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Audiovox Corp. (VOXX) filed Quarterly Report for the period ended 2011-08-31.
Audiovox Corp. has a market cap of $125.5 million; its shares were traded at around $6 with a P/E ratio of 5.5 and P/S ratio of 0.2.
This is the annual revenues and earnings per share of VOXX over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of VOXX.
Highlight of Business Operations:
Operating expenses increased $8,915 and $20,079 for the three and six months ended August 31, 2011, respectively, from $27,295 and $55,843 in the comparable prior year periods. As a percentage of net sales, operating expenses increased to 22.9% and 23.5% as compared to 21.1% and 21.5% for the comparable prior year period. The increase in total operating expenses was due to our recent acquisition of Klipsch which accounted for $9.6 million and $19.2 million during the three and six months ended August 31, 2011, respectively, as well as an increase in compensation expense as a result of performance related targets. These increases were partially offset by reductions in depreciation expense, headcount reductions in select groups, and a benefit recorded related to a put options.As of March 1, 2011, the Company has a revolving credit facility (the “Credit Facility”) with an aggregated committed availability of up to $175 million (the “Maximum Credit”). This amount may be increased at the option of the Company up to a maximum of $200 million. The Credit Facility includes a $25 million sublimit for issuances of letters of credit and a $20 million sublimit for Swing Loans. The Company may borrow under the Credit Facility as needed, provided the aggregate amounts outstanding will not exceed 85% of certain eligible accounts receivable, plus 65% of certain eligible inventory balances less the outstanding amounts for Letters of Credit Usage, if applicable. This amount may be further reduced by the aggregated amounts of reserves that may be required at the reasonable discretion of Wells Fargo in its role as the Administrative Agent. The Company may designate specific borrowings under the Credit Facility as either Base Rate or LIBOR Rate loans, based on certain restrictions, with interest rates of the base rate plus a margin from 1.25 - 1.75%, or LIBOR plus a margin from 2.25 - 2.75%, on the respective categories. On March 1, 2011, the Company borrowed approximately $89 million under this credit facility as a result of its stock purchase agreement related to Klipsch Group, Inc. All amounts outstanding under the Credit Facility will mature and become due on March 1, 2016. The Company may prepay any amounts outstanding at any time, subject to payment of certain breakage and redeployment costs relating to LIBOR Rate Loans. Further details regarding the facility are outlined in Note 15(a) of this report. At August 31, 2011, the Company had $817 outstanding in standby letters of credit. No commercial letters of credit were outstanding as of August 31, 2011.
Electronic sales represented 80.0% of the net sales for the three and six months ended August 31, 2011, compared to 73.6% and 73.1% in the prior year periods. For the three and six months ended August 31, 2011, approximately $39,500 and $74,600, respectively of the increase in sales from this product group was the result of our recent acquisition of Klipsch. In addition, the electronics group experienced increases in its OEM manufacturing lines due to increases in domestic automotive sales and the launch of new programs, both domestically and internationally. These increases were partially offset by a decline in sales of consumer electronics products including camcorders, clock radios, digital players and digital voice recorders as a result of the economy; the absence of FLO-TV products, whose program ended in the third quarter of Fiscal 2011; a decline in satellite fulfillment sales; and a decline in our audio product line. The audio decline is partially offset by sales related to new product introductions. Overall, the decline in electronic sales in the domestic market was partially offset by increases in our international markets.
The effective tax rate for the three and six months ended August 31, 2011 was a provision for income taxes of 41.9% and 40.9% compared to a provision (benefit) for income taxes of 37.6% and 16.4% in the comparable prior periods. The effective tax rate for the six-months ended August 31, 2011 is different than the statutory rate primarily to state and local taxes, differences between the U.S. and foreign tax rates and no tax benefit provided related to the impairment charge for Bliss-tel.
During the quarter ended August 31, 2011, sales incentive expenses increased by $2,069 primarily as a result of our Klispch acquisition, which has several marketing programs. Sales incentive expenses for the six months ended August 31, 2011 increased $3,905 primarily as a result of the Klipsch acquisition, partially offset by a decline in Accessories sales which has higher sales incentives. The release of unearned or unclaimed sales incentives was $463 and $1,364 for the three and six months ended August 31, 2011, respectively. We believe the reversal of earned 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.
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