ORLANDO, Fla., July 10, 2020 /PRNewswire/ -- VOXX International
Corporation (NASDAQ: VOXX), a leading manufacturer and distributor
of automotive and consumer technologies for the global markets,
today announced financial results for its Fiscal 2021 first quarter
ended May 31, 2020.
Commenting on the Company's results, Pat
Lavelle, President and Chief Executive Officer of VOXX
International Corporation stated, "Our Fiscal 2021 first quarter
results were affected by the COVID-19 global pandemic, with the
biggest impact on our Automotive Electronics segment as several of
our OEM customers were forced to shut their plants in March, and
car dealerships and retail outlets that carry our aftermarket
products were closed throughout most of the quarter. The same was
true for our Consumer Electronics segment as retail stores were
closed, both in the U.S. and Europe. However, we did experience
year-over-year sales increases in the premium mobility, premium
wireless, and Bluetooth speaker categories. With the gradual
re-opening of the country, we saw June sales increase over 30%
year-over-year and with better gross margins. While we are
projecting higher sales in July and August, we remain cautious
based on the spikes in COVID cases across the country."
Mr. Lavelle continued, "With the acquisition of the majority of
Directed's automotive electronics aftermarket business, for which
we spent $11 million, we expect to
add approximately $50 million of
annualized sales and be in position to generate this back within
120-150 days based on the movement of inventory and successful A/R
collections. With VSM and Directed's assets, we have strengthened
our automotive offering, customer base and engineering capabilities
in a meaningful way. We are also making progress in conversations
with several parties with respect to EyeLock LLC with more NDA's in
place, and more customer opportunities that have arisen since
March. Despite the pandemic, Klipsch is poised for its best sales
year ever and should see significant improvements in profitability.
Thus, Fiscal 2021 should be a better year for VOXX and our
shareholders."
Fiscal 2021 and Fiscal 2020 First Quarter Financial
Comparisons
Net sales in the Fiscal 2021 first quarter ended May 31, 2020 were $72.0
million, a $21.5 million
decline as compared to $93.5 million
in the Fiscal 2020 first quarter ended May
31, 2019.
Automotive Electronics segment net sales were $17.3 million as compared to $29.6 million, a decline of $12.4 million. This was primarily driven by OEM
plant closures at many of our largest OEM customers and the
temporary shutdown of car dealerships and other brick-and-mortar
businesses that sell our aftermarket products, offset by the
addition of VSHC, which was acquired in the Fiscal 2020 fourth
quarter.
Consumer Electronics segment net sales were $54.5 million as compared to $63.7 million, a decline of $9.1 million. The COVID-19 pandemic was the
primary driver for the year-over-year sales decline, as well as the
Company's exit from various consumer accessory product lines which
were in the prior Fiscal year sales totals. Additionally, the
Company experienced lower sales of premium home separate speakers,
which again is tied to brick-and-mortar store closings, as well as
lower sales of commercial speakers due to stay-at-home mandates
across the country. Offsetting this, however, were higher sales in
the premium mobility, premium wireless, and Bluetooth speaker
categories.
Biometrics segment sales were $0.1
million, up year-over-year as the Company began selling its
EXT outdoor perimeter access product, as well as an updated version
of its Nano NXT perimeter access product.
The gross margin in the Fiscal 2021 first quarter was 27.7%,
essentially flat with the prior fiscal year period. The Automotive
Electronics segment experienced a 470-basis point gross margin
decline (17.7% vs. 22.4%) due to lower sales volume and lower
absorption as a result, partially offset by the positive
contributions from the VSHC acquisition. Consumer Electronics
segment gross margins improved by 90 basis points (30.9% vs.
30.0%), primarily due to increased sales of higher margin premium
wireless and Bluetooth speakers, and partially offset by lower
sales of other higher margin product lines due to retail store
shutdowns.
Total operating expenses in the Fiscal 2021 first quarter were
$27.8 million as compared to
$33.1 million in the comparable
Fiscal 2020 period, a decline of $5.3
million or 15.9%. The Company implemented several programs
to lower both fixed and variable expenses, many of which will have
a permanent positive impact on operating expenses moving forward.
Selling expenses declined by $1.5
million or 15.4%; general and administrative expenses
declined by $2.4 million or 13.9%;
and engineering and technical support expenses declined by
$1.3 million or 22.8%. Note, the
Fiscal 2021 first quarter includes VSHC operating expenses and
thus, the reductions in core overhead were more significant in the
Company's Fiscal 2021 first quarter.
The Company reported an operating loss of $7.9 million in the Fiscal 2021 first quarter, as
compared to an operating loss of $7.1
million in the comparable year-ago period. Net loss
attributable to VOXX International Corporation was $8.3 million in the Fiscal 2021 first quarter, as
compared to a net loss attributable to VOXX International
Corporation of $1.1 million in the
Fiscal 2020 first quarter. The higher net loss is attributable to
lower total other income than in the comparable period, and an
income tax expense of $1.8 million in
the Fiscal 2021 first quarter, as compared to an income tax benefit
of $2.6 million in the Fiscal 2020
first quarter. On a per share basis, the Company reported a basic
and diluted loss per share attributable to VOXX International
Corporation of $0.34 in the Fiscal 2021 first
quarter, as compared to a basic and diluted loss per share
attributable to VOXX International
Corporation of $0.05 in the Fiscal 2020 first
quarter.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA") loss in the Fiscal 2021 first quarter was
$3.4 million, as compared to an
Adjusted EBITDA loss of $1.0 million
in the Fiscal 2020 first quarter.
Conference Call and Webcast Information
VOXX International will be hosting its conference call
on Monday, July 13, 2020 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: 7581288). A replay will be
available on the Company's website approximately one hour after the
completion of the call.
Non-GAAP Measures
EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per common
share are not financial measures recognized by GAAP. EBITDA
represents net (loss) income 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, as well as life insurance proceeds.
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 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 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 Automotive Electronics and Consumer
Electronics, with emerging Biometrics technology to capitalize on
the increased need for advanced security. Over the past several
decades, with a portfolio of approximately 35 trusted brands, VOXX
has built market-leading positions in in-vehicle entertainment,
automotive security, reception products, a number of premium audio
market segments, and more. VOXX is a global company, with an
extensive distribution network that includes power retailers, mass
merchandisers, 12-volt specialists and many of the world's leading
automotive manufacturers. For additional information, please visit
our website at www.voxxintl.com.
Safe Harbor Statement
Except for historical information contained herein, statements made
in this release constitute forward-looking statements and thus 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 the: risk factors described in the
Company's annual report on Form 10-K for the fiscal year ended
February 29, 2020 and other filings
made by the Company from time to time with the SEC. The factors
described in such SEC filings include, without limitation: the
impact of the COVID-19 outbreak on the Company's results of
operations, the Company's ability to realize the anticipated
results of its business realignment; cybersecurity risks; 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 electronics, consumer electronics and
biometrics 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 restrictive debt
covenants. Many of the foregoing risks and uncertainties are, and
will be, exacerbated by the COVID-19 pandemic and any worsening of
the global business and economic environment as a result. The
Company assumes no obligation and does not intend to update these
forward-looking statements.
Investor & Media Relations 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,
except share and per share data)
|
|
|
|
May 31,
2020
|
|
|
February 29,
2020
|
|
|
|
(unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
69,039
|
|
|
$
|
37,425
|
|
Accounts receivable,
net
|
|
|
55,069
|
|
|
|
69,714
|
|
Inventory
|
|
|
105,409
|
|
|
|
99,110
|
|
Receivables from
vendors
|
|
|
236
|
|
|
|
230
|
|
Prepaid expenses and
other current assets
|
|
|
11,186
|
|
|
|
10,885
|
|
Income tax
receivable
|
|
|
442
|
|
|
|
456
|
|
Total current
assets
|
|
|
241,381
|
|
|
|
217,820
|
|
Investment
securities
|
|
|
1,741
|
|
|
|
2,282
|
|
Equity
investment
|
|
|
21,284
|
|
|
|
21,924
|
|
Property, plant and
equipment, net
|
|
|
50,705
|
|
|
|
51,424
|
|
Operating lease,
right of use asset
|
|
|
3,175
|
|
|
|
3,143
|
|
Goodwill
|
|
|
55,000
|
|
|
|
55,000
|
|
Intangible assets,
net
|
|
|
87,193
|
|
|
|
88,288
|
|
Deferred income tax
assets
|
|
|
52
|
|
|
|
52
|
|
Other
assets
|
|
|
1,541
|
|
|
|
1,638
|
|
Total
assets
|
|
$
|
462,072
|
|
|
$
|
441,571
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
32,146
|
|
|
$
|
22,096
|
|
Accrued expenses and
other current liabilities
|
|
|
34,552
|
|
|
|
34,046
|
|
Income taxes
payable
|
|
|
2,190
|
|
|
|
1,523
|
|
Accrued sales
incentives
|
|
|
9,826
|
|
|
|
12,250
|
|
Current portion of
long-term debt
|
|
|
1,116
|
|
|
|
1,107
|
|
Total current
liabilities
|
|
|
79,830
|
|
|
|
71,022
|
|
Long-term debt, net
of debt issuance costs
|
|
|
26,180
|
|
|
|
6,099
|
|
Finance lease
liabilities, less current portion
|
|
|
594
|
|
|
|
720
|
|
Operating lease
liabilities, less current portion
|
|
|
2,340
|
|
|
|
2,391
|
|
Deferred
compensation
|
|
|
1,741
|
|
|
|
2,282
|
|
Deferred income tax
liabilities
|
|
|
4,477
|
|
|
|
3,828
|
|
Other tax
liabilities
|
|
|
1,213
|
|
|
|
1,225
|
|
Other long-term
liabilities
|
|
|
3,427
|
|
|
|
3,294
|
|
Total
liabilities
|
|
|
119,802
|
|
|
|
90,861
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Redeemable
equity
|
|
|
2,682
|
|
|
|
2,481
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred
stock:
|
|
|
|
|
|
|
|
|
No shares issued or
outstanding
|
|
|
—
|
|
|
|
—
|
|
Common
stock:
|
|
|
|
|
|
|
|
|
Class A, $.01 par
value, 60,000,000 shares authorized, 24,406,194 and 24,306,194
shares issued and 21,656,976 and 21,556,976 shares outstanding at
May 31, 2020 and February 29, 2020, respectively
|
|
|
245
|
|
|
|
244
|
|
Class B Convertible,
$.01 par value, 10,000,000 shares authorized, 2,260,954 shares
issued and outstanding at both May 31, 2020 and February 29,
2020
|
|
|
22
|
|
|
|
22
|
|
Paid-in
capital
|
|
|
299,579
|
|
|
|
299,228
|
|
Retained
earnings
|
|
|
113,867
|
|
|
|
122,139
|
|
Accumulated other
comprehensive loss
|
|
|
(18,742)
|
|
|
|
(19,055)
|
|
Less: Treasury stock,
at cost, 2,749,218 shares of Class A Common Stock at both May 31,
2020 and February 29, 2020
|
|
|
(23,918)
|
|
|
|
(23,918)
|
|
Less: Redeemable
equity
|
|
|
(2,682)
|
|
|
|
(2,481)
|
|
Total VOXX
International Corporation stockholders' equity
|
|
|
368,371
|
|
|
|
376,179
|
|
Non-controlling
interest
|
|
|
(28,783)
|
|
|
|
(27,950)
|
|
Total stockholders'
equity
|
|
|
339,588
|
|
|
|
348,229
|
|
Total liabilities,
redeemable equity, and stockholders' equity
|
|
$
|
462,072
|
|
|
$
|
441,571
|
|
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,
|
|
|
|
2020
|
|
|
2019
|
|
Net sales
|
|
$
|
71,987
|
|
|
$
|
93,454
|
|
Cost of
sales
|
|
|
52,012
|
|
|
|
67,445
|
|
Gross
profit
|
|
|
19,975
|
|
|
|
26,009
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling
|
|
|
8,362
|
|
|
|
9,881
|
|
General and
administrative
|
|
|
14,995
|
|
|
|
17,425
|
|
Engineering and
technical support
|
|
|
4,485
|
|
|
|
5,807
|
|
Total operating
expenses
|
|
|
27,842
|
|
|
|
33,113
|
|
Operating
loss
|
|
|
(7,867)
|
|
|
|
(7,104)
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
Interest and bank
charges
|
|
|
(853)
|
|
|
|
(997)
|
|
Equity in income of
equity investee
|
|
|
862
|
|
|
|
1,440
|
|
Other, net
|
|
|
534
|
|
|
|
1,644
|
|
Total other income,
net
|
|
|
543
|
|
|
|
2,087
|
|
Loss before income
taxes
|
|
|
(7,324)
|
|
|
|
(5,017)
|
|
Income tax expense
(benefit)
|
|
|
1,781
|
|
|
|
(2,645)
|
|
Net loss
|
|
|
(9,105)
|
|
|
|
(2,372)
|
|
Less: net loss
attributable to non-controlling interest
|
|
|
(833)
|
|
|
|
(1,224)
|
|
Net loss attributable
to VOXX International Corporation
|
|
$
|
(8,272)
|
|
|
$
|
(1,148)
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
504
|
|
|
|
(811)
|
|
Derivatives designated
for hedging
|
|
|
(177)
|
|
|
|
(107)
|
|
Pension plan
adjustments
|
|
|
(14)
|
|
|
|
14
|
|
Other comprehensive
income (loss), net of tax
|
|
|
313
|
|
|
|
(904)
|
|
Comprehensive loss
attributable to VOXX International Corporation
|
|
$
|
(7,959)
|
|
|
$
|
(2,052)
|
|
Loss per share -
basic: Attributable to VOXX International Corporation
|
|
$
|
(0.34)
|
|
|
$
|
(0.05)
|
|
Loss per share -
diluted: Attributable to VOXX International Corporation
|
|
$
|
(0.34)
|
|
|
$
|
(0.05)
|
|
Weighted-average
common shares outstanding (basic)
|
|
|
24,224,478
|
|
|
|
24,355,791
|
|
Weighted-average
common shares outstanding (diluted)
|
|
|
24,224,478
|
|
|
|
24,355,791
|
|
Reconciliation of
GAAP Net Income Attributable to VOXX International Corporation to
EBITDA,
|
Adjusted EBITDA
and Diluted Adjusted EBITDA per Common Share
|
|
|
|
Three months
ended
May 31,
|
|
|
|
2020
|
|
|
2019
|
|
Net loss attributable
to VOXX International Corporation
|
|
$
|
(8,272)
|
|
|
$
|
(1,148)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Interest expense and
bank charges (1)
|
|
|
715
|
|
|
|
878
|
|
Depreciation and
amortization (1)
|
|
|
2,509
|
|
|
|
2,761
|
|
Income tax expense
(benefit)
|
|
|
1,781
|
|
|
|
(2,645)
|
|
EBITDA
|
|
|
(3,267)
|
|
|
|
(154)
|
|
Stock-based
compensation
|
|
|
351
|
|
|
|
159
|
|
Life insurance
proceeds
|
|
|
(444)
|
|
|
|
(1,000)
|
|
Adjusted
EBITDA
|
|
$
|
(3,360)
|
|
|
$
|
(995)
|
|
Diluted loss per
common share attributable to VOXX International
Corporation
|
|
$
|
(0.34)
|
|
|
$
|
(0.05)
|
|
Diluted Adjusted
EBITDA per common share attributable to VOXX International
Corporation
|
|
$
|
(0.14)
|
|
|
$
|
(0.04)
|
|
|
|
(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.
|
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SOURCE VOXX International Corporation