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) May 19, 2005
AUDIOVOX CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-28839 13-1964841
(Commission File Number) (IRS Employer Identification No.)
180 Marcus Boulevard, Hauppauge, New York 11788
(Address of Principal Executive Offices) (Zip Code)
(631) 231-7750
(Registrant's Telephone Number, Including Area Code)
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))
Page 1 of 4
Item 8.01 Other Events
On May 19, 2005, Audiovox Corporation ("the Company") held its 2005 annual
meeting of stockholders ("the meeting"). At the meeting the following matters
were voted upon and approved:
1. Election of the board of eight directors.
2. Ratification of the appointment of Grant Thornton LLP as the Company's
independent registered public accounting firm for the fiscal year
ending November 30, 2005.
Subsequent to the voting of the above matters, John Shalam, President and
Chief Executive Officer, and Patrick Lavelle, President and Chief Executive
Officer of Audiovox Electronics Corporation, each presented speeches regarding
the recent financial results and future outlook of the Company. Please see the
copy of the transcript of the meeting furnished herewith as Exhibit 99.1.
The information furnished under this Item 8.01, including Exhibit 99.1,
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.
Page 2 of 4
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: May 19, 2005 By: /s/ Charles M. Stoehr
---------------------------------
Charles M. Stoehr
Senior Vice President and
Chief Financial Officer
Page 3 of 4
EXHIBIT INDEX
Exhibit No. Description
99.1 Transcript of Audiovox Corporation's annual meeting of
stockholders held on May 19, 2005
Page 4 of 4
AUDIOVOX CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
10:00 A.M. - MAY 19, 2005
SMITHTOWN SHERATON
Glenn: Ladies and Gentlemen, please come to order. Welcome to Audiovox's
annual meeting of shareholders. My name is Glenn Wiener and I am president
of GW Communications, the Company's Investor Relations firm. Before getting
started, I'd like to read Safe Harbor language.
Except for historical information contained herein, statements made today
that would constitute forward-looking statements may involve certain risks
and uncertainties which may cause results to differ materially from those
set forth in the statements. The forward looking statements may include
statements regarding product development, product performance or financial
performance. All forward-looking statements made are based on currently
available information, and the company assumes no responsibility to update
any such forward-looking statements.
Forward-looking statements made today will be evaluated together with the
many uncertainties that affect Audiovox's business, which include, but are
not limited to risks that may result from our ability to keep pace with
technological advances, significant competition in the 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, and the possibility that stockholders or regulatory
authorities may initiate proceedings against Audiovox and/or our officers
and directors as a result of any restatements.
Risk factors associated with our business including some of the factors set
forth herein are detailed in the company's Form 10-K for the fiscal fourth
quarter and year ended November 30, 2004 and its Form 10-Q for the three
months ended February 28, 2005.
Now to the business at hand. March 28, 2005 has been set by the Board as
the record date. All record shareholders on that date are entitled to vote
on the matters that come before this meeting. On or about April 8, 2005,
proxy materials and the annual report were mailed to shareholders of
record. The shareholders' list as of the record date has been available for
the past 10 days and can be inspected at the Company's headquarters.
1
Exhibit 99.1
As of March 28, 2005 there were 20,867,046 shares of Class A Common Stock
outstanding and 2,260,954 shares of Class B Common Stock outstanding. Based
on a preliminary count of the votes cast we are informed that that there is
a quorum present.
As you may know, each share of Class A Common Stock is entitled to one vote
and each share of Class B Common Stock is entitled to ten votes. The Class
A Shareholders, voting as a class, are entitled to vote for the election of
the Class A directors. The Class A and Class B Shareholders, voting
together, are entitled to vote for the election of the joint directors and
for all other matters properly presented to the meeting. If any shareholder
has a comment on a matter presented to the meeting, please raise your hand
and Mr. Shalam will recognize you. Each speaker should give his or her name
and the number of shares owned. Please focus your comments on the specific
proposal in the proxy statement. We will allow time for comments and
questions on other matters related to the Company after we have acted on
the item set forth in the proxy material.
We will first address the issues in the proxy statement. Following that,
John Shalam, Chairman, President and Chief Executive Officer will provide a
brief recap on fiscal 2004, followed by Patrick Lavelle, CEO of the
company's operating subsidiary, Audiovox Electronics Corp. Pat will bring
you up to date on developments at AEC. Michael Stoehr, Vice President and
Chief Financial Officer will not be making a presentation today, however he
is available for any questions on the financials. In addition, John
Desmond, a partner representing Grant Thornton, LLP, the Company's
accounting firm, will be available later to respond to appropriate
questions from the shareholders.
Proxy cards were sent out to all shareholders prior to the meeting. If
anyone wishes to change his/her proxy vote, the ushers have ballots and
will give you one. Please raise your hand, if you would like a ballot.
The Directors selected William Brennan and Kenneth Myung, employees of
Audiovox Corporation as Judges of the Election. They are both present, have
taken the oath of office and will count the ballots.
Nominees for the Board of Directors-Please stand as I introduce you.
PAUL C. KREUCH, JR., Chairman, International Asset Transactions, LLC.
DENNIS F. MCMANUS, Telecommunications Consultant.
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Exhibit 99.1
IRVING HALEVY, a Retired Professor and Arbitrator.
PETER A. LESSER , President of X-10 (USA) Inc.
PHILIP CHRISTOPHER, President and CEO of UTStarcom Personal
Communications LLC.
CHARLES M. STOEHR, Senior Vice President and Chief Financial Officer.
PATRICK M. LAVELLE, Senior Vice President of Audiovox Corporation and
the President and C.E.O. of Audiovox Electronics Corporation.
And the last director and nominee is John Shalam, Chairman, President
and Chief Executive Officer.
The items described in the proxy statement are the:
o Election of Directors;
o Approval of the appointment of Grant Thornton LLP as the
Company's independent registered public accounting firm;
First we will consider the Election of Directors.
The nominees set forth in the proxy statement are now before the meeting.
Do any shareholders have any questions that specifically relate to matters
bearing on the election of directors?
Since there are no questions or comments, and we have not received any
further nominations, I now declare the nominations and the polls closed. If
anyone has any ballots, please hand them to the ushers now.
Prior to this meeting, I was advised by the election judges that based on
the proxies received prior to the meeting, all the directors were elected.
There were 18,459,683 shares of Class A Common Stock voting and 21,830,860
shares of Class B Common Stock voting.
The preliminary votes for the Election of Directors were as follows:
There were 18,010,570 votes for Paul C. Kreuch, Jr. as a Class A Director
and 449, 113 votes were withheld.
There were 18,013,529 votes for Dennis F. McManus as a Class A Director and
446, 154 votes were withheld.
3
Exhibit 99.1
There were 18,006,598 votes for Irving Halevy as a Class A Director and
453,085 votes were withheld.
There were 18,012,879 votes for Peter A. Lesser as a Class A Director and
446,804 votes were withheld.
The highest number of shares withheld from any individual Class A nominee
was 453,085.
There were 35,500,653 votes for John J. Shalam as a director and 4,789,890
votes were withheld.
There were 35,489,471 votes for Philip Christopher as a director and
4,801,072 votes were withheld.
There were 35,489,850 votes for Charles M. Stoehr as a director and
4,800,693 votes were withheld.
There were 35,491,916 votes for Patrick M. Lavelle as a director and
4,798,627 votes were withheld.
There were 18,459,683 Class A votes and 21,830,860 Class B votes for Joint
Directors.
The highest number of shares withheld from any individual Class A and Class
B nominee was 4,801,072.
At this time, I would like to congratulate the Directors on their election.
The next proposal deals with the ratification of the appointment of Grant
Thornton, LLP as the Company's independent accountants. That matter is now
before the meeting.
Do any shareholders have any questions which, specifically relate to the
ratification of the appointment of Grant Thornton LLP as the Company's
independent accountants?
Since there are no questions or comments, I now declare the polls closed.
There were 18,306,273 Class A votes and 21,830,860 Class B votes for
appointment of Grant Thornton, LLP as the Company's accountants.
4
Exhibit 99.1
The votes on any ballots collected during this meeting will be added to
these totals. The final results of the vote will be contained in a
certificate of election prepared by the Judges of Election, which will be
annexed to the minutes of this meeting and recorded in the 10-Q filing for
the Company's second fiscal quarter. We will be pleased to send the results
to any shareholder who may request them.
This now concludes the formal portion of our meeting and I would like to
turn the call over to John Shalam. John.
Shalam: Thank you Glenn and good morning. I'd like to first congratulate the
Board of Directors on their elections as well as the team at Grant Thornton
for their dedication to and servicing of our account. I'd also like to give
a special thanks to Ann Boutcher and Rick Maddia, who have served on our
Board for the past 10 years. Ann...Rick...your contributions to our Company
have certainly not gone unnoticed and I, along with the Directors before
you, would like to extend our warm felt gratitude for your tremendous
efforts over the years.
Fiscal 2004 was a year marked by many key milestones..most notably...the
sale of our Wireless business to UTStarcom in November of last year. That
transaction, valued at over $320 million was without question, one of the
best moves this company has ever made and has already proven to be in the
best interests of Audiovox and its shareholders as it has provided us with
the financial resources to build and market our portfolio of brands in the
mobile and consumer electronics industries. With approximately $150 million
in net proceeds, currently earning interest in a number of short-term
investments and having paid down most of our bank lines, Audiovox today, is
in the best financial position in the Company's history.
Last fiscal year, we reported net sales of $567 million, up roughly 10
percent over the prior year. Driving this growth was our emergence in the
satellite radio category, where we have gained considerable market share
and enjoy strong relationships with both XM and Sirius Satellite Radio. We
believe this category will continue to play a major role in our growth over
the coming years, which was one of the key factors in our recent
acquisition of Terk Technologies this past January. Their Technology driven
products particularly in the XM direct connect products, should ensure that
we keep pace with the evolution of the satellite radio market.
Additionally, the brands we acquired in fiscal 2003- Jensen, Acoustic
Research, Advent and Phase Linear have begun to pay dividends as we enjoyed
considerable year-over-year gains in the U.S., driven primarily by the
re-emergence of Jensen auto sound products. And the acquisition has also
given us a solid international presence; something we have not had in years
5
Exhibit 99.1
past.
We also experienced strong growth in sales of our LCD TV's, multi-media
portables and automotive security products; the latter partially as a
result from Code Alarm, the automotive security business we acquired in
2002.
Unfortunately, growth in these areas was partially offset by continued
weakness in the portable DVD and video-in-a-bag business, which adversely
impacted our overall sales, margins and profitability. For the year, we
reported earnings per share from continuing operations of $0.01 but with
the realized gains from the sale of our Wireless group, we reported diluted
earnings per share o $3.45.
As I've said many times before, fiscal 2005 will be a transition year. We
have gone from a Company successfully competing in 2 very different market
segments - Cellular and Electronics - to a company focused on one. We are
in the process of implementing several programs across the board that will
lead to a leaner, more focused organization.
In summary, we are looking forward to an improving second half of the year
and believe the Company's prospects... this year and in the future are
bright. With a clean balance sheet and significant cash on hand, we intend
to pursue strategic and synergistic acquisitions that will better position
the Company in the years ahead and contribute to both our top and bottom
line performance. It is our goal to restore profitability to historical
levels and beyond and we are working diligently to enhance shareholder
value for all parties over the long-term.
I'm proud of the dedicated efforts of the management tea and employees here
at Audiovox and look forward to their support as we continue to grow our
company. Thank you again for your continued support and at this time, I'll
turn the meeting over Pat Lavelle who will bring you up to date on the
developments of our electronics company, AEC. Pat...
Lavelle: Good morning.
What I would like to do this morning is give you a brief recap of what has
transpired year to date and what we will be doing over the next few months
and for the balance of the year.
As most of you know, the first quarter was very challenging due to two of
our prime categories being impacted by (1) a severe decline in industry
sales and (2) from steady and significant price erosion.
6
Exhibit 99.1
As I have discussed in previous calls to analysts, the Mobile Video Market
has undergone dramatic changes starting in the second half o 2004. We have
been impacted in three areas:
A significant shift in business from the aftermarket to OEM car
manufacturers has occurred. As the OEM's have made this product part of
their standard option packaging, we have been negatively impacted by fewer
opportunities within the aftermarket.
A drop in SUV sales, which makes up the key segment of the market limits
our opportunities as well.
The effect of price erosion generated by deep discounting in the
aftermarket as suppliers attempted to move out inventories as a result of
this slow down.
These factors have combined to negatively affect our mobile video sales and
margins, which has been our key driver over the past few years.
With the largest marketshare, by far, in this category the impact on
Audiovox was greatest.
As I have said before, this development is part of the normal evolutionary
process within automotive electronics; however, the speed to market by the
OEM's was quicker than usual since they only needed to develop product for
their SUV's and minivans instead of having to develop product for their
entire fleet.
There are still good opportunities, however, within mobile video and it
will remain one of our key categories, but we do not expect to see the
growth in this area that we have enjoyed over the past years.
Secondly, Portable DVD's, which have been a key driver for our Consumer
Electronics Group was negatively impacted by severe price erosion. A drop
in selling prices of 30% year over year has made it very difficult to grow
sales.
To counteract these rather drastic market changes, we have been very active
in new product development, which gives us the opportunity to restore
eroded margins and generate new sales.
I am happy to advise you that we have commenced shipment of our Mobile
Video Shuttle System and will deliver to Best Buy and Circuit City starting
next week and into the month of June. There has been excellent interest on
the part of our retailers for the shuttle and we expect this program to
reverse the negative trend we've seen in the video bag segment, which had
7
Exhibit 99.1
previously been a strong performer for us.
Additionally, we have begun delivering our new 8.5" and 10" mobile video
overheads. These have met with very good reception. We will begin delivery
of our new 15" in June and 12" in August. These new units will bolster
sales but more importantly, improve margins within our Mobile Video Group.
We also expect fourth quarter shipments of our new Ray Sat Satellite
Antenna, which will bring Direct TV and Dish Network into the vehicle. With
a retail price of $3,000 we will be the first company to offer one unit
that can deliver both services, which is of key importance to our large
retailers. This product will also allow our expeditor network the ability
to upgrade to existing factory- installed systems; something we have not
been able to offer to date.
Within Security we will deliver new 2-way Remote Start Transmitters with
Text that will advise the user the status of the vehicle. Another first to
market. At Code Systems we will deliver new Remote Start Programs for the
Mazda Tribute and Mazda 5, the Kia Sportage and Spectra, and an all new
Security Program for Mopar in August.
Within Car Audio, between May and June we will deliver all new Jensen
Amplifiers and Speakers for Power Retailers and Independent Retailers and a
new line of Phase Liner by Jensen designed specifically for Mass Merchants
Additionally, our recently introduced Jensen VM9510 and VM9410 multi-media
head units placed number one and three within the top 10 in dash units
countrywide according to the NPD group. We expect these units to continue
their strong performance for the balance of the year.
In Satellite, over the next few months we deliver Direct Connect XM units
for Clarion, JVC, Mercedes, BMW and a direct connect designed to work on
any RDS equipped radio. This will allow all these head units to play XM
Satellite Radio. In May, we delivered our XM Connect and Play antenna and
receiver to work with any home stereo unit equipped with XM's Connect and
Play Chi Set. This will allow these home units to receive and play XM
Satellite Radio. It is important to note Audiovox is the exclusive supplier
of XM Direct Connect and Connect and Play products, which are designed to
work with XM ready units developed by other Consumer and Mobile Electronic
companies.
If a consumer purchases an XM Ready Head Unit from Sony, Pioneer, Kenwood,
JVC, Clarion, Panasonic, GM, Ford, Chrysler, BMW, Mercedes and wants to
upgrade to XM service, the XM Receiver and Antenna must be purchased from
Audiovox! This gives us tremendous exposure and places Audiovox product in
8
Exhibit 99.1
virtually every 12-volt retailer in the country.
Additionally, we are developing 2 new XM Plug-n Play units and 3 new Sirius
Plug- n-Play units for the 4th quarter.
Our Consumer Group delivered a complete new line of LCD TV's this month;
17", 20", 23", 27", 32" and 37" units with retails ranging from $499 to
$2,499. We have a very competitive lineup and response has been very
positive. We look for LCD to drive our consumer business for the balance of
the year.
We also plan to deliver In-Car and Portable Multi-Media GPS Navigation
Systems with real time traffic. These units will be packed with features
and very competitively priced. The In-Car is now available and the
Portables are scheduled for the 4th quarter.
Ladies and Gentlemen, we have built AEC on our ability to consistently
develop new product for our existing markets and to find new product in
which we can compete and expand our sales.
Over the last 5 years we have grown from approximately $250 million to $570
million in sales. Indeed, some of our markets have changed. This is normal
within our business, but we have been successful in the past in catching
the new emerging technologies and in that, I see no change. Audiovox is the
only supplier of XM and Sirius products. Our position in Satellite Radio; a
category that up to this point has grown at a faster pace than early DVD
sales. Our growing position in LCD TV; a category that has tremendous
potential (over 250 million CRT TV's will be replaced) and our position in
existing categories where we are the dominant supplier, puts us in a very
favorable position to grow.
Our Financial strength, which will allow us the opportunity to acquire
where we can leverage our distribution, customer and manufacturer
relationships or existing overhead puts us in a position to grow our
business faster. Our past three acquisitions are doing well and we continue
to research and assess all potential possibilities.
Although the first half has been difficult, I fully expect the second half
to improve as our new products deliver and as our recent overhead
reductions take hold.
Thank you.
Shalam: Ladies and Gentlemen, this concludes the Company's presentation at this
meeting and we will now take questions from the floor. If any shareholder
has a comment or a question please raise your hand and after I recognize
you, state your name and the number of shares owned.
9
Exhibit 99.1
Shalam: Since there are no questions and there is nothing further to come before
the meeting, I now declare this meeting adjourned.
I want to thank you all for attending today's meeting and for the interest
and support you have shown in Audiovox Corporation.
10
Exhibit 99.1