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Audiovox Posts $2.3M Loss In Q2

10/10/2008 09:47:00 AM Eastern

Hauppauge, N.Y. — Audiovox reported a net loss of $2.3 million for its second quarter, ended Aug. 31.

The loss compares with a net income of $3.7 million for the previous year’s fiscal second quarter. Net sales for the quarter were $147.2 million compared with net sales of $148.3 million reported in the comparable prior year period.

Pat Lavelle, president/CEO, stated, "Our results this quarter and throughout the first half of the year are reflective of a deteriorating global economy, as consumer confidence continues to suffer, particularly in the U.S. Our sales and margins have been impacted by a decline in consumer spending and lower automotive sales. As a result, we have taken aggressive steps to better align our operations beyond what was previously forecasted. Price increases instituted in the second quarter and recent overhead reductions should position us for a profitable second half of the year."

Lavelle added, "Economic forces will continue to hinder our growth and ability to generate the types of returns we believed we were capable of delivering following last year's acquisitions. However, I am encouraged by our presence at retail, which is the strongest in our company's history and we have improved our competitive position in many of our primary market categories. Our balance sheet and cash position remain healthy and that should provide us with advantages and opportunities to expand, both near and long-term."

Electronics sales, which include both mobile and consumer electronics were $111.7 million for the quarter, ended Aug. 31, an increase of 4.1 percent compared with $107.3 million reported in the comparable fiscal 2008 period. This increase is primarily related to incremental sales generated from the RCA Audio/Video operations and increases in the company's operations in Germany, Mexico and Venezuela.

Offsetting these increases were declines in select mobile, audio and video categories due to the weakening U.S. economy. Additionally, sales were impacted by the discontinuance of certain less profitable categories such as portable navigation and LCD flat-screen televisions.

Accessories sales for the fiscal 2009 second quarter were $35.5 million, a decrease of 13.4 percent compared with $41.0 million reported in the period, ended Aug. 31, and are a result of the overall decline of the U.S. economy. This decrease was partially offset by sales of $3.5 million generated from the Technuity acquisition in November 2007.

Audiovox reported operating expenses of $29.1 million for the three months, ended Aug. 31, compared with $24.6 million reported in the comparable period last year. The increase in total operating expenses is primarily due to approximately $4.6 of expenses related to the acquired businesses of Technuity and the RCA A/V operations and $1.0 million in workforce reduction charges.

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