UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): April 14, 2004 AUDIOVOX CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-9532 13-1964841 (State or other jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification Number) 150 Marcus Boulevard, Hauppauge, New York 11788 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (631) 231-7750 NONE (Former name or former address, if changed since last report) Exhibit Index on Page 4 Page 1 of 4ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. Exhibit No. Description 99.1 Press Release, dated April 14, 2004 ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 14, 2004, Audiovox Corporation issued a press release reporting fiscal first quarter 2004 results. A copy of the press release is attached hereto as Exhibit 99.1. Exhibit Index on Page 4 Page 2 of 4
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AUDIOVOX CORPORATION Dated: April 16, 2004 By:/s/Charles M. Stoehr -------------------------------- Charles M. Stoehr Senior Vice President and Chief Financial Officer Exhibit Index on Page 4 Page 3 of 4
EXHIBIT INDEX Exhibit No. Description 99.1 Press Release, dated April 14, 2004 announcing results for fiscal first quarter 2004. Exhibit Index on Page 4 Page 4 of 4
FOR IMMEDIATE RELEASE Audiovox Corporation Reports Fiscal First Quarter 2004 Results o Q1 '04 sales increase 27% as both operating units post sequential gains in revenues o Electronics sales increase 70% due to growth in consumer electronics and sound categories o (Basic) Earnings per share up 50% - Q1 '04 EPS of $0.09 vs. Q1 '03 of $0.06 o No conference call scheduled due to ongoing negotiations related to potential sale of Wireless Subsidiary HAUPPAUGE, N.Y., April 14 /PRNewswire-FirstCall/ -- Audiovox Corporation (Nasdaq: VOXX) today announced results for its fiscal first quarter ended February 29, 2004. Net sales for the first quarter of fiscal 2004 were $376.9 million, an increase of 27% over $296.8 million reported in the comparable fiscal 2003 period. Audiovox Electronics Group (AEC) reported net sales of $136.5 million, an increase of approximately 70% versus $80.3 million reported in the comparable period last year. This increase was largely due to increased sales in the sound and consumer electronics product lines in addition to sales of $15.7 million related to Audiovox Germany, which was formed in July 2003. Sales for Consumer Electronics products increased 121% to $36.5 million versus $16.5 million in the fiscal first quarter last year. This increase was driven by strong customer demand for DVD players and flat- panel TV's, products introduced during fiscal 2003. Fiscal first quarter sales in the Sound category increased 303% to $50.3 million versus $12.5 million in the comparable prior year period, as the new brands acquired from the Recoton acquisition and increased sales in the satellite radio product line contributed to the success. Mobile Electronics posted a 3% drop off in post holiday sales of video-in- a-bag products as compared to the prior year, though the Company does not expect the decrease in this category to be a future trend. The Company's majority owned subsidiary, Audiovox Communications Corporation (ACC) posted net sales of $240.3 million, an increase of 11% as compared to $216.6 million reported in the fiscal first quarter last year. Unit sales of wireless handsets increased 5.6% to approximately 1.258 million, up from 1.191 million in the first quarter of fiscal 2003. This increase was primarily due to new product introductions of camera phones with CDMA 1x technology. The average selling prices of the company's handsets increased to $179 per unit for the three months ended February 29, 2004 from $171 in February 28, 2003 due to higher selling prices of new product introductions. Earnings per share for the fiscal first quarter of 2004 were $0.09 basic and $0.08 diluted compared to $0.06 basic and $0.05 diluted in the fiscal first quarter of 2003. Net income for the three months ended February 29, 2004 was - more - Exhibit 99.1Audiovox Corporation Reports Fiscal First Quarter 2004 Results Page 2 of 5 was approximately $1.9 million as compared to $1.2 million in the comparable period in 2003. Earnings were affected by strong sales in both divisions and increased other income but offset by decreased gross margins and increased operating expenses. Commenting on the quarter's performance, John Shalam, Chairman, President and CEO of Audiovox Corporation stated, "We were able to post higher sales and profits in the first quarter despite the fact that the first fiscal quarter is typically our slowest in terms of sales. I am especially pleased with the strong growth in our Electronics group specifically in the consumer electronics product lines, which posted a year-over-year sales increase of over 100%. Strategic acquisitions made in the sound category are beginning to have an impact on our top-line performance and we are excited about several programs in place for the second half of the year. On the Wireless front, demand for our newer digital products remained strong and we continued to strengthen relationships with the leading CDMA carriers in North America." Gross Profit Gross profit margins for the fiscal first quarter of 2004 fell slightly to 8.3% from 8.6% in the fiscal first quarter last year as both groups experienced a decline. The decline was due primarily to lower margins on older phone models, DVD players and FRS Radios as well as increased sales of lower margin consumer electronics. While margins for both groups declined, the change in the mix of sales between Wireless and Electronics has affected the consolidated margins in a favorable way as traditionally higher margin Electronics represented a larger percentage of consolidated sales. Operating Expenses Operating expenses increased to $28.7 million for the three months ended February 29, 2004, as compared to $21.0 million in the first fiscal quarter of 2003. As a percentage of net sales, operating expenses increased to 7.6% versus 7.1% in the comparable period last year. Major components of this increase were in commissions, advertising, executive and office salaries and professional fees, primarily in the Electronics Group as a result of recent acquisitions and general growth in business. Wireless operating expenses increased $0.2 million during the fiscal first quarter 2004, however, as a percentage of net sales, declined to 3.3% compared to 3.6% in the fiscal first quarter of 2003. Operating income for the three months ended February 29, 2004 was $2.6 million, compared to $4.5 million in the prior year. Balance Sheet-Selected Items Accounts receivable as of February 29, 2004 was $183.8 million compared to $266.4 million at November 30, 2003. Inventory as of February 29, 2004 was $265.9 million versus $219.7 million at November 30, 2003, with ACC inventory levels as of February 29, 2004 at $128.2 million and AEC inventory levels at $137.7 million. The company's stockholder equity as of February 29, 2004 was $328.0 million. - more - Exhibit 99.1
Audiovox Corporation Reports Fiscal First Quarter 2004 Results Page 3 of 5 Potential Sale of Audiovox Communications Corporation (ACC) On February 19, 2004, the Company announced that it had signed a non-binding letter of intent to sell a controlling interest in its Wireless subsidiary, ACC, to Curitel Communications, Inc., a leading South Korean mobile phone maker (Curitel). As announced on that date, Audiovox Corporation must also consider all proposals submitted. Due to the ongoing negotiations and the material impact a potential sale might have on the Company's operations and forward-looking statements, there will be no conference call held at this time. If and when a transaction is concluded, the company will provide further commentary. About Audiovox Audiovox Corporation is an international leading company in consumer electronics and communications. The Company conducts its business through subsidiaries and markets its products both domestically and internationally under its own brands. It also functions as an OEM (Original Equipment Manufacturer) supplier to several customers. For additional information, please visit Audiovox on the Web at http://www.audiovox.com. Safe-Harbor Language 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 wireless 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 Audiovox 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 fourth quarter and year ended November 30, 2003 and Form 10-Q for the fiscal first quarter ended February 29, 2004. Company Contact: Public and Investor Relations Contact: - ----------------- -------------------------------------- C. Michael Stoehr, SVP/CFO Glenn Wiener Audiovox Corporation GW Communications (631) 231-7750 (212) 786-6011 or gwiener@GWCco.com - Tables to Follow -
AUDIOVOX CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations For the Three Months Ended February 28, 2003 and February 29, 2004 (In thousands, except share and per share data) (unaudited) Three Months Ended ----------------------------------- February 28, February 29, 2003 2004 ------------ ------------ Net sales $ 296,818 $ 376,884 Cost of sales 271,350 345,518 ------------ ------------ Gross profit 25,468 31,366 ------------ ------------ Operating expenses: Selling 7,303 9,920 General and administrative 12,305 17,106 Warehousing and technical support 1,399 1,703 ------------ ------------ Total operating expenses 21,007 28,729 ------------ ------------ Operating income 4,461 2,637 ------------ ------------ Other income (expense): Interest and bank charges (1,105) (1,435) Equity in income of equity investees 371 1,003 Other, net (1,099) 851 ------------ ------------ Total other income (expense), net (1,833) 419 ------------ ------------ Income before provision for income taxes and minority interest 2,628 3,056 Provision for income taxes 1,040 800 Minority interest expense income (expense) (380) (386) ------------ ------------ Net income $ 1,208 $ 1,870 ============ ============ Net income per common share (basic) $ 0.06 $ 0.09 ============ ============ Net income per common share (diluted) $ 0.05 $ 0.08 ============ ============ Weighted average number of common shares outstanding (basic) 21,830,480 21,922,100 ============ ============ Weighted average number of common shares outstanding (diluted) 22,021,548 22,254,488 ============ ============ Exhibit 99.1
AUDIOVOX CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share and per share data) November 30, February 29, 2003 2004 ------------ ------------ (unaudited) Assets Current assets: Cash $ 4,702 $ 4,981 Accounts receivable, net 266,421 183,782 Inventory, net 219,664 265,917 Receivables from vendors 7,830 14,018 Prepaid expenses and other current assets 12,371 15,412 Deferred income taxes 9,531 8,437 --------- --------- Total current assets 520,519 492,547 Investment securities 9,512 9,977 Equity investments 13,142 11,613 Property, plant and equipment, net 20,242 20,069 Excess cost over fair value of assets acquired 7,532 7,022 Intangible assets 8,043 8,043 Other assets 713 650 --------- --------- $ 579,703 $ 549,921 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 94,864 $ 80,011 Accrued expenses and other current liabilities 42,816 40,230 Accrued sales incentives 21,894 10,481 Income taxes payable 13,218 10,872 Bank obligations 39,940 40,599 Current portion of long-term debt 3,433 2,555 --------- --------- Total current liabilities 216,165 184,748 Long-term debt 18,289 17,236 Capital lease obligation 6,070 6,054 Deferred income taxes 3,178 2,360 Deferred compensation 5,280 6,096 --------- --------- Total liabilities 248,982 216,494 --------- --------- Minority interest 4,993 5,378 --------- --------- Commitments and contingencies Stockholders' equity: Preferred stock, $50 par value; 50,000 shares authorized and outstanding, liquidation preference of $2,500 per share 2,500 2,500 Series preferred stock $.01 par value, 1,500,000 shares authorized; no shares issued or outstanding -- -- Common stock: Class A $.01 par value; 60,000,000 shares authorized; 20,728,382 and 20,735,846 shares issued at November 30, 2003 and February 29, 2004, respectively; and 19,655,645 and 19,664,889 shares outstanding at November 30, 2003 and February 29, 2004, respectively 207 207 Class B $.01 par value convertible; 10,000,000 shares authorized; 2,260,954 shares issued and outstanding 22 22 Paid-in capital 252,104 252,203 Retained earnings 80,635 82,505 Accumulated other comprehensive loss (1,229) (891) Treasury stock, at cost, 1,072,737 and 1,070,957 shares of Class A common stock at November 30, 2003 and February 29, 2004, respectively (8,511) (8,497) --------- --------- Total stockholders' equity 325,728 328,049 --------- --------- Total liabilities and stockholders' equity $ 579,703 $ 549,921 ========= ========= Exhibit 99.1