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Audiovox Fiscal Q3 Sales Off 33%, Income Dives 90%

9/26/2001 02:46:00 PM Eastern

Hauppauge, N.Y. - Blaming the substantial negative changes the wireless industry has undergone this year, mobile phone maker Audiovox reported sales in its fiscal third quarter dropped about 33 percent, to $313.9 million, compared with $470.3 million in the same three months last year.

The company, which markets consumer electronics, entertainment systems and mobile products, in addition to the phones, recorded a 90 percent drop in net income for the three months ended August 31, down to $1 million, compared with $10 million in the year-ago period.

'We believe Audiovox has adjusted to the resulting new industry parameters,' said John J. Shalam, president/CEO, in defining the company's potential recovery. 'We feel that we will emerge from this period of transition stronger, and better positioned to benefit from new opportunities in the wireless industry.'

Sales at Audiovox Electronics (AEC), the company's CE and mobile products division, climbed 8 percent in the third quarter, compared with the same period last year. Claiming sales increases in most product categories, AEC reported year-to-date figures that are 7 percent ahead of last year, with consumer products posting the highest category gain.

'The introduction of new products and broader distribution has allowed us to expand sales in spite of the overall economic decline,' said Patrick Lavelle, AEC president/CEO.

For the nine months, sales at parent Audiovox decreased about 23 percent, to $920.9 million, down from $1.2 billion in the same period in 2000. The company reported a $4.7 million net loss, compared with a $22.2 million gain in the first nine months of last year. Excluding the charges associated with an analog inventory write-down in the fiscal second quarter, net income for the nine months was $3.9 million.

Audiovox plans product offerings in the fourth quarter and the early part of 2002 that will include state-of-the-art handsets and competitively priced volume models. These new products are expected to improve both Audiovox revenue and margins next year, said the company.

The company also said it sold during the third quarter all of its remaining hand-held analog inventories, clearing the way for new technologies expected to be major contributors in 2002. These include 1X phones and its initial PDA product.