VOXX - Earnings call transcript Q4 2018 | VOXX International Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the VOXX International Fiscal 2018 Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn introduce your host for today's conference, Glenn Wiener.

You may begin.

Glenn Wiener

Gigi. you, Thank welcome and and International's XXXX Fiscal Good Results to Conference Quarter Year-End Call. Fourth morning, VOXX

Our call today www.voxxintl.com. is being webcast live on our website,

We available to replay also who have able aren't for make those call. today's a

this management Officer; Chief Executive Financial Stoehr, and Michael for Pat Lavelle, morning Speaking and and President President Vice Senior Officer. Chief be our will

do Chairman their we'll have means, investors the any ask to by also remarks, today a all those with Shalam, Q&A Following and available questions, feel of please so. Board, is to will free wishing call. the of during Q&A session John portion and us for the be

Form constitute remind period contained Pat, this risk currently on associated to in statements information. we I'd on forward-looking it with our are business The call and Lavelle. the made and available Before responsibility would XXXX. our At no company such except would away. detailed for call take any everyone are XX, herein, like over to forward-looking President the CEO, statements statements. XX-K historical update information our time, to to based today's begin, turn assumes February Pat And please that for like that webcast I factors ended

Patrick Lavelle

addressing will good most our projects programs fiscal segments. throughout the know Mike like cover to on today I'll is of updates year, our our improve within business the of close a long-term Thank spent results morning. with our What you, few valuation. to year-end XXXX Glenn, that conversations from Many we you then strategy and performance both and I'd focus our on our and the versus million, and to transaction, fixed Hirschmann expenses facility million cash million company. last reduce our fiscal a $XX we steps first improvement of With a believe cash took and our credit nearly of the value down year-over-year step. paid year $XX equivalents quarter. ended sale with $XX will was and to we further unlock the in full, The in close improvement business that

year-end on improvement just have $XX million. untapped of Our capital mortgages And total under facilities, from an as additional to facilities. primarily our million debt through access was credit of over we $XX our

best strong to been company trajectory leveraging and continuing while both to balance on of sustainable cash is ways shareholder sheet a our back to put flow, future evaluate essential We the value. adding our our EBITDA and in building which have growth

been Our have inconsistent. results past over the few years

factors and technology been our Some of our to factors outside business, that is impact has some on and both to played seen We've issues due geopolitical and us, disruptive of a control. economic role. definitely have

one Additionally, has been has another strong, weakness. when suffered often business segment

affect safety or with example, large-scale results. recalls which launches, quarterly For issues OEM OEM associated timing often

million $X.X have VOXX attributable $X.X XXXX. net fiscal of our Hirschmann. income the XXXX, a attributable some of in We net loss of performance XXXX had earnings this VOXX to And million million due to sale was swings $XX.X from to dramatic in in in to year,

to is make existing is forward two, enter profitable an is I are potentially the portfolio; acquisition believe shareholders but a we best an path accomplish within weather downturn we in well position these economy. our our time, right a assets then our best this our a to to savings into at threefold business or decided, assets, is monetize in subsidiaries approach, to goals, one additional a the partnership potential us or and any to complement so some further strengthen believe basis. goal that our move buyback there synergies leverage to as know get positive. scalable, as value, in To we're that capital a business stock preserve to on Our to shareholder position route improving be acquisition cash on profitable infrastructure; operating and operations the make our our to enabling have and flow realign drive to and to the more

in us be strength allows to financial prudent our Our evaluations.

authorization yes, not know a at shares improve be that also a company do better especially does on That preclude share approximately this run, stock said, a that this by value in place. served And We the time, the value buying believe us we a However, value, undervalued, in growth our our from currently buyback are believe solid at back significantly would long our track. but we temporarily assets. might shareholder we when million X.X stock. looking of have shareholder

in in R&D Looking multiple ahead, Automotive the I programs, do periods. resulted we've year segment to modest made our as growth for contributing investments new we believe have for are positioned revenue

Our now could the favorably segment and impact margin market health higher Consumer that programs dollars. line top in care has future Accessories gross volume

We in to group line modestly performance Premium relationships in the expect made on the bottom by line much have on we cut margins. Premium Audio top protect back to fiscal as decline to a decisions this, we strategic anticipate stronger certain programs XXXX. Audio Based

the allocation in as course, seen cash generation. to our we to and we of Of plans prior resources focus something can that continue can years, things on so expenses, control, happen and impact we've more efficient

to been to see as bigger $XX million XXXX. come stronger to back results we some last be with I'll consolidated reduced is Mike? with on going expect business to call, what continuing costs coming in our works, then Mike we have and on the our take of We and down remarks year-over-year by cover indicated the fixed in programs our margins. overhead for products our and market now, our approximately new

Charles Stoehr

Thanks, Pat. Good morning, everyone.

business revenue our segments, everything, press summarize and highlight review of results drivers of operations our X.X%. programs sales increased new and Premium Klipsch. our products from Nursery product are speakers, results Striiv continued Accessories Project very digital continued set-top than drive XXXX international soundbars Many category our Wireless quarter sales. our the I'll for our key some Audio sell to favorably product new detailed Audio and our lines from helped of the to and wearables and newer declined by new particularly Consumer XXXX, comparisons. Form heritage in Fiscal by be wireless impacted fourth boxes. X.X%, Consumer growth in our well, Our Europe and and also speakers increased conversion in X.X%. by boosted Within by fiscal Accessories release wireless Rather HD XX-K. by year-end and were Premium

declines prior I've is the price our the programs, the about declined spoken older to legacy lower volume initially As some Where volumes in our timing were was The good grow lower in one years, of we past. to anticipated in of product and, number many year-over-year. Automotive but due which segment, reason cases, in OEM which points. experienced new lines

programs Premium Automotive of inventory in soundbars System segment we group begin past had in the Seat started a coming first to we Our until out Infotainment slated in happy previously Accessories report declined Consumer QX, older segment. margins as EVO the our cleared QX. we in Rear initially Gross online. -- product begin sales higher were the mix. that more and was XXX of And stated, the result in of which to late down as also basis Audio year-over-year, with have half didn't during points I'm Margins the year. fulfillment

in cover the XXXX incremental Investment took not are by expenses, paid. the working were at as to their is which programs to were few year. we In reduced half -- will which on, to promotions. taking lines dollars declines to coming our Pat offset fiscal second EyeLock. now fiscal were XXXX. expenses, of Expenses support support in just year, G&A actions moments. lower apparent mentioned, fiscal fully steps lower sort for new is company the commercialization reverse trend Pat severance in We and solutions expenses As reallocated were onetime primarily we this payments support product to marketing a and consolidated in the These specifically

on fiscal foreign currency XXXX forward losses the in of XXXX. the Included $X.X includes net. currency were actions, As compared in a foreign see $XXX,XXX other a XXXX. year-over-year. in in Total net change losses further Fiscal The a contracts line $X.X million in with on net conjunction in million was improvements $X million XXXX result other fiscal Hirschmann fiscal the loss losses of of biggest XXXX million should our of totaling expense increase was $X.X to on expenses sale. fiscal you

XX% million bank gain of noncontrolling following our full by And realized our outstanding $X.X in average decreased our on lower equity $XXX,XXX due investees paid XX. in Additionally, was on of from was RxNetworks, were investment in XXXX. balances interest to $X.X Hirschmann sold approximately a by which in XXXX, in million increased which fiscal sale August charges year-over-year. our income and July credit in facility, on interest we ASA Equity

all U.S. inclusive stated, have payers we new the As of corporate law impacts VOXX. tax tax

million benefit a favorable had including new VOXX, fiscal continuing from tax financial operations. tax on For has $XX.X statements, a XXXX act the result our of

The fourth the the on an million. federal quarter, recorded For of rate components, several tax $XX.X we benefit tax of was lower result the income the impact including tax of benefit deferred change in XX. information footnote There Page to our the is few. further in our a reserves, on name in tax positions, in taxes, change valuation uncertain tax just contained XX-K

million fiscal year. impact NOLs of able the and that retain credits positive coming approximately million $XX.X $X.X is various to in we've tax Another been for

rate. differ available, as XX% rate the to from provision effective We to expect becomes we will from continue update current our but clarification IRS tax corporate our further tax the

on two, relates asset-based of our reported we attributable associated All result three, the on million remaining prior mortgages taking the on lending rehash gain that by million discontinued EBITDA income so And the along a into cash As $XX.X the of euro a abroad summary operations. was gain the to of obligations the company and net our compared to million sale these domestically sale; $XX.X debt support and contracts RxNetworks. million of year. figures. with with sale million EBITDA debt $XX.X of loss of million. positions, on the to adjusted forward when account, $XX.X Hirschmann, operations; and sale impact I one, was the our German compared to our $XX.X Pat to of in the $X.X provided held VOXX won't to gain compared

find this and over will Pat? in This Pat. the You concludes information my turn remarks, X. Footnote all to now call the XX-K back I'll

Patrick Lavelle

with with remarks year are are additional is over September few rolling began Within thanks, Automotive discussions in business. live we or A so. And several the other XXXX, in for and programs OEMs and vehicle vehicles other to on begin track Infotainment programs out with GM with Seat Ford still next now EVO our in Nissan QX. Okay, Mazda and Rear Mike. our our closing on models. segment,

and still X from away the product eFob generation. year X or stage Our is development in revenue

electric program good a place underway the have for talks and in partners with with do we However, manufacturer, leading others. vehicle

seasonal I well CES. all Infotainment, on our with systems way our into soundbars, be at upgraded Our aftermarket happy than modestly more and Rear high-end segment basis. of XXXX. market-leading Overall, our starts increase launched products discussed audio has are their fiscal programs answer Heritage drivers Audio, business year-over-year. and In new continue HD Jamo Premium on maintain be Heritage remote Automotive the channels. would making in to Klipsch any that perform should were speakers, to wireless and designs position last features wireless should Seat a call these speakers We questions. and distribution in

soundbars Heritage and select amplifiers expand to in launched we Heritage and continue and were channels. distribution high-end speakers spring, headphones, New segments lifestyle this

fall, fiscal ground-up Google Premiere second We the Reference Assistant and will have series ship Klipsch speakers of a its this first product. Voice in Reference subwoofers and quarter, and new debuting

this inventory versus year, last year. a will last coming position is XQ, year lower to margin see QX, so into extent, and improvements than Our large

and expect I However, we we programs, small decline as a see in cut on indicated, to sales. certain back

and program declined new quarterly commercial an Hard with Our promotions. based a an see year lines, to all launches. and program we in next product some Margaritaville, fiscal new program retail Accessories, our continue iPic new with new support with older we'll some anticipating improvement of Rock business Hotel Theaters on across XXXX, with to fluctuations are Consumer Within exciting erosion

offer coming products home and products are over years. However, and market smart over the months. The coming with more should launching to erosion market new security new now potential strong RCA the in offset coming

and growth to should we'll line. our products We time have the arriving launched, we see product new new that this holiday And summer Singsation audio has for have Project in continue sales. Nursery in program

addition one of program, insurers has increased Samsung healthcare of and first country's half the revenue anticipate wearable largest of we and from the Our the Overall, from begun, the wearables Guard. and wearable Consumer program, growth in Singsation we be year security audio. but the half will year second anticipate smart Accessories of and down, the programs on home to based the show

and continuing While by advancements, and and rollout. are impacted making their are technology to line bottom development commercialization our at have support of we further investments they been expenses R&D EyeLock, upcoming

We who a to expect their midyear. embedded Media, machine EyeLock to launch new due artificial technology ViaTouch see will increased intelligence program new revenue with vending with Vicki,

and and has always Additionally, can of number recent efforts. of progress a convenient authentication strategy and considered to most questions. fast be intensifying, plan Demand Interest and from concludes at closing, and it EXT open our perimeter being disciplined is factor paramount. with see two security units cost-effective, system and where environment. from in our access as biometric device This the profitability QX EyeLock anticipate tomorrow. for EyeLock technology revenue pharmaceutical patent systems this impressive for Iris the multi-modes now value. approach to any years security more A the controls In multiform well points access authentication, we biometric we to investment, of we'll year. will throughout unlock starting we airport commercialization environment in security biometric introduce after years tablets bundled be a consistent any storage proves beginning will remain with applications its at as will EyeLock's be is of have and execute Also, in believe next checkpoints. to been and new is growing. year's do is secure to EXT we're royalty for portfolio our iris access outdoors We balance remarks, prepared NXT new and in designed and the ready the mobile call and place, showcase Show currently in work and Asia in enrollment tested access

Operator

And from Cowen and Instructions]. our is Company. [Operator first James question Medvedeff from

James Medvedeff

what of aggregate which the within segment. was but just the looking the gross level, I interestingly, let puts at a couple much margins, ask questions So me takes there about were for, and were, pretty

-- Automotive it the what was know going than So was I -- several was example basis What's year-over-year, margin -- what above for little a points I but on think gross I stronger What was I so expecting. drove was expecting. there? down the driver? hundred

Patrick Lavelle

some in bit little that on in performed we launched talked the Well, coming later of year of we mix. programs somewhat remain impact. We with. the change we mix mix some new had without that of the had the about margins But the Hirschmann the down based in product a because better

James Medvedeff

Okay, of margin fair. improved outlook there And that's it's the for is you? so development, gross out of cost behind the

Patrick Lavelle

have in the Yes, started, we'll we in some due now see our factory. that margin program our improvements absorption to

an some improvements So as we'll we lot of spend the also there. we And improvement some a in new R&D these launched should of see see vehicles. have

James Medvedeff

Okay.

line somebody first I I only for just couple say and be year-over-year Is for I'll me call. of and Consumer revenue of the thought couple that to Let heard switch Accessories correct? let a should questions the join ask the you quarters. minute down a else

Patrick Lavelle

Yes.

James Medvedeff

for full up But year? the

Patrick Lavelle

in revenue different that signup period. launch with we by there wearable midyear again, the are, happen will that end greater at year. signup of it, during happen does to program, the not the The give towards but or periods and launch and expect wearables impact the be all the expecting us will able the new periods have program that that midyear of year, additional do end wearables we We're -- the

James Medvedeff

big of And QX, a health care So already it selling Order $XX those million magnitude, business in wearable $XX that was bands? order was million you're them. of this magnitude, a business in can how QX. and

impact marketing can an of have? partner the big how new So

Patrick Lavelle

the I've in What based in lower said a impact segment. we a a dollars. model. profit should is said this past, the than increase, be -- I've in experienced fulfillment is will program. fulfillment top Accessories What line overall, the the see margin on good we'll we but program This see to the But what

James Medvedeff

a quick me let then on And expenses. ask Okay. just one

lower to I operating $XX said Is control as in you that year-over-year? them, a take Do when $XX think million improvement overhead. million You I that expenses, -- continue -- and

Patrick Lavelle

call changes indicated made I had that second new somewhere that an $X year. year on my budgets our of at look the when we're this dollars we've this I that would And the target for the be coming from seeing Yes. last that, drop and million, throughout half last additional the a year, of and okay, savings throughout then around other with operation.

James Medvedeff

I additional mean, that, $X on million sold? the

Patrick Lavelle

that has to severance year. All place. expecting in see so this we're is Everything paid, impact been

Operator

next Our from Landry is question from BML. Eric

Eric Landry

So you is own that eight buildings now, correct?

Patrick Lavelle

two had Hirschmann, two. exited buildings. we Hirschmann Six buildings went. When

Eric Landry

still? there Okay. Venezuela And is in one

Patrick Lavelle

some are Venezuela, Yes, buildings yes. there in

Eric Landry

own you buildings many of do outside how So Venezuela?

Patrick Lavelle

Six.

Eric Landry

six do you Venezuela? own Oh, outside of

Patrick Lavelle

own yes. Venezuela, six of do outside We

Eric Landry

the X what of buildings? idea those total square footage Any is

Patrick Lavelle

see. Let's Maybe feet. XXX,XXX square

Eric Landry

mostly warehouse that's industrial and And industrial? or

Patrick Lavelle

engineering. offices, Warehouse,

Eric Landry

Okay.

So make you when kind rate a of mentioned tax at you're not money? looking Any be long-term idea what tax rate of XX%. do your will you

Patrick Lavelle

Mike, you that? want to add to

Charles Stoehr

Yes, it's purposes, Mike speaking. XX% Pat. look rate. at Right is the planning as we This to per because, mentioned the I tend but take with NOLs, as I'll now, that, Federal

operations, X will there. be have European high so profitable, over also taxes We it which are

anywhere for XX% XX%. model use So between and purposes,

Eric Landry

XX% and XX%.

Charles Stoehr

Right. That kind of will foreign that inclusive be stuff. and of credits, banking

Eric Landry

the didn't Okay. I hear last comment.

Charles Stoehr

bit -- next do. probably during as IRS we what to year, the get we try get said wants an little us I of idea it'll to lessen

Eric Landry

Okay.

how is other those health think your that bands, say, fitbit, Striiv. one that it's So I any? band, if differentiated Is -- from of from,

Patrick Lavelle

into certain may but the It not the from with so provide to of looking a differs that a it that on for. that information band Qualcomm differ could fitbit, worked has it the we It other that embedded software from have much that wearables. is insurer lot

Eric Landry

were same product, product this with with when the some other other competition you introduced sort of people you Infotainment OEMs, EVO thing? for introducing in the your Okay. On vendors to this

Patrick Lavelle

suppliers no but a the that the system introduce there in suppliers, other that EVO features, are features other are and everything the streaming product. with all are There

So was were EVO one player. is. offering They from there a what maybe offering no competition was standpoint, a DVD that just

Eric Landry

Okay.

of make us to infotainment sort are -- mind of who is a or those this you it buyer that mentioning kind the system? might for the new to would For new spend $X,XXX a want story, of what dealer

Patrick Lavelle

as -- can is okay? phone. this you not at I functionality, DVD just Well, You when player, the a your stream from look said,

the stream hotspot from can your You car. in

future In TV the You one live back you'll from the screen can go forth vehicle. and see other. to iterations, in

content So a drives what EVO that is wants this standpoint, home. may and on content the the DVD, may and that what that brings is all consumer that that not sit And the at content an into have car. entertainment can from -- business. you bring just It

Eric Landry

Okay.

Lastly, G&A actually and that to a went those unchanged XXXX at we going bit. support are engineering more was for little see fiscal that engineering in support I with technical trends the and are looking EyeLock. persist more largely EyeLock? Are Or tech to regard G&A and year-over-year, down future? in

Patrick Lavelle

Depending new lot on we're down our of our operating million. projects looking based total on indicated, year for some bringing that a on. by this R&D we're at the company the $XX is I've as And of wins, working set but approximately spend for

Eric Landry

that be would of some EyeLock? it And in

Patrick Lavelle

Yes.

Operator

is Our Kahn next Brothers. Kahn from from Thomas question

Thomas Kahn

in three question I the right negative Mike, for through I continuing numbers, that the Am operations. Mike that, please. was or I quarter, have a from fourth loss is, these earnings look five? as operating questions recurring Stoehr, first

Charles Stoehr

million? what, Five

Thomas Kahn

earnings operating continuing recurring operations. Yes, from

Charles Stoehr

Yes, $X.X million.

Thomas Kahn

Okay, so next check that. I to put a

full the for year... Second question,

Charles Stoehr

of the to prior EyeLock for point the don't allocation own. we back was expenses that to That

at $X.X $X we about were million. So million,

Thomas Kahn

operating please? and $XX show million, reading earnings operations, million, February the 'XX, $X.X million. 'XX a With 'XX. I Number $XX.X negative recurring 'XX 'XX these or a negative for correctly, for and and a I numbers for years two, Am continuing for Okay. from loss 'XX ended negative

Charles Stoehr

at Tom, getting I'm you Where the press that are looking from? release.

Patrick Lavelle

are operating Those losses.

Charles Stoehr

Operating losses.

net Sorry, loss. at I correct. was looking That's

Thomas Kahn

Okay. continuing, are Operating those from numbers correct?

Charles Stoehr

Yes.

Patrick Lavelle

Yes.

Thomas Kahn

Okay.

million, So and negative $XX $XX million, $X.X million all negative.

X in last please? profit gross Accessories I and reading Premium third have all declined. the see the profit businesses of margin. gross Automotive, Am Auto is year I and this margin correctly, question The in this these I

Patrick Lavelle

Yes.

Operator

Dennis a Stephen Our investor. [ph], is next private from question

Unidentified Analyst

look least long-term What years. live XX in I XX I'm look it's a I'm down is I a same to? got the like do investor very to price stock I in years I have at The ago. retired. forward to? question. have What to been do Florida. VOXX forward

Patrick Lavelle

Well, and drop over stock then $XX, the back. we've up the $XX, seen XX rise years, to almost

we're is the I company at transition. what thing that looking in the think -- here, a

the technologies Kahn's and and into making, Tom just that out require move search are iris all use. in of fast biometric We by The iris going is authenticated secure investment take most by, the us way investment to of biometric. and technologies into we And those And that more someone secure believe DNA that As easy will one, in that the is future. those new driven biometric that thing everyone is the were we're a losses test. be comments, to investment. only future, answering their identifying is

So we facial, of multimodal that iris, adoption over adoption will we to authentication. iris believe see adoption biometric continue of of

area have through and around the standoff that greatest patents a iris in system on has demonstrated EyeLock authentication they of and have market. distance We the any the And of EyeLock. fastest number

great in bet the that will So that's technology company will the be future. in have everything a ubiquitous we're and to we do that impact a this new that making,

investments volume stability. us business is one we've our the The real into made, that The other investments that OEM OEM space. and gives

which is standard OEM eFob, manufacturers or continuing is as the improve will know, their a you after car the in The in the the either you a time, future. starts thing to part a been for in you've manufacturer system, in it another period business that see many option. an because the is investor systems, XX aftermarket years, business ways some us infotainment our that but of adopt business, aftermarket declines for standard As makes of with which phone our key, our new car a growth

Audio technology. space, Klipsch. our that We our in when we're #X leading at at Premium space, are then Premium And finally, look Audio you

impact teams referred premium and to, the is one Rock with program us. one when the look have Klipsch business, the audio this number programs to the there, because adopted have could significant at retail. across does good would brand. then premium then the the And be not board. program of that accessory there's insurers new A at that Hard that just to are out And percentage yield space, I continue other and tremendous on business. that adopted that with on that into offset on of grow life, at as end the program have we sunsetting, programs new rest are working that programs are being will introduce Hotels, are new we In #X of we us We Based the programs many programs that our future. wearable will take of Margaritaville,

financed. if looking well this we're So at you're company,

balance have We a secure sheet.

We an are reason future. will improvement you why new -- in in estimation, businesses the years. should that's, the this that company take you And into my valuation and in see over will us in the your

Unidentified Analyst

-- kind anyway, But of you XX know to years. years. not more. don't am another I've if sounds been I'll anymore can see have But to it up. woke I XX you Thank if afford do I have for good, and buy I'll because I don't that. asleep just for me anything I -- want well, I okay, sure Well. I

Patrick Lavelle

Good your luck and support. thanks for

Operator

is question Company. next and Medvedeff a James Our follow-up Cowen from from

James Medvedeff

earlier. about ask to I had intended this to

largely was the at the of debt the So Hirschmann the end sale end at August, with reduced correct?

Patrick Lavelle

Yes.

James Medvedeff

of little was million, was as it the a in was QX essentially curious same to expense than larger interest actually QX. expense it Interest in I'm So as $X.XX the in QX? why

Patrick Lavelle

a those that Audio German activity year the Yes. second in Heco, due and our all we've the and Germany. program that. we and Part have to expense that Mac of expenses the with are our half interest brands Magnat factoring have And still is Schwaiger we had of part of in

be, of would biggest that our So interest. I the think, to one impacts

Charles Stoehr

program we there And That's debt in Florida. mortgage of lines have that in in the properties on also lines go see, receivables at Germany, on base line that discount our the with that volume amortization Best asset an in VOXX the Walmart, the on on, of and interest the them And them sell -- we expense did to which with our lines. payments had correct. a from Fargo being some the bank company made in also, increase are the the and for Citibank is We quarter. Wells good fourth the Buy also discount. a do Inside has you

James Medvedeff

I only mean, in bit, the you interest of little down over fell a at well the just -- you $XX the by paid million end mortgage year, of expense little of million $XXX from -- interest 'XX, the million of million. 'XX debt $XX am mean, I And only to went fiscal end and the debt $XX virtually debt of at of expense went a bit. I

Charles Stoehr

the would be quarter. And that fourth down in

James Medvedeff

Okay.

about more it I think forward? this So how Does importantly, going do stay...

Charles Stoehr

facilities of outstanding we know had We the the the XXth you November. right so Just so that million, to stuff out. that the fourth had quarter, interest dropped $X about

you'll think hadn't is were So yet. off, was year if I million that X%, you what see I paid $XX that's see, remember. we take you're assume going about risen to that that now average the if Rates what rate paying last we

X.X% fee about -- little at right? reduction, looking bank lines in we just renewed did And we bit. off changes you're so our dropped a bank and the all drop on So that interest the some should unused

James Medvedeff

forward, expense smaller be interest what is I'm line going So hearing? will this

Charles Stoehr

correct. That's

James Medvedeff

Like half?

Charles Stoehr

out the about we'd take take to to I $X $X.X million. would interest, million say out No. between

James Medvedeff

For the year? full

Charles Stoehr

For the full year.

Operator

next SGF Mike Our from Capital. from Hughes question

Michael Hughes

number the year then for we a you out? Could us so back First the maybe fourth quarter, and kind give can ballpark you severance. thing, referenced that for

Patrick Lavelle

fourth quarter was I We close want had about $X.X And say, for approximately, million, year. $X.X severance the million to to $XXX,XXX. in the

Michael Hughes

coming the that for year? like look should What Okay.

Patrick Lavelle

Right now, that should not repeat.

Michael Hughes

then Okay, EyeLock. good, good. And

us I give is in XX sounds It quarters should revenue. going that rough a last $XXX,XXX you look to months. over what that year, XX about Can to think few ramp some it of the next like idea like generated number out?

Patrick Lavelle

this The frame. time should the November the year, out for EXT business year that October, later -- maybe we've be in obviously,

launching are that numbers see until some any impactful that revenue this that you going would ViaTouch units Media it's -- see then So They going The to first strong to June. possibly than how that. any to pretty first more later and fast we be ramps. of week we're have then. won't on give can't month, I sometime And program, us. system

Michael Hughes

kind back. what is you're better to of Why hasn't doubt a you're been as Okay. it? And think indicating true. superior, stepping no there saying technology and you If have the I market do is receptivity then

Patrick Lavelle

been the market Well, adopted. -- has been iris this iris reception to has

you perimeter those only program and focused EyeLock's embedded point. of embedded And over where see were focus to going And for solutions last over products seen that smartphones. particular now. able years other being people's is be part is X types think used seeing multimodal in the what this I that's asked biometrics of on Apple introduce iris being are other part years is access and the at authentication facial. of We've we multimodal to that into biometric. on of that devices. is I But solutions they we And types think

the scan winner. live eye situation get recently, improved been That's quicker X.X demonstrate one to able when most again, standoff you're going system there. where looking trillion rival a a for And in distance, double A a will security, a high-end has which authentication, into to much secure security positives. got have is maximum and false iris be iris most you We okay, facial. out

Michael Hughes

entity, has Consumer Okay. correct? And the within business. that Accessories on then consolidated EyeLock just

Patrick Lavelle

Yes.

Michael Hughes

Okay.

its if division, came I than am of back from call close $X up last your just business. the that the his shareholders. up was worse prior And term significantly the I was kind is to which think a one million, know year. this I -- me-too of I So on large loss the losses from EyeLock's

business? it seem the it What plans So your strategic Do it? are this be does for consider case. asset? you Or to would a divesting you consider of

Patrick Lavelle

want EyeLock in Look, business. have indicated, investment want business revenue at the a didn't not of is had it not the real into component program. as a an I've on a making as wearable generate take accessory big of but it's our we remote whether move group our and start-up divest, and business, to But areas. programs is look grow speaker basis reception that of regular business not other like businesses all companies. to The Bluetooth we're the we It's or it. we just just space. them this that different money we or other or cost any That's to also

come So take an than what EyeLock there. from those new see EyeLock losses other as where other those improves think trying programs that this And businesses. we'll is as improvement other I year businesses hold, see to we're and you'll grow

Michael Hughes

are R&D? start-up Could you losses Okay. from And example, are where be from, generating just say to when more you the you you for talking wearables, that losses specific the start-up related program?

Patrick Lavelle

with. setup R&D company working be the also we're insurance the get compliant, HIPAA of an high beginning program, had to Some to but because we in trust it's

to we our So to shipping had and year. investments our bring those warehouses last facilities speed, were and up made

Michael Hughes

-- you're contract I an for manufacturing using you're using outside And assume partner that?

Patrick Lavelle

Yes.

Operator

Williamson, Our is private a from next investor. question David

Unidentified Analyst

be to sales. mentioned it that division was half the about call, auto was The of EVO Last conference

so current are at EVO million, that be the year. $XXX $XXX we'll auto million, Then EVO's be X/X. on which now how million So sales Is $XXX you... it, then call -- about, would add would $XXX would $XXX a million million division

Patrick Lavelle

no. the that half, our about $XXX no, it is $XX No, video million. and category. represents If about million it's is And business mobile

Unidentified Analyst

is securities, cash and a of that that's net sheet, I the I of $X debt, cash investment take the million When of $XX cash $XX passive the quickly, net million and of cash, ASA, when $X.XX million income net the get the Real I take I year. add subtract about equity share. $XX from about the per to of million million $XX Okay. balance which

-- a PE cash million So And share. $XX per value or about a $X per I is get $X.XX about $X.XX if at which about be per XX that share. the share that add net to would I share, $X.XX

ramp that that discuss sales $X. and million is sales, are EVO's for sales of sales EyeLock's the at And of so Please basically auto that ramp case, the $XXX means all million the free around that. if price stock and the division's Klipsch's the $XXX

Patrick Lavelle

is we the Well, value it each where shares that the is asset, push there's we up, when way price share share independent of above then look -- even look that And thing are if undervalued. at now. question right the the we the price no at

that have. to would And are the the improve the at we're to you're So what we we value of we're operating buyback think we Obviously, the immediate an price. grow an our do the and the cash overall that we long-term main to thing the looking and market, of some the we we profit going ruled of the strengthen that's at shares, share remove And pop. as to in I continue there investments that see not is obviously the looking improvement the is company. a the need one make company, have EBITDA what with But improve on business. to see shares reasons of stock why out

Unidentified Analyst

on in that quickly the Real still margins. about area margin XXXX EBITDA Klipsch. roughly? super. XX% after Super, that The of was Is acquiring for it goal goal

Patrick Lavelle

them the going that Yes, goal, because distribution. as far in goes for customers, order to where type their be I of product and and yes. somewhat we control for themselves protect as and to what think are would to the Their have margins maintain lower sales

it reasons as of were that we to one that's So the as profitable programs not be. some cancelled wanted we

is So they what be are where much Klipsch, improvement were. year we off that on bottom somewhat margin next we we're sales at which looking will structure on better when the the at at line think look an

Unidentified Analyst

Okay.

yet was phone? had Lastly, revenue it's iris of phone on until not suppliers the recognized scanner a they release use after company on gone the and because which the just Samsung SX actually months way that the Samsung doesn't EyeLock

Patrick Lavelle

own. on technology, not their -- is that not Samsung We are phone. our the is the That

Unidentified Analyst

own. is It their

Okay.

Operator

Bruce Our next question from from is Olephant Oppenheimer.

Bruce Olephant

first the remaining weeks first some you and in some us color? I'm of have two idea if have how give wondering sure kind of looking. We the can you just I'm quarter, is quarter

Patrick Lavelle

the remarks, we the my that second, fourth will expect I of improvements. see and had some would that third you In quarter, indicated

there's terribly in so products period that enrollment we quarter, enrollment is in strong, Our the that, have, new the we see would there's again, not second generally period first third quarter but an an quarter. some of the

our expect heats to Premium of in as summer in improvement business. up, see accessory accessories sales in the the to some And some there the we So and Audio start improvement space. we'll see

Bruce Olephant

I'm agree want say long-term I agree a to that shareholder we -- that the too. The stock all We is only all thing is undervalued. very

to that for just Because all. those all can feel to all at hearing years proceeds that have not if no I stock of use are -- just and us company some do should these And shareholders about call, There's these shareholder stock. million how should the balance through motivated We back buy conference and is continue I'm being because motivation at action. value. in or to be they sheet, you your years show remains it take to the just for in feel an even more all the we because $XX.X is just company, motivation go that these and equity these company conference buying any doesn't publicly-traded consider show same all strengthened the me calls to a over I'm up. stock the something and sometimes care cash in with And you've I cheap sure cheap management

Patrick Lavelle

plans not year, authorization And we the we're million are indicated, the out and may -- as X.X ruling we indicated, buy start an materialize, we projecting a back we stock. a as for to see the have and Well, make as I in shares. if I as move

Bruce Olephant

plan stock noticed you Wall question program is that, want to Street. other very I that increase for the the on Investor I little coverage ask has Relations there And to a is because any

Patrick Lavelle

that is that will year. address something we Yes, this

Operator

program. Ladies for today's your and This you in gentlemen, concludes participation the thank conference.

You may now disconnect.

VOXX International (VOXX) 15 May 182018 Q4 Earnings call transcript