ORLANDO, Fla., April 29, 2019 /PRNewswire/ -- VOXX International
Corporation (NASDAQ: VOXX), a leading manufacturer and distributor
of automotive and consumer technologies for global markets, today
provided updates on several matters pertaining to its business,
unaudited financials and plans to enhance shareholder value.
Restructuring of the Premium Audio and Consumer Accessories
Segments
Over the past several months, the Company has worked to realign
its Consumer Accessories and Premium Audio operations to lower
fixed costs, generate efficiencies and better leverage resources.
The Company continues to integrate its Magnat GmbH operations into
Klipsch Europe, expected to be completed in June 2019, and has successfully combined the
international accessories operations of Oehlbach and Schwaiger into
one entity in Germany. The Company
continues to realign its domestic accessories operations and
commenced a comprehensive SKU rationalization program to
discontinue certain product lines, in order to focus on offerings
with longer lifecycles, more sustainable gross margins and better
growth potential. Significant progress has been made to date, and
the SKU rationalization program is expected to continue in Fiscal
2020. Management has also instituted cost-containment programs
throughout the Company, resulting in lower fixed expenses this
Fiscal year that are expected to result in further expense
reductions in Fiscal 2020. Due to these and other actions, the
Company incurred severance and restructuring cash charges in its
Fiscal 2019 fourth quarter of approximately $4.6 million.
The Company also expects to take a non-cash impairment charge in
its Fiscal 2019 fourth quarter of approximately $16.5 million relating to the Notes Receivable
from 360fly, Inc. The potential for an impairment charge was
disclosed in the Company's Form 8-K filed on January 29, 2019 with the Securities and Exchange
Commission.
The Company is currently preparing the valuation reports related
to the proper carrying value of certain intangibles, and
intellectual property and Intercompany Notes Receivable associated
with EyeLock. The potential exists for additional non-cash
impairment charges related to these ongoing valuations to be
recognized in the Company's Fiscal 2019 fourth quarter.
Due to all the restructuring activities completed and underway,
the Company expects to report a net loss in Fiscal year 2019.
Adjusted EBITDA, which excludes one-time, non-recurring charges, is
expected to be positive.
Balance Sheet Update and Authorization of a New Stock Repurchase
Program
VOXX International Corporation's balance sheet remains strong
and the Company anticipates it will report that its Fiscal year
2019 ended with approximately $58.0
million in cash and no debt outstanding under its
$140.0 million Credit Facility. The
Company has sufficient capital to meet all anticipated funding
requirements and to pursue its strategy of identifying potential
acquisitions that can further strengthen its product offering,
competitive position, financial performance and valuation.
Based on the Company's cash position, business outlook and
current share price, the Board has authorized the Company to
repurchase up to 3.0 million shares of its Class A Common Stock, an
increase of approximately 1.6 million shares over the remaining
balance of the prior authorization, from time to time in the open
market or otherwise, subject to market conditions and other
factors. The Company believes the repurchase of shares represents a
strong use of capital.
New Reporting Structure in FY 2020
As a result of the business transformation and realignment
initiatives, effective March 1, 2019,
the Company realigned its operating structure and reporting
segments. Moving forward, the Company will be reporting financial
results for: 1) Automotive Electronics, which consists of the OEM
and aftermarket business in the Automotive market; 2) Consumer
Electronics, which consists of the former reporting segments of
Premium Audio and Consumer Accessories and excludes EyeLock LLC;
and 3) Biometrics, which consists of the operations of EyeLock LLC,
the Company's majority-owned subsidiary. It is management's belief
that by combining the Premium Audio and Consumer Accessories
businesses into one reporting segment and operating the business as
such, additional synergies can be generated, leading to improved
shareholder value. Additionally, by separating EyeLock LLC from the
former Consumer Accessories segment and creating a separate
reporting segment, investors will have greater visibility into the
operational and financial performance of the Company and the
anticipated improvements in EyeLock in Fiscal 2020 and beyond.
Pat Lavelle, President and CEO
of VOXX International Corporation stated, "We have taken
numerous actions that will position VOXX for profitability in the
years ahead, with more actions planned in the coming year. The
restructuring of our business will enable us to focus on more
sustainable and profitable product lines, streamline operations,
and generate future savings. We will provide additional information
on our year-end conference call in May when our Fiscal 2019 results
are reported."
Lavelle continued, "Our transformation is not done. As we've
stated previously, we may look to divest additional assets, further
strengthening our balance sheet and we will continue to look for
accretive acquisitions that will drive top-line growth and Adjusted
EBITDA. We are also evaluating instituting other corporate
initiatives to enhance shareholder value. Our balance sheet and
cash position are strong, and we believe the repurchase of our
stock represents a good use of capital. On the business front, we
are taking a cautious outlook with respect to the global car
market, but see offsetting opportunities emerging, particularly in
the premium audio and healthcare spaces near-term. We intend to
continue our investment in EyeLock, as we expect new business from
the launch of their EXT solution and current embedded solutions,
and other deals they are working on. Management continues to
explore all avenues to enhance efficiencies, lower expenses and
improve bottom-line performance, to position our Company to
generate more consistent profitability."
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 is a global company, with 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 and Latin
America, and a growing portfolio, which is comprised of over
30 trusted brands. 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 Company's ability to realize the
anticipated results of its business realignment; the completion of
the ongoing impairment valuation; the ability to successfully
complete transactions under negotiation for EyeLock; 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, 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 restrictive debt covenants. 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 and will be updated in the Company's
Form 10-K for the fiscal year ended February
28, 2019.
Company Contact:
Glenn Wiener, President
GW Communications
Tel: 212-786-6011
Email: gwiener@GWCco.com
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SOURCE VOXX International Corporation