Voxx Posts Higher Q4 Sales, Lower Net Income

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Hauppauge, N.Y. - Voxx International reported higher sales but lower net income for its fiscal fourth quarter, ended Feb. 28.

Fourth-quarter sales rose 27.1 percent to $176.6 million, with operating income rising 182 percent to $13.8 million. Fourth-quarter net income fell 37.4 percent to $10.9 million from the year-ago $17.4 million.

However in its fiscal 2012 Voxx said sales rose 25.9 percent to $701.1 million, operating income rose 387 percent to $43.9 million, and net income rose 11.4 percent to $25.6 million. That number included a $13.2 million tax expense, compared with a 2011 $10.5 million tax benefit. The Klipsch Group generated around $169.5 million in fiscal year sales, up by an unspecified amount. Klipsch was acquired on March 1, 2011.

In fiscal 2012, Voxx said it posted continued growth in its mobile electronics OEM business and that Klipsch Group sales rose and met projections. Also in 2012, said president/CEO Pat Lavelle, "We shifted our product mix towards higher margin growth categories, strengthened our international footprint and are in the process of better aligning our organization to realize additional synergies, both sales and expense driven, over the coming years."

In breaking out fourth-quarter sales, Voxx said electronics sales rose 32.3 percent to $136 million and accessory sales rose 12.5 percent to $40.6 million, thanks to higher sales of mobile electronics products in select product categories, continued growth in the company's international operations, and the addition of Klipsch sales. The gains were partially offset by lower sales in the company's consumer business and declines in mobile audio fulfillment sales.

As a percentage of fourth-quarter net sales, electronics and accessories accounted for 77 percent and 23 percent of the net sales in the quarter, up from a year-ago 74 percent and 26 percent, respectively. The quarter's gross margin was 31.5 percent, up from a year-ago 25.1 percent.

In breaking out fiscal year sales, Voxx said electronics sales rose 35.1 percent to $561 million. Accessory sales were $146.1 million, down 0.3 percent. The company said it enjoyed increases in its OEM mobile electronics segment, both domestically and abroad, and higher sales across most of its international segments. Offsetting these gains were declines in the company's consumer business and in mobile audio, primarily satellite-radio fulfillment sales. As a percentage of net sales, electronics and accessories represented 79.3 percent and 20.7 percent of net sales, respectively, for the full year.

Full-year gross margin rose to 28.7 percent from the prior year's 22.1 percent because of a shift in product mix geared towards high-end premium audio and OEM mobile electronics products, as well as better margins in most of the company's product lines, both domestically and abroad, the company said. Lower sales in the company's fulfillment and consumer businesses also helped boost margins, the company added.

In fiscal 2013, Lavelle said sales would grow to around $900 million because "many of our core product lines are expected to grow organically this year, and we see increased potential in the second half of the year backed by new product introductions and new OEM programs." He also said the company continues to monitor "a number of product lines" and might de-emphasize some of our lower margin product categories, consistent with our strategy."


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