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Audiovox Posts Q4 Higher Profits, Lower Sales

5/17/2011 08:44:03 AM Eastern
Hauppauge, N.Y. - Audiovox posted its fiscal year financials reporting lower sales, but higher net income in its fiscal fourth quarter ended February 28.

Net income for the quarter was $17.4 million as compared to net income of $6.6 million year-on-year. Net income for the 2011 fiscal fourth quarter was positively impacted by a net tax benefit of $12.3 million compared to a net tax benefit of $1.0 million in the comparable fiscal fourth quarter.

Net sales for the quarter were $138.9 million, a decrease of 7.6 percent compared to net sales of $150.3 million reported in the comparable three-month period.

Electronics sales, which includes both mobile and consumer electronics products, were $102.8 million in the quarter as compared to $107.3 million for the prior year's final quarter, a decrease of 4.2 percent. Electronics sales were positively impacted by the acquisition of Invision, as well as higher sales of mobile electronics products in most categories. The increases in mobile electronics were partially offset by declines in mobile audio, lower margin consumer electronics business and sales of FLO TV products which were included in fiscal 2010 comparisons.

Accessory sales were $36.1 million in the quarter as compared to $43.1 million for the prior year, a decrease of 16.1 percent. The Accessories group was impacted by the continued slowdown in consumer electronics sales at retail, particularly video-related products which correlate to the company's accessories offering.

In the fiscal year net sales were $561.7 million, an increase of 2 percent compared to net sales of $550.7 million reported in the comparable year ago period.

Electronics sales, which include both mobile and consumer electronics products, were $415.2 million for the 2011 fiscal year as compared to $375 million for the 2010 fiscal year, an increase of 10.7 percent. Audiovox said it experienced sales increases in its security and video businesses.

Offsetting the increase was the lack of FY11 sales of FLO TV as that product line was discontinued, lower fulfillment sales, and lower volumes of consumer goods products at retail.

Accessory sales were $146.5 million as compared to $175.7 million in the comparable year-ago period. This decline of 16.6 percent was directly related to slower retail sales for products utilizing our accessory products at the retail level, primarily in the Audio/Video category. While a more diverse group of customers were added in FY11, continued weakness in consumer spending for non-essential items, such as flat-panel TV's, adversely impacted Accessory sales. Offsetting the decline, were increased accessory sales in the company's European operations.

Operating income for the fiscal year was $9 million compared to operating income of $3.8 million in the comparable year ago period. Net income for the fiscal year 2011 period was $23 million compared to net income of $22.5 million n the prior year. Net income for fiscal year 2011 was positively impacted by a $10.5 million tax benefit compared to an $11.3 million tax benefit in the comparable fiscal year.

The Audiovox acquisition of Klipsch Group for $167.6 million was completed on March 1, 2011 and its performance will be included in fiscal year 2012 results.

In its year-end report Audiovox did say on a pro forma basis, had the Klipsch acquisition taken place on March 1, 2009, the company would have reported net sales of $728.3 million for the fiscal year-ended February 28, 2011 as compared to net sales of $706.7 million for the fiscal year-ended February 28, 2010.

Net income for the year ended Feb. 28, 2011 would have been $31.4 million compared to the prior year's net income of $31.4 million.
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