HAUPPAUGE, N.Y., Jan. 9, 2017 /PRNewswire/ -- VOXX
International Corporation (NASDAQ: VOXX), today announced financial
results for its Fiscal 2017 third quarter and nine-months ended
November 30, 2016.
Net sales for the Fiscal 2017 third quarter were $198.9 million compared to $192.5 million reported in the comparable
year-ago period, an increase of $6.4
million or 3.3%.
- Automotive segment sales were $90.3
million as compared to $92.6
million, a decline of $2.2
million or 2.4%. This decline was primarily related to
lower aftermarket and domestic OEM sales, offset by sales increases
in the Company's international OEM business.
- Premium Audio segment sales were $56.8
million as compared to $44.7
million, an increase of $12.0
million or 26.9%. This increase was driven by higher
sales of new product lines introduced throughout Fiscal 2017,
including sound bars, multi-room streaming audio systems,
headphones, as well as speakers within the Custom Installation
channel, among others.
- Consumer Accessories segment sales were $51.4 million as compared to $54.8 million, a decline of $3.4 million or 6.2%. The sales decline was
primarily related to lower sales of select hook-up, power and
remote products, offset by higher sales of wireless and Bluetooth
speakers, Project Nursery baby monitors, and 360Fly™ Action
Cameras, among others.
Pat Lavelle, President and CEO of
VOXX International, commented, "We had a relatively strong fiscal
third quarter, as our net sales, gross margins and expenses all
improved year-over-year. We reported a $3.7 million increase in operating income and
Adjusted EBITDA improved by $2.4
million. Driving much of this improvement was our Premium
Audio segment. The investments we made throughout last year
to enhance our line-up and expand into new categories are paying
off, and with a few quarters of growth behind us, we believe this
is a trend that should continue. Lower Automotive segment
sales were anticipated, due primarily to changes in the aftermarket
and lower domestic OEM sales. Internationally, our OEM
business remains strong and we continue to win new OEM contracts.
Similarly, our Consumer Accessories segment should be aided by new
products introduced in the second and third quarters and many of
the products we introduced last week at the Consumer Electronics
Show. We believe we're better positioned to show improved
top- and bottom-line performance in the year ahead."
The gross margin for the Fiscal 2017 third quarter came in at
29.3% as compared to 29.0% for the same period last year, an
increase of 30 basis points. Automotive gross margins came in
at 30.0% as compared to 29.2%, an increase of 80 basis points,
which was driven primarily by higher international OEM sales offset
by lower fulfillment product sales, such as satellite radio.
Premium Audio gross margins came in at 32.8% as compared to 33.9%,
a decrease of 110 basis points. The decline in gross margin
was primarily related to a shift in product mix within the
segment. Consumer Accessories gross margins were 23.6% as
compared to 24.1%, a decline of 50 basis points. Gross
margins were adversely impacted by a shift in product mix and
favorably impacted by higher sales of wireless speakers, Project
Nursery products, and higher sales internationally.
Operating expenses for the Fiscal 2017 third quarter were
$50.9 million as compared to
$52.3 million, a reduction of
$1.4 million or 2.6%. Selling,
general and administrative expenses declined for the comparable
periods by $2.3 million, and this
improvement was partially offset by a $1.8
million increase in engineering and technical support.
The Company experienced decreases in salary, payroll and benefit
expenses, as well as lower professional fees, occupancy costs and
acquisition-related expenses. Driving the increase in
engineering and technical support were higher research and
development expenses related to its iris-based authentication
solutions, and increases to support technology innovation within
the Automotive OEM business and Premium Audio operating
segment.
The Company reported operating income of $7.3 million in its Fiscal 2017 third quarter as
compared to operating income of $3.6
million in the comparable year-ago period. The
$3.7 million year-over-year
improvement was driven by higher sales and gross margins, and lower
total operating expenses.
Net income attributable to VOXX for the Fiscal 2017 third
quarter was $5.8 million or
$0.24 per basic and diluted share, as
compared to $7.8 million or
$0.32 per basic and diluted share in
the Fiscal 2016 third quarter. Note, net income in the Fiscal
2016 third quarter was favorably impacted by a $4.7 million bargain purchase gain related to the
Company's acquisition of EyeLock, among other factors.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the Fiscal 2017 third quarter was $15.3 million as compared to EBITDA of
$16.8 million reported in the Fiscal
2016 third quarter. Adjusted EBITDA was $15.5 million as compared to $13.1 million for the comparable Fiscal 2017 and
2016 third quarter periods.
Nine-Month Comparisons (for the nine-month periods ended
November 30, 2016 and November 30, 2015)
Net sales for the Fiscal 2017 nine-month period were
$513.7 million compared to
$511.1 million reported in the
comparable year-ago period, an increase of $2.6 million or 0.5%.
- Automotive segment sales of $251.6
million declined by $15.2
million or 5.7%. The Company experienced higher
international OEM sales which were offset by lower domestic OEM
sales and lower aftermarket product sales. Additionally, the
sale and subsequent licensing of all Jensen Mobile inventory in
Fiscal 2016 resulted in approximately $6.4
million of the total decline.
- Premium Audio segment sales of $123.8
million increased by $19.5
million or 18.7%, driven by strength in the Company's
Klipsch and Jamo product lines. Premium Audio sales were
favorably impacted by new product introductions in new
categories.
- Consumer Accessories sales of $137.4
million decreased by $1.3
million or 0.9%. The Company had higher sales of new
products, including Project Nursery baby monitors and 360Fly Action
Cameras, as well as higher sales internationally, offset by a
decline in select Consumer Accessories product lines.
Additionally, international sales increased, primarily due to the
roll out of an upgrade to the digital broadcasting platform in
Europe.
The gross margin for the Fiscal 2017 nine-month period was 29.4%
as compared to 29.1% for the same period last year, an increase of
30 basis points. Automotive gross margins were 30.4% as
compared to 30.0%; Premium Audio gross margins were 33.3% as
compared to 33.0%; and Consumer Accessories gross margins were
23.5% as compared to 24.0%.
Operating expenses for the Fiscal 2017 nine-month period were
$151.4 million as compared to
operating expenses of $152.9 million
in the comparable year-ago period, a reduction of $1.5 million or 1.0%. Selling, general and
administrative expenses declined by $4.3
million, while engineering and technical support expenses
increased $9.8 million, both when
comparing the Fiscal 2017 and Fiscal 2016 nine-month periods.
Additionally, during the Fiscal 2016 nine-month period, the Company
recorded intangible asset impairment charges of $6.2 million and $0.8
million associated with acquisition costs.
The Company reported an operating loss of $0.6 million as compared to an operating loss of
$4.1 million in the Fiscal 2016
nine-month period, an improvement of $3.4
million. As noted above, intangible asset impairment
charges and acquisition related expenses were $7.0 million during the Fiscal 2016 nine-month
period.
The Company reported net income attributable to VOXX for the
Fiscal 2017 nine-month period of $4.5
million or $0.19 per basic and
diluted share, as compared to $2.7
million or $0.11 per basic and
diluted share for the comparable Fiscal 2016 period. Net
income for the Fiscal 2016 nine-month period was favorably impacted
by a $4.7 million bargain purchase
gain related to the Company's acquisition of EyeLock, among other
factors.
EBITDA for the Fiscal 2017 nine-month period was $22.1 million as compared to EBITDA of
$19.8 million reported in the
comparable Fiscal 2016 period, an improvement of $2.4 million. Adjusted EBITDA was
$22.7 and $22.8 million for the comparable Fiscal 2017 and
2016 nine-month periods.
Lavelle continued, "Sales through the first nine-months are up
modestly and we expect to show year-over-year improvements in our
fiscal fourth quarter as well. We continue to control costs,
while investing strategically in R&D to drive innovation in
future product lines. We have a strong line-up for the coming
fiscal year in both our Premium Audio and Consumer Accessories
segments and will be entering new markets throughout the year,
which over time, will expand our distribution even further.
Customer relationships remain strong and the economic environment
has been more stable than in years past. We look forward to
finishing out the year and believe we're in a good position
entering Fiscal 2018 to maximize shareholder value."
Non-GAAP Measures
EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per common
share are not financial measures recognized by GAAP. Adjusted
EBITDA represents net income (loss), computed in accordance with
GAAP, before interest expense and bank charges, taxes, depreciation
and amortization, stock-based compensation expense, impairment
charges and certain acquisition related expenses and gains.
Depreciation, amortization, stock-based compensation, and
impairment expenses are non-cash items.
Diluted Adjusted EBITDA per common share represent 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.
These measures 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 costs or gains relating to the Company's acquisitions,
impairments and stock-based compensation, 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. Adjusted EBITDA should not be assessed in isolation from
or construed as a substitute for EBITDA. Adjusted EBITDA and
diluted adjusted earnings 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, January 10, 2017 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: 43538882). 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: 43538882).
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 Corporation 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®, 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, President
GW Communications
Tel: 212-786-6011
Email: gwiener@GWCco.com
- Tables to Follow -
VOXX International
Corporation and Subsidiaries Consolidated Balance
Sheets (In thousands)
|
|
|
|
|
November 30,
2016
|
|
February 29,
2016
|
Assets
|
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
5,672
|
|
|
$
|
11,767
|
|
Accounts receivable,
net
|
|
110,408
|
|
|
87,055
|
|
Inventory,
net
|
|
158,636
|
|
|
144,028
|
|
Receivables from
vendors
|
|
2,914
|
|
|
2,519
|
|
Prepaid expenses and
other current assets
|
|
19,681
|
|
|
17,256
|
|
Income tax
receivable
|
|
1,365
|
|
|
1,426
|
|
Total current
assets
|
|
298,676
|
|
|
264,051
|
|
Investment
securities
|
|
10,417
|
|
|
10,206
|
|
Equity
investments
|
|
22,343
|
|
|
21,949
|
|
Property, plant and
equipment, net
|
|
79,664
|
|
|
79,422
|
|
Goodwill
|
|
103,265
|
|
|
104,349
|
|
Intangible assets,
net
|
|
178,300
|
|
|
185,022
|
|
Deferred income
taxes
|
|
23
|
|
|
23
|
|
Other
assets
|
|
1,818
|
|
|
2,168
|
|
Total
assets
|
|
$
|
694,506
|
|
|
$
|
667,190
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
71,778
|
|
|
$
|
55,790
|
|
Accrued expenses and
other current liabilities
|
|
44,785
|
|
|
50,748
|
|
Income taxes
payable
|
|
39
|
|
|
4,081
|
|
Accrued sales
incentives
|
|
17,243
|
|
|
12,439
|
|
Current portion of
long-term debt
|
|
11,820
|
|
|
8,826
|
|
Total current
liabilities
|
|
145,665
|
|
|
131,884
|
|
Long-term debt, net
of debt issuance costs
|
|
105,267
|
|
|
88,169
|
|
Capital lease
obligation
|
|
704
|
|
|
1,381
|
|
Deferred
compensation
|
|
4,276
|
|
|
4,011
|
|
Other tax
liabilities
|
|
5,043
|
|
|
4,997
|
|
Deferred income tax
liabilities
|
|
30,107
|
|
|
30,374
|
|
Other long-term
liabilities
|
|
9,988
|
|
|
10,480
|
|
Total
liabilities
|
|
301,050
|
|
|
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 November 30, 2016 and
February 29, 2016
|
|
256
|
|
|
256
|
|
Class B Convertible,
$.01 par value, 10,000,000 shares authorized, 2,260,954 shares
issued and outstanding
|
|
22
|
|
|
22
|
|
Paid-in
capital
|
|
295,087
|
|
|
294,038
|
|
Retained
earnings
|
|
159,459
|
|
|
154,947
|
|
Non-controlling
interest
|
|
3,413
|
|
|
8,524
|
|
Accumulated other
comprehensive loss
|
|
(43,605)
|
|
|
(40,717)
|
|
Treasury stock, at
cost, 2,168,074 shares of Class A Common Stock at both November 30,
2016 and February 29, 2016
|
|
(21,176)
|
|
|
(21,176)
|
|
Total stockholders'
equity
|
|
393,456
|
|
|
395,894
|
|
Total liabilities and
stockholders' equity
|
|
$
|
694,506
|
|
|
$
|
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
November 30,
|
|
Nine Months
Ended
November 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net sales
|
|
$
|
198,937
|
|
|
$
|
192,506
|
|
|
$
|
513,655
|
|
|
$
|
511,063
|
|
Cost of
sales
|
|
140,724
|
|
|
136,663
|
|
|
362,848
|
|
|
362,202
|
|
Gross
profit
|
|
58,213
|
|
|
55,843
|
|
|
150,807
|
|
|
148,861
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling
|
|
12,421
|
|
|
12,464
|
|
|
36,200
|
|
|
36,182
|
|
General and
administrative
|
|
27,240
|
|
|
29,536
|
|
|
79,214
|
|
|
83,530
|
|
Engineering and
technical support
|
|
11,243
|
|
|
9,459
|
|
|
36,013
|
|
|
26,190
|
|
Intangible asset
impairment charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,210
|
|
Acquisition
costs
|
|
—
|
|
|
800
|
|
|
—
|
|
|
800
|
|
Total operating
expenses
|
|
50,904
|
|
|
52,259
|
|
|
151,427
|
|
|
152,912
|
|
Operating income
(loss)
|
|
7,309
|
|
|
3,584
|
|
|
(620)
|
|
|
(4,051)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest and bank
charges
|
|
(1,995)
|
|
|
(1,772)
|
|
|
(5,560)
|
|
|
(4,964)
|
|
Equity in income of
equity investees
|
|
1,931
|
|
|
1,927
|
|
|
5,284
|
|
|
5,002
|
|
Gain on bargain
purchase
|
|
—
|
|
|
4,679
|
|
|
—
|
|
|
4,679
|
|
Other, net
|
|
100
|
|
|
636
|
|
|
(228)
|
|
|
1,103
|
|
Total other income
(expense), net
|
|
36
|
|
|
5,470
|
|
|
(504)
|
|
|
5,820
|
|
Income (loss) before
income taxes
|
|
7,345
|
|
|
9,054
|
|
|
(1,124)
|
|
|
1,769
|
|
Income tax expense
(benefit)
|
|
3,435
|
|
|
2,968
|
|
|
(218)
|
|
|
791
|
|
Net income
(loss)
|
|
3,910
|
|
|
6,086
|
|
|
(906)
|
|
|
978
|
|
Less: net loss
attributable to non-controlling interest
|
|
(1,890)
|
|
|
(1,691)
|
|
|
(5,418)
|
|
|
(1,691)
|
|
Net income
attributable to Voxx International Corporation
|
|
$
|
5,800
|
|
|
$
|
7,777
|
|
|
$
|
4,512
|
|
|
$
|
2,669
|
|
Other comprehensive
(loss) income:
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
|
(6,684)
|
|
|
(7,993)
|
|
|
(3,168)
|
|
|
(9,026)
|
|
Derivatives designated for hedging
|
|
752
|
|
|
(32)
|
|
|
240
|
|
|
(1,673)
|
|
Pension
plan adjustments
|
|
96
|
|
|
155
|
|
|
44
|
|
|
154
|
|
Unrealized
holding gain (loss) on available-for-sale investment securities,
net of tax
|
|
4
|
|
|
5
|
|
|
(4)
|
|
|
1
|
|
Other comprehensive loss, net of tax
|
|
(5,832)
|
|
|
(7,865)
|
|
|
(2,888)
|
|
|
(10,544)
|
|
Comprehensive (loss)
income attributable to Voxx International Corporation
|
|
$
|
(32)
|
|
|
$
|
(88)
|
|
|
$
|
1,624
|
|
|
$
|
(7,875)
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share attributable to Voxx International Corporation
(basic)
|
|
$
|
0.24
|
|
|
$
|
0.32
|
|
|
$
|
0.19
|
|
|
$
|
0.11
|
|
Net income per common
share attributable to Voxx International Corporation
(diluted)
|
|
$
|
0.24
|
|
|
$
|
0.32
|
|
|
$
|
0.19
|
|
|
$
|
0.11
|
|
Weighted-average
common shares outstanding (basic)
|
|
24,160,324
|
|
|
24,183,791
|
|
|
24,160,324
|
|
|
24,177,061
|
|
Weighted-average
common shares outstanding (diluted)
|
|
24,287,431
|
|
|
24,219,555
|
|
|
24,237,357
|
|
|
24,211,651
|
|
VOXX International
Corporation and Subsidiaries Reconciliation of GAAP Net
Income (Loss) to Adjusted EBITDA
|
|
|
|
Three Months
Ended
November 30,
|
|
Nine Months
Ended
November 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income
attributable to Voxx International Corporation
|
|
$
|
5,800
|
|
|
$
|
7,777
|
|
|
$
|
4,512
|
|
|
$
|
2,669
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Interest expense and
bank charges (1)
|
|
1,824
|
|
|
1,772
|
|
|
5,134
|
|
|
4,964
|
|
Depreciation and
amortization (1)
|
|
4,225
|
|
|
4,302
|
|
|
12,715
|
|
|
11,356
|
|
Income tax expense
(benefit)
|
|
3,435
|
|
|
2,968
|
|
|
(218)
|
|
|
791
|
|
EBITDA
|
|
15,284
|
|
|
16,819
|
|
|
22,143
|
|
|
19,780
|
|
Stock-based
compensation
|
|
205
|
|
|
199
|
|
|
568
|
|
|
686
|
|
Intangible asset
impairment charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,210
|
|
Gain on bargain
purchase
|
|
—
|
|
|
(4,679)
|
|
|
—
|
|
|
(4,679)
|
|
Acquisition
costs
|
|
—
|
|
|
800
|
|
|
—
|
|
|
800
|
|
Adjusted
EBITDA
|
|
$
|
15,489
|
|
|
$
|
13,139
|
|
|
$
|
22,711
|
|
|
$
|
22,797
|
|
Diluted income per
common share
|
|
$
|
0.24
|
|
|
$
|
0.32
|
|
|
$
|
0.19
|
|
|
$
|
0.11
|
|
Diluted adjusted
EBITDA per common share
|
|
$
|
0.64
|
|
|
$
|
0.54
|
|
|
$
|
0.94
|
|
|
$
|
0.94
|
|
|
(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 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-third-quarter-and-nine-month-financial-results-300388033.html
SOURCE VOXX International Corporation