Audiovox Corporation to Restate Results for Fiscal Years 2000, 2001
and the First Three Quarters of 2002
o Cumulative effect of changes is an increase of $1.0 million to net income
o Certain expenses reclassified from operating expenses to cost of sales for
the same periods
HAUPPAUGE, N.Y., May 29, 2003....Audiovox Corporation (Nasdaq: VOXXE) today
announced that in connection with the previously announced Securities and
Exchange Commission ("SEC") comment letter and the current audit, the Company
expects to restate results for fiscal years 2000, 2001, and the first three
quarters of fiscal 2002. The net effect of the adjustments is expected to have
no impact on the Company's cash balances for any period.
The Company expects to file its Form 10-K for 2002 reflecting restatements for
2000, and 2001 and the first three quarters of fiscal 2002 as soon as the
remaining SEC comments are resolved and the Company's audit is completed. As a
result, until the audit is complete and the statements are filed, previously
issued financial statements should no longer be relied upon until this process
is completed.
Although adjustments vary by period, the cumulative effect of all of these
changes, which include changes previously announced on March 14, 2003, is an
unaudited $1.0 million increase in income over the periods. The unaudited net
effect of all the restatement adjustments by period, including that previously
announced on March 14, 2003, is as follows:
Increase (Decrease) (Increase) Decrease Increase (Decrease)
in Net Income for the in Net Loss for the in Net Income for the
Fiscal Year Ended Fiscal Year Ended Nine Months Ended
November 30, 2000 November 30, 2001 August 31, 2002
----------------- ----------------- ----------------
Restatement adjustments:
Revenue recognition $ (779) $ 779 -
Timing of revenue (15) $ (103)
Litigation (373) 427
Foreign currency translation - - (1,491)
Inventory pricing - - 420
Sales incentives 1,884 910 847
Gain on the issuance of subsidiary shares (1) - - 179
Minority interest (2) - 20 (87)
Operating expense reclassification to cost of
sales (3) - - -
----------- --------- ---------
Total adjustment to pre-tax income (loss) 1,105 1,321 192
(Provision for) recovery of income taxes (842) (310) (455)
----------- --------- ---------
Total effect on net income (loss) $ 263 $ 1,011 $ (263)
=========== ========= =========
(1) This adjustment reflects the impact of the restatement adjustments on the
calculation of the gain on
Exhibit 99.1
Audiovox Corporation to Restate Results
Page 2 of 3
the issuance of subsidiary shares that was originally recorded by the
Company in the quarter ended May 31, 2002.
(2) This adjustment reflects the impact of the restatement adjustments on
minority interest.
(3) This adjustment represents a reclassification of warehousing and technical
support and general and administrative costs (which are a component of
operating expenses) to cost of sales. This reclassification did not have
any effect on previously reported net income or (loss) for any fiscal year
or period presented herein.
As a result of outstanding SEC comments, and the completion of the current audit
the Company has not yet filed with the SEC its annual report on Form 10-K for
the fiscal year ended November 30, 2002 and its quarterly report on Form 10-Q
for the fiscal quarter ended February 28, 2003. As previously announced, the
Company continues to trade on The Nasdaq Stock Market with an "E" on the VOXX
trading symbol.
About Audiovox Corporation
Audiovox Corporation is an international leader in the marketing of cellular
telephones, mobile security and entertainment systems, and consumer electronics
products. The Company conducts its business through two subsidiaries and markets
its products both domestically and internationally under its own brands. It also
functions as an OEM (Original Equipment Manufacturer) supplier to several
customers. For additional information, please visit Audiovox on the Web at
http://www.audiovox.com.
Audiovox Safe Harbor
Except for historical information contained herein, statements made in this
release that would constitute forward-looking statements may involve certain
risks and uncertainties. All forward-looking statements made in this release are
based on currently available information and the company assumes no
responsibility to update any such forward-looking statement. The following
factors, among others, may cause actual results to differ materially from the
results suggested in the forward-looking statements. The factors include, but
are not limited to: risks that may result from our ability to keep pace with
technological advances; significant competition in the wireless, mobile and
consumer electronics businesses; quality and consumer acceptance of newly
introduced products; our relationships with key suppliers and customers; market
volatility; non- availability of product; excess inventory; price and product
competition; new product introductions; the possibility that the review of our
prior filings by the SEC may result in changes to our financial statements; the
possibility that our failure to timely file our annual report on Form 10-K for
the fiscal year ended November 30, 2002 and our quarterly report on Form 10-Q
for the quarter ended February 28, 2003 will result in a determination that we
are subject to delisting from the Nasdaq Stock Market; the possibility that the
Nasdaq will decline our request for continued listing; and the possibility that
stockholders or regulatory authorities may initiate proceedings against Audiovox
and/or our officers and directors as a result of any restatements that may be
required as a result of the resolution of the SEC comment letter. Risk factors
associated with our business, including some of the factors set forth herein,
are detailed in the Company's Form 10-Q for the fiscal third quarter ended
August 31, 2002 and other documents filed with the SEC.
Exhibit 99.1
Audiovox Corporation to Restate Results
Page 3 of 3
Company Contacts:
C. Michael Stoehr, SVP and CFO - (631) 231-7750
Glenn Wiener, Investor and Financial Media Relations - (212) 786-6011
Exhibit 99.1