Hauppauge, N.Y. - Bolstered by a positive customer response to new products in both its cellular telephone and consumer electronics subsidiaries, Audiovox reported a net income of $4.5 million for the quarter, up from a $8.3 million loss last year.
The profit was on sales of $304.6 million, up from the $276.8 million earned during the same period last year.
In addition, the second quarter operating loss was reduced to $5.6 million, down from an operating loss of $13.2 million in the same three months last year. Audiovox did report a pre-tax gain on the issuance of subsidiary's shares to Toshiba of $15.8 million during the second quarter ended May 31.
'Of equal significance to the introduction of new wireless products was our strengthened partnership with Toshiba, who increased its ownership position in our wireless subsidiary from 5 percent, which it has held since 1999, to 25 percent,' said John J. Shalam, chairman/CEO.
During the second quarter, the Audiovox Communications subsidiary shipped CDM 9155 phones that contain the Federal Communications Commission mandated e 911 technology, as well as began shipping of the Thera PDA. 'Demand for the new products has been positive,' said Philip Christopher, president/CEO of Audiovox Communications. 'We anticipate this and other new products scheduled for fall introduction to figure in a positive second half.'
Audiovox's electronics subsidiary recorded an increase in second quarter sales of 21 percent and pre-tax profit of 45 percent, compared with the same three months in 2001. The company said it was the eighth consecutive quarter for sales in this segment to have outperformed the respective comparable quarter.
'Sales continue to be driven by increased demand for our mobile video products, especially the new overhead and portable DVDs,' said Patrick Lavelle, president/CEO of Audiovox Electronics. 'In addition, the quarter saw an increase in vehicle security sales, and we began shipment of our new XM satellite radio units,' he said.
In the six months, overall Audiovox sales dropped about 19 percent, to $493.2 million, compared with $605.1 million in the same quarter last year.
The company reported net income of $505,000 for the six months, up from a loss of $5.7 million in the same six months in 2001. The 2002 six months also benefited from a $15.8 million gain on the issuance of securities to Toshiba.
The six-month operating loss widened a bit, from $9.6 million in 2001, to a loss of $11 million in this year's six-month period.
Looking ahead, Shalam said, 'We continue to anticipate sales and profits to improve over the third and fourth quarters, and for new products in both the wireless and consumer electronics companies to fuel that improvement.'
About Toshiba increasing its ownership position in the Audiovox wireless subsidiary, Shalam said he 'believes it is indicative of their commitment to our marketing strategies and distribution. This investment should allow us to compete more effectively and capitalize on the convergence trends in the fast-paced wireless market.'