Audiovox Returns To Profitability, Posting $3.8M Net Income In Qtr.
By Amy Gilroy -- TWICE, 1/22/2007
LAS VEGAS — Audiovox reported a return to profit for its fiscal 2006 third-quarter results and presented some updates on its planned purchase of Thomson accessories in an earnings call broadcast from International CES, held here earlier this month.
For its financial quarter ended Nov. 30, 2006, Audiovox reported slightly lower net sales of $151.8 million for the period, down 2.9 percent compared with $156.3 million for the period a year ago. Net income was $3.8 million compared with a net loss of $8.3 million a year ago.
With its purchase of Thomson's accessory business, Audiovox president/CEO Pat Lavelle said Audiovox will become a significant player in the accessories business and that accessories will generate $170 million in sales, including Terk accessories.
Even after the acquisition of Thomson, Audiovox expects to have $130 million in cash and is open to further acquisitions, he said.
For the quarter, Audiovox's mobile electronics sales, which represented 58.3 percent of net sales, were $88.6 million, down 4.9 percent due mainly to the company's exit of the video-in-a bag business. Audiovox said mobile sales were also adversely affected by lower average selling prices in car video, down about 25 percent, as that market matures. The decreases, however, were partially offset by increases in XM satellite radio sales and higher sales of car security. Jensen also claimed to be the leader in car mobile multimedia.
Consumer electronics sales, which represented 41.7 percent of sales, increased 0.2 percent to $63.3 million. Unit sales or portable DVD and LCD increased, but prices on the products declined.
Gross margins for the period were 16.7 percent compared with 6.2 percent a year ago due to reduced freight costs, improved buying programs and inventory management, said the company.
Lavelle stated, "Although sales were down slightly from the November quarter last year, our profits increased significantly, and we have reduced overhead to a level that we believe is necessary to support the additional volume being brought on by the previously announced acquisition of the consumer electronics accessory business of Thomson."
He added, "The pending acquisition of the RCA brand for accessories products, as well as the addition of other accessories lines and brands, greatly strengthens our growing portfolio. We maintain significant financial resources at our disposal to pursue both organic growth and growth via acquisition."
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