HAUPPAUGE, N.Y., May 14, 2012 /PRNewswire/ --VOXX International Corporation (NASDAQ: VOXX), today announced financial results for its fiscal 2012, fourth quarter and year ended February 29, 2012.
Release Highlights:
- Year-over-year sales increase of 25.9%, gross margin improvement of 660 basis points and operating income rises nearly $35.0 million.
- Fiscal 2012 EBITDA of $54.8 vs. $23.0 million in Fiscal 2011, a $31.8 million improvement.
- Continued growth in Mobile OEM business segment with new programs scheduled for FY13.
- Klipsch sales meet projections; high-end audio category increases year-over-year.
- Accessories sales begin to rebound in 2nd half of the year; new products to hit market throughout FY13.
- International business continues to increase; addition of Hirschmann strengthens global footprint, OEM relationships and technology offering.
Commenting on the Company's performance, Pat Lavelle, President and CEO stated, "We executed our strategy in Fiscal 2012 and I believe the financial benefits are reflected in our bottom-line. We shifted our product mix towards higher margin growth categories, strengthened our international footprint and are in the process of better aligning our organization to realize additional synergies, both sales and expense driven, over the coming years. Our retail placement remains strong and our OEM relationships have expanded globally, especially with the addition of Hirschmann. We have several new products which have us excited, as well as new partnerships with technology leaders, such as Qualcomm and Sprint. I'm proud of what our team accomplished and we all remain focused on continuing to meet the needs of our customers and driving long-term sustainable value for our shareholders."
Lavelle continued, "Moving in to Fiscal 2013, we are projecting sales of approximately $900 million and EBITDA of $62 - $65 million. Many of our core product lines are expected to grow organically this year and we see increased potential in the 2nd half of the year backed by new product introductions and new OEM programs. Over a third of our sales however are tied to the Euro and the weaker year-over-year Euro comparisons should adversely impact sales, income and EBITDA. There are also a number of product lines we continue to monitor and we may de-emphasize some of our lower margin product categories, consistent with our strategy. We are being conservative based on the global markets today, and there is potential upside to our forecasts should the global markets stabilize and if we see improvements in consumer spending domestically. Long-term, our value proposition has not changed and we are optimistic in our ability to generate growth and increased profitability. Our market positions have never been stronger."
Fiscal Fourth Quarter Comparisons
Net sales for the fiscal 2012 fourth quarter were $176.6 million, an increase of 27.1% compared to net sales of $138.9 million in the comparable year ago period.
Electronics sales were $136.0 million and $102.8 million for the comparable fiscal fourth quarters, an increase of 33.2%. Accessories sales for the fiscal 2012 fourth quarter were $40.6 million, an increase of 12.5% as compared to sales of $36.1 million in the comparable year-ago period. Driving these increases were higher sales of mobile electronics products in select product categories, continued growth in the Company's international operations and the addition of Klipsch sales. These gains were partially offset by lower sales in the Company's consumer business, and declines in mobile audio fulfillment sales. As a percentage of net sales, Electronics and Accessories represented 77.0% and 23.0% of the net sales for the three months ended February 29, 2012 and 74.0% and 26.0% for the three months ended February 28, 2011, respectively.
The gross margin for the three months ended February 29, 2012 was 31.5%, an increase of 640 basis points as compared to 25.1% for the three months ended February 28, 2011. The increase in gross margin is directly related to a shift in product mix during the comparable quarters, with the addition of Klipsch sales, increases in Accessories and lower sales mobile audio products and in the Company's consumer business.
Operating expenses for the fiscal 2012 fourth quarter were $41.8 million, an increase of $11.9 million over $29.9 million reported in the fiscal 2011 fourth quarter. This increase was primarily driven by the addition of Klipsch expenses, which accounted for approximately $10.2 million, as well as increases in compensation expense and professional service fees. These increases were partially offset by reductions in depreciation expense, a benefit related to put options, and other ongoing cost controls instituted by senior management.
The Company reported operating income of $13.8 million for the fourth quarter of fiscal 2012, compared to operating income of $4.9 million in the comparable year ago period, an improvement of $8.9 million. Net income for the three month period ended February 29, 2012 was $10.9 million or earnings per basic share of $0.47 and earnings diluted share of $0.46. This compares to net income of $17.4 million or earnings per basic and diluted share of $0.75 for the period ended February 28, 2011. The fiscal 2012 fourth quarter includes a tax expense of $3.0 million as compared to a tax benefit of $12.3 million in the comparable fiscal 2011 fourth quarter.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of fiscal 2012, was $17.7 million as compared to EBITDA of $8.3 million for the comparable period in fiscal 2011, an improvement of $9.4 million. Adjusted EBITDA for the same periods was $19.2 million and $9.3 million, respectively.
Fiscal Year-end Comparisons (FY12 vs. FY11)
Net sales for the fiscal year ended February 29, 2012 were $707.1 million, an increase of 25.9% compared to net sales of $561.7 million in the comparable year ago period.
Electronics sales were $561.0 million and $415.2 million for the years ended February 29, 2012 and February 28, 2011, respectively, an increase of 35.1%. Accessories sales for the similar comparable periods were $146.1 million as compared to $146.5 million, a decrease of 0.3%. For the fiscal 2012 period, approximately $169.5 million of sales were generated from Klipsch, which was acquired on March 1, 2011. The Company also experienced increases in its OEM mobile electronics segment, both domestically and abroad, and higher sales across most of its international segments. Offsetting these gains were declines in the Company's consumer business and in mobile audio, primarily satellite radio fulfillment sales. As a percentage of net sales, Electronics and Accessories represented 79.3% and 20.7% of net sales for the fiscal year ended February 29, 2012, compared to 73.9% and 26.1% in the prior year.
The gross margin for the fiscal year ended February 29, 2012 was 28.7%, an increase of 660 basis points as compared to 22.1% for the fiscal year ended February 28, 2011. The increase in gross margin is related to both, a shift in product mix geared towards high-end premium audio and OEM mobile electronics products, as well as better margins in most of the Company's product lines, both domestically and abroad. Additionally, lower sales in the Company's fulfillment and consumer businesses positively impacted margins for the comparable fiscal year periods.
Operating expenses for fiscal 2012 were $159.1 million, an increase of $44.2 million over $114.9 million reported in comparable fiscal year. This increase was primarily due to the addition of overhead associated with Klipsch, which accounted for $39.2 million of operating expenses in Fiscal 2012, as well as an increase in compensation expenses and professional service fees. Offsetting these increases were reductions in depreciation expense, headcount reductions in select groups and a benefit recorded related to a put option. The Company continues to monitor its expenses and believes it has the right infrastructure to support its business in the coming years.
The Company reported operating income of $43.9 million in fiscal 2012, compared to operating income of $9.0 million in the comparable year ago period, an improvement of $34.9 million. Net income for the year-ended February 29, 2012 was $25.6 million or earnings per basic and diluted share of $1.11 and $1.10, respectively. This compares to net income of $23.0 million or earnings per basic and diluted share of $1.00 for the fiscal year-ended February 28, 2011. Fiscal 2012 includes a tax expense of $13.2 million compared to a tax benefit of $10.5 million in the comparable fiscal year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fiscal year ended February 29, 2012, was $54.8 million as compared to EBITDA of $23.0 million in Fiscal 2011, an improvement of $31.8 million. Adjusted EBITDA for the same periods was $58.7 million and $25.5 million, respectively.
A reconciliation of GAAP net income to Adjusted EBITDA can be found in the Company's Form 10-K for the period ended February 29, 2012.
Non-GAAP Measures
Adjusted net income and adjusted EBITDA are not financial measures recognized by GAAP. Adjusted net income represents net income, computed in accordance with GAAP, before stock-based compensation expense, a tax refund, and costs relating to acquisitions. Adjusted EBITDA represents net income, computed in accordance with GAAP, before interest expense, taxes, depreciation and amortization, stock-based compensation expense and costs relating to acquisitions. Depreciation, amortization, and stock-based compensation expense are non-cash items. Adjusted net income per diluted share is calculated by dividing adjusted net income by diluted shares outstanding calculated in accordance with GAAP.
We present adjusted net income and related per diluted share amounts as well as adjusted EBITDA in this release because we consider them to be useful and appropriate supplemental measures of our performance. Adjusted net income and related per diluted share amounts as well as adjusted EBITDA help us to evaluate our performance without the effects of certain GAAP calculations that may not have a direct cash impact on our current operating performance. In addition, the exclusion of costs relating to the Klipsch acquisition and the tax refund allows for a more meaningful comparison of our results from period-to-period. These non-GAAP measures, as we define them, are not necessarily comparable to similarly entitled measures of other companies and may not be appropriate measures for performance relative to other companies. Adjusted net income and adjusted EBITDA should not be assessed in isolation from or construed as a substitute for net income prepared in accordance with GAAP. Adjusted net income and adjusted EBITDA are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP.
Conference Call Information
The Company will be hosting its conference call on Tuesday, May 15, 2012 at 10:00 a.m. EDT. Interested parties can participate by visiting www.voxxintl.com, and clicking on the webcast in the Investor Relations section or via teleconference (toll-free number: 800-706-7748; international: 617-614-3473; pass code: 58625362). For those who will be unable to participate, a replay will be available approximately one hour after the call has been completed and will last for one week thereafter (replay number: 888-286-8010; international replay: 617-801-6888; pass code: 12567094).
About VOXX International Corporation
VOXX International Corporation (NASDAQ: VOXX) is the new name for Audiovox Corporation, a company that was formed over 45 years ago as Audiovox that has grown into a worldwide leader in many automotive and consumer electronics and accessories categories, as well as premium high-end audio. Through its wholly owned subsidiaries, VOXX International proudly is recognized as the #1 premium loudspeaker company in the world, and has #1 market positions in automotive video entertainment and remote starts, digital TV tuners and digital antennas. The Company's brands also hold #1 market share for TV remote controls and reception products and leading market positions across a wide-spectrum of other consumer and automotive segments.
Today, VOXX International is a global company....with an extensive distribution network that includes power retailers, mass merchandisers, 12-volt specialists and most of the world's leading automotive manufacturers. The company has an international footprint in Europe, Asia, Mexico and South America, and a growing portfolio, which is now comprised of over 30 trusted brands. Among the key domestic brands include Klipsch®, RCA®, Invision®, Jensen®, Audiovox®, Terk®, Acoustic Research®, Advent®, Code Alarm®, CarLink®, Excalibur® and Prestige®. International brands include Hirschmann®, Klipsch®, Jamo®, Energy®, Mirage®, Mac Audio®, Magnat®, Heco®, Schwaiger®, Oehlbach® and Incaar'. The Company continues to drive innovation throughout all of its subsidiaries, and maintains its commitment to exceeding the needs of the consumers it serves. For additional information, please visit our Web site at www.voxxintl.com.
Safe Harbor Statement
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 accessories 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 VOXX International Corporation 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 year ended February 29, 2012.
Company Contact:
Glenn Wiener, GW Communications
Tel: 212-786-6011 / Email: gwiener@GWCco.com
VOXX International Corporation and Subsidiaries | |||||||
February29, | February28, | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 13,606 | $ | 98,630 | |||
Accounts receivable, net | 142,585 | 108,048 | |||||
Inventory | 129,514 | 113,620 | |||||
Receivables from vendors | 4,011 | 8,382 | |||||
Prepaid expenses and other current assets | 13,549 | 9,382 | |||||
Income tax receivable | 698 | - | |||||
Deferred income taxes | 3,149 | 2,768 | |||||
Total current assets | 307,112 | 340,830 | |||||
Investment securities | 13,102 | 13,500 | |||||
Equity investments | 14,893 | 12,764 | |||||
Property, plant and equipment, net | 31,779 | 19,563 | |||||
Goodwill | 87,366 | 7,373 | |||||
Intangible assets | 175,349 | 99,189 | |||||
Deferred income taxes | 796 | 6,244 | |||||
Other assets | 3,782 | 1,634 | |||||
Total assets | $ | 634,179 | $ | 501,097 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 43,755 | $ | 27,341 | |||
Accrued expenses and other current liabilities | 52,679 | 36,500 | |||||
Income taxes payable | 5,432 | 1,610 | |||||
Accrued sales incentives | 18,154 | 11,981 | |||||
Deferred income taxes | 515 | 399 | |||||
Current portion of long-term debt | 3,592 | 4,471 | |||||
Total current liabilities | 124,127 | 82,302 | |||||
Long-term debt | 34,860 | 2,077 | |||||
Capital lease obligation | 5,196 | 5,348 | |||||
Deferred compensation | 3,196 | 3,554 | |||||
Other tax liabilities | 2,943 | 1,788 | |||||
Deferred tax liabilities | 34,220 | 4,919 | |||||
Other long-term liabilities | 7,840 | 8,163 | |||||
Total liabilities | 212,382 | 108,151 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock | - | - | |||||
Common stock | 250 | 248 | |||||
Paid-in capital | 281,213 | 277,896 | |||||
Retained earnings | 162,676 | 137,027 | |||||
Accumulated other comprehensive loss | (3,973) | (3,849) | |||||
Treasury stock, at cost | (18,369) | (18,376) | |||||
Total stockholders' equity | 421,797 | 392,946 | |||||
Total liabilities and stockholders' equity | $ | 634,179 | $ | 501,097 | |||
VOXX International Corporation and Subsidiaries | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||
February29, | February28, | February28, | |||||||||
Net sales | $ | 707,062 | $ | 561,672 | $ | 550,695 | |||||
Cost of sales | 504,107 | 437,735 | 443,944 | ||||||||
Gross profit | 202,955 | 123,937 | 106,751 | ||||||||
Operating expenses: | |||||||||||
Selling | 47,282 | 34,517 | 30,147 | ||||||||
General and administrative | 93,219 | 67,262 | 62,854 | ||||||||
Engineering and technical support | 15,825 | 11,934 | 9,781 | ||||||||
Acquisition related costs | 2,755 | 1,207 | 209 | ||||||||
Total operating expenses | 159,081 | 114,920 | 102,991 | ||||||||
Operating income | 43,874 | 9,017 | 3,760 | ||||||||
Other income (expense): | |||||||||||
Interest and bank charges | (5,630) | (2,630) | (1,556) | ||||||||
Equity in income of equity investee | 4,035 | 2,905 | 1,657 | ||||||||
Other, net | (3,387) | 3,204 | 7,294 | ||||||||
Total other income (expenses), net | (4,982) | 3,479 | 7,395 | ||||||||
Income from operations before income taxes | 38,892 | 12,496 | 11,155 | ||||||||
Income tax expense (benefit) | 13,243 | (10,535) | (11,328) | ||||||||
Net income | $ | 25,649 | $ | 23,031 | $ | 22,483 | |||||
Net income per common share (basic) | $ | 1.11 | $ | 1.00 | $ | 0.98 | |||||
Net income per common share (diluted) | $ | 1.10 | $ | 1.00 | $ | 0.98 | |||||
Weighted-average common shares outstanding (basic) | 23,080,081 | 22,938,754 | 22,875,651 | ||||||||
Weighted-average common shares outstanding (diluted) | 23,265,206 | 23,112,518 | 22,919,665 | ||||||||
VOXX International and Subsidiaries | ||||||||||||
Reconciliation of GAAP Net Income to Adjusted EBITDA and Adjusted Diluted Earnings per Common Share | ||||||||||||
Fiscal | Fiscal | Fiscal | ||||||||||
2012 | 2011 | 2010 | ||||||||||
Net income | $ | 25,649 | $ | 23,031 | $ | 22,483 | ||||||
Adjustments: | ||||||||||||
Interest and bank charges | 5,630 | 2,630 | 1,556 | |||||||||
Depreciation and amortization | 10,295 | 7,865 | 7,694 | |||||||||
Income tax expense (benefit) | 13,243 | (10,535) | (11,328) | |||||||||
EBITDA | 54,817 | 22,991 | 20,405 | |||||||||
Stock-based compensation | 1,082 | 1,284 | 1,138 | |||||||||
Acquisition related costs | 2,755 | 1,207 | 209 | |||||||||
Adjusted EBITDA | $ | 58,654 | $ | 25,482 | $ | 21,752 | ||||||
Diluted earnings per common share | $ | 1.10 | $ | 1.00 | $ | 0.98 | ||||||
Diluted adjusted EBITDA per common share | $ | 2.52 | $ | 1.10 | $ | 0.95 | ||||||
VOXX International and Subsidiaries | ||||||||
Reconciliation of GAAP Net Income to Adjusted EBITDA and Adjusted Diluted Earnings per Common Share | ||||||||
Quarter Ended | ||||||||
February 29, 2012 | February 28, 2011 | |||||||
Net Income | $ | 10,866 | $ | 17,407 | ||||
Diluted earnings per common share | $ | 0.46 | $ | 0.75 | ||||
Adjustments: | ||||||||
Interest expense, net | 1,384 | 1,238 | ||||||
Depreciation and amortization | 2,466 | 1,991 | ||||||
Taxes | 3,006 | (12,321) | ||||||
EBITDA | 17,722 | 8,315 | ||||||
Stock-based compensation | 354 | - | ||||||
Acquisition costs | 1,148 | 988 | ||||||
Adjusted EBITDA | $ | 19,224 | $ | 9,303 | ||||
Adjusted diluted earnings per share | $ | 0.82 | $ | 0.40 | ||||
SOURCE VOXX International Corporation
