UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): January 9, 2012
VOXX INTERNATIONAL CORPORATION
(formerly known as Audiovox Corporation)
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) | 0-28839 (Commission File Number) |
13-1964841 (IRS Employer Identification No.) | |
180 Marcus Blvd., Hauppauge, New York (Address of principal executive offices) | 11788 (Zip Code) |
Registrant's telephone number, including area code (631) 231-7750
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of file following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(e))
Item 2.02 Results of Operations and Financial Condition.
On January 9, 2012, Voxx International Corporation (the "Company") issued a press release announcing its earnings for the three and nine months ended November 30, 2011. A copy of the release is furnished herewith as Exhibit 99.1.
Item 8.01 Other Events.
On January 10, 2012, the Company held a conference call to discuss its financial results for the three and nine months ended November 30, 2011. The Company has prepared a transcript of that conference call, a copy of which is annexed hereto as Exhibit 99.2.
The information furnished under Items 2.02 and 8.01, including Exhibits 99.1 and 99.2, shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01(d). Exhibits
EXHIBIT No. | DESCRIPTION |
99.1 | Press Release dated January 9, 2012, relating to Voxx International Corporation's earnings release for the three and nine months ended November 30, 2011 (furnished herewith). |
99.2 | Transcript of conference call held on January 10, 2012 at 10:00 am EST (furnished herewith). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
AUDIOVOX CORPORATION (Registrant)
Date: January 11, 2012
BY: /s/ Charles M. Stoehr
Charles M. Stoehr
Senior Vice President and
Chief Financial Officer
VOXX International Corporation Reports Fiscal 2012 Third Quarter Results
- 3Q12 sales up 26.7% with the addition of Klipsch and continued OEM growth
- 3Q12 gross margins of 28.9%, up 770 basis points
- 3Q12 operating income of $18.4 million, a $13.0 million improvement (3Q12 vs. 3Q11)
- 3Q12 EBITDA of $18.7 million vs. $8.0 million in 3Q11, a $10.7 million improvement
HAUPPAUGE, N.Y., Jan. 9, 2012 /PRNewswire/ -- VOXX International Corporation (NASDAQ: VOXX), today announced financial results for its fiscal 2012, third quarter and nine months ended November 30, 2011.
Commenting on the Company's performance, Pat Lavelle, President and CEO stated, "Our business continued to gain traction across multiple markets, product lines and geographies, and I believe we're well positioned moving into 2012. We have a number of new products coming to market, new accounts at retail and with automotive OEMs, and several new programs and partnerships kicking off this year. The holiday season is over and while not overly robust, there was a pick-up in certain categories, which should continue into our fourth fiscal quarter, and hopefully into next year. We believe we're in a good position for organic growth and continued profitability in fiscal 2013."
Lavelle continued, "We're also pleased with our performance year to date, though we had budgeted for higher sales. Klipsch, our automotive business and international operations, have all performed at or ahead of plan, and each group has me excited about our prospects. Consumer weakness, however, primarily in the U.S. and at retail, led to a modest slowdown in our consumer accessories segments. On the positive side, the steps we took to improve margins and operating efficiencies, and to right size our expense structure, have resulted in bottom-line performance which is tracking ahead of our initial plan. As such, we believe our sales for the year will be in excess of $700 million and we're raising our EBITDA forecast to $44 million."
Net sales for the fiscal 2012 third quarter, were $206.8 million, an increase of 26.7% compared to net sales of $163.2 million in the comparable year ago period. For the nine month period ended November 30, 2011, net sales were $530.5 million, an increase of 25.5% as compared to net sales of $422.8 million for the comparable nine month period in fiscal 2011.
For the three and nine month periods ended November 30, 2011, Electronics sales were $165.9 million and $425.0, an increase of 35.3% and 36.0%, respectively over the comparable prior year periods. Accessories sales were $40.9 million and $105.5 million, an increase of 0.9% and a decrease of 4.4%, respectively. The Electronics Group was favorably impacted by the addition of Klipsch, and continued increases in the automotive OEM channel, driven by increases in domestic car sales and new OEM programs for remote start and mobile entertainment systems. Additionally, Accessories sales were up slightly for the quarter, primarily due to increased sales in international markets. Offsetting these improvements were lower sales of consumer electronics products and a decline in the audio category. As a percentage of net sales, Electronics represented 80.2% and 80.1% of the net sales for the three and nine month periods ended November 30, 2011, and Accessories represented 19.8% and 19.9% for the comparable three and nine month periods ended November 30, 2011.
The gross margin for the three months ended November 30, 2011 was 28.9%, an increase of 770 basis points as compared to 21.2% for the three months ended November 30, 2010. For the comparable nine month periods, the gross margin was 27.8% as compared to 21.1%, an increase of 670 basis points. Gross margins continue to increase throughout the year, driven by the shift in product mix more towards high-end audio and mobile OEM products. During the three and nine month periods, gross margins were also positively impacted by new product introductions, better margins in exciting product lines, lower sales in our fulfillment business, and reduced charges for required inventory provisions and a decline in warehouse and assembly expenses.
For the three and nine months ended November 30, 2011 and November 30, 2010, operating expenses were $41.4 million and $117.3 million, an increase of $12.2 million and $32.3 million, respectively. The increase was due primarily to expenses from our Klipsch acquisition, which accounted for approximately $9.8 million and $29.0 million for the three and nine months ended November 30, 2011. Additionally, this was partially related to an
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increase in compensation expense and non-recurring professional service fees associated with the Company's patent infringement case. These increases were partially offset by reductions in depreciation expense, headcount reductions in select groups and a benefit recorded related to put options. The Company continues to monitor its expense structure and identify synergies within its existing businesses.
The Company reported operating income of $18.4 million for the third quarter of fiscal 2012, compared to operating income of $5.4 million in the comparable year ago period. For the nine month period ended November 30, 2011, the Company reported operating income of $30.1 million as compared to operating income of $4.1 million for the period ended November 30, 2010, a $26.0 million improvement.
Net income for the three month period ended November 30, 2011 was $8.9 million or $0.38 per basic and diluted share as compared to net income of $3.9 million or earnings per basic and diluted share of $0.17 for the third quarter of fiscal 2011. For the nine months ended November 30, 2011, net income was $14.8 million or $0.64 per basic and diluted share as compared to net income of $5.6 million or earnings per basic share of $0.25 and per diluted share of $0.24 for the comparable nine month period ended November 30, 2010.
Adjusted net income for the three month period ended November 30, 2011 was $9.1 million or $0.39 per diluted share compared to $4.3 million or $0.19 per diluted share for the comparable year ago period. For the nine month period ended November 30, 2011, adjusted net income was $16.2 million or $0.70 per diluted share compared to $6.2 million or $0.27 per diluted share for the comparable nine month period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of fiscal 2012, was $18.7 million as compared to EBITDA of $8.0 million for the comparable period in fiscal 2011, an improvement of $10.7 million. Adjusted EBITDA for the same periods was $19.1 million and $8.5 million, respectively. For the nine month period ended November 30, 2011, EBITDA was $37.1 million as compared to EBITDA of $14.7 million, an improvement of $22.4 million. Adjusted EBITDA for the same periods was $39.4 million and $16.0 million, respectively. Adjusted EBITDA for the three and nine month periods excludes stock-based compensation and Klipsch acquisition costs.
A reconciliation of GAAP net income to Adjusted EBITDA can be found in the Company's Form 10-Q for the period ended November 30, 2011.
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 the Klipsch acquisition. 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 the Klipsch acquisition. 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
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The Company will be hosting its conference call on Tuesday, January 10, 2012 at 10:00 a.m. EST. 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: 866-383-8108; international: 617-597-5343; pass code: 22494010). 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: 92271941).
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, and now into 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 and TV remote controls and reception products. The Company's brands also hold leading market positions across a wide-spectrum of 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®, Omega®, Excalibur®, Prestige®, and SURFACE™. International brands include 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 28, 2011.
Company Contact:
Glenn Wiener, GW Communications
Tel: 212-786-6011 / Email: gwiener@GWCco.com
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VOXX International Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share data)
November 30, 2011 | February 28, 2011 | |||||||
Assets | (unaudited) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 18,836 | $ | 98,630 | ||||
Accounts receivable, net | 163,476 | 108,048 | ||||||
Inventory, net | 147,785 | 113,620 | ||||||
Receivables from vendors | 4,222 | 8,382 | ||||||
Prepaid expenses and other current assets | 8,967 | 9,382 | ||||||
Deferred income taxes | 2,338 | 2,768 | ||||||
Total current assets | 345,624 | 340,830 | ||||||
Investment securities | 13,027 | 13,500 | ||||||
Equity investments | 14,730 | 12,764 | ||||||
Property, plant and equipment, net | 23,199 | 19,563 | ||||||
Goodwill | 87,366 | 7,373 | ||||||
Intangible assets, net | 177,327 | 99,189 | ||||||
Deferred income taxes | 11 | 6,244 | ||||||
Other assets | 3,718 | 1,634 | ||||||
Total assets | $ | 665,002 | $ | 501,097 | ||||
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VOXX International Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share data)
November 30, 2011 | February 28, 2011 | |||||||
Liabilities and Stockholders' Equity | (unaudited) | |||||||
Current liabilities: | ||||||||
Accounts payable | $ | 58,799 | $ | 27,341 | ||||
Accrued expenses and other current liabilities | 54,004 | 36,500 | ||||||
Income taxes payable | 4,990 | 1,610 | ||||||
Accrued sales incentives | 21,226 | 11,981 | ||||||
Deferred income taxes | 388 | 399 | ||||||
Current portion of long-term debt | 4,293 | 4,471 | ||||||
Total current liabilities | 143,700 | 82,302 | ||||||
Long-term debt | 67,659 | 5,895 | ||||||
Capital lease obligation | 5,235 | 5,348 | ||||||
Deferred compensation | 3,224 | 3,554 | ||||||
Other tax liabilities | 1,788 | 1,788 | ||||||
Deferred tax liabilities | 30,931 | 4,919 | ||||||
Other long-term liabilities | 4,459 | 4,345 | ||||||
Total liabilities | 256,996 | 108,151 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
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, 22,630,837 shares issued and 20,813,705 shares outstanding at November 30, 2011 and 60,000,000 shares authorized, 22,630,837 shares issued and 20,813,005 shares outstanding February 28, 2011 | 226 | 226 | ||||||
Class B convertible, $.01 par value; 10,000,000 shares authorized, 2,260,954 shares issued and outstanding at November 30, 2011 and February 28, 2011 | 22 | 22 | ||||||
Paid-in capital | 278,625 | 277,896 | ||||||
Retained earnings | 151,810 | 137,027 | ||||||
Accumulated other comprehensive loss | (4,301 | ) | (3,849 | ) | ||||
Treasury stock, at cost, 1,817,132 shares of Class A common stock at November 30, 2011 and 1,817,832 shares of Class A common stock at February 28, 2011 | (18,376 | ) | (18,376 | ) | ||||
Total stockholders' equity | 408,006 | 392,946 | ||||||
Total liabilities and stockholders' equity | $ | 665,002 | $ | 501,097 | ||||
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VOXX International Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
Three Months Ended November 30, | Nine Months Ended November 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net sales | $ | 206,803 | $ | 163,167 | $ | 530,465 | $ | 422,778 | ||||||||
Cost of sales | 146,960 | 128,570 | 383,072 | 333,650 | ||||||||||||
Gross profit | 59,843 | 34,597 | 147,393 | 89,128 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling | 12,620 | 9,498 | 35,723 | 25,951 | ||||||||||||
General and administrative | 24,740 | 16,674 | 68,159 | 50,034 | ||||||||||||
Engineering and technical support | 4,021 | 3,023 | 11,839 | 9,052 | ||||||||||||
Acquisition-related costs | 25 | — | 1,607 | — | ||||||||||||
Total operating expenses | 41,406 | 29,195 | 117,328 | 85,037 | ||||||||||||
Operating income | 18,437 | 5,402 | 30,065 | 4,091 | ||||||||||||
Other (expense) income: | ||||||||||||||||
Interest and bank charges | (1,371 | ) | (471 | ) | (4,246 | ) | (1,392 | ) | ||||||||
Equity in income of equity investees | 1,236 | 600 | 3,255 | 2,348 | ||||||||||||
Other, net | (3,308 | ) | 363 | (4,054 | ) | 2,363 | ||||||||||
Total other (expense) income, net | (3,443 | ) | 492 | (5,045 | ) | 3,319 | ||||||||||
Income before income taxes | 14,994 | 5,894 | 25,020 | 7,410 | ||||||||||||
Income tax expense | 6,136 | 2,035 | 10,237 | 1,786 | ||||||||||||
Net income | $ | 8,858 | $ | 3,859 | $ | 14,783 | $ | 5,624 | ||||||||
Net income per common share (basic) | $ | 0.38 | $ | 0.17 | $ | 0.64 | $ | 0.25 | ||||||||
Net income per common share (diluted) | $ | 0.38 | $ | 0.17 | $ | 0.64 | $ | 0.24 | ||||||||
Weighted-average common shares outstanding (basic) | 23,074,030 | 22,934,211 | 23,073,983 | 22,904,746 | ||||||||||||
Weighted-average common shares outstanding (diluted) | 23,074,030 | 23,098,948 | 23,203,504 | 23,057,969 | ||||||||||||
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Audiovox Corporation
GAAP Net Income to Adjusted Net Income
For the Three and Nine Months Ended November 30, 2011
Three Months Ended November 30, | Nine Months Ended November 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income | $ | 8,858 | $ | 3,859 | $ | 14,783 | $ | 5,624 | ||||||||
Adjustments: | ||||||||||||||||
Klipsch acquisition costs | 25 | — | 1,607 | — | ||||||||||||
Stock Compensation | 353 | 428 | 728 | 1,284 | ||||||||||||
Discrete tax item | — | — | — | (750 | ) | |||||||||||
Tax effects of above adjustments | (154 | ) | — | (955 | ) | — | ||||||||||
Pro forma net income | $ | 9,082 | $ | 4,287 | $ | 16,163 | $ | 6,158 | ||||||||
GAAP net income per common share, diluted | $ | 0.38 | $ | 0.17 | $ | 0.64 | $ | 0.24 | ||||||||
Pro forma net income per common share, diluted | $ | 0.39 | $ | 0.19 | $ | 0.70 | $ | 0.27 | ||||||||
Diluted weighted average number of shares (GAAP and pro forma) | 23,074,679 | 23,098,948 | 23,204,200 | 23,057,969 | ||||||||||||
Reconciliation of GAAP Net Income to Adjusted EBITDA
Three Months Ended November 30, | Nine Months Ended November 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income | $ | 8,858 | $ | 3,859 | $ | 14,783 | $ | 5,624 | ||||||||
Adjustments: | ||||||||||||||||
Interest expense, net | 1,371 | 471 | 4,246 | 1,392 | ||||||||||||
Depreciation and amortization | 2,401 | 1,682 | 7,829 | 5,874 | ||||||||||||
Taxes | 6,136 | 2,035 | 10,237 | 1,786 | ||||||||||||
EBITDA | 18,766 | 8,047 | 37,095 | 14,676 | ||||||||||||
Stock-based compensation | 353 | 428 | 728 | 1,284 | ||||||||||||
Klipsch acquisition costs | 25 | — | 1,607 | — | ||||||||||||
Adjusted EBITDA | $ | 19,144 | $ | 8,475 | $ | 39,430 | $ | 15,960 | ||||||||
SOURCE VOXX International Corporation
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JANUARY 10, 2012 / 03:00PM GMT, VOXX - Q3 2012 Audiovox Corp Earnings Conference Call |
THOMSON REUTERS STREETEVENTS
EDITED TRANSCRIPT
VOXX - Q3 2012 AUDIOVOX CORP EARNINGS CONFERENCE CALL
EVENT DATE/TIME: JANUARY 10, 2012 / 03:00PM GMT
Patrick Lavelle VOXX International Corporation - President, CEO
CORPORATE PARTICIPANTS
Glenn Wiener GW Communications - IR
Michael Stoehr VOXX International Corporation - SVP, CFO
John Shalam VOXX International Corporation - Chairman
CONFERENCE CALL PARTICIPANTS
Matt Spratford Sidoti & Company - Analyst
Scott Tilghman Caris & Company - Analyst
PRESENTATION
Operator
Good day, ladies and gentlemen, and welcome to Audiovox' fiscal third-quarter results conference call. My name is Carmen and I will be your coordinator for today.
At this time all participants are in a listen only mode. (Operator Instructions). Later we will conduct a question and answer session.
I would now like to turn the call over to your host for today, Mr. Glenn Weiner. Please proceed.
Glenn Wiener - GW Communications - IR
Thank you, Carmen. Welcome everybody to Audiovox' fiscal 2012 third-quarter nine-month results conference call and webcast. Today's call is being webcast on our website, www.voxxintl.com, and can be accessed in the Investor Relations section.
With us today are Patrick Lavelle, President and Chief Executive Officer, and John Shalam, our Chairman of the Board. We are all out here in Las Vegas at the Consumer Electronics Show. Mike Stoehr is dialing in from our New York office.
Before we begin I would like to quickly remind everyone that except for historical information contained herein statements made on today's call and in today's webcast that would constitute forward-looking statements may involve certain risks and uncertainties. All forward-looking statements made are based on currently available information and the Company assumes no responsibility to update any such forward-looking statements.
Risk factors associated with our business are detailed in the Company's Form 10-K for the fiscal year ended February 28, 2011. We released our results after market close yesterday. If anybody needs a copy please feel free to call my office. Additionally, it can be downloaded on our website in the Investor Relations section, as can our Form 10-K, which was also filed after market.
We are very excited to be speaking with you today, and at this time I would like to turn the call over to Pat.
Patrick Lavelle - VOXX International Corporation - President, CEO
Thanks, Glenn, and good morning everyone. I would like to begin by wishing you a healthy and Happy New Year and all the best in 2012.
As Glenn indicated, we are here at the Consumer Electronics Show in Las Vegas where yesterday we released over 30 new product announcements. We are looking forward to the potential 2012 brings for VOXX International and our shareholders.
Our fiscal Q3 sales were nearly $44 million or 26.7% higher than Q3 2011, driven by three factors -- the addition of Klipsch, continued growth in our mobile OEM business, and strength in our international markets.
While the holiday season was better than I believe most anticipated, consumer spending for electronic products, excluding smartphones, tablets and related accessories, was still hampered by a weak domestic economy.
Our margins increased with the shift in our product mix to more mobile products, high-end audio systems, and accessories both domestically and internationally. Gross margins were 28.9%, up 770 basis points over the third quarter last year. For the nine-month period our gross margins were 27.8%, 670 basis points higher than last year and ahead of our initial plan.
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Based on our expectations for the fourth quarter, I am comfortable with revising our prior guidance of 25% for the fiscal year upwards to approximately 27%.
We posted an operating profit of $18.4 million versus $5.4 million in last year's third quarter. And for the nine-month period operating profit was $30.1 million, a $26 million improvement over last year.
Earnings-per-share for the third quarter were $0.38 versus $0.17 last year, and for the comparable nine-month period we reported $0.64 in fiscal 2012 versus $0.24 in fiscal 2011.
Adjusted EBITDA was $19.1 million, up almost $11 million. And for the nine-month period we reported adjusted EBITDA of $39.4 million, which is over a $23 million increase.
With the all-important holiday season behind us we are in a better position to estimate our results for the fiscal year. We expect sales to come in lower than prior guidance and be just north of $700 million. Holiday sales, although better than last year, did not materialize as planned, primarily because we chose to pass on a number of programs that would have required deep discounting. As I have indicated in the past, our focus is on profitability and therefore we chose not to sacrifice margin for topline revenue.
With that said, as a result of the shift to higher products and the expense controls we have in place we believe we will exceed our prior EBITDA guidance of $42 million and come closer to EBITDA of approximately $44 million in fiscal 2012. We remain highly focused on the bottom line and increasing shareholder value.
Now I would like to spend a few minutes touching on some of the key drivers so far this year and highlight some of the products we are introducing here at CES. In consumer electronics year-to-date our high-end speaker sales and margins have been tracking to plan, and more importantly, our new products are being met with positive response.
The Klipsch S4i and s4A in-ear headphones, the Mode noise-canceling headphone, our high-end home entertainment audio systems, and the Gallery G17 Air, the first product Klipsch introduced for Apple's AirPlay were all key drivers in Q3.
At CES Klipsch is launching three new Apple AirPlay-enabled audio solutions, the Klipsch RoomGroove, the Klipsch Stadium and the Klipsch Console. All of these systems seamlessly stream high-quality audio directly from any iPod Touch, iPhone or iPad wirelessly, as well as from a Mac or PC. They are fantastic offerings based on years of design and and deliver quality to the consumer that really is unrivaled.
We also have plans to introduce new high-end speaker systems under Magnat, Heco and Klipsch this year, and have a revamped lineup under Jamo ready to go which should make international sales a bigger part of the VOXX story.
We are looking forward to a strong finish of the year for this group and believe we have made inroads for continued growth next year.
In consumer accessories throughout most of the year sales of our domestic consumer accessories products were down, still suffering from a weak CE market; however, certain categories did do well. Reception products and wired headphones were up year-over-year. Sales of TV remotes were down, but despite that we believe we gained unit share. Power products were also off, but we anticipate growth in the coming year due to some exciting new offerings, which I will discuss in a few minutes.
Q3 consumer electronics sales were disappointing. Camcorders were negatively impacted by significant price declines and the market flooded with Flip closeouts from Cisco. We faced a similar situation with MP3 players. However, overall margins in the accessory group improved and we have a robust product lineup planned for 2012.
We remain the number one provider of TV reception products and remote controls, and have leading market positions in several other categories. We have added a number of new retail accounts, grown with existing ones, and have expanded our distribution beyond the traditional CE outlets as we began selling into the hardware and home improvement channels to Menards, True Value, Lowe's and Bed, Bath & Beyond. This should lead to organic growth and increased sales next year.
International accessory sales were up this year, and sales for Oehlbach and Schwaiger have improved. Schwaiger in particular recently added new retail accounts in Germany, and both Schwaiger and Oehlbach have new products coming to market in the reception and power cord categories, respectively.
At CES we are introducing some key new products that we believe will drive growth. Our new line of AR indoor/outdoor portable wireless speakers is compatible with Bluetooth, direct connect and wireless transmitters. This year's lineup includes a 2012 CES Innovations winner, an outdoor portable wireless speaker that is compact, easy-to-use and water resistant and will be available this spring. We believe that AR will capture the number one market share in position in wireless speakers in 2012.
We also are introducing an Apple AirPlay audio system under Acoustic Research at targeted price points, that combined with the Klipsch AirPlay products will give us broad price coverage throughout retail.
As I stated earlier, the power market is a growth area that we have focused R&D efforts on to develop a new line of power products that differentiate us from the competition. Some of the significant product enhancement include front panel access, reconfigured outlet placement, high gloss black finish, as well as dedicated charging ports for today's can't-live-without smart electronic devices.
Driving the new power technology are three unique new features -- SpeedPass for front panel control. PureCurrent technology purifies the dirty power typical of most home outlet and protect satellite or cable set-top boxes and networks from power surges. And Ecoficient technology optimizes energy use by automatically powering down computer peripherals when the computer is turned off.
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In addition, we recently won a CES Innovation Award for our RCA USB wall plate charger that converts a standard wall outlet to a 2-port USB charger.
Consumer awareness of our RCA Personal Sound Amplifier continues to grow, and we began selling the PSA nationwide at over 2,000 RadioShack stores just before the holidays. An AR version of this product is being marketed to eyeglass centers and health care market, and longer-term we plan to make both systems available globally.
On the mobile side of our business, mobile sales through the first nine months are up 9%. However, this was offset by an anticipated decline in aftermarket satellite radio sales as more cars are coming factory equipped with satellite radio. We remain the exclusive aftermarket supplier for Sirius XM, and we still see this as a viable market for years to come.
In security sales of data bus modules increased significantly as our FlashLogic line continues to gain acceptance, and as we introduce new modules, including a model designed exclusively for Mercedes-Benz and BMW.
Our OEM business continues to be strong, up 22% through the first nine months of the year, and we have new programs kicking off in 2012, which should lead to continued growth. Vehicle production slowdowns that were the result of the tsunami and the impact it had on Asian manufacturers are behind us, and car sales remain on track to exceed an annualized total of 13 million for the year, which should help us maintain growth in the category.
We begin shipments of our rear seat entertainment system to Bentley this fiscal quarter, and we are on track to deliver our new Nissan program scheduled for the third quarter of 2012.
And now for some new programs. New categories headline our mobile offerings as we move into 2012. Location-based services, LBS, is the first one. And we are entering in a big way with an in-vehicle solution, a personal product, a pet tracker, and a new line of wireless leash products for keeping track of your valuables like cell phones and laptops.
We start off with Audiovox Car Connection, an in-vehicle, onboard diagnostic for the automotive market that will be supported by Sprint. This product helps consumers monitor, manage and maintain their vehicles and the drivers who operate it. It will monitor driver behavior, manage regular vehicle upkeep and repairs, maintain vehicle safety and performance. It is cellular-based and has no third-party monitoring service. You do the monitoring from your smartphone or computer, and it is a simple plug-in installation. We expect to have Car Connection available at retail in our first quarter.
Its sister product, Care Connection, will be at retail in the second quarter. This product is a wearable -- a watch, a belt clip or a lanyard that will help consumers, especially caregivers, keep track, locate and protect the people they love and the property they value.
This product will track seniors and children's locations, monitor stay-at-home seniors, and even track your valuables. It operates with two-way voice so you can speak to your loved ones 24/7. Like Car Connection, it's cellular-based and has no third-party monitoring service. You do the monitoring from your smartphone or computer.
Our mobile group will also be distributing QUALCOMM's new LBS product Tagg Pet Tracker available in Q1 2012, which we believe will tap into the huge pet ownership market.
Finally, the mobile group has introduced Insite, its line of wireless leash products designed to keep you close to your valuables like briefcases, cell phones, laptops and cameras and all the data stored in them, which for most of us is more valuable than the device itself.
Another important partnership for the mobile group in 2012 is a distribution agreement that we have made with DICE Electronics. We will have exclusive rights to the DICE line of OE vehicle integration kits, which essentially turn selected factory radios into full-featured smartphone-connected entertainment systems.
As for some of our core mobile products, the big news in rear seat entertainment is a new custom headrest system that brings full function Android technology to the car. Mobile entertainment has moved beyond DVD and Blu-ray to the Internet where consumers want access to real time entertainment and social media, and to view it on their rear seat entertainment system.
With our Android headrest all they need is a hot spot Wi-Fi connection through their smartphone or other Wi-Fi-enabled device. Our system is Bluetooth-enabled and includes a wireless remote control and is available in over 1,000 OE style vehicle applications.
That was a quick rundown of only some of what we are showing here in Las Vegas. It will truly be an exciting year with all that we have to offer.
As you are aware, Audiovox recently changed its name to VOXX International during the third quarter. This is not the same company as we were in years past. We believe the VOXX International name maintains our heritage and also conveys who we are today. We are a global company. We have over 30 brands in our portfolio and multiple businesses that run under our corporate umbrella.
Our management team is both financial and strategic. We have made 11 acquisitions over the past decade and over the last five years. We built this Company to be in a stronger position to generate value for our shareholders.
As I mentioned, we are here at CES, and we have just completed the first 24 hours of meetings. We held our press conference yesterday and the turnout by far the best yet. There has been a lot of excitement around VOXX International and our portfolio of global brands, and we share that excitement.
Now with that I will turn the call over to Michael, and then we will open it up and take your questions. Michael?
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Michael Stoehr - VOXX International Corporation - SVP, CFO
Thanks, Pat. Good morning everyone. I will go through our third-quarter and nine-month results and I will make some comments on balance sheet and expectations for the full year.
Net sales for fiscal 2012 third-quarter were $206.8 million versus $163.2 million in the third quarter last year, an increase of $43.6 million or 26.7%.
We reported electronic sales of $165.9 million, a 35.3% increase, and accessory sales of $40.9 million, up approximately 1%. Klipsch sales for the 2012 fiscal third-quarter were $51 million, and this was primarily led to the -- this primarily led to the increase.
Additionally, our mobile OEM business and our international operations both reported increases for the comparable third quarters. When all said, the strength of these groups were declines in consumer electronics and in audio, primarily satellite radios.
With comparable nine-month periods net sales were $530.5 million versus $422.8 million, an increase of $107.7 million or 25.5%. Electronic sales were $425 million, up 36%, and accessory sales were down 4.4% at $105.5 million. Driving the increase in electronics were the same factors, approximately $125.6 million in sales from Klipsch and the growth in both our mobile OEM and international operations.
Internationally electronics, accessories and mobile were all up for the comparable nine-month periods. What offset stronger growth in this segment was primarily the continued weakness in the domestic economy, while in our third quarter, particularly in accessories, we saw a reversal of that trend due to several new product introductions and a slight pickup in holiday sales compared to last year.
Additionally, mobile sales were somewhat impacted early on in fiscal 2012 as a result of the supply shortages caused by the Asian tsunami. This is now behind us.
As we continue to transform our product offerings our gross margins for the 2012 third quarter came in at 28.9%, a 770 basis point improvement over last year's third quarter, and a 120 basis point improvement over our second fiscal quarter.
As for the 2012 nine-month period our gross profit margins were 27.8% compared to 21.1%, up 660 basis points. There are several factors that are driving margins upwards, including continued increases in our mobile OEM business, which carries higher margins than our aftermarket products, sales of high-performance premium speaker products -- this is the Klipsch acquisition -- reduced emphasis on low-margin CE products such as camcorders, clock radios, digital players, and lower sales of fulfillment products.
Besides improvements in our product margin the Company has experienced improvements in our inventory provisions for obsolescence and warranty. As we have pointed out in several previous calls, our continued emphasis in process improvement has resulted in lower warehouse and assembly cost, which impacts our gross margins favorably. The Company's margin improvement was not just due to the Klipsch acquisition.
And while Pat raised our gross profit outlook for fiscal year -- for the fiscal year, please keep in mind that in any one quarter we can have a shift towards more consumer or fulfillment type sales, which could affect margins.
As stated, we anticipate closing our fiscal 2012 with a gross profit margin of approximately 27%, which is above our initial projections of 25%.
Operating expenses for the three- and nine-months periods for fiscal 2012 were $41.4 million and $117.3 million, which represents an increase of $12.2 million and $32.3 million over the comparable fiscal 2011 periods.
As a percentage of net sales operating expenses increased to 20% and 22.1% as compared to 17.9% and 20.1% for the comparable three- and nine-month periods. The increase in expenses was primarily related to Klipsch, which accounted for $9.8 million in our fiscal third quarter, and $29 million for the 2012 nine-month period.
The pre-Klipsch overhead for the comparable periods was up $2.4 million in the third quarter and $3.3 million for the nine-month period. A portion of this increase for the third quarter was nonrecurring professional service fees related to our patent infringement case.
Looking at our operating expenses, after taking into effect the impact of professional fees, the selling expenses were flat, and the only major increase in G&A expenses not related to Klipsch was increased compensation due to the Company meeting its performance targets for goals.
All in all, our operating groups have continued to reduce or restructure their overhead as we continue to implement synergies and savings through the system changes or overhead integration. We expect this to continue through next fiscal year.
We reported operating income of $18.4 million versus $5.4 million in the third quarter of last year and for the nine-month, $30.1 million versus $4.1 million, a $13 million improvement in the third quarters and $26 million improvement for the nine months as a result of improved margins and cost structures of our Company.
Other income decreased by approximately $3.9 million during the comparable third quarters and approximately $8.4 million for the nine-month periods due to interest expense, fees and amortization of deferred financing costs related to new credit facility as a result of the Klipsch acquisition.
Additionally, other income decreased due to a $2.6 million charge related to a patent infringement judgment, the absence of gains on foreign exchange contracts, which were recorded in fiscal 2011, and an other-than-temporary charge recorded during the three- and nine-month periods in fiscal 2012 of $48,000 and $1.2 million, respectively, related to our investment in [Bluestone].
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For the nine-month period equity and income of our equity investees increased $636,000, and for the nine-month period $907,000. This is related to continued profitability in our joint venture with ASA, which continues to experience growth in several of its markets, which includes specialty special vehicles, not only RV, but commercial and heavy-duty vehicles.
Net income was $8.9 million and $14.8 million for the three- and nine-month periods in fiscal 2012 compared to $3.9 million and $5.6 million for the same periods. As Pat said, earnings per diluted share were $0.38 versus $0.17 for the third quarter and $0.64 versus $0.24 for the nine-month comparisons.
Adjusted net income was $9.1 million or $0.39 a share compared to $4.3 million or $0.19 a share for the third quarters of 2012 and 2011, respectively. And for the nine-month period adjusted net income was $16.2 million or $0.70 a share in fiscal 2012 compared to $6.2 million or $0.27 per share in fiscal 2011.
The effective tax rate for the three and nine months ended November 30, 2011 was a provision for income taxes of 40.9% as compared to 34.5% and 24.1% in the comparable prior periods. The effective tax rates for the nine months ended November 30, 2011, is different from the statutory rate primarily due to state and local taxes and differences between US and foreign tax rates and no tax benefit provided to the impairment charge (inaudible).
We reported EBITDA of $18.7 million for the 2012 fiscal quarter versus $8 million in last year's third quarter, a $10.7 million improvement. Adjusted third-quarter EBITDA, taking into account Klipsch transaction costs and charges for stock-based compensation, was $19.1 million versus $8.5 million. For the nine-month period EBITDA was $37.1 million versus $14.7 million and adjusted EBITDA was $39.4 million versus $16 million.
For your reference the nine-month comparisons for adjusted EBITDA includes a $1.6 million of Klipsch acquisition costs and adjustment and differences of approximately $700,000 in stock-based compensation.
As Pat mentioned in his remarks, our bottom-line performance in the first nine months of the year is ahead of plan, and given that we are halfway through our fiscal fourth-quarter now, we feel comfortable raising our prior EBITDA guidance for fiscal 2012 of $42 million to approximately $44 million. Our goal next year, of course, is to do even better.
Moving to our balance sheet. Operating activities provided $27.7 million during the nine months ended November 30, 2011, principally due to net income before depreciation and amortization, an increase in accounts payable and accrued expenses, partially offset by increased accounts receivable.
Investing activities used cash of $169.3 million, of which $160.3 million was used for the Klipsch acquisition. And CapEx through the first nine months of fiscal 2012 was $2.2 million.
Additionally, our AR turns were 4.3 compared to 4.4 for the comparable nine-month period. And our inventory turns were 3.1 versus 3.2, as we entered into the heaviest selling season during our -- of our fiscal year.
As of November 30 we had a working capital of $201.9 million, which includes cash and short-term investments of $18.8 million compared to working capital of $258.5 million and cash and short-term investments of $98.6 million as of February 20, 2011. The decrease in cash was primarily related to our Klipsch acquisition.
Our fiscal third quarter is our heaviest selling season and requires the most working capital throughout the year. At this time we don't see any product category at risk, and our inventory position is relatively clean, similar to last year. Our cash position will begin to ramp up in the fourth quarter as we collect the $163.5 million receivables and our loan position will drop.
The balance sheet continues to generate cash flow based on our business model. And consistent with my past remarks, barring any additional acquisitions, we should be in a position to pay down the ABL within 2 to 2.5 years of acquiring Klipsch.
In closing, as we continue to remain cautious about the overall macro view of the national and world economy, but our sales will come in a bit lighter than initially projected, but our bottom-line performance is benefited by better margins through increased sales in our higher-margin product areas and continued focus on operating expenses.
We made a lot of progress and we are positioned well moving into the fourth quarter. I will give the call back to Pat. Pat?
Patrick Lavelle - VOXX International Corporation - President, CEO
Okay, Michael. Thank you, and we will open it up for some questions.
QUESTION AND ANSWER
Operator
(Operator Instructions). Matt Spratford, Sidoti & Company.
Matt Spratford - Sidoti & Company - Analyst
Great quarter. I just had a couple quick questions on OEM. First, I was just curious if you could give us the percentage of OEM revenues through the first three quarters of 2012?
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Patrick Lavelle - VOXX International Corporation - President, CEO
Our OE business is in excess of $100 million at this point through the year.
Matt Spratford - Sidoti & Company - Analyst
Fair enough. Then I was just curious maybe you could comment on maybe ASPs on OEM systems.
Patrick Lavelle - VOXX International Corporation - President, CEO
Well, because of the fact that we provide not only electronics in our rear seat entertainment systems, and also the headrest and all the supporting material, the average selling price would be higher than some of the other products that we would sell in the higher -- or in the consumer groups and product like that. That wouldn't reflect on the actual price range though.
Matt Spratford - Sidoti & Company - Analyst
I got you. Maybe an ASP on the rear seat systems, if you could maybe expand on that a little bit.
Patrick Lavelle - VOXX International Corporation - President, CEO
I wouldn't go there, Matt, that is confidential information.
Matt Spratford - Sidoti & Company - Analyst
Okay, no problem. I just got two more quick ones for you. Considering your existing relationship with Bentley and the fact they just announced a new SUV, can we expect maybe an OEM system award for that?
Patrick Lavelle - VOXX International Corporation - President, CEO
Well, we are working on a number of systems for them for their vehicles, and the ones that we have slated for introduction for this quarter are for existing vehicles. But once you develop a relationship with an OEM manufacturer your chances of winning additional contracts are much greater, providing you are providing a quality product at a competitive price.
Matt Spratford - Sidoti & Company - Analyst
Got you. Just one more. Any update on potential Klipsch and OEM partnerships.
Patrick Lavelle - VOXX International Corporation - President, CEO
No, we have not -- we really haven't even started that at this particular point, other than some exploratory questions. We are focused right now -- our OEM business on our remote start products, our rear seat entertainment, and some of the other automotive products that we have been selling like lane departure and rear observation.
Matt Spratford - Sidoti & Company - Analyst
Got you. Thanks.
Operator
Scott Tilghman, Caris & Company..
Scott Tilghman - Caris & Company - Analyst
I wanted to really touch on a strategic question. With the announcements yesterday you hit on consumer, you hit on OEM; you hit on just the distribution model rather than the traditional home-grown model. Going forward how do you think strategically about balancing the different growth vehicles with international and domestic, with OEM versus consumer, and then with the distribution model versus the home-grown model?
Patrick Lavelle - VOXX International Corporation - President, CEO
When we look at -- we look at each group and we look at them separately for their -- number one, their ability to grow organically. I think we are seeing a change that has been a long time coming in certain categories within the automotive group, and I am specifically talking about the aftermarket, where we are seeing new products come to market like the location-based products that can give us new products, new categories to bring to retailers, to bring to distributors and car dealers that will give us a new category and new sales.
That is very normal within the aftermarket 12-volt business. New categories come up. The car manufacturers have not put them into their vehicles yet, and it gives the aftermarket a chance to grow sales and incubate the product, which will eventually move into a car.
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So we see some of the new product categories that are coming through on the automotive side as giving us the ability for organic growth there. When we look at the consumer business and we look at product introductions from Klipsch (technical difficulty) around their new AirPlace sound systems, again, essentially a new category for them to sell to where you can stream wirelessly from any of your smart devices directly to the speaker. And you can have these placed throughout the house. A completely new category for us at Klipsch -- should give us some good organic growth.
The same thing with headphones. Our headphone business, our in-ear business has done very, very well over the past year. This is a category that Klipsch had traditionally not been in, but is doing very well as far as placement and marketshare, and we see growth in that category.
Now when I take that and I look at international, we have the same opportunities internationally as we have domestically. So we see our international sales growing because of the things that I have just mentioned.
On an OEM basis, with the new Android-based units that we are developing and planning for market, we see additional growth there within our OEM customers as they look to expand their product offerings and stay relevant with the type of rear seat entertainment products that they are offering.
Then, finally, on the fulfillment side we are constantly being approached by partners. We have a number of great partners, whether it is Sirius XM, QUALCOMM, Sprint, that recognize Audiovox' unique position in the marketplace where we have the logistics, we have the engineering, we have the customer contacts, we have the ability to market and bring products to market quickly, and that is a advantage for them. So we have in many cases very good opportunities to expand that business as well.
So strategically we are looking at each one of them, how can they grow organically. And I don't have any set specific number as I want my fulfillment sales to be this or the OEM sales to be this. Each group has their ability to grow and we are looking to maximize that potential in each group.
Scott Tilghman - Caris & Company - Analyst
Great, and then one quick follow-up. I know it is really here at CES, but there has been a number of product introductions. Are there any innovations here that either make you think you have a new potential product category coming down the pike or that there may be an attractive tuck-in in a category where you typically aren't operating right now?
Patrick Lavelle - VOXX International Corporation - President, CEO
I think -- what I just said, like some of the location-based stuff is a new category that I think the retailers and the customers will embrace as a new way to make sales. The new stuff that we are introducing under AR as far as the home theater, power conditioning product, I think has got -- although it falls under power conditioning and surge protection, it is a completely new concept that I think the market will embrace. We have a number of new products that we are very excited about.
John Shalam - VOXX International Corporation - Chairman
And, Scott, this is John Shalam. Just to add a little bit to that, I think a big emphasis here at the show is in connectivity. Everybody is showing products that expand your reach with your cell phone, your iPhone or your various devices to stay in touch 24/7. But there is also a major emphasis now on health-related products in electronics and we see this as potentially a strong growth product area in the future.
Scott Tilghman - Caris & Company - Analyst
Great, thank you both.
Operator
(Operator Instructions).
Patrick Lavelle - VOXX International Corporation - President, CEO
Okay, if there are no more questions, I want to thank everybody for joining us this morning. We are very excited about what is happening at the show. And we're leaving here right now and on our way to the show. So hopefully I will be able to report on our next call some very, very good results emanating from the show.
Have a great day and thank you.
Operator
This concludes the presentation for today, ladies and gentlemen. You may now disconnect. Have a wonderful day.
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