|
|
$
|
(0.03)
|
|
Discontinued operations
|
|
$
|
—
|
|
|
$
|
(0.09)
|
|
Attributable to VOXX International Corporation
|
|
$
|
(0.04)
|
|
|
$
|
(0.13)
|
|
|
|
|
|
|
Loss per share -
diluted:
|
|
|
|
|
Continuing operations
|
|
$
|
(0.04)
|
|
|
$
|
(0.03)
|
|
Discontinued operations
|
|
$
|
—
|
|
|
$
|
(0.09)
|
|
Attributable to VOXX International Corporation
|
|
$
|
(0.04)
|
|
|
$
|
(0.13)
|
|
|
|
|
|
|
Weighted-average
common shares outstanding (basic)
|
|
24,316,103
|
|
|
24,160,324
|
|
Weighted-average
common shares outstanding (diluted)
|
|
24,316,103
|
|
|
24,160,324
|
|
Reconciliation of
GAAP Net Income Attributable to VOXX International Corporation to
EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per Common
Share (2)
|
(In thousands,
except share and per share data)
|
|
|
|
Three Months
Ended
May 31,
|
|
|
2018
|
|
2017
|
Net loss attributable
to VOXX International Corporation
|
|
$
|
(939)
|
|
|
$
|
(3,031)
|
|
Adjustments:
|
|
|
|
|
Interest expense and
bank charges (1)
|
|
747
|
|
|
1,676
|
|
Depreciation and
amortization (1)
|
|
2,654
|
|
|
4,137
|
|
Income tax
benefit
|
|
(1,113)
|
|
|
(4,063)
|
|
EBITDA
|
|
1,349
|
|
|
(1,281)
|
|
Stock-based
compensation
|
|
107
|
|
|
142
|
|
Adjusted
EBITDA
|
|
$
|
1,456
|
|
|
$
|
(1,139)
|
|
Diluted loss per
common share attributable to VOXX International
Corporation
|
|
$
|
(0.04)
|
|
|
$
|
(0.13)
|
|
Diluted Adjusted
EBITDA per common share attributable to VOXX International
Corporation
|
|
$
|
0.06
|
|
|
$
|
(0.05)
|
|
|
(1) For purposes of
calculating Adjusted EBITDA for the Company, interest expense and
bank charges, as well as depreciation and amortization, have been
adjusted in order to exclude the non-controlling interest portion
of these expenses attributable to EyeLock LLC.
|
|
(2) EBITDA, Adjusted
EBITDA and Diluted Adjusted EBITDA per common share in this
presentation are based on a reconciliation to Net income
attributable to VOXX International Corporation, which includes net
income (loss) from both continuing and discontinued operations for
all periods presented, as the Company sold its Hirschmann
subsidiary on August 31, 2017.
|
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SOURCE VOXX International Corporation