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Audiovox Posts Profit, But Lower Sales

10/14/2009 10:09:51 AM Eastern

Hauppauge, N.Y. - Audiovox reported lower net sales but turned a $2.8 million profit in its fiscal second quarter, ended Aug. 31, with accessories sales leading the way.

Net sales for the fiscal 2010 second quarter were $124.9 million, compared with net sales of $147.2 million reported in the prior year period, a decrease of 15.2 percent.

The $2.8 million in net income for the quarter compares with a $2.3 million net loss for the same quarter last year.

Accessories sales for quarter were $45.9 million, an increase of 29.0 percent as compared with $35.5 million reported in the comparable fiscal year period.

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Audiovox said this increase is due primarily to the addition of new customers and higher sales of antennas as a result of the switch from analog to digital TV, remote controls and other accessory lines under Terk, Acoustic Research and RCA. As a percentage of net sales, accessories represented 36.7 percent for the quarter, higher than the 24.1 percent for the prior year's second quarter.

Electronics sales, which include both mobile and consumer electronics, were $79.0 million for the quarter, down from $111.7 million in the comparable fiscal year period, a decrease of 29.2 percent.

This decline is primarily due to lower sales of consumer goods, mostly as a result of the company's exit from lower profit product categories - such as flat-screen TVs, portable navigation and GMRS radios, and mobile electronics products - due to the weakening U.S. economy and lower vehicle sales. The decline was partially offset by increased sales of satellite radio products and digital clock radios.

Pat Lavelle, CEO, said in a statement, "We've made significant progress over the past year to improve our competitive position, while taking aggressive steps to manage our business through this economic downturn. Cost containment efforts, new products, new customers and ongoing margin improvement programs enabled us to post a profit this quarter and through the first half of the year, despite the decline in sales. While we remain cautious given the continued weakness in consumer confidence globally, we believe we have taken the necessary steps to be profitable this year and are well positioned for the future."

Net sales for the first half were $244.7 million, compared with net sales of $291.8 million in the comparable fiscal 2009 period, a decrease of 16.1 percent. Accessories sales were $86.7 million, an increase of 30.5 percent vs. the prior year's first half.

Electronics sales, which include both mobile and consumer electronics, were $158 million in its first half, down from the prior year's $225.4 million.

Net income for the first half was $3.2 million, compared with a net loss of $7.5 million in last year's first half.

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