VOXX International Corporation Reports its Fiscal 2025 First Quarter Financial Results
Net sales declined by 18.1%, gross margins improved by 310 basis points, operating expenses declined by 16.6%; Adjusted EBITDA Loss of
Commenting on the Company's first quarter results,
Fiscal 2025 and Fiscal 2024 First Quarter Comparisons
On
Net sales in the Fiscal 2025 first quarter ended
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Automotive Electronics segment net sales in the Fiscal 2025 first quarter were$27.7 million as compared to$38.4 million in the comparable year-ago period, a decrease of$10.7 million or 27.9%. For the same comparable periods, OEM product sales were$12.8 million as compared to$20.3 million , primarily due to a decline in sales of OEM rear seat entertainment ("RSE") products, partially offset by an increase in sales of OEM remote start products. RSE sales were lower for the comparable periods primarily due to temporary halts in customer programs and volume reductions, as well as the termination of a customer program that was in place in the prior year. Aftermarket product sales were$14.8 million as compared to$18.1 million due primarily to lower aftermarket security, rear seat entertainment, and satellite radio products, among others.
- Consumer Electronics segment net sales in the Fiscal 2025 first quarter were
$63.9 million as compared to$73.3 million in the comparable year-ago period, a decrease of$9.4 million or 12.8%. For the same comparable periods, premium audio product sales were$48.4 million as compared to$47.6 million , driven by higher sales domestically and driven by the successful launch of new products during the current Fiscal year period. This growth was partially offset by lower sales of premium audio products inEurope andAsia . Other consumer electronics ("CE") product sales were$15.5 million as compared to$25.7 million , primarily related to lower sales of domestic wireless accessory speakers as a large customer program did not repeat, as well as lower sales of the Company's balcony solar power products.
The gross margin in the Fiscal 2025 first quarter was 27.7% as compared to 24.6% in the Fiscal 2024 first quarter, an improvement of 310 basis points as margins improved across all business segments. When comparing the Fiscal 2025 and Fiscal 2024 first quarters, the Company reported:
-
Automotive Electronics segment gross margin of 23.2% as compared to 21.0%, an increase of 220 basis points with the year-over-year improvement primarily driven by the Company's OEM manufacturing transition fromFlorida toMexico , as well as improvements related to product mix.
- Consumer Electronics segment gross margin of 29.6% as compared to 25.5%, an increase of 410 basis points. The year-over-year improvement was primarily driven by the launch of new products both domestically and internationally and fewer close-out promotion sales, with other offsetting factors.
Total operating expenses in the Fiscal 2025 first quarter were
- Selling expenses of
$9.6 million as compared to$11.2 million . The year-over-year improvement of$1.6 million or 14.1% was primarily driven by lower website and trade show expenses, as well as lower headcount related expenses.
- General and administrative ("G&A") expenses of
$16.5 million as compared to$19.4 million . The year-over-year improvement of$3.0 million or 15.3% was primarily driven by lower headcount related expenses, and a decline in legal, professional and third-party service fees, among other factors.
- Engineering and technical support expenses of
$6.2 million as compared to$8.3 million . The year-over-year improvement of$2.1 million or 25.1% was primarily due to a decline in labor expense due to lower headcount, as well as lower research and development expenses.
- The Company incurred approximately
$0.2 million of restructuring costs as compared to$0.1 million , with costs in both periods related to the relocation of certain OEM production operations toMexico .
The Company reported an operating loss of
Total other expense, net, in the Fiscal 2025 first quarter increased by
Net loss attributable to
The Company reported an Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") loss in the Fiscal 2025 first quarter of
Balance Sheet Update
As of
Conference Call Information
The Company will be hosting its conference call and webcast on
- To attend the webcast: https://edge.media-server.com/mmc/p/kzsk98zv
- To access by phone: https://register.vevent.com/register/BI7eae05a5e3b74b5b8b78a3235500c167
Participants are requested to register a day in advance or at a minimum 15 minutes before the start of the call. Those wishing to ask questions following management's remarks should use the dial-in numbers provided.
- A replay of the webcast will be available approximately two hours after the call and archived under "Events and Presentations" in the Investor Relations section of the Company's website at https://investors.voxxintl.com/events-and-presentations
Non-GAAP Measures
EBITDA and Adjusted EBITDA are not financial measures recognized by GAAP. EBITDA represents net loss attributable to
We present EBITDA and Adjusted EBITDA in this release because we consider them to be useful and appropriate supplemental measures of our performance. Adjusted EBITDA helps 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 certain costs or gains relating to certain events 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 an appropriate measure for performance relative to other companies. EBITDA and Adjusted EBITDA should not be assessed in isolation from, 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.
About VOXX International Corporation
VOXX International Corporation (NASDAQ: VOXX) has grown into a worldwide leader in the Automotive Electronics and Consumer Electronics industries. Over the past several decades, with a portfolio of approximately 35 trusted brands, VOXX has built market-leading positions in in-vehicle entertainment, automotive security, reception products, a number of premium audio market segments, and more. VOXX is a global company, with an extensive distribution network that includes power retailers, mass merchandisers, 12-volt specialists and many of the world's leading automotive manufacturers. For additional information, please visit our website at www.voxxintl.com.
Safe Harbor Statement
Except for historical information contained herein, statements made in this release constitute forward-looking statements and thus 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 statements. 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 the risk factors described in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended
Investor Relations Contact:
Email: gwiener@GWCco.com
Consolidated Balance Sheets (In thousands, except share and per share data) |
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(unaudited) |
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Assets |
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Current assets: |
|
|
|
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|
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Cash and cash equivalents |
|
$ |
4,160 |
|
|
$ |
10,986 |
|
Accounts receivable, net of allowances of |
|
|
64,787 |
|
|
|
71,066 |
|
Inventory |
|
|
116,230 |
|
|
|
128,471 |
|
Receivables from vendors |
|
|
1,190 |
|
|
|
1,192 |
|
Due from |
|
|
- |
|
|
|
1,238 |
|
Prepaid expenses and other current assets |
|
|
16,759 |
|
|
|
20,820 |
|
Income tax receivable |
|
|
4,273 |
|
|
|
2,095 |
|
Total current assets |
|
|
207,399 |
|
|
|
235,868 |
|
Investment securities |
|
|
761 |
|
|
|
828 |
|
Equity investments |
|
|
23,762 |
|
|
|
21,380 |
|
Property, plant and equipment, net |
|
|
44,420 |
|
|
|
45,070 |
|
Operating lease, right of use assets |
|
|
3,053 |
|
|
|
2,577 |
|
|
|
|
63,283 |
|
|
|
63,931 |
|
Intangible assets, net |
|
|
65,265 |
|
|
|
68,766 |
|
Due from |
|
|
- |
|
|
|
1,340 |
|
Deferred income tax assets |
|
|
1,461 |
|
|
|
1,452 |
|
Other assets |
|
|
2,798 |
|
|
|
2,794 |
|
Total assets |
|
$ |
412,202 |
|
|
$ |
444,006 |
|
Liabilities, Redeemable Equity, Redeemable Non-Controlling Interest, and Stockholders' Equity |
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Current liabilities: |
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|
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Accounts payable |
|
$ |
25,895 |
|
|
$ |
35,076 |
|
Accrued expenses and other current liabilities |
|
|
36,601 |
|
|
|
38,238 |
|
Income taxes payable |
|
|
834 |
|
|
|
1,123 |
|
Accrued sales incentives |
|
|
15,160 |
|
|
|
18,236 |
|
Contract liabilities, current |
|
|
3,574 |
|
|
|
3,810 |
|
Current portion of long-term debt |
|
|
4,162 |
|
|
|
500 |
|
Total current liabilities |
|
|
86,226 |
|
|
|
96,983 |
|
Long-term debt, net of debt issuance costs |
|
|
63,684 |
|
|
|
71,881 |
|
Finance lease liabilities, less current portion |
|
|
559 |
|
|
|
644 |
|
Operating lease liabilities, less current portion |
|
|
2,127 |
|
|
|
1,884 |
|
Deferred compensation |
|
|
761 |
|
|
|
828 |
|
Deferred income tax liabilities |
|
|
2,604 |
|
|
|
2,690 |
|
Other tax liabilities |
|
|
706 |
|
|
|
809 |
|
Prepaid ownership interest in |
|
|
- |
|
|
|
9,817 |
|
Other long-term liabilities |
|
|
2,147 |
|
|
|
2,170 |
|
Total liabilities |
|
|
158,814 |
|
|
|
187,706 |
|
Commitments and contingencies |
|
|
|
|
|
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Redeemable equity: Class A, |
|
|
4,110 |
|
|
|
4,110 |
|
Redeemable non-controlling interest |
|
|
(3,158) |
|
|
|
(3,203) |
|
Stockholders' equity: |
|
|
|
|
|
|
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Preferred stock: |
|
|
|
|
|
|
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No shares issued or outstanding |
|
|
- |
|
|
|
- |
|
Common stock: |
|
|
|
|
|
|
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Class A, |
|
|
240 |
|
|
|
240 |
|
Class |
|
|
22 |
|
|
|
22 |
|
Paid-in capital |
|
|
296,044 |
|
|
|
293,272 |
|
Retained earnings |
|
|
49,003 |
|
|
|
58,272 |
|
Accumulated other comprehensive loss |
|
|
(16,784) |
|
|
|
(17,366) |
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Less: |
|
|
(39,821) |
|
|
|
(39,573) |
|
|
|
|
288,704 |
|
|
|
294,867 |
|
Non-controlling interest |
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|
(36,268) |
|
|
|
(39,474) |
|
Total stockholders' equity |
|
|
252,436 |
|
|
|
255,393 |
|
Total liabilities, redeemable equity, redeemable non-controlling interest, and stockholders' equity |
|
$ |
412,202 |
|
|
$ |
444,006 |
|
Unaudited Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share data) |
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Three months ended |
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2024 |
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|
2023 |
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Net sales |
|
$ |
91,661 |
|
|
$ |
111,926 |
|
Cost of sales |
|
|
66,252 |
|
|
|
84,346 |
|
Gross profit |
|
|
25,409 |
|
|
|
27,580 |
|
Operating expenses: |
|
|
|
|
|
|
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Selling |
|
|
9,590 |
|
|
|
11,166 |
|
General and administrative |
|
|
16,457 |
|
|
|
19,427 |
|
Engineering and technical support |
|
|
6,244 |
|
|
|
8,337 |
|
Restructuring expenses |
|
|
231 |
|
|
|
59 |
|
Total operating expenses |
|
|
32,522 |
|
|
|
38,989 |
|
Operating loss |
|
|
(7,113) |
|
|
|
(11,409) |
|
Other (expense) income: |
|
|
|
|
|
|
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Interest and bank charges |
|
|
(2,138) |
|
|
|
(1,546) |
|
Equity in income of equity investees |
|
|
351 |
|
|
|
1,616 |
|
Final arbitration award |
|
|
- |
|
|
|
(986) |
|
Other, net |
|
|
(1,871) |
|
|
|
(701) |
|
Total other expense, net |
|
|
(3,658) |
|
|
|
(1,617) |
|
Loss before income taxes |
|
|
(10,771) |
|
|
|
(13,026) |
|
Income tax benefit |
|
|
(594) |
|
|
|
(1,321) |
|
Net loss |
|
|
(10,177) |
|
|
|
(11,705) |
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Less: net loss attributable to non-controlling interest |
|
|
(908) |
|
|
|
(967) |
|
Net loss attributable to |
|
$ |
(9,269) |
|
|
$ |
(10,738) |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
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Foreign currency translation adjustments |
|
|
595 |
|
|
|
238 |
|
Derivatives designated for hedging |
|
|
(13) |
|
|
|
(60) |
|
Pension plan adjustments |
|
|
- |
|
|
|
(1) |
|
Other comprehensive income, net of tax |
|
|
582 |
|
|
|
177 |
|
Comprehensive loss attributable to |
|
$ |
(8,687) |
|
|
$ |
(10,561) |
|
Loss per share - basic: Attributable to |
|
$ |
(0.40) |
|
|
$ |
(0.45) |
|
Loss per share - diluted: Attributable to |
|
$ |
(0.40) |
|
|
$ |
(0.45) |
|
Weighted-average common shares outstanding (basic) |
|
|
23,139,876 |
|
|
|
23,795,718 |
|
Weighted-average common shares outstanding (diluted) |
|
|
23,139,876 |
|
|
|
23,795,718 |
|
Reconciliation of GAAP Net Loss Attributable to
|
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|
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|
|
Three months ended |
|
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|
|
2024 |
|
|
2023 |
|
||
Net loss attributable to |
|
$ |
(9,269) |
|
|
$ |
(10,738) |
|
Adjustments: |
|
|
|
|
|
|
||
Interest expense and bank charges (1) |
|
|
1,923 |
|
|
|
1,346 |
|
Depreciation and amortization (1) |
|
|
2,728 |
|
|
|
3,101 |
|
Income tax benefit |
|
|
(594) |
|
|
|
(1,321) |
|
EBITDA |
|
|
(5,212) |
|
|
|
(7,612) |
|
Stock-based compensation |
|
|
146 |
|
|
|
258 |
|
Gain on sale of tradename |
|
|
- |
|
|
|
(450) |
|
Loss on contribution of assets to joint venture (1) |
|
|
252 |
|
|
|
- |
|
Foreign currency losses (1) |
|
|
1,849 |
|
|
|
962 |
|
Restructuring expenses |
|
|
231 |
|
|
|
59 |
|
Non-routine legal fees |
|
|
(123) |
|
|
|
853 |
|
Final arbitration award |
|
|
- |
|
|
|
986 |
|
Adjusted EBITDA |
|
$ |
(2,857) |
|
|
$ |
(4,944) |
|
|
|
(1) |
For purposes of calculating Adjusted EBITDA for the Company, interest expense and bank charges, depreciation and amortization, losses on the contribution of assets to a joint venture, as well as foreign currency losses have been adjusted in order to exclude the non-controlling interest portion of these expenses attributable to |
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