HOLD FOR RELEASE
AUDIOVOX CORPORATION REPORTS FISCAL 2004
THIRD QUARTER AND YEAR-TO-DATE RESULTS
Hauppauge, NY, October 15, 2004 . . . Audiovox Corporation (NASDAQ: VOXX) today
announced fiscal 2004 third quarter and year-to-date results for the three and
nine months ended August 31, 2004.
Audiovox Corporation (the "Company") reported fiscal 2004 third quarter net
sales from continuing operations of $133.0 million, a decrease of $2.2 million,
or 1.7% compared to net sales from continuing operations of $135.2 million
reported in the comparable period in fiscal 2003. Income from continuing
operations for the fiscal 2004 third quarter was $.04 million, a decrease of
$2.26 million compared to income from continuing operations of $2.3 million in
the comparable period in the prior year. Income from discontinued operations,
net of tax for the fiscal 2004 third quarter was $5.3 million, an increase of
$6.9 million, or 424% compared to a loss from discontinued operations, net of
tax of $1.6 million in the comparable period in the prior year.
Net income for the fiscal 2004 third quarter was $5.3 million, an increase of
$4.65 million compared to net income $.65 million for the comparable period in
the prior year. Income per diluted share for the three months ended August 31,
2004 from continuing and discontinued operations was $.00 and $.24,
respectively, compared to income per diluted share from continuing operations of
$.10 and net loss per diluted share from discontinued operations of $.07 in the
comparable period in the prior year.
On June 11, 2004, the Company's majority owned subsidiary, Audiovox
Communications Corporation ("ACC"), entered into a definitive asset purchase
agreement to sell certain assets and certain liabilities to UTStarcom, Inc.
(Nasdaq: UTSI) for a purchase price of $165.1 million, subject to a net working
capital adjustment, as defined in the agreement. Accordingly, the Company
classified the related assets and liabilities of ACC as assets and liabilities
held-for-sale as of August 31, 2004 and November 30, 2003 and classified ACC's
operating results as a discontinued operation for the three and nine months
ended August 31, 2004 and 2003.
Results for the Nine-Month Period
The Company reported fiscal 2004 year-to-date net sales from continuing
operations of $417.5 million, an increase of $90.1 million, or 27.5% compared to
net sales from continuing operations of $327.4 million reported in the
comparable period in fiscal 2003. Income from continuing operations for the
fiscal 2004 and 2003 year-to-date period was $2.3 million in each year. Income
from discontinued operations, net of tax for the fiscal 2004 year-to-date period
was $8.6 million, an increase of $7.0 million, or 423% compared to income from
discontinued operations, net of tax of $1.6 million in the comparable period in
the prior year.
Net income for the fiscal 2004 year-to-date period was $10.9 million, an
increase of $6.9, or 177% compared to net income of $4.0 million for the
comparable period in the prior year. Net income per diluted common share for the
nine months ended August 31, 2004 from continuing and discontinued operations
was $.10 and $.39, respectively, compared to net income per diluted common share
from continuing and discontinued operations of $.10 and $.08 in the comparable
period in the prior year.
- more -
Exhibit 99.1
Audiovox Corporation Reports Fiscal 2004 Third Quarter Results
Page 2 of 4
The Company's Chairman, President and Chief Executive Officer stated, "Due to
the pending sale of our Wireless business to UTStarcom, we will not be hosting a
conference call until after the November 1, 2004 Stockholder meeting, at which
time we will discuss our financial and operational results in more detail."
Conference Call
On Tuesday, November 2, 2004 at 10:00 a.m. EDT, the Company will host a
conference call to discuss its third quarter financial results and its Consumer
Electronics operations. Further information will be supplied approximately one
week prior to.
About Audiovox
Audiovox Corporation is a leading international distributor and value added
service provider in the consumer electronics industry. 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/A for the fiscal
year ended November 30, 2003 and Form 10-Q for the fiscal 2004 third quarter
ended August 31, 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
- Tables to Follow -
Exhibit 99.1
AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
November 30, August 31,
2003 2004
---- ----
(unaudited)
Assets
Current assets:
Cash ................................................................................. $ 4,702 $ 8,592
Accounts receivable, net ............................................................. 266,421 222,120
Inventory ............................................................................ 152,762 165,126
Receivables from vendors ............................................................. 7,830 11,092
Prepaid expenses and other current assets ............................................ 10,319 10,477
Deferred income taxes ................................................................ 9,531 8,196
Assets held-for-sale ................................................................... 70,641 170,646
- ------------------------------------------------------------------------------------------- --------- ---------
Total current assets .............................................................. 522,206 596,249
Investment securities ..................................................................... 9,512 7,548
Equity investments ........................................................................ 13,142 13,138
Property, plant and equipment, net ........................................................ 18,598 18,896
Excess cost over fair value of assets acquired ............................................ 7,532 7,195
Intangible assets ......................................................................... 8,043 8,043
Other assets .............................................................................. 670 458
- ------------------------------------------------------------------------------------------- --------- ---------
$ 579,703 $ 651,527
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable ..................................................................... $ 35,126 $ 28,199
Accrued expenses and other current liabilities ....................................... 31,115 24,810
Accrued sales incentives ............................................................... 14,604 7,419
Income taxes payable ................................................................. 13,218 12,456
Bank obligations ..................................................................... 39,940 117,597
Current portion of long-term debt ...................................................... 3,433 10,320
Liabilities related to assets held-for-sale ............................................ 78,772 87,189
- ------------------------------------------------------------------------------------------- --------- ---------
Total current liabilities ......................................................... 216,208 287,990
Long-term debt ............................................................................ 18,246 7,388
Capital lease obligation .................................................................. 6,070 6,022
Deferred income taxes ..................................................................... 3,178 1,523
Deferred compensation ..................................................................... 5,280 6,089
- ------------------------------------------------------------------------------------------- --------- ---------
Total liabilities ................................................................. 248,982 309,012
- ------------------------------------------------------------------------------------------- --------- ---------
Minority interest ......................................................................... 4,993 6,689
- ------------------------------------------------------------------------------------------- --------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $50 par value; 50,000 shares authorized and outstanding,
liquidation preference of $2,500 .................................................. 2,500 2,500
Series preferred stock $.01 par value, 1,500,000 shares authorized; no shares
issued or outstanding ............................................................. -- --
Common stock:
Class A $.01 par value; 60,000,000 shares authorized; 20,728,382 and
20,772,846 shares issued at November 30, 2003 and August 31, 2004,
respectively .................................................................... 207 208
Class B $.01 convertible par value; 10,000,000 shares authorized; 2,260,954
shares issued and outstanding ................................................... 22 22
Paid-in capital ...................................................................... 252,104 252,752
Retained earnings .................................................................... 80,635 91,526
Accumulated other comprehensive loss ................................................. (1,229) (2,685)
Treasury stock, at cost, 1,072,737 and 1,070,957 shares of Class A common stock
at November 30, 2003 and August 31, 2004, respectively ............................ (8,511) (8,497)
- ------------------------------------------------------------------------------------------- --------- ---------
Total stockholders' equity ................................................................ 325,728 335,826
- ------------------------------------------------------------------------------------------- --------- ---------
Total liabilities and stockholders' equity ................................................ $ 579,703 $ 651,527
========= =========
Exhibit 99.1
AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
For the Three and Nine Months Ended August 31, 2003 and 2004
(In thousands, except share and per share data)
(unaudited)
Three Months Ended Nine Months Ended
------------------------------- ----------------------------
August 31, August 31, August 31, August 31,
2003 2004 2003 2004
------ ----- ----- ----- ----
Net sales ................................................... $ 135,239 $ 132,965 $ 327,397 $ 417,533
Cost of sales ............................................... 112,516 109,747 274,793 351,406
- ------------------------------------------------------------- ------------ ------------ ------------ ------------
Gross profit ................................................ 22,723 23,218 52,604 66,127
Operating expenses:
Selling .................................................. 5,759 8,370 15,967 23,144
General and administrative ............................... 11,807 12,924 29,168 36,200
Warehousing and technical support ........................ 479 935 1,859 3,404
------------ ------------ ------------ ------------
Total operating expenses ............................. 18,045 22,229 46,994 62,748
- ------------------------------------------------------------- ------------ ------------ ------------ ------------
Operating income ............................................ 4,678 989 5,610 3,379
------------ ------------ ------------ ------------
Other income (expense):
Interest and bank charges ................................ (893) (888) (1,648) (2,682)
Equity in income of equity investees ................. 1,019 1,182 2,134 3,706
Other, net ............................................... 44 324 (411) 1,663
------------ ------------ ------------ ------------
Total other income, net .............................. 170 618 75 2,687
------------ ------------ ------------ ------------
Income from continuing operations before provision for income
taxes, minority interest and discontinued operations ... 4,848 1,607 5,685 6,066
Provision for income taxes .................................. 2,726 832 3,850 3,042
Minority interest (expense) ................................. 161 (738) 454 (710)
------------ ------------ ------------ ------------
Income from continuing operations ........................... 2,283 37 2,289 2,314
Income (loss) from discontinued operations, net of tax ...... (1,636) 5,307 1,641 8,577
- ------------------------------------------------------------- ------------ ------------ ------------ ------------
Net income .................................................. $ 647 $ 5,344 $ 3,930 $ 10,891
============ ============ ============ ============
Earnings (loss) per common share (basic):
From continuing operations ............................... $ 0.11 $ 0.00 $ 0.10 $ 0.11
From discontinued operations ............................. $ (0.08) $ 0.24 $ 0.08 $ 0.39
------------ ------------ ------------ ------------
Net income per common share (basic) ......................... $ 0.03 $ 0.24 $ 0.18 $ 0.50
============ ============ ============ ============
Earnings (loss) per common share (diluted):
From continuing operations ............................... $ 0.10 $ 0.00 $ 0.10 $ 0.10
From discontinued operations ............................. $ (0.07) $ 0.24 $ 0.08 $ 0.39
------------ ------------ ------------ ------------
Net income per common share (diluted) ....................... $ 0.03 $ 0.24 $ 0.18 $ 0.49
============ ============ ============ ============
Weighted-average common shares outstanding (basic) .......... 21,840,621 21,962,843 21,836,241 21,945,364
============ ============ ============ ============
Weighted-average common shares outstanding (diluted) ........ 22,101,749 22,400,415 22,000,232 22,363,733
============ ============ ============ ============
Exhibit 99.1