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): February 19, 2004
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
On February 19, 2004, Audiovox Corporation (the Company) announced that it
had signed a non-binding letter of intent to sell a controlling interest in the
Company's wireless subsidiary, Audiovox Communications Corp., to Curitel
Communications, Inc. A copy of the press release is filed as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
99.1 Press Release, dated February 19, 2004
99.2 Press Release, dated February 24, 2004
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On February 24, 2004, the Company issued a press release reporting fourth
quarter and fiscal year end 2003 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: February 25, 2004 By: /s/Charles M. Stoehr
-----------------------
Charles M. Stoehr
Senior Vice President and
Chief Financial Officer
Exhibit Index on Page 4
Page 3 of 4
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release, dated February 19, 2004, announcing non-binding
letter of intent
99.2 Press Release, dated February 24, 2004, announcing fourth
quarter and fiscal year end 2003 results
Exhibit Index on Page 4
Page 4 of 4
Audiovox Corporation (ticker: VOXX, exchange: NASDAQ) News Release - 2/19/2004
Audiovox Signs Non-Binding Memorandum of Understanding
HAUPPAUGE, N.Y., Feb. 19 /PRNewswire-FirstCall/ -- Audiovox Corporation (Nasdaq:
VOXX) announced today that it has signed a non-binding letter of intent to sell
a controlling interest in the Company's wireless subsidiary, Audiovox
Communications Corp. (ACC) to Curitel Communications Inc., (or one of its
affiliates or subsidiaries) a leading mobile phone manufacturer in South Korea
(Curitel). Currently, Audiovox owns 75% of ACC and Toshiba Corporation owns the
remaining interest.
The transaction is subject to a number of contingencies, including satisfactory
completion of due diligence, negotiation and signing of definitive agreements
and requisite approvals. The terms of the transaction were not disclosed. The
Company must also consider all proposals submitted and there can be no
assurances that this, or any other transaction, will be completed or as to any
terms that may be negotiated. The Company also announced that ACC has retained
the services of Jefferies & Company, Inc. to assist in this matter.
Philip Christopher, President and CEO of ACC said, "We welcome this interest
shown in our company and its management and recognize that partnership with a
strong manufacturer, such as Curitel, a major supplier of handsets to ACC, will
permit expansion of our product line and render us very competitive."
About Audiovox
Audiovox Corporation is an international leading company in consumer electronics
and communications. The Company conducts its business through subsidiaries and
markets its products both domestically and internationally under its own brands.
It also functions as an OEM (Original Equipment Manufacturer) supplier to
several customers. For additional information, please visit Audiovox on the Web
at http://www.audiovox.com.
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; our relationships with key suppliers and
customers; quality and consumer acceptance of newly introduced products; market
volatility; non-availability of product; excess inventory; price and product
competition; new product introductions; the possibility that the review of our
prior filings by the SEC may result in changes to our financial statements; and
the possibility that stockholders or regulatory authorities may initiate
proceedings against Audiovox and/or our officers and directors as a result of
any restatements. Risk factors associated with our business, including some of
the facts set forth herein, are detailed in the Company's Form 10-K for the
fiscal fourth quarter and year ended November 30, 2002 and its Form 10-Q for the
three months ended August 31, 2003.
Company Contact:
C. Michael Stoehr, SVP/CFO
Audiovox Corporation
(631) 231-7750
Public and Investor Relations Contact:
Glenn Wiener
GW Communications(212) 786-6011 or gwiener@GWCco.com
SOURCE Audiovox Corporation02/19/2004
CONTACT: C. Michael Stoehr, SVP/CFO of Audiovox Corporation, +1-631-231-7750;
or Glenn Wiener of GW Communications, +1-212-786-6011,
gwiener@GWCco.com, for Audiovox
Web site: http://www.audiovox.com
(VOXX)
Exhibit 99.1
FOR IMMEDIATE RELEASE
Company Contact: Public and Investor Relations Contact:
- ---------------- --------------------------------------
C. Michael Stoehr, SVP/CFO Glenn Wiener
Audiovox Corporation GW Communications
(631) 231-7750 (212) 786-6011 or GWIENER@GWCCO.COM
-----------------
Audiovox Corporation Reports Fiscal Fourth Quarter and Year-End 2003 Results
o 4Q03 Revenues increase 45% year-over-year and 73% since 3Q03
o 4Q03 EPS per share was $0.33 vs. loss per share of $0.69 in 4Q02
o FY03 Revenues over $1.3 billion, up 20% as compared to FY02
o FY03 EPS of $0.51 vs. loss per share of $0.64 in FY02
o Both operating subsidiaries report increases in revenues and profits
Hauppauge, NY...February 24, 2004...Audiovox Corporation (Nasdaq: VOXX) today
announced results for its fiscal fourth quarter and year-ended November 30,
2003.
Net sales for the fourth quarter of fiscal 2003 were $460.3 million, an increase
of 45% over $316.9 million reported in the comparable fiscal 2002 period and up
73% sequentially compared to $265.8 million reported in the third quarter of
fiscal 2003. Audiovox Electronics Corp. (AEC) reported net sales of $190.3
million during the fourth quarter of fiscal 2003, up 80% as compared to $105.8
million reported last year and an increase of 41% as compared to $135.2 million
reported in the fiscal 2003 third quarter. AEC results included sales from the
recent Recoton acquisition. Audiovox Communications Corp. (ACC) reported net
sales of $270.0 million during the fourth quarter of fiscal 2003, an increase of
28% as compared to the $211.1 million reported in the fourth quarter of fiscal
2002. ACC sold approximately 1.3 million total units at an average selling price
of $167 during the fourth quarter of fiscal 2003, compared to unit sales of 1.4
million and an average selling price of $134 in the comparable quarter last
year.
As a result of higher revenue and gross profit margins, the Company's fiscal
2003 fourth quarter net income and income per share were $7.3 million and $0.33,
respectively, compared to a net loss and loss per share of $15.1 million and
$0.69, respectively for the three months ended November 30, 2002.
For the fiscal year ending November 30, 2003, Audiovox reported net sales of
$1.3 billion versus $1.1 billion reported in the prior year, an increase of 20%.
AEC's fiscal 2003 sales were $517.7 million, an increase of 39% compared to
$372.7 million reported in fiscal 2002. ACC's fiscal 2003 sales were $806.2
million, an increase of 11% compared to $727.7 million reported in fiscal year
2002. ACC sold approximately 4.7 million handsets in fiscal 2003 at an average
selling price of $163 compared to 5.0 million units and an average selling price
of $136 for the same period last year. Consolidated net income and income per
share for fiscal 2003 were $11.2 million and $0.51 respectively, compared to a
net loss and loss per share of $14.0 million and $0.64, respectively, for fiscal
2002.
Exhibit 99.2
- more -
Audiovox Corporation Reports Fiscal Fourth Quarter...
Page 2 of 4
Gross Profit
Gross profit for fiscal 2003 was 9.4%, compared to 6.8% in fiscal 2002. This
increase in profit margin was primarily due to lower wireless inventory
write-downs and a change in the mix of sales from wireless products to
electronics products, which generally carry higher gross margins. Margins for
ACC increased to 4.7% in fiscal 2003 from 2.0% in fiscal 2002 due to lower
inventory write-downs and new product introductions. Margins for the AEC
increased to 16.6% in fiscal 2003 from 16.1% in fiscal 2002 due to higher
margins on consumer product sales, further increases in mobile video sales and
the margins of Audiovox Europe, a new subsidiary formed as a result of the
Recoton acquisition.
Operating Expenses
Operating expenses increased $13.7 million to $102.4 million in fiscal 2003,
compared to $88.7 million in fiscal 2002. As a percentage of net sales,
operating expenses decreased to 7.7% in fiscal 2003 from 8.1% in fiscal 2002.
Major components of this increase were a $2.8 million increase in advertising
due to an increase in general promotions to support the growing business and
$7.8 million of operating expenses for Audiovox Europe. Operating income for
fiscal 2003 was $21.8 million, compared to an operating loss of $14.1 million in
fiscal 2002.
Balance Sheet-Selected Items
Accounts receivable as of November 30, 2003 were $266.4 million. Inventory as of
November 30, 2003 was $219.7 million with ACC inventory levels at $67.0 million
and AEC inventory levels at $152.7 million, which included inventory acquired
from Recoton. At the close of the 2003 fiscal year, the Company's stockholder
equity was $325.7 million.
On February 19, 2004, the Company announced that it has signed a non-binding
letter of intent to sell a controlling interest in ACC to Curitel Communications
Inc., a leading South Korean mobile phone maker (Curitel). The transaction is
subject to a number of contingencies, including satisfactory completion of due
diligence, negotiation and signing of definitive agreements and requisite
approvals. The terms of the transaction were not disclosed. The Company must
also consider all proposals submitted and there can be no assurances that this,
or any other transaction, will be completed or as to any terms that may be
negotiated. The Company also announced that it has retained the services of
Jefferies & Company, Inc. to assist in this matter.
John Shalam, Chairman, President and CEO of Audiovox Corporation, said "As
previously stated, we anticipated fourth quarter results to show an improvement
over prior quarters due to the continued and consistent performance in our
electronics subsidiary, which reached the $500 million sales mark for the first
time in our Company's history and to the introduction of several high-end
wireless handsets in ACC. This quarter, both operating subsidiaries posted
increases in revenues and profits, as consumer and customer demand for our
products has been strong. Once more, we believe that our diverse product
offering provides us with a competitive advantage in key markets, such as mobile
video and flat-panel TVs."
- more -
Exhibit 99.2
Audiovox Corporation Reports Fiscal Fourth Quarter...
Page 3 of 4
Conference Call
Audiovox Corporation will be hosting a results conference call later this
morning at 11:00 a.m. EDT. Interested parties may participate in a listen-only
mode via a real-time web cast by visiting the company's web site at
HTTP://WWW.AUDIOVOX.COM.
About Audiovox
Audiovox Corporation is an international leading company in consumer electronics
and communications. The Company conducts its business through subsidiaries and
markets its products both domestically and internationally under its own brands.
It also functions as an OEM (Original Equipment Manufacturer) supplier to
several customers. For additional information, please visit Audiovox on the Web
at http://www.audiovox.com.
Except for historical information contained herein, statements made in this
release that would constitute forward-looking statements may involve certain
risks and uncertainties. All forward-looking statements made in this release are
based on currently available information and the Company assumes no
responsibility to update any such forward-looking statement. The following
factors, among others, may cause actual results to differ materially from the
results suggested in the forward-looking statements. The factors include, but
are not limited to, risks that may result from changes in the Company's business
operations; our ability to keep pace with technological advances; significant
competition in the mobile and consumer electronics businesses as well as the
wireless business; our relationships with key suppliers and customers; quality
and consumer acceptance of newly introduced products; market volatility;
non-availability of product; excess inventory; price and product competition;
new product introductions; the possibility that the review of our prior filings
by the SEC may result in changes to our financial statements; and the
possibility that stockholders or regulatory authorities may initiate proceedings
against Audiovox and/or our officers and directors as a result of any
restatements. Risk factors associated with our business, including some of the
facts set forth herein, are detailed in the Company's Form 10-K for the fiscal
fourth quarter and year ended November 30, 2003.
# # #
- Table to Follow -
Exhibit 99.2
Audiovox Corporation Reports Fiscal Fourth Quarter...
Page 4 of 4
AUDIOVOX CORPORATION
Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Data)
Three Months Ended Twelve Months Ended
November 30, November 30,
2002 2003 2002 2003
---- ---- ---- ----
Net sales $ 316,853 $ 460,252 $1,100,382 $1,323,902
Cost of sales 302,098 414,957 1,025,783 1,199,696
------------------------- ------------------------
Gross profit 14,755 45,295 74,599 124,206
Operating expenses:
Selling 7,640 12,369 29,509 36,514
General and administrative 15,600 19,336 55,292 60,106
Warehousing and technical support 1,116 1,752 3,874 5,783
------------------------- ------------------------
Total operating expenses 24,356 33,457 88,675 102,403
------------------------- ------------------------
Operating income (loss) (9,601) 11,838 (14,076) 21,803
Other income (expense):
Interest and bank charges (1,466) (1,435) (4,219) (4,602)
Equity in income of equity investees 169 1,146 1,779 3,279
Gain on issuance of subsidiary shares - - 14,269 -
Other, net (673) 1,062 (4,156) 556
------------------------- ------------------------
Total other income (expense), net (1,970) 773 7,673 (767)
------------------------- ------------------------
Income (loss) before provision for (recovery of)
income taxes, minority interest
and cumulative effect of a change
in accounting for negative goodwill (11,571) 12,611 (6,403) 21,036
Provision for income taxes 7,696 4,843 12,932 9,407
Minority interest income (expense) 4,193 (458) 5,055 (390)
------------------------- ------------------------
Income (loss) before cumulative effect of a change in
accounting for negative goodwill (15,074) 7,310 (14,280) 11,239
Cumulative effect of a change in accounting for negative
goodwill - - 240 -
------------------------- ------------------------
Net income (loss) $ (15,074) $ 7,310 $ (14,040) $ 11,239
========================= ========================
Net income (loss) per common share (basic) before
cumulative effect of a change in accounting for
negative goodwill $ (0.69) $ 0.33 $ (0.65) $ 0.51
Cumulative effect of a change in accounting for negative
goodwill - - 0.01 -
------------------------- ------------------------
Net income (loss) per common share (basic) $ (0.69) $ 0.33 $ (0.64) $ 0.51
========================= ========================
Net income (loss) per common share (diluted) before
cumulative effect of a change in accounting for
negative goodwill $ (0.69) $ 0.33 $ (0.65) $ 0.51
Cumulative effect of a change in accounting for negative
goodwill - - 0.01 -
------------------------- ------------------------
Net income (loss) per common share (diluted) $ (0.69) $ 0.33 $ (0.64) $ 0.51
========================= ========================
Weighted average number of common shares outstanding
(basic) 21,809,903 21,913,238 21,850,035 21,854,610
========================= ========================
Weighted average number of common shares outstanding
(diluted) 21,809,903 22,219,992 21,850,035 22,054,320
========================= ========================
# # #
Exhibit 99.2