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Voxx Posts Higher Profits On Lower Sales

10/20/2013 08:00:00 PM Eastern

HAUPPAUGE, N.Y. — Voxx International reported higher net earnings but slightly lower sales in its fiscal second quarter, ended Aug. 31.

Net income for the quarter was $4.9 million, compared with net income of $3.7 million for the comparable period last year. Net income for this year’s fiscal second quarter was favorably impacted by funds Voxx received as part of a class action settlement and funds related to the Circuit City bankruptcy.

Net sales for the quarter were $183.8 million, a decrease of 4.1 percent compared with net sales of $191.7 million reported in the comparable year-ago period. Automotive sales for the quarter were $99 million, an increase of 0.2 percent over last year.

Automotive sales were positively impacted by higher product sales to the company’s global OEM customers for both smart app remote starts and rear-seat entertainment systems. Excluding a difficult Venezuela market, automotive sales increased approximately 3 percent for the comparable periods.

Premium audio sales for the quarter were $40.8 million, a decrease of 8.8 percent compared with $44.7 million reported in the comparable period last year. The decline in this segment was primarily related to declines in our European sales, as the company’s domestic business was up for the comparable periods.

Consumer accessories sales were $43.5 million for the quarter, a decrease of 9.1 percent compared with $47.9 million reported in the comparable period last year. This decline was primarily related to lower international sales. The declines were partially offset by growth in some of the company’s domestic product lines, such as Bluetooth wireless speakers and personal sound amplifiers.

As a percentage of sales for the quarter, automotive represented 53.8 percent, premium audio represented 22.2 percent and consumer accessories represented 23.7 percent.

Voxx reported operating income of $2.2 million for the quarter, compared with $6.8 million in the year-ago period. The decline is directly attributed to lower sales for the quarter and higher operating costs, many of which are not expected to repeat in fiscal 2015, the company said.

Pat Lavelle, Voxx International’s president and CEO, said in a statement, “Our results through the first half of the year are tracking in line with our plan, and we are anticipating a strong second half based on several new product launches across all three of our business segments.”

He continued, “We have a lot of activities that should boost sales and increase margins, both near and long-term. We’re generating cash flow and paying down debt and assuming no acquisitions are made in the balance of this fiscal year, we should exit fiscal 2014 with under $100 million in debt. We’re taking steps to lower our fixed overhead moving into next year, and it remains our goal to drive organic growth, improve our margins and cash flow and continue to deliver better bottom- line returns and increased shareholder value.”

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