Audiovox Exits LCD TV, Cuts Employees
By Amy Gilroy -- TWICE, 10/10/2008
Hauppauge, N.Y. — Taking steps to counter “what is shaping up to be the worst economy in decades,” Audiovox exited the LCD flat-panel TV market and let go of an additional 8 percent of its employee headcount, said president and CEO Patrick Lavelle.
Speaking on a conference call with analysts today, where Audiovox announced second-quarter results, Lavelle said the actions will help position the company to see sales growth in the second half despite slower automobile sales and reduced consumer spending that contributed to a 20 percent decline in Audiovox mobile video sales during the second quarter and an overall net loss of $2.3 million.
Flat-panel TV inventory was sold off during the quarter, following the company’s exit from the portable GPS market in July.
Categories that performed well during the quarter included RCA camcorders, clock radios and digital audio players, as well as Code Alarm’s OEM business.
Overall, the slowdown in vehicle sales has cut into aftermarket video, in-dash multimedia, vehicle security and remote-starter product groups,” said Lavelle, although Jensen and Audiovox are retaining their leading market share positions in mobile video, he said.
Satellite-radio sales are off, “but over the past few months, we’ve seen an uptick now that the merger is complete. We believe satellite radio will continue to grow and Audiovox will be a significant supplier to this market. We don’t expect any post merger changes in our relationships,” Lavelle said.
Audiovox had targeted an $8 million reduction in expenses for the year, but because “the economy worsened at a far quicker pace than expected” it decreased expenses by another $8 million, including the 8 percent head-count reduction that increased to a 13 percent total head-count reduction for the year.
The company asserted, however, that it is well positioned at retail. Lavelle announced Audiovox has been selected as the accessory supplier to Lowe’s and will begin shipping in the third quarter.
During Black Friday, the company will sell Audiovox DVD players and a variety of RCA products at Wal-Mart, Best Buy and Circuit City. Sales of its new flat TV antennas are exceeding expectations at Wal-Mart, Best Buy and Circuit City, Lavelle said.
The company also launched a new line of surface-cleaning products and new high definition powerline products that allow HDMI transmission over the home’s existing power lines. It is also launching new car multimedia products and Bluetooth accessories for hands-free calling.
Lavelle said, “We remain cautiously optimistic despite the fact that we are in a recession.”
The company also believes the recession may bring opportunities, as it continues to monitor mergers and acquisitions and said it has the resources “to move quickly.”
