FOR IMMEDIATE RELEASE
AUDIOVOX CORPORATION REPORTS FISCAL THIRD QUARTER 2003 RESULTS
Hauppauge, NY, October 15, 2003...Audiovox Corporation (Nasdaq: VOXX) today
announced results for its fiscal third quarter and nine-months ended August 31,
2003.
Net sales for the third quarter of fiscal 2003 were $265.8 million compared to
$302.0 million reported in the comparable period one year ago. The company's
majority owned subsidiary, Audiovox Communications Corp. (ACC) reported net
sales of $130.6 million compared to $197.3 million in the fiscal third quarter
2002, a decrease of 34%. ACC sold approximately 816,000 total units at an
average selling price of $145, compared to unit sales of 1.2 million and an
average selling price of $151 as reported in the comparable quarter last year.
Audiovox Electronics Corp. (AEC) reported net sales of $135.2 million compared
to $104.7 million in the fiscal third quarter last year, an increase of 29%. Net
sales were up 21% sequentially over $111.9 million reported last fiscal quarter.
AEC results included sales from the recent Recoton acquisition.
Net income and income per share for the quarter were $647,000 and $0.03 both
basic and diluted compared to net income and income per share of $2.6 million
and $0.12 both basic and diluted for the three months ended August 31, 2002.
For the nine-month period ended August 31, 2003, net sales were $863.7 million
versus $783.5 million in the comparable nine-month period one year ago. Wireless
sales (ACC) were $536.2 million compared to $516.6 million reported in the
nine-month period last year. ACC sold approximately 3.1 million total units at
an average selling price of $161 compared to 3.5 million and $137 for the same
period last year. AEC posted net sales of $327.4 million, an increase of over
22% compared to $266.9 million reported during the same nine-month period one
year ago. Consolidated net income and income per share were $3.9 million and
$0.18 both basic and diluted compared to net income and income per share of $1.0
million and $0.05 both basic and diluted reported for the nine-month 2002
period.
Commenting on the quarter's results, John Shalam, President & CEO of Audiovox
Corporation said, "In our wireless group, ACC, sales and profits were adversely
affected by the late introduction of several handsets, which are awaiting final
testing and approval by the carriers. However, we have begun shipping our 8600
series and anticipate the introduction of our 8400 Series as well as the 9900
Series and 8900 Series camera phones in time for the Holiday season. We believe
these new product introductions will have a positive impact on both our fiscal
fourth quarter 2003 and fiscal first quarter 2004 results."
Shalam continued, "Our electronics group posted a record third quarter, driven
primarily by continued demand for our mobile video and consumer electronics
product offerings. We are 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. Additionally, this
month we began shipping our new satellite radio products and remain excited
about the potential of this market segment."
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Audiovox Corporation Reports Fiscal Third Quarter 2003 Results
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Operating Expenses
Operating expenses increased $4.1 million to $25.4 million for the three months
ended August 31, 2003 compared to $21.3 million reported in the fiscal third
quarter 2002. As a percentage of net sales, operating expenses increased to 9.5%
from 7.0% in the comparable period one year ago. Major components of the
increase include office and salesman's salaries, advertising, and employee
benefits.
Operating income for the three months ended August 31, 2003 was $2.4 million
compared to $6.2 million reported in the fiscal third quarter last year.
Balance Sheet-Selected Items
Accounts receivable as of August 31, 2003 were $155.6 million. Inventory as of
August 31, 2003 was $187.7 million with ACC inventory levels at $70.0 million
and AEC inventory levels at $117.7 million, which included inventory acquired
from Recoton. At the close of the fiscal third quarter, the company's
shareholder equity was $314.8 million.
Shalam concluded, "The economy is slowly improving and we continue to see signs
of renewed consumer confidence. With that said, the telecommunications industry
remains highly competitive with new technologies shortening product lifecycles.
As we enter the fourth quarter and begin looking ahead into our next fiscal
year, I am confident, yet cautious and believe that Audiovox Corporation remains
well positioned to grow due to its diversified product offerings."
Conference Call
Audiovox Corporation will be hosting a results conference call later this
morning 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; 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 August 31, 2003.
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Audiovox Corporation Reports Fiscal Third Quarter 2003 Results...
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AUDIOVOX CORPORATION
Consolidated Statements of Income
(In Thousands, Except Share and Per Share Data)
(unaudited)
Three Months Ended Nine Months Ended
August 31, August 31,
2002 2003 2002 2003
------------ ------------ ------------ ------------
As restated As restated
Net sales $ 301,992 $ 265,822 $ 783,528 $ 863,650
Cost of sales 274,524 237,991 723,684 784,739
------------ ------------ ------------ ------------
Gross profit 27,468 27,831 59,844 78,911
Operating expenses
Selling 7,497 8,568 21,869 24,145
General and administrative 12,686 15,576 39,692 40,771
Warehousing and technical support 1,100 1,237 2,757 4,030
------------ ------------ ------------ ------------
Total operating expenses 21,283 25,381 64,318 68,946
------------ ------------ ------------ ------------
Operating income (loss) 6,185 2,450 (4,474) 9,965
Gain on issuance of subsidiary's shares 0 0 14,269 0
Other income (expense) (1,200) (8) (4,584) (1,539)
------------ ------------ ------------ ------------
Income before provision for (recovery of)
income taxes, minority interest and cumulative
effect of a change in accounting for negative
goodwill 4,985 2,442 5,211 8,426
Provision for income taxes 2,416 2,606 5,236 4,564
Minority interest 49 811 819 68
------------ ------------ ------------ ------------
Income before cumulative effect of a change in
accounting for negative goodwill 2,618 647 794 3,930
Cumulative effect of a change in accounting for
negative goodwill 0 0 240 0
------------ ------------ ------------ ------------
Net income 2,618 647 1,034 3,930
============ ============ ============ ============
Net income per common share (basic):
Income before cumulative effect of a change in
accounting for negative goodwill $ 0.12 $ 0.03 $ 0.04 $ 0.18
Cumulative effect of a change in accounting
for negative goodwill $ 0.00 $ 0.00 $ 0.01 $ 0.00
Net income per common share $ 0.12 $ 0.03 $ 0.05 $ 0.18
Net income per common share (diluted):
Income before cumulative effect of a change in
accounting for negative goodwill $ 0.12 $ 0.03 $ 0.04 $ 0.18
Cumulative effect of a change in accounting
for negative goodwill $ 0.00 $ 0.00 $ 0.01 $ 0.00
Net income per common share $ 0.12 $ 0.03 $ 0.05 $ 0.18
Weighted average number of common shares outstanding:
basic 21,947,573 21,840,621 21,960,652 21,836,241
diluted 21,982,803 22,101,749 21,997,892 22,000,232