FOR IMMEDIATE RELEASE
AUDIOVOX CORPORATION REPORTS FIRST QUARTER 2003
o Q1 '03 Net Income of $1.2 million vs. Q1 '02 Net Loss of ($5.3)
million
o Company sets conference call for June 9, 2003 at 10:00 AM
o Annual meeting set for July 24, 2003
Hauppauge, NY, June 6, 2003 . . . Audiovox Corporation (Nasdaq: VOXXE) today
announced that it has filed its Form 10-Q for the three months ended February
28, 2003 with the Securities and Exchange Commission (SEC). The Company will
discuss these results during the previously scheduled conference call on June 9,
2003 at 10:00 AM (EST). The Company intends to request that Nasdaq remove the
"E" on its trading symbol, subject to Nasdaq's requirement that the Company file
its Form 10-Q for the quarter ended May 31, 2003 on or before July 15, 2003.
Net sales for the first quarter of fiscal 2003 were $296.8 million vs. $184.3
million in the first quarter 2002. Net sales for the first quarter of fiscal
2003 for Audiovox Communications Corp (ACC) were $216.6 million vs. $113.0
million for the first quarter of 2002. ACC sold 1.2 million total units at an
average selling price of $171 during the first quarter of 2003. Fiscal first
quarter net sales for Audiovox Electronics Corp. (AEC) were $80.3 million vs.
net sales of $71.3 million in the first quarter of 2002.
Net income and income per common share for the quarter were $1.2 million or
$0.06 per share basic and $0.05 diluted compared to a net loss of ($5.3) million
or ($0.24) per share basic and diluted in the first quarter 2002.
John J. Shalam, Chairman commented on the quarter's results, "I am pleased to
report that sales in both our operating subsidiaries increased during the first
quarter and the company returned to profitability. In wireless, the market began
to show some improvement as products with new consumer friendly features began
delivery. The CDM 9500, 9155 and 8500 with their higher selling prices all
contributed to the increase in our performance. In our electronics group new
products in the mobile video category fueled growth. Two days ago, we announced
the acquisition of Recoton's audio assets, which we believe will add to our
market share as we leverage the well known Jensen, Acoustic Research and Advent
brands to increase sales and penetration." Shalam further stated, "Our balance
sheet remains strong and inventories are at acceptable levels. The economy is
showing modest signs of improvement and provided that continues, we believe we
have the right products, pricing and brands to achieve our sales and profit
goals.
The Company's cash position as of February 28, 2003 was $43 million. In addition
as of February 28, 2003, the Company had no direct borrowings under its main
bank facility. The Company has
Audiovox Corporation Reports Fiscal First Quarter 2003
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requested waivers from its bank group on covenant violations related to income
tests for all of fiscal 2002 and timely delivery of financial statements for the
year ended November 30, 2002 and the quarter ended February 28, 2003.
Operating Expenses
Operating expenses increased $2,061 to $21,007 for the three months ended
February 28, 2003, compared to $18,946 in 2002. As a percentage of net sales,
operating expenses decreased to 7.1% for the three months ended February 28,
2003 from 10.3% in 2002. Major components of the increase in operating expenses
were salaries due to Code Systems, Inc. and increased insurance and advertising
expenses, particularly the general liability insurance. This increase in
operating expenses was partially offset by reductions in other expenses.
Operating income for the three months ended February 28, 2003 was $4.5 million
compared to operating loss of $5.2 million in 2002.
Balance Sheet-Selected Items
Accounts receivable as of February 28, 2003 were $105.3 million. Inventory as of
February 28, 2003 was $214.0 million with ACC inventory levels at $124.0 million
and AEC inventory levels at $89.8 million. The Company's shareholder equity was
$311.6 million as of February 28, 2003.
Conference Call
Audiovox Corporation will be hosting a results conference call on June 9, 2003
at 10:00 a.m. (EDT). Interested parties may participate in a listen-only mode
via a real-time web cast by visiting the Company's web site
http://www.audiovox.com.
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.
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;
Audiovox Corporation Reports Fiscal First Quarter 2003
Page 3 of 4
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; 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. 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 its Form 10-Q
for the three months ended February 28, 2003.
Company Contacts:
C. Michael Stoehr Glenn Wiener
SVP and CFO Investor and Financial Media Relations
(631) 231-7750 (212) 786-6011 or GWIENER@GWCCO.COM
-- Table To Follow -
Audiovox Corporation Reports Fiscal First Quarter 2003
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AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three Months Ended February 28, 2002 and February 28, 2003
(In thousands, except share and per share data)
(unaudited)
Three Months Ended
February 28, February 28,
2002 2003
------------ ------------
As Restated
See Note 2
Net sales $ 184,269 $ 296,818
Cost of sales 170,546 271,350
------------ ------------
Gross profit 13,723 25,468
------------ ------------
Operating expenses:
Selling 6,751 7,303
General and administrative 11,053 12,305
Warehousing and technical support 1,142 1,399
------------ ------------
Total operating expenses 18,946 21,007
------------ ------------
Operating income (loss) (5,223) 4,461
------------ ------------
Other income (expense):
Interest and bank charges (963) (1,105)
Equity in income of equity investments 304 371
Other, net (1,672) (1,099)
------------ ------------
Total other income (expense), net (2,331) (1,833)
------------ ------------
Income (loss) before provision for (recovery of) income taxes, minority interest and
cumulative effect of a change in accounting for negative goodwill (7,554) 2,628
Provision for (recovery of) income taxes (1,500) 1,040
Minority interest 557 (380)
------------ ------------
Income (loss) before cumulative effect of a change in accounting for negative goodwill (5,497) 1,208
Cumulative effect of a change in accounting for negative goodwill 240 --
------------ ------------
Net income (loss) $ (5,257) $ 1,208
============ ============
Net income (loss) per common share (basic):
Income (loss) before cumulative effect of a change in accounting for
negative goodwill $ (0.25) $ 0.06
Cumulative effect of a change in accounting for negative goodwill 0.01 --
------------ ------------
Net income (loss) per common share $ (0.24) $ 0.06
============ ============
Net income (loss) per common share (diluted)
Income (loss) before cumulative effect of a change in accounting for negative
goodwill $ (0.25) $ 0.05
Cumulative effect of a change in accounting for negative goodwill 0.01 --
------------ ------------
Net income (loss) per common share $ (0.24) $ 0.05
============ ============
Weighted average number of common shares outstanding:
Basic 21,967,263 21,830,480
============ ============
Diluted 21,967,263 22,021,548
============ ============