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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
AMENDMENT NO. 3
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AUDIOVOX CORPORATION
(NAME OF ISSUER)
AUDIOVOX CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
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6 1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2001
(TITLE OF CLASS OF SECURITIES)
--------------------
050757-AB-9
(CUSIP NUMBER OF CLASS OF SECURITIES)
--------------------
C. MICHAEL STOEHR
AUDIOVOX CORPORATION
150 MARCUS BLVD.
HAUPPAUGE, NY 11788
(516) 231-7751
(Name, Address and Telephone Number of a Person Authorized to
Receive Notes and Communications on Behalf of the Person(s)
Filing Statement)
--------------------
COPIES TO:
STUART H. GELFOND, ESQ. ROBERT LEVY, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & LEVY & STOPOL
JACOBSON ONE PENNSYLVANIA PLAZA
ONE NEW YORK PLAZA NEW YORK, NY 10119
NEW YORK, NY 10004 (212) 279-7007
(212) 859-8000
OCTOBER 18, 1996
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY
HOLDERS)
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION1 AMOUNT OF FILING FEE
$49,725,000 $9,945*
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1. For purposes of calculating this filing fee
in accordance with Rule 0-11(b)(2) under the Securities
Exchange Act of 1934, as amended, the market value of the 6
1/4% Convertible Subordinated Debentures due 2001 which may be
exchanged pursuant to the Company's offer to exchange such
Convertible Debentures for Common Stock of the Company is based
upon the average of the high and low prices reported on the
American Stock Exchange, Inc. as of October 16, 1996 ($765.00
per Convertible Debenture) and the maximum number of
Convertible Debentures exchangeable pursuant to the Exchange
Offer (65,000 Convertible Debentures).
[] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED
BY RULE 0-11(A)(2) AND IDENTIFY THE FILING WITH WHICH THE
OFFSETTING FEE WAS PREVIOUSLY PAID. IDENTIFY THE PREVIOUS
FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM
OR SCHEDULE AND THE DATE OF ITS FILING.
Amount Previously Paid: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
*Previously paid.
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ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Statement
relates is Audiovox Corporation, a Delaware corporation (the
"Company"). The principal executive offices of the Company are
located at 150 Marcus Blvd., Hauppauge, New York 11788.
(b) As of the date hereof, there were $65,000,000 aggregate
principal amount of the Company's 6 1/4% Convertible Subordinated
Debentures due 2001 (the "Convertible Debentures") outstanding.
Upon the terms and subject to the conditions set forth in the
Offering Circular dated October 18, 1996, as supplemented on
October 30, 1996 (the "Offering Circular") and the related Letter
of Transmittal, copies of which are filed herewith as Exhibits
99.(a)(i) and 99.(a)(ii), respectively, the Company is offering
to exchange (the "Exchange Offer") 165 shares of the Company's
Class A Common Stock, par value $.01 per share (the "Class A
Common Stock") for each $1,000 principal amount of Convertible
Debentures outstanding. The information under the headings "The
Exchange Offer -- General" and "-- Terms of the Exchange Offer"
in the Offering Circular and the information in the Supplement
No. 1 to the Offering Circular (a copy of which is filed herewith
as Exhibit 99.(a)(xii)) is incorporated herein by reference. To
the knowledge of the Company, no officer, director or affiliate
of the Company beneficially owns any of the Convertible
Debentures except Martin Novick, a Vice President of the Company,
who owns $222,000 principal aggregate amount of the Convertible
Debentures. Any such Convertible Debentures owned by Mr. Novick
at the time of the Exchange Offer are eligible for exchange if
properly tendered pursuant to the Exchange Offer on the same
basis as all other Convertible Debentures.
(c) The information under the heading "Description of the
Convertible Debentures -- Market Price of Convertible Debentures"
in the Offering Circular is incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The Company has reserved 10,725,000 shares of its
authorized but unissued Class A Common Stock for issuance upon
exchange of the Convertible Debentures pursuant to the Exchange
Offer. If all of the outstanding Convertible Debentures are
exchanged pursuant to the Exchange Offer, the Company will have
issued 10,725,000 shares of its Class A Common Stock to
Debentureholders pursuant to the Exchange Offer.
(b) Not applicable.
ITEM 3. PURPOSE OF THE EXCHANGE OFFER AND PLANS OR PROPOSALS OF
THE ISSUER OR AFFILIATE.
The information on the cover page and under the headings
"Offering Summary -- The Exchange Offer" and "The Exchange Offer
- -- General" in the Offering Circular discusses the purpose of the
Exchange Offer and is incorporated herein by reference. The
Convertible Debentures are to be canceled upon consummation of
the Exchange Offer.
(a) The information on the cover page and under the
headings "Offering Summary -- The Exchange Offer" and "The
Exchange Offer -- General" in the Offering Circular is
incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) The information under the headings "Pro Forma Financial
Data" in the Offering Circular is incorporated herein by
reference.
(f) Not applicable.
(g) Not applicable.
(h) The information under the heading "Risk Factors --
Effect of Exchange Offer on Unconverted Securities" is
incorporated herein by reference.
(i) The Convertible Debentures are registered pursuant to
Section 12(g)(4) of the Exchange Act. Although it has no current
plans or proposals to do so, if the Convertible Debentures cease
to be listed on AMEX, the Company may seek to terminate the
registration of the Convertible Debentures under the Exchange Act
upon certification that the Convertible Debentures are held of
record by fewer than 500 persons.
(j) Not applicable.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The following sets forth each transaction in the Convertible
Debentures effected since (and including) August 21, 1996 by the
Company, by any person referred to in Instruction C of
Schedule 13E-4 (i.e., by each executive officer and director of
the Company, any person "controlling" the Company and each
director and executive officer of any "controlling" person) or by
any associate or subsidiary of such person, including any
director or officer of any such subsidiary:
99.(a)(xv)
November 18, 1996
Dear Audiovox Bondholder:
AUDIOVOX BOND EXCHANGE OFFER TO EXPIRE 5 PM, NEW YORK
CITY TIME ON MONDAY, NOVEMBER 25, 1996
Several weeks ago you should have received an information packet
relating to our offer to exchange $1,000 principal amount of
Audiovox 6 1/4% Convertible Subordinated Debentures for 165
shares of Audiovox Class A Common Stock. THE EXCHANGE OFFER WILL
EXPIRE AT 5:00 PM, NEW YORK CITY TIME ON MONDAY, NOVEMBER 25,
1996, and we wanted to make sure you have all the information
necessary for you to make an informed decision. You must notify
your broker to participate in the Exchange Offer.
The information package contains a more detailed explanation of
the Exchange Offer as well as instructions on how to exchange
your bonds for the Company's Class A Common Stock. Should you
have any questions on exchange procedures, please contact your
broker or call Audiovox promptly at (516) 436-6550. We will be
happy to provide you with all the information necessary to
participate in this offer.
This letter shall not constitute an offer to sell, exchange or
redeem or the solicitation of an offer to buy, exchange or
redeem, nor shall there by any exchange of these securities in
any state in which such offer or solicitation would be unlawful
prior to registration or qualification under the securities laws
of any such state. The Exchange Offer may be made only by means
of an offering circular, which should be read carefully before
making any decision to participate in the Exchange Offer.
We look forward to hearing from you.
Sincerely,
John J. Shalam
Chairman,
President and Chief Executive Officer
(Audiovox Corp.) Logo
(AMEX: VOX)
Terms of the Exchange Offer
- - $65 million outstanding of 6 1/4% Convertible Subordinated
Debentures due 2001
- - 165 shares of Class A Common Stock for each $1,000 principal
amount
- - Accrued Interest Through the Exchange Acceptance Date
(November 25) will be paid in cash
Why Make The Exchange Offer?
The exchange offer is part of an overall strategy to improve
Audiovox's economic strength and to take advantage of the rapid
growth in evolving technologies and growing markets.
Why Tender?
- - Continually introducing new wireless and automotive products
- - Entering new international markets
- - planned entry into manufacturing
- - Improved financial position
- - Reducing corporate overhead
Advantages & Disadvantages
Advantages Disadvantages
(Assumes 100% (Assumes 100%
Participation) Participation)
Company -Increases equity by -Significant dilution
approximately $65 -Accounting treatment
million requires
-Increases economic approximately $45
strength million charge
-Increases (offset by a
institutional contribution to
ownership of stock capital)
-Converts debt at a
discount
Converting -Priced at a premium -Loss of "current
Bondholders to pre-offer bond yield"
price -Loss of "priority
-Equity has more claim" over equity
upside potential -Loss of fixed
-Equity should have redemption date
better liquidity than
bonds
Non-Converting -Increased equity -Potential delisting
Bondholders of bonds from AMEX
-S&P may stop rating
the bonds
Audiovox Corporation
Operates in Two Business Segments
- - Wireless Communications Products
-Cellular and PCS
-63.8% of Company's business in fiscal 1995 ($319,481,000)
- - Automotive Products
-Sound, security and accessories
-36.2% of company's business in fiscal 1995 ($181,259,000)
Audiovox
Communications Corp.
(Logo)
Cellular Domestic Subscribers
1985-2000
Line graph showing the increase in cellular domestic subscribers
from 1985 through 9/96, and a projection through the year 2000.
year millions
1985 0.3
1986 0.7
1987 1.2
1988 2.1
1989 3.5
1990 5.3
1991 7.2
1992 11.0
1993 14.9
1994 24.0
1995 32.0
1996 42.0
2000 60.0
Source: CTIA
Note: 40.6 as of 9/96
Audiovox Cellular Unit Sales
1985 - 1996 (fiscal nine months)
Bar graph showing the increase in Audiovox unit sales from 1985
through fiscal 9 months 8/31/96, superimposed on a line graph
showing the increase in cellular domestic subscribers from 1985
through 9/96, and a projection for the year 2000.
domestic Audiovox
industry cellular
subscribers unit sales
(millions) (millions)
1985 0.3 26,900
1986 0.7 66,500
1987 1.2 127,500
1988 2.1 219,000
1989 3.5 221,000
1990 5.3 262,000
1991 7.2 330,000
1992 11.0 427,000
1993 14.9 504,024
1994 24.0 834,000
1995 32.0 1,216,725
1996 42.0 1,286,114 fiscal nine months
2000 60.0
Domestic Industry Projections Source: CTIA
Audiovox Wireless
Domestic Wholesale & Retail
- - New Technology - CDMA, PCS, TDMA, GSM
- - Accessory and Fulfillment Marketing - Packaging Programs
- - Retail Strengthens Relationships with RBOCs
- - Revenues via Product Sales, Activations, Residuals
Audiovox Wireless
Broad Customer Base Includes:
- - RBOCS's such as: Bell Atlantic/NYNEX Mobile
AirTouch Cellular, South
Western Bell
- - Non-Wireline
Carriers such as: AT&T, MCI
- - Distributors such as: Bright Point, Cellstar
- - Retailers such as: The Wiz, Walmart
Audiovox Wireless
OEM and Private Label Programs Include
- - OEM
-BMW
-Land Rover
- - Private Label Programs
-Talk Along
-AAA
-Liberti Program
Audiovox International Wireless
International Overview
Total Number of
Countries in the World: 185 (United Nations)
Total Population (Estimated - World
Worldwide: 5,734,000,000 Almanac 1996)
Total Number of
Countries in the World (December 1994, EMC
with Cellular Service: 174 World Report)
Total Population with 3,838,460,000 (December 1994, EMC
Cellular Service: World Report)
Total Subscribers (Deloitte & Touche LLP
Worldwide: 86,000,000 Review, October 1996)
World Cellular Subscriber Growth to October 1996
Line graph showing the growth in world cellular subscribers from
year-end 1991 through 10/96.
year end millions
1991 11.2
1992 16.0
1993 22.9
1994 34.1
1995 55.0
1996 86.0
Source: Deloitte & Touche LLP
Audiovox Global Presence
Europe Central & South America Asia Pacific Middle East/Africa
- ------- ----------------------- ------------ -----------
Cyprus South America Australia Bahrain
France Antigua China/ Israel
Greece Argentina Hong Kong Kuwait
Iceland Aruba Indonesia Lebanon
Italy Bolivia Korea Saudi Arabia
Portugal Brazil New Zealand Oman
Turkey Chile [Image of Philippines South Africa
Spain Columbia World] Singapore
Netherlands Greneda Sri Lanka
Poland Mexico Taiwan
Paraguay Thailand
Peru
Puerto Rico
Uruguay
Venezuela
West Indies
Audiovox Wireless
International Sales Growth
1993 1994 1995 9 Months '96
------ ----- ----- -------------
Dollars $21,750,631 $30,051,828 $40,630,952 $60,309,427
Units 38,573 74,404 159,405 314,005
Audiovox Wireless
International Sales Growth
- - Asia
-Entered Indonesia, Taiwan, Malaysia, Vietnam and Thailand
- - Europe
-Entered Portugal, Greece and Spain
- - Latin America
-Entered Uruguay and Chile
Automotive Products
- Audio
- Security
- Accessories
Domestic Automotive Markets
Mobile Electronics Consumer Electronics
Car Deal Expediter Mass Market
- - Pursuit & SPS - Audiovox Brand
- Alco Product
12 Volt Specialist - Key customers - Sears,
- - Prestige & Posse Walmart
International Automotive
1996 Sales Approx. $45,000,000
Established Distribution in:
Asia Europe South/Latin America
- ---- ------ -------------------
Malaysia (joint venture) France Venezuela (joint venture)
Taiwan Greece Mexico
Thailand Poland Chile
Indonesia Hungary Guatemala
Australia (joint venture) Russia Honduras
Paraguay
Uruguay
Automotive OEM
- - OEM - Private Label Programs
- Delco - Chrysler Canada
- Proton - Gulf States Toyota
- BayLiner Boats - South East Toyota
- GM Venezuela - Honda Malaysia
- Chrysler Venezuela - Chrysler of Greece
- Hyundai of Greece
Technology
- - Security: Combo Systems with Security and Remote Start
- - Security: Vehicle Tracking and Navigation
- - Audio: GC-600 Combination CD and Cassette
- - Multi-Media
Planned Manufacturing Initiatives
- - GS-9001 Certification
- - 33% Ownership on TALK (cellular and car stereo)
- - Vehicle Security - Southeast Toyota/Gulf States Toyota (OEM
Platform)
- - Malaysia: Assembly of Cruise Controls
Advantages:
- Design proprietary products - cellular and non-cellular
- Full engineering staff
- QC procedures
Third Quarter Comparison
(In 000's except per share amounts)
Three Months Ended Variance
-------------------- --------
8/31/95 8/31/96 95/96
-------- --------- -------
Net Sales $112,177 $142,828 $30,651
Cost of Sales 104,771(fn1) 118,189 13,418
------- -------- -------
Gross Profit 7,406 24,639 17,233
Operating Expenses 22,552 20,911 (1,641)
------- ------- -------
Operating Income
(Loss) (15,146) 3,728 18,874
Interest and Bank
Charges (2,595) (2,193) 402
Other Income
(Expense) 8,012(fn2) 40 (7,972)
------ ------- -------
Pre-Tax Income (9,729) 1,575 11,304
Provision for
(Recovery of)
Taxes (3,344) 808 4,152
------- ------- --------
Net Income
(Loss) ($6,385) $767 $7,152
======= ======= =======
EPS - Fully
Diluted (0.71) $0.08 $0.79
======= ======= =======
Weighted Avg.
Shares (Fully 9,039 9,326
Diluted) ====== =======
(1) Includes $9.3MM charge for inventory write-down to market
(2) Includes $8.4MM gain on sale of investment
Pro Forma Income Statement
(000's except per share amounts)
Nine Months Ended Pro Forma (fn1)
-------------------- ---------
8/31/95 8/31/96 8/31/96
-------- --------- ---------
Net Sales $349,378 $406,515 $406,515
Cost of Sales 300,115(fn6) 340,413 340,413
------- -------- -------
Gross Profit 49,263 66,102 66,102
Operating Expenses 62,495 57,778 57,778
------- ------- -------
Operating Income
(Loss) (13,232) 8,324 8,324
Interest and Bank
Charges (7,306) (6,407) (3,360)(fn2)
Other Income
(Expense) 7,652(fn5) $1,173 (1,606)
------ ------- -------
Pre-Tax Income (12,886) 3,090 6,570(fn3)
Provision for
(Recovery of)
Taxes (3,265) 1,696 3,088(fn4)
------- ------- --------
Net Income
(Loss) ($9,621) $1,394 $3,482
======= ======= =======
EPS - Fully
Diluted ($1.06) $0.15 $0.17
======= ======= =======
Weighted Avg. 9,039 9,330 20,055
Diluted) ====== ======= =======
(1) Assumes exchange offer occurred on December 1, 1994 (100%
participation)
(2) Reversal of Interest Expense
(3) Reversal of Amortization of Debt Issuance Costs
(4) Reflects Estimated Tax Impact at 40% of Reversal of Interest
and Debt Issuance Costs
(5) Includes $8.4 MM Gain on Sale of Investment and $2.9 MM
Expense on Issuance of Warrants
(6) Includes $9.3MM charge for inventory write-down to market
Pro Forma Balance Sheet
(In 000's)
As Reported Pro Forma(fn1)
ASSETS 8/31/96 Adjustments 8/31/96
-------- ----------- ---------
Cash & Cash
Equivalents $6,509 $6,509
Other Current Assets 204,991 204,991
Investment Securities
- - CellStar 20,781 20,781
Equity Investment 8,522 8,522
P.P. & E. Net 6,760 6,760
Other Assets
(Including Debt
Issuance Costs) 7,311 (2,595)(fn2) 4,716
-------- ------------ ---------
Total Assets $254,874 ($2,595) $252,279
======== ============ =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities $48,004 $48,004
Deferred Income Taxes 7,518 7,518
Convertible
Subordinated Debt
65,000 (65,000) 0
Other Debt 39,347 39,347
-------- -------- ---------
Total Debt 104,347 (65,000) 39,347
-------- -------- ---------
Total Liabilities 159,869 (65,000) 94,869
Minority Interest 836 836
Stockholders' Equity
94,169 62,405(fn3) 156,574
-------- -------- ---------
Total Liabilities &
Stockholders' Equity
$254,874 ($2,595) $252,279
======== ======== =========
(1) Assumes exchange offer occurred August 31, 1996 (100%
participation)
(2) Reversal of Unamortized Debt Issuance Costs
(3) Net Increase in Stockholder's Equity
SCRIPT_BONDHOLDER CALLS
INTRODUCTION:
Hello, my name is from Audiovox. I am calling with
respect to the exchange offer for our bonds.
- - Did you receive the Bond Exchange material sent out by the
Company? If not, will send.
- - Are you still a bondholder? If yes, go to next question.
- - May I ask how many bonds you hold?
LET US EXPLAIN THE OFFER TO YOU.
- - WHAT IS THE OFFER?
The offer is to convert each bond into 165 shares of Audiovox
Class A common stock. For your information, the stock is trading
at ________ . Bonds are trading at _______ .
- - AS A POTENTIAL STOCKHOLDER, we'd like to tell you about some
of the prospects of the Company. Although we do not know what
the stock will do in the future, we believe the growth
prospects for the company are very good. Our automotive
group, which sells security and sound products, plans
expansion to overseas markets and the introduction of new
products to both our overseas and domestic markets. Our
cellular telephone group will be experiencing the same
overseas growth as it supports the cellular phone companies
abroad. The cellular group will also be bringing in several
new digital technology products which we are very excited
about.
- - WHAT ARE SOME BENEFICIAL EFFECTS OF THE OFFERING?
1.Provides us with a stronger equity base to support the growth
just mentioned.
2.Provides a larger pool of shares available to the public which
will attract more interest from investment funds.
3.Reduces our interest expenses and related costs by
approximately $2.6 million.
CONCLUSION:
- - Thank you for taking our call.
- - If you wish to convert your bonds, we suggest you call your
broker.
- - Reminder: Offer is open only through November 25th.
- - Do you have a feeling whether you will convert your bonds?
- - If you have any questions, please call _______________ .