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Audiovox Electronics Registers 29% Q3 Sales Hike

Hauppauge, N.Y. – The electronics group at Audiovox posted its ‘best quarter ever,’ notching a 29 percent increase in the company’s fiscal third quarter, to $135.2 million, up from $104.7 million in the year-ago period.

Net sales for electronics were up 21 percent over the $111.9 million recorded in the preceding quarter.

Breaking out the three segments of the Audiovox electronics group, mobile electronics, the largest division, enjoyed a 13.4 percent sales increase in the third quarter, rising to $78.3 million, from $69 million year on year. The sequentially quarterly increase hit 5.6 percent, up from $74.1 million in the second three months of 2003.

The consumer electronics segment recorded $36.9 million in sales for the period, ended Aug. 31, soaring 76.8 percent over the $20.8 million held down in the same period a year earlier. Second quarter sales for this year reached $27.8 million, resulting in a 32.7 percent sequential increase in the third quarter. The electronics group results included sales from the recent Recoton acquisition.

Sound revenue for the third quarter climbed to $19.9 million, a 34.7 percent increase over the $14.8 million registered in the year-ago three months. Sequentially, sales in the third quarter doubled from the second three month’s $9.9 million.

Even with record third quarter sales for the Audiovox electronics group, which also topped total quarterly sales for the company’s wireless group, consolidated revenue dropped 11.9 percent, to $265.8 million, down from $302 million in the same quarter in 2002. The consolidated slide was attributed primarily to a shortfall in the communications [wireless] group, due to delays in the carrier approval process. Consolidated net income dropped to $647,000 in the third quarter, compared with $2.6 million year over year.

The communications segment group had a 34 percent decline in sales in the third quarter, down to $130.6 million, from $197.3 million year-on-year. The wireless group sold about 816,000 total units at an average selling price of $145, compared with unit sales of 1.2 million and an average selling price of $151 in the comparable three months in 2002.

‘In our wireless group, Audiovox Communications, sales and profit were adversely affected by the late introduction of several handsets, which are awaiting final testing and approval by the carriers,’ said John Shalam, Audiovox president/CEO. ‘We believe new product introductions [phones and camera phones for the holiday season] will have a positive impact on both our fiscal fourth quarter 2003 and fiscal first quarter 2004 results.’

Shalam said Audiovox is ‘working diligently to assimilate the recently acquired Recoton assets, and as we’ve previously stated, believe this strategic acquisition should positively impact our fiscal 2004 results.’

For the nine months, Audiovox consolidated sales reached $863.7 million, up from $783.5 million in the same period a year ago. Net income for the nine months reached $3.9 million, compared with $1 million in the same period in 2002.

Nine-month electronics group sales jumped 22 percent, to $327.4 million, up from $266.9 million recorded year over year.

Communications group sales for the nine months were $536.2 million, compared with the $516.6 million reported in a similar period last year. The wireless group sold about 3.1 million total units at an average selling price of $161, compared with 3.5 million units and $137 for the same period last year.