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Audiovox Q2 Sales Rise, Profit Slides

7/01/2003 08:45:00 AM Eastern

Hauppauge, N.Y. - Fiscal second quarter sales edged upward at Audiovox, while net income moved lower during the three month period.

Audiovox, a marketer of cellular phones, consumer electronics products, mobile security and entertainment systems, posted sales of $301 million in the second quarter, ended May 31, up about 1 percent from the $297.3 million posted in the year-ago period. Net income slipped, to $2.1 million in the second quarter, compared with $3.7 million in the same three months in 2002.

Sales at Audiovox Communications (ACC), the company's wireless subsidiary, dropped to $189.1 million in the second quarter, down from $206.3 million in the same period a year ago. ACC sold 1.1 million total units, at an average selling price of $161 in the second quarter of 2003.

Second quarter sales for Audiovox Electronics (AEC), the company's consumer and mobile electronics subsidiary climbed to $111.9 million, up from $91 million year-on-year.

'Overall we are pleased with the results of our second quarter, even though ACC sales were slightly below those of the second quarter 2002,' said John J. Shalam, chairman.

'Profits for our wireless subsidiary improved, due to higher selling prices. Although competition remains fierce, we anticipate that new products scheduled for the second half of the year will contribute to continued improvement at ACC.

'Our electronics subsidiary continues to post increasing sales due largely to our success in the mobile video market. They, too, will introduce a number of new products in the second half, which we believe will help them continue their profitable trend,' said Shalam.

Audiovox operating expenses decreased to $22.6 million in the second quarter, compared with $24.1 million in the same period a year earlier. As a percentage of net sales, operating expenses dropped to 7.6 percent in the second quarter, compared with 8.2 percent year over year. Operating income for the second quarter was $3.1 million, compared with an operating loss of $5.4 million in the same three months last year.

For the six months, Audiovox sales hit $597.8 million, about a 3 percent jump over the $481.5 million recorded year-on-year. The company reported net income of $3.3 million for the six months, compared with a net loss of $1.6 million in the same six months a year ago.

Audiovox has regained compliance with the listing requirements to trade its stock on the NASDAQ. The company, which filed its 10-K for the fiscal year, ended Nov. 30, 2002 and its 10-Q for the first fiscal quarter, ended Feb. 28, 2003, has had the 'E' removed from its trading symbol, returning it to good standing with the exchange. NASDAQ will continue listing Audiovox since the company also has filed its 10-Q for the fiscal second quarter, ended May 31, by July 15.

Audiovox also announced it has closed on the purchase of a new building adjacent to the company's current headquarters here. The new 40,000-sq.-ft. facility, which is expandable by an additional 20,000 square feet, was purchased for $3.5 million. The company's recent Recoton acquisition will require additional space, as the Jensen, Acoustic Research and Advent brands are melded into the Audiovox operation.