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): June 3, 2003
AUDIOVOX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-9532 13-1964841
(State or other jurisdiction (Commission (IRS Employer Identification
of Incorporation) File Number) 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 4
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
On June 3, 2003, Audiovox Corporation (the "Company") issued a press
release reporting that the United States Bankruptcy Court for the Southern
District of New York accepted the bid by one of the Company's wholly owned
subsidiaries for the audio assets of Recoton Corporation. A copy of the press
release is attached hereto as Exhibit 99.1, and is incorporated by reference in
its entirety.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
99.1 Press Release, dated June 3, 2003
99.2 Press Release, dated June 3, 2003
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On June 3, 2003, Audiovox Corporation issued a press release reporting
fourth quarter and fiscal year end 2002 results. A copy of the press release is
attached hereto as Exhibit 99.2, and is incorporated by reference in its
entirety.
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: June 4, 2003 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 June 3, 2003, announcing
acceptance of bid to purchase certain
assets of Recoton Corporation
99.2 Press Release, dated June 3, 2003, announcing fourth
quarter and fiscal year end 2002 results.
Exhibit Index on Page 4
Page 4 of 4
FOR IMMEDIATE RELEASE:
AUDIOVOX CORPORATION TO PURCHASE
AUDIO BRANDS FROM RECOTON FOR $40 MILLION
Well-known Jensen, Advent and Acoustic Research
brands are at the center of the deal
Hauppauge, NY, June 3, 2003 . . . Audiovox Corporation (Nasdaq: VOXXE) today
announced that the US Bankruptcy Court for the Southern District of New York has
accepted the bid by one of the Company's wholly owned subsidiaries for the
assets of Recoton (OTC: RCOTQ), which include the US audio operation as well as
a German company. Under the terms of the purchase Audiovox will pay $40.0
million and assume a $5 million debt on the German company to acquire Recoton's
U.S. audio operation, which includes well known brands Jensen, Advent and
Acoustic Research as well as the purchase of the shares of Recoton German
Holdings GmbH, a wholly owned subsidiary with 2002 sales of $70 million.
The proposed transaction will create one of the largest U.S. audio suppliers of
mobile entertainment products, adding to the company's existing portfolio of
high quality mobile entertainment products marketed under three existing brands:
Audiovox, Prestige and Rampage.
The purchase price was reached through an auction bidding process conducted
pursuant to an order issued by the U.S. Bankruptcy Court for the Southern
District of New York. Recoton Corporation filed a voluntary petition to
reorganize under Chapter 11 of the U.S. Bankruptcy Code on April 8, 2003 in the
Southern District of New York
John J. Shalam Chairman of Audiovox Corp. said, "Our strong balance sheet allows
us to consider the growth opportunities that acquisitions like this one can
provide. Our bank lines are extensive and are presently barely being utilized. I
expect this acquisition will create minimal financial pressure on our operation
since our cash position combined with our credit facilities will more than cover
the transaction. The deal made sense because of the synergies that exist in our
product lines, customer base and business practices and we expect it to be
accretive from the onset and to generate additional revenue of between $70 and
$100 million in the first year of our ownership."
Shalam continued, "Recoton's U.S. audio business will be assimilated into our
wholly owned subsidiary Audiovox Electronics Corp. (AEC). The German company
will allow us additional growth opportunities as we begin to promote our
consumer electronics and mobile products through the already established Recoton
distribution network in Western Europe."
Patrick Lavelle, president and CEO of AEC also commented on the acquisition, "We
expect to blend
Exhibit 99.2
Audiovox Corporation To Purchase Audio Brands...
Page 2 of 3
the Recoton brands into our electronics subsidiary with minimal overhead
expense. We believe that the addition of the well-known Jensen brand will allow
Audiovox Electronics Corp to expand marketing opportunities within existing
12-volt distribution channels. We will utilize this acquisition to expand
Audiovox's penetration into the home by offering a complete line of Acoustic
Research, Advent and Audiovox speaker and entertainment systems."
In addition, during the second quarter we took charges relating to analog
inventories which also had a substantial negative effect on second quarter
performance."
Audiovox Corporation is an international leader in the marketing of cellular
telephones, mobile security and entertainment systems, and consumer electronics
products. Audiovox Electronics Corp is a wholly owned subsidiary that markets
auto sound, vehicle security, mobile video systems, and consumer electronics
products such as Flat Panel TV's, Portable DVD players, Two-Way radios, MP 3
products and home and portable stereos. For additional information, visit their
web site at www.audiovox.com or call 1- 800-290-6650.
Audiovox Safe Harbor
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 our ability to keep pace with
technological advances; significant competition in the wireless, mobile and
consumer electronics businesses; quality and consumer acceptance of newly
introduced products; our relationships with key suppliers and customers; 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; the
possibility that our failure to timely file our quarterly report on Form 10-Q
for the quarter ended February 28, 2003 will result in a determination that we
are subject to delisting from the Nasdaq Stock Market; 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 that may be
required as a result of the resolution of the SEC comment letter. Risk factors
associated with our business, including some of the factors set forth herein,
are detailed in the Company's Form 10- K for the fiscal fourth quarter and year
ended November 30, 2002 and other documents filed with the SEC.
Company Contacts:
C. Michael Stoehr, SVP and CFO - (631) 231-7750
Glenn Wiener, Investor and Financial Media Relations - (212) 786-6011.
Exhibit 99.2
]
FOR IMMEDIATE RELEASE
Company Contacts:
C. Michael Stoehr Glenn Wiener
SVP and CFO Investor and Financial Media Relations
(631) 233-7750 (212) 786-6011 or GWIENER@GWCCO.COM
--------------------------------------
AUDIOVOX CORPORATION REPORTS FOURTH QUARTER AND FISCAL 2002
o Q4 '02 Net Loss of $0.69 vs. Q4 '01 Net Loss of $0.14
o FY '02 Net Loss of $14.0 million vs. FY '01 Net Loss of $7.2 million
o Final FY '02 adjustment for the restatements results in a net
cumulative loss through August 31, 2002 of $65,000
o Company sets conference call for June 9, 2003 at 10:00 AM to discuss
FY '02 and Q1 '03
o Annual meeting of Shareholders set for July 24, 2003
Hauppauge, NY, June 3, 2003 . . . Audiovox Corporation (Nasdaq: VOXXE) today
announced that it has filed its Form 10-K for Fiscal 2002 with the Securities
and Exchange Commission (SEC). In addition to announcing results, the Company
has also set a conference call date for June 9, 2003 at 10:00 AM (EST) and the
Annual Meeting of Shareholders for July 24, 2003. As soon as the Company files
its Form 10-Q for the period ended February 28, 2003, it intends to request that
Nasdaq remove the "E" on its trading symbol, subject to Nasdaq's requirement
that the Company file its Form 10-Q for the quarter ended May 31, 2003 on or
before July 15, 2003.the
John J. Shalam, Chairman, commented on the announcement, "We are pleased to get
this difficult period behind us and are anxious to get on with the Company's
business for 2003. Our balance sheet remains strong and we are in a position to
grow with both new product additions and synergistic business acquisitions
should they arise. We have a number of exciting new products from both groups
set to start shipping in the second half of the year, many of which are already
placed with key accounts. Our investors, customers and suppliers can be
confident that now that we have these financial reporting issues behind us,
management remains focused on increasing revenues and profits in 2003."
Restatement
As previously announced, the Company had delayed filing its Form 10-K for the
fiscal year ended November 30, 2002 and Form 10-Q for the quarter ended February
28, 2003. As a result of an SEC comment letter and completion of its audit for
Fiscal 2002, the Company has restated results for fiscal years 2000, 2001, and
the first three quarters of fiscal 2002.
Exhibit 99.2
Audiovox Corporation Reports...
Page 2 of 6
On May 29, 2003, the Company announced an unaudited cumulative change as of that
date, to income and equity of $1.0 million. At the completion of the Company's
audit, the cumulative change results in a loss of $65,000 through the period
ending August 31,2002. In finalizing the Form 10-K, the Company made an
additional adjustment to its financial statements, reversing $1.7 million in
expenses incurred in connection with the Company's issuance of subsidiary
shares, which was previously recorded in paid in capital. This resulted in an
increase in stockholders equity and reduced the gain recorded on the issuance of
those shares. After recovery for income taxes, the net charge to the income
statement was $1.1 million. The net effect of the adjustments had no impact on
the Company's cash balances for any of those periods.
Although adjustments vary by period, the net cumulative effect of all of these
changes, which include changes previously announced on March 14, 2003 and May
29, 2003, is as follows:
Effects of Restatement Adjustments on Net Income or Net Loss
(in thousands)
Increase (Decrease) Increase (Decrease)
in Net Income (Increase) Decrease in Net Income for
for the Fiscal in Net Loss for the the Nine Months Net
Year Ended Fiscal Year Ended Ended Cumulative
November 30, 2000 November 30, 2001 August 31, 2002 Change
----------------- ----------------- --------------- ------
Restatement adjustments:
Revenue recognition ($ 779) $ 779 -- --
Timing of revenue -- (15) ($ 103) ($ 118)
Litigation -- (373) 427 54
Foreign currency
translation -- -- (1,491) (1,491)
Inventory pricing -- -- 420 420
Sales incentives 1,884 910 847 3,641
Gain on the issuance of
subsidiary shares -- -- (1,556) (1,556)
Operating expense
reclassification to cost of
sales (1) -- -- -- --
Total adjustment to pre-tax
income (loss) 1,105 1,301 (1,456) 950
(Provision for) recovery of
Income taxes (842) (310) 204 (948)
Minority interest (2) -- 20 (87) (67)
------- -------- -------- -------
Total effect on net income (loss) $ 263 $ 1,011 ($1,339) (65)
======== ======== ======== =======
(1) This adjustment represents a reclassification of warehousing and technical
support and general and administrative costs (which are a component of
operating expenses) to
Exhibit 99.2
Audiovox Corporation Reports...
Page 3 of 6
cost of sales. This reclassification did not have any effect on previously
reported net income or (loss) for any fiscal year or period presented
herein.
(2) This adjustment reflects the impact of the restatement adjustments on
minority interest.
Fiscal Year 2002
For the fiscal year ended November 30, 2002, net sales were $1.1 billion. For
the fiscal year ended November 30, 2002, the Company's majority-owned
subsidiary, Audiovox Communications Corp. (ACC) had revenues of $727.7 million
on sales of 4.9 million units. The average selling price was $136 per unit due
to higher priced, new product introductions during the fourth quarter. Wireless
sales were impacted by reduced consumer demand, price erosion and delivery
delays by some of ACC's suppliers. These conditions resulted in an additional
adjustment to the carrying value of the wireless inventory. For the fiscal
year-ended November 30, 2002, the Company's wholly owned subsidiary, Audiovox
Electronics Corp. (AEC) posted sales of $372.7 million. Sales in AEC were
positively impacted by continued growth in the mobile video, security and
consumer product categories.
For the fiscal year ended November 30, 2002, net loss and loss per common share
were $14.0 million and $0.64 per share, both basic and diluted, respectively. As
a result of the additional sale of shares of ACC to Toshiba Corporation,
Audiovox Corporation's majority ownership of ACC was reduced to 75%. For Federal
Income Tax purposes, ACC will no longer be consolidated in the parent company's
Federal Tax returns. The Company has recorded a valuation allowance of $13.1
million on the deferred tax assets of ACC.
For the fiscal year ended November 30, 2002, ACC's loss before taxes was $24.9
million. Income before taxes for AEC was $17.7 million. AEC provided for
additional foreign currency translation costs relating to the Company's
Venezuelan subsidiary. The Company reports its operating segments on an income
before taxes basis and retains certain expenses at the corporate level, which
are not allocated to the operating segments.
Fourth Quarter '02 Results
Net sales for the fourth quarter of fiscal 2002 were $316.9 million. Net sales
for ACC were $211.1 million for the fourth quarter with 1.5 million total units
sold at an average selling price of $137.
Fourth quarter net sales for AEC were $105.8 million. The Company reports its
operating segments on an income before taxes basis and retains certain expenses
at the corporate level, which are not allocated to the operating segments.
Exhibit 99.2
Audiovox Corporation Reports...
Page 4 of 6
Net loss and loss per common share for the quarter, which includes a valuation
allowance on ACC's deferred tax assets were $15.1 million and $0.69 basic and
diluted, respectively. ACC's fourth quarter loss before taxes was $9.4 million.
AEC's fourth quarter income before taxes was $2.8 million. The Company reports
its operating segments on an income before taxes basis.
There were several charges taken by ACC during the fourth quarter. The Company
recorded a valuation allowance of $13.1 million on the deferred tax assets of
ACC. In addition, results were affected by markdowns recorded on ACC's inventory
and the increased provision for doubtful accounts for a PCS carrier and for
customers in Venezuela and Argentina, due to the current economic conditions
there.
The Electronics group provided an additional provision for inventory as a result
of fourth quarter order cancellations from some of its mass merchant customers.
This markdown reflects future resale value of the inventory based on current
market conditions.
In addition, during the second quarter we took charges relating to analog
inventories which also had a substantial negative effect on second quarter
performance."
Conference Call
Audiovox Corporation will be hosting a results conference call on June 9, 2003
at 10:00 a.m. (EDT) to discuss the results of Fiscal 2002 and the first quarter
of 2003. Interested parties may participate in a listen-only mode via a
real-time web cast by visiting the Company's web site http://www.audiovox.com.
For those who will be unable to participate on the call, 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 Call-in Number: 617-801-6888
Access Code: 14864630
Annual Meeting
Audiovox will be hosting its Annual meeting on Thursday, July 24th at 10:00 a.m.
at the Sheraton Hotel in Hauppauge, New York.
Audiovox Corporation is an international leader in the marketing of cellular
telephones, mobile security and entertainment systems, and consumer electronics
products. The Company conducts its business through two 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.
Exhibit 99.2
Audiovox Corporation Reports...
Page 5 of 6
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 our ability to keep pace with
technological advances; significant competition in the wireless, mobile and
consumer electronics businesses; quality and consumer acceptance of newly
introduced products; our relationships with key suppliers and customers; 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; the
possibility that our failure to timely file our quarterly report on Form 10-Q
for the quarter ended February 28, 2003 will result in a determination that we
are subject to delisting from the Nasdaq Stock Market; 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 that may be
required as a result of the resolution of the SEC comment letter. Risk factors
associated with our business, including some of the factors set forth herein,
are detailed in the Company's Form 10-K for the fiscal fourth quarter and year
ended November 30, 2002 and other documents filed with the SEC.
- Table Follows -
Exhibit 99.2
Audiovox Corporation Reports...
Page 6 of 6
AUDIOVOX CORPORATION
Consolidated Statement of Operations
(In Thousands, Except Share and Per Share Data)
Three Months Ended Twelve Months Ended
November 30, November 30,
2001 2002 2000 2001 2002
(unaudited)(unaudited)(as restat(as restated)
Three Months Ended Twelve Months Ended
November 30, November
30,
2001 2002 2000 2001 2002
---- ---- ---- ----
(unaudited)(unaudited)(as restated) (as restated)
Net sales 341,152 316,853 1,670,291 1,276,591 1,100,382
Cost of sales 323,017 302,098 1,551,666 1,205,201 1,025,783
-------- ------- --------- ---------- ---------
Gross profit 18,135 14,755 118,625 71,390 74,599
Operating expenses
Selling 7,628 7,639 29,056 30,039 29,509
General and administrative 12,481 15,600 46,466 46,505 55,292
Warehousing, assembly and repair 1,137 1,117 3,474 4,082 3,874
-------- ------- --------- ---------- ---------
Total operating expenses 21,246 24,356 78,996 80,626 88,675
-------- ------- --------- ---------- ---------
Operating income (3,111) (9,601) 39,629 (9,236) (14,076)
Gain on issuance of subsidiary's shares 0 0 0 0 14,269
Other income (expense) (1,282) (1,970) 2,514 (2,246) (6,596)
-------- ------- --------- ---------- ---------
Income (loss) before provision for (recovery of) income
taxes and cumulative effect of a change in accounting
principle (4,393) (11,571) 42,143 (11,482) (6,403)
Provision for (recovery of) income taxes (1,169) 7,696 15,766 (3,627) 12,932
Minority interest income (expense) 147 4,193 (1,074) 657 5,055
-------- ------- --------- ---------- ---------
Income (loss) before cumulative effect of a change in
accounting for negative goodwill (3,077) (15,074) 25,303 (7,198) (14,280)
Cumulative effect of a change in accounting for negative
goodwill 0 0 2,189 0 240
-------- ------- --------- ---------- ---------
Net income (loss) (3,077) (15,074) 27,492 (7,198) (14,040)
-------- ------- --------- ---------- ---------
Net income (loss) per common share (basic):
Income (loss) before extraordinary item and
cumulative effect of a change in accounting for
negative goodwill ($0.14) ($0.69) $1.19 ($0.33) ($0.65)
Extraordinary item - gain on extinguishment of debt - - $0.10 - -
Cumulative effect of a change in accounting for
negative goodwill - - - - $0.01
Net income (loss) per common share ($0.14) ($0.69) $1.29 ($0.33) ($0.64)
Net income (loss) per common share (diluted):
Income (loss) before extraordinary item and
cumulative effect of a change in accounting for
negative goodwill ($0.14) ($0.69) $1.12 ($0.33) ($0.65)
Extraordinary item - gain on extinguishment of debt - - $0.10 - -
Cumulative effect of a change in accounting for
negative goodwill - - - - $0.01
Net income (loss) per common share ($0.14) ($0.69) $1.22 ($0.33) ($0.64)
Weighted average number of common shares outstanding:
basic 21,966,461 21,809,90321,393,566 21,877,100 21,850,035
diluted 21,966,461 21,809,90322,565,806 21,877,100 21,850,035
Exhibit 99.2