Fiscal year-end sales in the Audiovox Electronics (AEC) subsidiary of Audiovox Corp. increased in all three of its categories, with growth in the consumer electronics and mobile sectors driven primarily by new product introductions.
Net sales for the overall AEC subsidiary in the 12-month period, ended Nov. 30, 2003, increased 39 percent to $517.7 million, compared with $372.7 million year-over-year. In the fourth quarter, overall AEC sales rose 80 percent to $190.3 million, up from the $105.8 million recorded in the year-ago period.
In the 12 months, AEC consumer electronics sector sales soared 66.8 percent, hitting $294.5 million, up from $229.3 million in the year-ago period. Mobile electronics sales jumped 28.4 percent, reaching $294.5 million, compared with $229.3 million year-on-year. Sound category sales jumped 39.2 percent to $78.4 million, up from $56.3 million in the same quarter a year earlier.
These increases helped push Audiovox into the black for the fiscal year, with consolidated net income reaching $11.2 million, compared with a loss of $14 million year-over-year. Operating income for the 12 months reached $21.8 million, compared with a $14.1 million operating loss year-over-year.
Operating expenses increased to $102.4 million in the 12 months, up from $88.7 million year-on-year. However, operating expenses, as a percentage of net sales, decreased to 7.7 percent for the year, from 8.1 percent the previous 12 months. Increased advertising expenditures, promotional expenses to support a growing business and expenses for Audiovox Europe accounted for the $13.7 million expense rise. Consolidated 12-month sales increased 20 percent to $1.3 billion, up from $1.1 billion the previous fiscal year.
Results from the Recoton acquisition — namely Advent, Acoustic Research and Jensen products, as well as Recoton's European operations — contributed to growth in the AEC sound category.
The AEC subsidiary, which also reported increased fourth quarter profit, saw overall gross profit margin rise to 16.6 percent for the fiscal year, from 16.1 percent the previous year. This was due to higher margin on consumer product sales, further increases in mobile video sales and the margin of Audiovox Europe, a new subsidiary formed as a result of the Recoton acquisition.
"We anticipated fourth quarter results to show an improvement over prior quarters due to continued and consistent performance in our electronics subsidiary, which reached the $500 million sales mark [over the fiscal year] for the first time in our company's history," said John Shalam, chairman/CEO of parent Audiovox.
In the Audiovox Communications (ACC) subsidiary, introduction of several high-end wireless handsets was the key sales driver. Fiscal-year sales for ACC increased 11 percent, hitting $806.2 million, up from $727.6 million a year earlier.
Fourth quarter sales for AAC rose 28 percent, hitting $270 million, up from $211.1 million in the same period a year ago.
ACC, which also enjoyed increased fourth quarter profit, saw its fiscal-year gross profit margin increase to 4.7 percent from 2 percent the previous 12 months, due to lower inventory write-downs and new product introductions.
As a result of higher subsidiary revenue and gross profit margin, consolidated Audiovox fourth quarter profit moved into the black, coming in at $7.3 million, compared with a net loss of $15.1 million in the year-ago period.
Consolidated sales for the fourth quarter jumped 45 percent, reaching $460.3 million, up from $316.9 million recorded in the same three months a year earlier.