Audiovox Posts Q3 Sales, Income Gain
By Steve Smith -- TWICE, 1/21/2008
HAUPPAUGE, N.Y. — Audiovox reported a double-digit sales gain and increases in operating and net income for its fiscal third quarter, ended Nov. 30.
Net sales were $183.6 million, an increase of 20.9 percent compared with $151.8 million reported in the comparable prior year quarter. Operating income for the quarter was $5.6 million, an increase of 229.4 percent compared with $1.7 million reported in the comparable prior year period.
Net income for the quarter was approximately $4.7 million vs. a net income of $3.9 million in the previous year's fiscal third quarter.
Electronics sales, which include both mobile and consumer electronics, were $139.0 million, a decrease of 6.3 percent compared with the three-month period ending Nov. 30, 2006. This decrease was due to a decline in consumer electronics sales as a result of lower holiday sales than anticipated and LCD panel shortages. Offsetting these declines was an increase in sales of mobile electronics products; particularly Jensen, Phase Linear and satellite radio product lines, as well as increases in the electronics sales of the company's international operations in Germany and Venezuela.
Accessories sales were $44.6 million, an increase of more than 1,139 percent compared with sales of $3.6 million in the fiscal 2007 third quarter. This increase was primarily due to sales generated by the recently acquired Thomson, Oehlbach and Technuity operations, which were not part of fiscal 2007 results.
As a percentage of net sales, electronics represented 75.7 percent compared with almost 98 percent in the comparable fiscal 2007 quarter and accessories represented 24.3 percent compared with 2.3 percent in the comparable year-ago period.
Pat Lavelle, president/CEO of Audiovox, stated, "While there were many positives this past quarter, our results were impacted by the industry wide shortage of LCD panels as well as weaker Christmas sales and lower car sales. During the quarter, we experienced positive momentum in some of our mobile groups and both our domestic and international accessory businesses. Despite retail pressure, our margins tracked in line with last quarter's performance and internal projections."
Gross margins for the period increased 240 basis points to 19.1 percent compared with 16.7 percent in the fiscal 2007 third quarter. Gross margins were favorably impacted by higher margins generated from the recently acquired accessory companies as well as improved overall margins in the core electronics business.
Operating expenses for the three months ending Nov. 30, 2007, were $29.4 million, an increase of $5.7 million, compared with $23.7 million reported in the comparable prior-year period. Excluding the impact of the acquisitions of $6.3 million, overhead for the company's core operations was down approximately $0.6 million in the fiscal 2008 third quarter.
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