FOR IMMEDIATE RELEASE:
AUDIOVOX CORPORATION TO PURCHASE
AUDIO BRANDS FROM RECOTON FOR $40 MILLION
Well-known Jensen, Advent and Acoustic Research
brands are at the center of the deal
Hauppauge, NY, June 3, 2003 . . . Audiovox Corporation (Nasdaq: VOXXE) today
announced that the US Bankruptcy Court for the Southern District of New York has
accepted the bid by one of the Company's wholly owned subsidiaries for the
assets of Recoton (OTC: RCOTQ), which include the US audio operation as well as
a German company. Under the terms of the purchase Audiovox will pay $40.0
million and assume a $5 million debt on the German company to acquire Recoton's
U.S. audio operation, which includes well known brands Jensen, Advent and
Acoustic Research as well as the purchase of the shares of Recoton German
Holdings GmbH, a wholly owned subsidiary with 2002 sales of $70 million.
The proposed transaction will create one of the largest U.S. audio suppliers of
mobile entertainment products, adding to the company's existing portfolio of
high quality mobile entertainment products marketed under three existing brands:
Audiovox, Prestige and Rampage.
The purchase price was reached through an auction bidding process conducted
pursuant to an order issued by the U.S. Bankruptcy Court for the Southern
District of New York. Recoton Corporation filed a voluntary petition to
reorganize under Chapter 11 of the U.S. Bankruptcy Code on April 8, 2003 in the
Southern District of New York
John J. Shalam Chairman of Audiovox Corp. said, "Our strong balance sheet allows
us to consider the growth opportunities that acquisitions like this one can
provide. Our bank lines are extensive and are presently barely being utilized. I
expect this acquisition will create minimal financial pressure on our operation
since our cash position combined with our credit facilities will more than cover
the transaction. The deal made sense because of the synergies that exist in our
product lines, customer base and business practices and we expect it to be
accretive from the onset and to generate additional revenue of between $70 and
$100 million in the first year of our ownership."
Shalam continued, "Recoton's U.S. audio business will be assimilated into our
wholly owned subsidiary Audiovox Electronics Corp. (AEC). The German company
will allow us additional growth opportunities as we begin to promote our
consumer electronics and mobile products through the already established Recoton
distribution network in Western Europe."
Patrick Lavelle, president and CEO of AEC also commented on the acquisition, "We
expect to blend
Exhibit 99.2
Audiovox Corporation To Purchase Audio Brands...
Page 2 of 3
the Recoton brands into our electronics subsidiary with minimal overhead
expense. We believe that the addition of the well-known Jensen brand will allow
Audiovox Electronics Corp to expand marketing opportunities within existing
12-volt distribution channels. We will utilize this acquisition to expand
Audiovox's penetration into the home by offering a complete line of Acoustic
Research, Advent and Audiovox speaker and entertainment systems."
In addition, during the second quarter we took charges relating to analog
inventories which also had a substantial negative effect on second quarter
performance."
Audiovox Corporation is an international leader in the marketing of cellular
telephones, mobile security and entertainment systems, and consumer electronics
products. Audiovox Electronics Corp is a wholly owned subsidiary that markets
auto sound, vehicle security, mobile video systems, and consumer electronics
products such as Flat Panel TV's, Portable DVD players, Two-Way radios, MP 3
products and home and portable stereos. For additional information, visit their
web site at www.audiovox.com or call 1- 800-290-6650.
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 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; 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- K for the fiscal fourth quarter and year
ended November 30, 2002 and other documents filed with the SEC.
Company Contacts:
C. Michael Stoehr, SVP and CFO - (631) 231-7750
Glenn Wiener, Investor and Financial Media Relations - (212) 786-6011.
Exhibit 99.2