Audiovox Corp. (VOXX, Financial) filed Quarterly Report for the period ended 2010-11-30.
Audiovox Corp. has a market cap of $166.21 million; its shares were traded at around $8.04 with a P/E ratio of 30.92 and P/S ratio of 0.3. VOXX is in the portfolios of Irving Kahn of Kahn Brothers & Company Inc., Donald Smith of Donald Smith & Co., Seth Klarman of The Baupost Group, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
During the quarter ended November 30, 2010, sales incentive expenses decreased by $1,309 primarily as a result of the decline in Accessory sales partially offset by our Schwaiger acquisition, which has several marketing programs. Sales incentive expenses for the nine months ended November 30, 2010 increased $231 primarily as a result of the Schwaiger acquisition, partially offset by a decline in Accessories sales which has higher sales incentives. The release of unearned or unclaimed sales incentives was $267 and $910 for the three and nine months ended November 30, 2010, respectively. We believe the reversal of unearned but unclaimed or unearned sales incentives upon expiration of the claim period is a disciplined, rational, consistent, and systematic method of reversing these claims. These sales incentive programs are expected to continue and will either increase or decrease based upon competition and customer demands.
Operating expenses increased $2,105 and $12,475 for the three and nine months ended November 30, 2010, respectively, from $27,090 and $72,562 in the comparable prior year periods. As a percentage of net sales, operating expenses were 17.9% and 20.1% for the three and nine months ended November 30, 2010, as compared to 17.4% and 18.1% for the three and nine months ended November 30, 2009, respectively. The increase in total operating expenses was primarily due to our Schwaiger and Invision acquisitions which accounted for approximately $2.6 million and $10.1 million during the three and nine months ended November 30, 2010, respectively. Prior to overhead expenses related to recent acquisitions, the Company showed a decline of $.5 million for the quarter primarily as a result of decreases in general and administrative expenses. Year to date, after adjusting for our recent acquisition, expenses increased as a result of charges for employee stock option costs, professional fees, bad debt expenses associated with a bankruptcy settlement, and severance charges associated with the consolidation of a German operating location. The balance of the increase was due to a reinstatement of a portion of the reductions originally instituted in the salary reduction program to all employees below the level of vice president.
As of November 30, 2010, we had working capital of $252,368 which includes cash and short-term investments of $62,381, compared with working capital of $239,787 at February 28, 2010, which included cash and short-term investments of $69,511. The decrease in cash and short-term investments is primarily due to an increase in inventory and the repayment of the Suntrust loan, partially offset by an increase in accounts payable and accrued expenses, a decrease in prepaid expenses, and other and the sale of a long-term investment. We plan to utilize our current cash position as well as collections from accounts receivable, the cash generated from our operations, and income on our investments to fund the current operations of the business. However, we may utilize all or a portion of current cash resources to pursue other business opportunities, including acquisitions.
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Audiovox Corp. has a market cap of $166.21 million; its shares were traded at around $8.04 with a P/E ratio of 30.92 and P/S ratio of 0.3. VOXX is in the portfolios of Irving Kahn of Kahn Brothers & Company Inc., Donald Smith of Donald Smith & Co., Seth Klarman of The Baupost Group, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Electronic sales represented 75.2% and 73.9% of the net sales for the three and nine months ended November 30, 2010, respectively, compared to 70.5% and 66.9% in the prior year periods. For the three and nine months ended November 30, 2010, approximately $15,500 and $42,200, respectively of the increase in sales from this product group was the result of our recent acquisition of Invision, a manufacturer of rear seat entertainment systems, and the addition of a new security distribution agreement. Our OEM sales increased as a result of increased car manufacturing and its related sales, as well as our new OEM programs. Our security, OEM and other electronics increased for the quarter partially offset by declines in video, audio, satellite and DVD. Year to date, all categories increased except for satellite and DVD.During the quarter ended November 30, 2010, sales incentive expenses decreased by $1,309 primarily as a result of the decline in Accessory sales partially offset by our Schwaiger acquisition, which has several marketing programs. Sales incentive expenses for the nine months ended November 30, 2010 increased $231 primarily as a result of the Schwaiger acquisition, partially offset by a decline in Accessories sales which has higher sales incentives. The release of unearned or unclaimed sales incentives was $267 and $910 for the three and nine months ended November 30, 2010, respectively. We believe the reversal of unearned but unclaimed or unearned sales incentives upon expiration of the claim period is a disciplined, rational, consistent, and systematic method of reversing these claims. These sales incentive programs are expected to continue and will either increase or decrease based upon competition and customer demands.
Operating expenses increased $2,105 and $12,475 for the three and nine months ended November 30, 2010, respectively, from $27,090 and $72,562 in the comparable prior year periods. As a percentage of net sales, operating expenses were 17.9% and 20.1% for the three and nine months ended November 30, 2010, as compared to 17.4% and 18.1% for the three and nine months ended November 30, 2009, respectively. The increase in total operating expenses was primarily due to our Schwaiger and Invision acquisitions which accounted for approximately $2.6 million and $10.1 million during the three and nine months ended November 30, 2010, respectively. Prior to overhead expenses related to recent acquisitions, the Company showed a decline of $.5 million for the quarter primarily as a result of decreases in general and administrative expenses. Year to date, after adjusting for our recent acquisition, expenses increased as a result of charges for employee stock option costs, professional fees, bad debt expenses associated with a bankruptcy settlement, and severance charges associated with the consolidation of a German operating location. The balance of the increase was due to a reinstatement of a portion of the reductions originally instituted in the salary reduction program to all employees below the level of vice president.
As of November 30, 2010, we had working capital of $252,368 which includes cash and short-term investments of $62,381, compared with working capital of $239,787 at February 28, 2010, which included cash and short-term investments of $69,511. The decrease in cash and short-term investments is primarily due to an increase in inventory and the repayment of the Suntrust loan, partially offset by an increase in accounts payable and accrued expenses, a decrease in prepaid expenses, and other and the sale of a long-term investment. We plan to utilize our current cash position as well as collections from accounts receivable, the cash generated from our operations, and income on our investments to fund the current operations of the business. However, we may utilize all or a portion of current cash resources to pursue other business opportunities, including acquisitions.
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