FOR IMMEDIATE RELEASE
AUDIOVOX CORPORATION ANNOUNCES DEFINITIVE AGREEMENT
TO SELL ITS WIRELESS HANDSET BUSINESS TO UTSTARCOM
FOR A TOTAL PURCHASE PRICE OF $165.1 MILLION
Hauppauge, NY, June 14, 2004 . . . Audiovox Corporation (Nasdaq: VOXX) announced
today that its majority owned subsidiary Audiovox Communications Corporation
("ACC") has entered into a definitive agreement to sell selected assets and
liabilities (excluding its receivables, inter-company accounts payable, and
certain accrued expenses), to UTStarcom, Inc. (Nasdaq: UTSI) for a total
purchase price of $165.1 million in cash, subject to certain post closing
adjustments.
Audiovox has agreed to enter into a five-year royalty free licensing agreement
permitting UTStarcom to use the Audiovox brand on certain products. Audiovox
recently purchased 5% of ACC's shares from Toshiba Corporation, ACC's minority
stockholder, and has entered into an agreement with Toshiba to purchase the
balance of Toshiba's shares prior to the closing. Toshiba will be paid $15
million, which includes the repayment of an $8.1 million subordinated note.
Audiovox Communications Corporation anticipates that the net proceeds of the
sale will be approximately $90 million, subject to certain adjustments.
While the company anticipates the transaction to close during the second half of
2004, there can be no assurances as it is subject to certain closing conditions,
including regulatory, third party and Audiovox shareholder approval. The
Company's Board of Directors as well as the Board of UTStarcom has approved the
transaction and John Shalam, Audiovox's Chairman and Chief Executive Officer and
majority shareholder, has agreed to vote his Audiovox shares in favor of this
deal.
Jefferies & Company, Inc. acted as financial advisors to the Company on this
transaction.
"This marks a major milestone in Audiovox Corporation's evolution," stated Mr.
Shalam. "Over the years, ACC has been a key driver in building and enhancing the
Audiovox brand name and today, enjoys long-standing relationships with many of
the world's leading technology manufacturers and wireless carriers. We have
decided to exit that business because we believe we no longer have the
capabilities to be a major player in that market. UTStarcom's position in the
communications industry makes them better suited to meet the challenges of this
exciting market."
Shalam continued, "As a result of this transaction we will emerge focused on the
management of a diversified product portfolio. And it is our intention to
continue to invest in engineering, product development, advertising and
promotion as we are committed to building the Audiovox family of brands into a
major force in the consumer electronics industry. We will have a strong balance
sheet with substantial cash reserves that should allow us to take advantage of
growth opportunities and new acquisitions while maximizing shareholder value. We
believe that based both on the past performance of our electronics business, and
the exciting programs currently underway, Audiovox should continue to expand
it's presence in the marketplace."
Exhibit 99.7
Conference Call
Audiovox Corporation will be hosting a conference call on Tuesday, June 15, 2004
at 10:00 a.m. EDT to discuss the details of this transaction. 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 and by clicking on "investor
relations". For more information, please contact the company's investor
relations department.
About Audiovox
Audiovox Corporation is an international leading company in consumer electronics
and communications. The Company conducts its business through 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.
Safe-Harbor Language
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 changes in the Company's business
operations; our ability to keep pace with technological advances; significant
competition in the mobile and consumer electronics businesses as well as the
wireless business; our relationships with key suppliers and customers; quality
and consumer acceptance of newly introduced products; 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
facts set forth herein, are detailed in the Company's Form 10-K for the fiscal
fourth quarter and year ended November 30, 2003 and Form 10-Q for the fiscal
first quarter ended February 29, 2004.
Company Contact: Public and Investor Relations Contact:
- ------- -------- ------ --- -------- --------- --------
C. Michael Stoehr, SVP/CFO Glenn Wiener
Audiovox Corporation GW Communications
(631) 231-7750 (212) 786-6011 or GWIENER@GWCCO.COM
Exhibit 99.7