UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 [fee required]
For the fiscal year ended November 30, 1996
Commission file number 1-9532
AUDIOVOX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-1964841
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
150 Marcus Blvd., Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 231-7750
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of each class: Which Registered
Class A Common Stock $.01 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (Sec 229.405 of this chapter)
is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
(X)
The aggregate market value of the voting stock held by non-affiliates
of the registrant was $90,356,035 (based upon closing
price on the American Stock Exchange, Inc. on February 20, 1997).
The number of shares outstanding of each of the registrant's
classes of common stock, as of February 20, 1997 was:
Class Outstanding
Class A Common Stock $.01 par value 16,901,339
Class B Common Stock $.01 par value 2,260,954
PART I
Item 1 - Business
General
Audiovox Corporation, together with its operating subsidia-
ries (collectively, the "Company"), markets and supplies, under
its own name or trade names, a diverse line of aftermarket
products which include cellular telephones, both hand held
portables and vehicle installed, cellular telephone accessories,
automotive sound equipment and automotive accessories, both of
which are designed primarily for installation in cars, trucks and
vans after they have left the factory and consumer electronic
products.
The Company's products are sold through a worldwide distri-
bution network covering the United States, Canada and overseas.
Sales are made directly and through independent distributors to
cellular telephone accounts, cellular service providers, regional
Bell Operating Companies ("BOCs"), new car dealers, mass merchan-
disers, catalogue showrooms, original equipment manufacturers
("OEMs"), military Army and Air Force Exchange Systems ("AAFES"),
autosound specialists and retailers. The Company sells to
consumers from Company-owned retail sales and service locations
which generally operate under the name "Quintex", which also
receive activation commissions and residuals from certain cellu-
lar service providers.
The Company's products may be broadly grouped into three
major categories: cellular, which includes telephone products,
activation commissions and residual fees, automotive sound
equipment and automotive accessories. These categories represent
different product lines rather than separate reporting segments.
The Company was incorporated in Delaware on April 10, 1987,
as successor to the business of Audiovox Corp., a New York
corporation founded in 1960 (the "predecessor company") by John
J. Shalam, the Company's President, Chief Executive Officer and
controlling stockholder. Unless the context otherwise requires,
or as otherwise indicated, references herein to the "Company"
include the Company, its wholly-owned and majority-owned operat-
ing subsidiaries.
Trademarks
The Company markets products under several trademarks,
including Audiovox , Custom SPS , Prestige , Pursuit , Minivox ,
Minivox Lite , The Protector and Rampage . The Company believes
that these trademarks are recognized by customers and are there-
fore significant in marketing its products. Trademarks are
registered for a period of ten years and such registration is
renewable for subsequent ten-year periods.
Distribution and Marketing
Cellular and Non-Cellular Wholesale
The Company markets products on a wholesale basis to a
variety of customers through its direct sales force and independ-
ent sales representatives. During the fiscal year ended November
30, 1996, the Company sold its products to approximately 2,500
wholesale accounts, including the BOCs, other cellular carriers
and their respective agents, mass merchandise chain stores,
specialty installers, distributors and car dealers, OEMs and
AAFES.
The Company's five largest wholesale customers (excluding
joint ventures), who, in the aggregate, accounted for 29.4% of
the Company's net sales for the fiscal year ended November 30,
1996, are Bell Atlantic Mobile Systems, Airtouch Cellular, US
Cellular, Proton Corporation Sdn. Bhd. (Proton) and Nynex Mobile
Communications Company. Proton is an automobile manufacturer in
Malaysia. The other four are cellular carriers. None of these
customers individually accounted for more than 12.4% of the
Company's net sales for such period. In addition, the Company
also sells its non-cellular products to mass merchants such as
Walmart Stores, Inc., warehouse clubs including Price/Costco,
Inc. and OEMs such as Chrysler of Canada, Navistar International
Corporation, General Motors Corporation and BMW of North America.
The Company uses several techniques to promote its products
to wholesale customers, including trade and customer advertising,
attendance at trade shows and direct personal contact by Company
sales representatives. In addition, the Company typically
assists cellular carriers in the conduct of their marketing
campaigns (including the scripting of telemarketing presenta-
tions), conducts cooperative advertising campaigns, develops and
prints custom sales literature and conducts in-house training
programs for cellular carriers and their agents.
The Company believes that the use of such techniques, along
with the provision of warranty services and other support pro-
grams, enhances its strategy of providing value-added marketing
and, thus, permits the Company to increase Audiovox brand
awareness among wholesale customers while, at the same time,
promoting sales of the Company's products through to end users.
The Company's wholesale policy is to ship its products
within 24 hours of a requested shipment date from public ware-
houses in Norfolk, Virginia, Sparks, Nevada and Canada and from
leased facilities located in Hauppauge, New York and Los Angeles,
California.
Retail
As of November 30, 1996, the Company operated approximately
29 retail outlets and licensed its trade name to 11 additional
retail outlets in selected markets in the United States through
which it markets cellular telephones and related products to
retail customers under the names Audiovox , American Radio ,
Quintex and H & H Eastern Distributors ("H&H"). In addition to
Audiovox products, these outlets sell competitive products such
as Motorola and Nokia.
The Company's retail outlets typically generate revenue from
three sources: (i) sale of cellular telephones and related
products, (ii) activation commissions paid to the Company by
cellular telephone carriers when a customer initially subscribes
for cellular service and (iii) monthly residual fees. The amount
of the activation commissions paid by a cellular telephone
carrier is based upon various service plans and promotional
marketing programs offered by the particular cellular telephone
carrier. The monthly residual payment is based upon a percentage
of the customer's usage and is calculated based on the amount of
the cellular phone billings generated by the base of the custom-
ers activated by the Company on a particular cellular carrier's
system. Under the Company's 11 licensee relationships, the
licensee receives the majority of the activation commissions, and
the Company retains the majority of the residual fees. The
Company's agreements with cellular carriers provide for a reduc-
tion in, or elimination of, activation commissions in certain
circumstances if a cellular subscriber activated by the Company
deactivates service within a specified period. The Company
records an allowance to provide for the estimated liability for
return of activation commissions associated with such deactiva-
tions. See Note 1(l) of Notes to Consolidated Financial State-
ments. As a practical matter, the profitability of the Company's
retail operations is dependent on the Company maintaining agency
agreements with cellular carriers under which it receives activa-
tion commissions and residual fees.
The Company's relationships with the cellular carriers are
governed by contracts that, in the aggregate, are material to the
continued generation of revenue and profit for the Company.
Pursuant to applicable contracts with cellular carriers, each of
the Company's retail outlets functions as a non-exclusive agent
engaged to solicit and sell cellular telephone service in certain
geographic areas and, while such contract is in effect and for a
specified period thereafter (which typically ranges from three
months to one year), may not act as a representative or agent for
any other carrier or reseller in those areas or solicit cellular
or wireless communication network services of the kind provided
by the cellular carrier in the areas where the Company acts as an
agent. The Company's retail operation is free, at any time after
the restricted period, to pursue an agreement with another
carrier who services a particular geographic area. At present,
each geographic area is serviced by two cellular carriers.
As of November 30, 1996, the Company had agency contracts
with the following carriers in selected areas: Bell
Atlantic/NYNEX Mobile Systems, Inc., BellSouth Mobility, Inc.,
GTE Mobilnet of the Southeast, Inc., and Richmond Cellular
Telephone Company d/b/a Cellular One. Dependant upon the terms
of the specific carrier contracts, which typically range in
duration from one year to five years, the Company's retail
operation may receive a one-time activation commission and
periodic residual fees. These carrier contracts provide the
carrier with the right to unilaterally restructure or revise
activation commissions and residual fees payable to the Company,
and certain carriers have exercised such right from time-to-time.
Dependent upon the terms of the specific carrier contract, either
party may terminate the agreement, with cause, upon prior notice.
Typically, the Company's right to be paid residual fees ceases
upon termination of an agency contract.
Equity Investments
The Company has from time-to-time, at both the wholesale and
retail levels, established joint ventures to market its products
to a specific market segment or geographic area. In entering
into a joint venture, the Company seeks to join forces with an
established distributor with an existing customer base and
knowledge of the Company's products. The Company seeks to blend
its financial and product resources with these local operations
to expand their collective distribution and marketing capabili-
ties. The Company believes that such joint ventures provide a
more cost effective method of focusing on specialized markets.
The Company does not participate in the day-to-day management of
these joint ventures.
As of November 30, 1996, the Company had a 31.6% ownership
interest in TALK Corporation (TALK) which holds world-wide
distribution rights for product manufactured by Shintom Co., Ltd.
(Shintom). These products include cellular telephones, video
recorders and players and automotive sound products. TALK has
granted Audiovox exclusive distribution rights on all wireless
personal communication products for all countries except Japan,
China, Thailand, and several mid-eastern countries. Addition-
ally, the Company had a 50% non-controlling ownership in five
other companies: Protector Corporation (Protector) which acts as
a distributor of chemical protection treatments, Audiovox Spe-
cialty Markets Co., L.P. (ASMC), which acts as a distributor of
televisions and other automotive sound, security and accessory
products to specialized markets for RV's and van conversions,
Audiovox Pacific Pty., Limited (Audiovox Pacific) which distrib-
utes cellular telephones and automotive sound and security
products in Australia and New Zealand, G.L.M. Wireless Communica-
tions, Inc. (G.L.M.) which is in the cellular telephone, pager
and communications business and Quintex Communications West, LLC,
which is in the cellular telephone and communications business.
The Company's 80%-owned subsidiary, Audiovox Holdings (Malaysia)
Sdn. Bhd. (Audiovox Holdings), had a 30% ownership interest in
Avx Posse (Malaysia) Sdn. Bhd. (Posse) which monitors car security
commands through a satellite based system in Malaysia.
Customers
The Company had one customer, Bell Atlantic, that accounted
for 12.4% of the Company's net sales for fiscal 1996.
Suppliers
The Company purchases its cellular and non-cellular products
from manufacturers located in several Pacific Rim countries,
including Japan, China, Korea, Taiwan and Singapore, Europe and
in the United States. In selecting its vendors, the Company
considers quality, price, service, market conditions and reputation.
The Company maintains buying offices or inspection offices
in Taiwan, Korea and China to provide local supervision of
supplier performance with regard to, among other things, price
negotiation, delivery and quality control. The majority of the
products sourced through these foreign buying offices are non-cellular.
Since 1984, the principal supplier of the Company's wholesale
cellular telephones has been Toshiba Corporation
("Toshiba"), accounting for approximately 28%, 44% and 45% of the
total dollar amount of all product purchases by the Company,
during the fiscal years ended November 30, 1996, 1995 and 1994,
respectively. In 1994, Toshiba competed directly with the
Company in the United States by marketing cellular telephone
products through Toshiba's United States distribution subsidiary.
As of November 30, 1995, Toshiba announced it will no longer
distribute cellular telephone products through its subsidiary in
the United States. Toshiba continues to sell products to the
Company as an original equipment customer. In order to expand
its supply channels and diversify its cellular product line, the
Company now sources cellular equipment from other manufacturers
including, Hagenuk Telecom Gmbh. ("Hagenuk"), Dancall Telecom A/S
("Dancall") and TALK. Purchases from TALK accounted for approximately
26%, 20% and 7% of total inventory purchases for the years
ended November 30, 1996, 1995 and 1994, respectively. Purchases
of non-cellular products are made primarily from other overseas
suppliers including Hyundai Electronics Inc. ("Hyundai"), Namsung
Corporation ("Namsung") and Nutek Corporation ("Nutek"). There
are no agreements in effect that require manufacturers to supply
product to the Company. The Company considers its relations with
its suppliers to be good. In addition, the Company believes that
alternative sources of supply are currently available.
Competition
The Company's wholesale business is highly competitive in
all its product lines, each competing with a number of well-
established companies that manufacture and sell products similar
to those of the Company. Specifically, the cellular market place
is driven by current selling prices, which also affects the
carrying value of inventory on hand. Additionally, the Custom
SPS line competes against factory-supplied radios. Service and
price are the major competitive factors in all product lines.
The Company believes that it is a leading supplier to the cellular
market primarily as a result of the performance of its
products and the service provided by its distribution network.
The Company's retail business is also highly competitive on a
product basis. In addition, since the Company acts as an agent
for cellular service providers, these cellular service providers
must also compete in their own markets which are also highly
competitive. The Company's retail performance is, therefore,
also based on the carriers' ability to compete.
Employees
At November 30, 1996, the Company employed approximately
934 people.
Executive Officers of the Registrant
The executive officers of the registrant are listed below.
All officers of the Company are elected by the Board of Directors
to serve one-year terms. There are no family relationships among
officers, or any arrangement or understanding between any officer
and any other person pursuant to which the officer was selected.
Unless otherwise indicated, positions listed in the table have
been held for more than five years.
Name Age Current Position
John J. Shalam 63 President and Chief Executive
Officer and Director
Philip Christopher 48 Executive Vice President and
Director
Charles M. Stoehr 50 Senior Vice President, Chief
Financial Officer and Director
Patrick M. Lavelle 45 Senior Vice President and
Director
Chris L. Johnson 45 Vice President, Secretary
Ann M. Boutcher 46 Vice President and Director
Richard Maddia 38 Vice President and Director
John J. Shalam has served as President and Chief Executive
Officer and as a director of the Company since 1960. Mr. Shalam
also serves as president and is a director of most of the Company's
operating subsidiaries.
Philip Christopher, Executive Vice President of the Company,
has been with the Company since 1970 and has held his current
position since 1983. Prior thereto, he was Senior Vice President
of the Company. Mr. Christopher also has been a director of the
Company since 1973 and, in addition, serves as an officer and a
director of most of the Company's operating subsidiaries.
Charles M. Stoehr has been Chief Financial Officer of the
Company since 1979 and was elected Senior Vice President in 1990.
Mr. Stoehr has been a director of the Company since 1987. From
1979 through 1990, Mr. Stoehr was a Vice President of the Company.
Patrick M. Lavelle has been a Vice President of the Company
since 1982. In 1991, Mr. Lavelle was elected Senior Vice President,
with responsibility for marketing and selling the Company's
automotive accessory and automotive sound line of products. Mr.
Lavelle was elected to the Board of Directors in 1993.
Chris L. Johnson has been a Vice President of the Company
since 1986 and Secretary since 1980. Ms. Johnson has been
employed by the Company in various positions since 1968 and was a
director of the Company from 1987 to 1993.
Ann M. Boutcher has been a Vice President of the Company
since 1984. Ms. Boutcher's responsibilities include the development
and implementation of the Company's advertising, sales
promotion and public relations programs. Ms. Boutcher was
elected to the Board of Directors in 1995.
Richard Maddia has been a Vice President of the Company
since 1991. Mr. Maddia is responsible for the Company's Management
Information Systems for both the Company's distribution
network and financial reporting. Mr. Maddia was elected to the
Board of Directors in 1996.
Item 2 - Properties
As of November 30, 1996, the Company leased a total of
forty-three operating facilities located in thirteen states and
two Canadian provinces. These facilities serve as offices,
warehouses, distribution centers or retail locations. Additionally,
the Company utilizes approximately 117,000 square feet of
public warehouse facilities. Management believes that it has
sufficient, suitable operating facilities to meet the Company's
requirements.
Item 3 - Legal Proceedings
On February 10, 1997, the Company and the other defendants
in the case entitled Robert Verb, et al. v. Motorola, Inc.,
Audiovox Corporation, et al. filed their answer to Plaintiff's
Petition for Leave to Appeal. The Company believes that the
likelihood of the Court granting Plaintiff's motion is low. In
addition, the Company believes that its insurance coverage and
rights of recovery against manufacturers of its portable hand-
held cellular telephones relating to this case are sufficient to
cover any reasonably anticipated damages. The Company also
believes that there are meritorious defenses to the claims made
in this case.
On March 15, 1996 and April 4, 1996, Audiovox was served
with a complaint and an amended complaint, respectively, in an
action entitled Electronics Communications Corp. ("ECC") v.
Toshiba America Consumer Products, Inc. and Audiovox Corporation
in which plaintiff seeks injunctive relief and damages against
Toshiba and Audiovox. The damages against both defendants could
be an amount in excess of $16,000 arising out of alleged anti-trust
violations, tortious interference with contract and tortious interfer-
ence with prospective economic advantage or business relations and
monopoly, all arising out of the termination
of ECC's alleged distributorship arrangement with Toshiba.
Audiovox's motion to dismiss the complaint for failure to state a
federal cause of action and for lack of subject matter jurisdiction
was granted on August 12, 1996. Plaintiff has filed a
Notice of Appeal with the Second Circuit Court of Appeals.
In addition, the Company is currently, and has in the past
been, a party to other routine litigation incidental to its
business. The Company does not expect any pending litigation to
have a material adverse effect on its consolidated financial
position.
Item 4 - Submission of Matters to a Vote of Security Holders
A special meeting of the stockholders of Audiovox Corporation
(the "Company") was held on November 25, 1996 at the Company's offices,
150 Marcus Boulevard, Hauppauge, New York.
The matter presented to the meeting concerned the approval
of the issuance of up to 10,725,000 shares of Class A Common
Stock of the Company in exchange for its 6 1/4% Convertible
Subordinated Debentures due 2001. The Class A vote was as
follows: 4,340,254 for the proposal, 44,025 against and 22,365
abstentions. All of the Class B stockholders, representing
22,609,540 votes, voted in favor of the proposal.
Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
(In thousands, except share and per share data)
The Company's operations are conducted in a single business
segment encompassing three principal product lines: cellular,
automotive sound equipment and automotive security and accessory
equipment.
The Company's wholesale cellular operations generate revenue
from the sale of cellular telephones and accessories. The
Company's retail outlets typically generate revenue from three
sources: (i) the sale of cellular telephones and related products,
(ii) activation commissions paid to the Company by cellular
telephone carriers when a customer initially subscribes for
cellular service and (iii) monthly residual fees. The price at
which the Company's retail outlets sell cellular telephones is
often affected by the amount of the activation commission the
Company will receive in connection with such sale. The amount of
the activation commission paid by a cellular telephone carrier is
based upon various service plans and promotional marketing
programs offered by the particular cellular telephone carrier.
The monthly residual payment is based upon a percentage of the
customer's usage and is calculated based on the amount of the
cellular phone billings generated by the base of customers
activated by the Company on a particular cellular carrier's
system.
The Company's automotive sound product line includes stereo
cassette radios, compact disc players and changers, speakers and
amplifiers. The automotive security and accessory line consists
of automotive security products, such as alarm systems, and power
accessories, including cruise controls and power door locks.
Certain reclassifications have been made to the data for
periods prior to fiscal 1996 in order to conform to fiscal 1996
presentation. The net sales and percentage of net sales by
product line for the fiscal years ended November 30, 1996, 1995
and 1994 are reflected in the following table:
Years Ended November 30,
1996 1995 1994
Cellular product-
wholesale $349,655 58% $260,704 52% $237,566 49%
Cellular product-
retail 8,309 1 15,470 3 18,198 3
Activation
commissions 33,102 6 38,526 8 47,788 10
Residual fees 4,828 1 4,781 1 4,005 1
Total Cellular 395,894 66 319,481 64 307,557 63
Automotive sound
equipment 104,696 18 107,404 21 112,512 23
Automotive security
and accessory
equipment 93,625 16 73,207 15 64,040 13
Other 3,700 - 648 - 2,339 1
Total $597,915 100% $500,740 100% $486,448 100%
The following table sets forth for the periods indicated
certain statement of income (loss) data for the Company expressed
as a percentage of net sales:
Percentage of Net Sales
Year Ended November 30,
1996 1995 1994
Net sales:
Net product sales 93.7% 91.4% 89.4%
Cellular telephone activation
commissions 5.5 7.7 9.8
Cellular telephone residual fees 0.8 0.9 0.8
Net sales 100.0 100.0 100.0
Cost of sales (83.9) (85.9) (82.5)
Gross profit 16.1 14.1 17.5
Selling expense (6.7) (6.9) (6.7)
General and administrative expense (5.4) (7.2) (6.7)
Warehousing, assembly and repair
expense (1.8) (2.0) (1.9)
Total operating expenses (13.9) (16.1) (15.3)
Operating income (loss) 2.2 (2.0) 2.2
Interest expense (1.4) (1.9) (1.3)
Income of equity investments 0.1 0.6 0.8
Management fees - - 0.3
Gain on sale of equity investment 0.2 1.7 5.7
Gain on public offering equity
investment - - 2.2
Debt conversion expense (4.4) - -
Expenses related to issuance of
warrants - (0.6) -
Other expenses, net (0.1) (0.2) (0.3)
Income tax (expense) recovery (1.0) 0.6 (4.2)
Net income (loss) (4.4) (1.8) 5.4
Results of Operations
Fiscal 1996 Compared to Fiscal 1995
Net sales increased by approximately $97,175, or 19.4% for
fiscal 1996, compared to fiscal 1995. This result was primarily
attributable to increases in net sales from the cellular division
of approximately $76,413, or 23.9%, automotive security and
accessory equipment of approximately $20,418, or 27.9% and other
products, primarily home stereo systems of $3,052. These increases
were partially offset by a decrease in automotive sound
equipment of approximately $2,708, or 2.5%.
The improvement in net sales of cellular telephone products
was primarily attributable to an increase in unit sales. Net
sales of cellular products increased by approximately 857,000
units, or 70.9%, compared to fiscal 1995, primarily resulting
from an increase in sales of hand-held portable cellular tele-
phones and transportable cellular telephones, partially offset by
a decline in sales of installed mobile cellular telephones. The
average unit selling price declined approximately 23.7% vs. 1995
as production efficiencies and market competition continues to
reduce unit selling prices. The Company believes that the shift
from installed mobile cellular telephones to hand-held and
transportable cellular telephones is reflective of a desire by
consumers for increased flexibility in their use of cellular
telephones. Toward that end, the Company markets an accessory
package that permits its Minivox and Minivox Lite hand-held
cellular telephones to be used in an automobile on a hands-free
basis and to draw power from the automobile's electrical system
like an installed mobile cellular telephone.
Activation commissions decreased by approximately $5,424, or
14.1%, for fiscal 1996 compared to fiscal 1995. This decrease
was primarily attributable to fewer new cellular subscriber
activations and partially due to fewer retail outlets operated by
the Company. The number of activation commissions decreased
21.4% compared to fiscal 1995. This decrease in commission
revenue was offset by a 9.3% increase in average activation
commissions paid to the Company. Residual revenues on customer
usage increased by approximately $47, or 1.0%, for fiscal 1996,
compared to fiscal 1995, due primarily to the addition of new
subscribers to the Company's cumulative subscriber base, despite
a decrease in current year activations. A majority of the
residual income resides with the remaining operating retail
locations.
Net sales of automotive sound equipment decreased by approxi-
mately $2,708, or 2.5%, for fiscal 1996, compared to fiscal
1995. This decrease was attributable primarily to a decrease in
sales of products sold to mass merchandise chains and auto sound
sales to new car dealers. This decrease was partially offset by
increases in sales of sound products to private label customers.
Net sales of automotive security and accessory products increased
approximately $20,418, or 27.9%, for fiscal 1996, compared to
fiscal 1995, principally due to increases in sales of vehicle
security products, Protector Hardgoods and cruise controls. This
increase was partially offset by a reduction in net sales of AA
security products.
Gross margins increased to 16.1% in fiscal 1996 from 14.1%
in fiscal 1995. The 1995 gross margin included a $9,300 charge
for inventory written down to market at August 31, 1995. Cellular
gross margins were 13.2% compared to 9.8% in 1995. Despite a
23.7% decrease in average unit selling prices, the average gross
margin per unit increased 25.3%. The number of new subscriber
activations decreased 21.4% but was partially offset by a 9.3%
increase in average activation commissions earned by the Company.
Residuals increased 1.0% over last year. The Company believes
that the cellular market will continue to be a highly-competitive
and price-sensitive environment. Increased price competition
related to the Company's product could result in downward pressure
on the Company's gross margins if the Company is unable to
obtain competitively priced product from its suppliers or result
in adjustments to the carrying value of the Company's inventory.
Automotive sound margins were 19.9%, up from 17.5% in 1995.
Most product lines in the category experienced an increase and
there was a marked increase in the gross margin on international
sales. Automotive accessory margins decreased from 27.9% in 1995
to 24.5% in 1996. This decrease was primarily in the Prestige and
cruise control lines.
Total operating expenses increased approximately $2,837, or
3.5%, compared to last year. As a percentage to sales, total
operating expenses decreased to 13.9% during 1996 compared to
16.1% for 1995. Selling expenses increased approximately $5,544,
or 16.1%, over last year. Divisional marketing and advertising
increased approximately $8,256 compared to last year in addition
to travel and related expenses. These increases were partially
offset by decreases in salesmen's commissions, salesmen's salaries,
payroll taxes and employee benefits. General and administrative
expenses decreased approximately $3,708 during 1996. The
decreases were in occupancy costs, telephone and overseas buying
office expenses and were partially offset by increases in office
salaries, travel, payroll taxes, employee benefits and profes-
sional fees. Warehousing, assembly and repair expenses increased
approximately $1,001 compared to last year, predominately in
warehousing expenses and direct labor.
Management fees and related income and equity in income from
joint venture investments decreased by approximately $2,164 for
1996 compared to 1995 as detailed in the following table:
1996 1995
Equity Equity
Management Income Management Income
Fees (Loss) Total Fees (Loss) Total
CellStar - - - - $2,151 $2,151
ASMC - $ 948 $ 948 - 819 819
G.L.M. $ 100 - 100 $ 14 - 14
Pacific 22 (334) (312) 186 21 207
TALK - - - - (210) (210)
Quintex West 18 - 18 - - -
Posse 46 17 63 - - -
$ 186 $ 631 $ 817 $ 200 $2,781 $2,981
The decrease was primarily due to the Company's owning less
than 20% of CellStar for the entire fiscal year and, therefore,
not accounting for the investment on the equity method. During
1995, the Company owned more than 20% of CellStar until the third
quarter and, therefore, accounted for CellStar under the equity
method until then. Audiovox Pacific has experienced an overall
decline in gross margins, as the cellular market in Australia has
experienced the same competitive factors as those in the United
States.
Interest expense and bank charges decreased by $1,214, or
12.5%, compared to 1995 as a result of a decrease in interest
bearing debt. Other expenses decreased approximately $412
primarily due to the write-off of fixed assets in the retail group
during 1995 which did not recur in 1996. Costs associated with the
issuance of stock warrants for no monetary consideration to
certain holders of the Company's convertible subordinated deben-
tures also did not recur in 1996.
During the fourth quarter of 1996, the Company exchanged
$41,252 of its 6 1/4% subordinated debentures for 6,806,580 shares
of Class A Common Stock. This exchange resulted in a charge to
earnings of approximately $26,318 before income taxes. This charge
includes the loss on the exchange and the write-off of the remaining
debt issuance costs associated with the original issue of the
debentures.
Fiscal 1995 Compared to Fiscal 1994
Net sales increased by approximately $14,300, or 2.9%, for
fiscal 1995 compared to fiscal 1994. This result was primarily
attributable to increases in net sales from cellular telephone
products of approximately $11,900, or 3.9%, and automotive
security and accessory equipment of approximately $9,200, or 14.3%.
These increases were partially offset by a decline in net sales
attributable to automotive sound equipment of approximately
$5,100, or 4.5%.
The improvement in net sales of cellular telephone products
was primarily attributable to increased unit sales, partially
offset by a decrease in activation commissions. Net sales of
cellular telephones increased by approximately 382,000 units, or
46.3%, compared to fiscal 1994, primarily resulting from an
increase in sales of hand-held portable cellular telephones,
partially offset by a decline in sales of installed mobile and
transportable cellular telephones. The average unit selling price
declined approximately 23.4% vs. 1994 as production efficiencies
and market competition continues to reduce unit selling prices.
Activation commissions decreased by approximately $9,300, or
19.4%, for fiscal 1995 compared to fiscal 1994. This decrease was
primarily attributable to fewer new cellular subscriber activations
and partially due to the net reduction of 61 retail outlets
operated by the Company. The number of activation commissions
decreased 15.5% over fiscal 1994. This decrease in commission
revenue was further affected by a 4.7% decrease in average
activation commissions paid to the Company. Residual revenues on
customer usage increased by approximately $776, or 19.4%, for
fiscal 1995, compared to fiscal 1994, due primarily to the addition
of new subscribers to the Company's cumulative subscriber
base, despite a decrease in current year activations. A majority
of the residual income resides with the remaining 30 operating
retail locations.
During fiscal 1994, the Company experienced dramatic growth
in its Quintex type retail operations. This growth reflected the
large increases in cellular telephone sales experienced in the
domestic U.S.
During this period, the Company had favorable contracts with
several of the major cellular carriers. To capitalize on the
growth in the market during 1994, the Company embarked on an
expansion program to increase its retail presence in its designated
cellular markets. During fiscal 1995, beginning with the
first quarter, the market place in which the Quintex retail
operations conducted their business was adversely affected by
several trends. These trends include a slow down in the growth of
the cellular market, a desire by the cellular carriers to lower
their acquisition costs with lower payments to its individual
agents, increased competition by mass merchandisers and the
cellular carriers direct sales force, and the overall economic
conditions in the U.S. domestic market. As a result of these
trends, the Company decided to reduce its retail presence by
closing or disposing of all unprofitable Quintex locations through-
out the U.S. The result of this plan was a reduction of outlets
from 91 to 30. The cost of this closing was approximately $4,000
during fiscal 1995. Of the $4,000 charge to income, approximately
$1,500 is related to inventory write-offs, $1,800 is associated
with the lease buy-outs, employee severance pay, the write-off of
leasehold improvements and other fixed assets and $700 of miscellan-
eous charges including co-op advertising, deactivation allowances,
and anticipated bad debts. The impact of this Quintex
reduction program and the overall erosion of the retail market was
a decrease in revenue of approximately $21,000 for fiscal 1995.
This decrease was due to a decrease in revenues of cellular
and non-cellular products of approximately $12,500 and a decrease
in activation commission revenues of approximately $9,300, which
was partially offset by an increase in residuals of $776. During
the earlier part of the 1995 fiscal year, prior to the retail
program, the Company continued to open and close various retail
outlets. During the third quarter of 1995, the Company felt that
the erosion of the retail business in certain carrier regions
would not allow a return to profitability. It was then decided to
close all those locations which had not attained profitability.
This further accelerated the reduction of operating revenues and
income in the fourth quarter of fiscal 1995. The performance of
the retail locations closed during fiscal 1995, which were a part
of the retail reduction program and included in the total $21,000
decrease in revenues for the entire retail group, is as follows:
1995 1994 1993
Net sales $18,077 $25,663 $14,496
Operating income (loss) $(1,438) $ 1,159 $ 1,944
The Company believes that these closures will reduce revenue,
as well as operating expenses, primarily in occupancy costs,
salaries and commissions, during fiscal 1996. The Company will
continue to review its remaining locations and will close them if
they do not remain profitable.
Net sales of automotive sound equipment decreased by approxi-
mately $5,100, or 4.5%, for fiscal 1995, compared to fiscal 1994.
This decrease was attributable primarily to a decrease in sales of
products sold to mass merchandise chains, coupled with decreases
in auto sound sales to private label customers, new car dealers,
products used in the truck and agricultural vehicle markets and
several OEM accounts. Net sales of automotive security and
accessory products increased approximately $9,200, or 14.3%, for
fiscal 1995, compared to fiscal 1994, principally due to increases
in sales of vehicle security products and Protector Hardgoods.
This increase was partially offset by a reduction in net sales by
the Company of recreational vehicle equipment and accessories.
Gross margins declined to 14.1% in fiscal 1995 from 17.5% for
fiscal 1994 as a result of lower selling prices and the write-down
of the carrying value of inventory of $9,300 during the third
quarter of 1995. This reflects the overall erosion of gross
margins experienced primarily in the cellular product category
which resulted in the decision to mark down the carrying value of
the Company's cellular inventory. Of the $9,300 inventory adjust-
ment, $8,800 was in the cellular product category and $500 was in
the automotive sound product category in wholesale operations.
Cellular gross margins were 9.8% for fiscal 1995 compared to
14.8% for fiscal 1994. As previously mentioned, the gross margins
reflect an $8,800 charge for inventory write-downs. In addition,
the decline in cellular margins is a result of the continuing
decline of unit selling prices due to increased competition and
the introduction of lower-priced units. The portable cellular
telephone line accounted for the majority of this decrease. The
average unit selling price declined 23.4% during the 1995 fiscal
year. Likewise, gross profits on unit sales declined 26.7% for
the same period. The number of new subscriber activations declined
15.5% to 126,000 for 1995 compared to 1994. Average
commissions received by the Company from the cellular carriers per
activation also declined 4.7% to $305 for the twelve months ended
November 30, 1995 versus fiscal 1994. These decreases were
partially offset by an increase of 19.4% in residual payments
received by the Company compared to the same period in 1994. The
Company believes that the cellular market will continue to be a
highly-competitive, price-sensitive environment. Increased price
competition related to the Company's product could result in
downward pressure to the Company's gross margins if the Company is
unable to obtain competitively-priced product from its suppliers
or result in additional adjustments to the carrying value of the
Company's inventory.
Automotive sound margins decreased to 17.5% from 18.7% for
the fiscal year ended November 30, 1995 compared to fiscal 1994.
The decrease in automotive sound margins was primarily in the AV
product line, partially offset by increases in the Heavy Duty
Sound product lines. Automotive accessory margins decreased to
27.9% for 1995 from 29.1% in 1994. These decreases were primarily
in the AA security product line, partially offset by an increase
in margins in Prestige security products and Protector Hardgoods.
Total operating expenses increased by approximately $6,100,
or 8.1%, for the twelve months ended November 30, 1995 compared to
fiscal 1994. A major component of this increase was the third
quarter 1995 charge for the downsizing of the Company's retail
operations. Excluding this charge, operating overhead increased
$3,600 for fiscal 1995 compared to the same period of 1994.
Warehousing, assembly and repair expenses increased approxi-
mately $441, or 4.7 %, for 1995 compared to 1994. The increase
for the twelve months was primarily in field warehousing expenses
and travel. Selling expenses increased approximately $2,200, or
6.8%, compared to 1994. Advertising and other promotional market-
ing programs accounted for the majority of the increase in fiscal
1995. General and administrative expenses increased $3,400, or
10.5%, for 1995 compared to 1994. A provision for costs associated
with the down-sizing of the retail group was the primary
component of this increase. This provision included costs for the
buy-out of leases, the write-off of leasehold improvements, sever-
ance pay and other charges necessary to close and consolidate the
retail operations. Other increases were in professional fees, bad
debt and expenses associated with the Company's overseas buying
offices.
Management fees and related income and equity in income from
joint venture investments decreased by approximately $12,900 for
1995, as compared to 1994, principally due to CellStar Corporation
("CellStar") as detailed in the following table:
1995 1994
Equity Equity
Management Income Management Income
Fees (Loss) Total Fees (Loss) Total
CellStar - $ 2,151 $ 2,151 - $13,958 $13,958
ASMC - 819 819 - 932 932
G.L.M. $ 14 - 14 - - -
Pacific 186 21 207 $ 435 242 677
Protector - - - 1,108 - 1,108
TALK - (210) (210) - (819) (819)
$ 200 $ 2,781 $ 2,981 $1,543 $14,313 $15,856
During 1994, the Company sold shares of CellStar, resulting
in a pre-tax gain on sale of $27,800. Also in 1994, the Company
recorded a $10,600 gain on the carrying value of the investment
in CellStar after their public offering. This event did not
repeat in 1995. In addition, in 1995, the Company sold 1,500,000
shares of CellStar Common Stock. The gain on the sale of these
securities, before income taxes, was approximately $8,400. Since
the Company's ownership in CellStar is less than 20%, the Company
can no longer account for CellStar under the equity method of
accounting. The decrease in Audiovox Pacific is due to an
overall decline in gross profits, as the cellular market in
Australia experienced the same competitive factors which exist in
the United States. As a result, Audiovox Pacific recorded an
inventory write-down of $800 during 1995, 50% of which resulted
in the Company recording lower income from equity investments.
Interest expense and bank charges increased by $3,200, or
48.3%, compared to 1994 as a result of an increase in interest
costs from increased borrowing to support higher levels of
inventory purchases and asset financing. Other expenses increased
approximately $3,000 primarily due to $2,900 in costs
associated with the issuance of stock warrants for no monetary
consideration to certain holders of the Company's convertible
subordinated debentures. This one-time, non-cash charge to
earnings is offset by a $2,900 increase in paid in capital.
Therefore, there is no effect on total shareholders' equity.
For fiscal 1995, the Company recorded an income tax recovery
of approximately $2,800, compared to a provision of approximately
$20,300 for fiscal 1994. The effective income tax recovery rate
for 1995 was negatively impacted primarily due to the non-deductibility
of losses in the Company's Canadian operations which can
no longer be carried-back, the non-deductibility of costs
associated with the issuance of the stock warrants and undistributed
earnings from equity investments.
Liquidity and Capital Resources
The Company's cash position at November 30, 1996 was approxi-
mately $5,274 above the November 30, 1995 level. Operating
activities provided approximately $24,011, primarily from a
decrease in inventory and increases in accounts payable, accrued
expenses and income taxes payable. These favorable events were
partially offset by increases in accounts receivable, prepaid
expenses and other currents assets. Investing activities used
approximately $1,488, composed primarily of $2,805 for the
purchase of property, plant and equipment, partially offset by
$1,000 from the sale of an investment. Financing activities used
approximately $17,280, principally for the reduction of bor-
rowings under line of credit agreements and documentary acceptances.
On February 9, 1996, the Company's 10.8% Series AA and 11.0%
Series BB Convertible Debentures matured. The Company paid $4,362
to holders on that date. The remaining $1,100 was converted into
206,046 shares of Common Stock. On November 25, 1996, the Company
concluded an exchange of $41,252 of its 6 1/4% subordinated
debentures for 6,806,580 shares of the Company's Class A Common
Stock. Accounting charges to earnings for this transaction were
$29,206, including income taxes on the gain of the exchange of
the bonds. As a result of the exchange, stockholders' equity was
increased by $34,426.
On October 1, 1996, business formally conducted by the
Company's cellular division will be continued in a newly-formed,
wholly-owned subsidiary called Audiovox Communications Corp.
(ACC). Capitalization of this company was accomplished by
exchanging the assets of the former division, less their
respective liabilities, for all of the common stock.
On May 5, 1995, the Company entered into the Second Amended
and Restated Credit Agreement (the "Credit Agreement") which
superseded the first amendment in its entirety. During 1996, the
Credit Agreement was amended six times providing for various
changes to the terms. The terms as of November 30, 1996 are
summarized below.
Under the Credit Agreement, the Company may obtain credit
through direct borrowings and letters of credit. The obligations
of the Company under the Credit Agreement continue to be guaranteed
by certain of the Company's subsidiaries and is secured by
accounts receivable and inventory of the Company and those
subsidiaries. The obligations were secured at November 30, 1996
by a pledge agreement entered into by the Company for 2,125,000
shares of CellStar Common Stock and ten shares of ACC. Subsequent
to year end, the shares of CellStar common stock were released
from the Pledge Agreement. Availability of credit under the
Credit Agreement is a maximum aggregate amount of $85,000,
subject to certain conditions, and is based upon a formula taking
into account the amount and quality of its accounts receivable
and inventory. The Credit Agreement expires on February 28,
1998. As a result, bank obligations under the Credit Agreement
have been classified as long-term at November 30, 1996.
The Credit Agreement contains several covenants requiring,
among other things, minimum levels of pre-tax income and minimum
levels of net worth and working capital as follows: pre-tax
income of $4,000 per annum; pre-tax income of $2,500 for any two
consecutive fiscal quarters; the Company cannot have pre-tax
losses of more than $500 in any quarter; and the Company cannot
have pre-tax losses in any two consecutive quarters. In addition,
the Company must maintain a minimum level of total net worth of
$88,500, adjusted for 50% of the aggregate gains realized on
sales of capital stock. The Company must maintain a minimum
working capital of $125,000. Additionally, the agreement
includes restrictions and limitations on payments of dividends,
stock repurchases, and capital expenditures. At November 30,
1996, the Company was not in compliance with several financial
covenants which were waived. The violations pertained to the
limit on capital expenditures made in the fiscal year ended
November 30, 1996, the pre-tax net loss incurred in the fourth
quarter of fiscal year ended November 30, 1996, the pre-tax net
loss incurred in the two consecutive fiscal quarters ending
November 30, 1996 and the pre-tax loss for the fiscal year ended
November 30, 1996. As of the date of the issuance of the
financial statements, the Company's creditors waived their right
to call the bank obligations.
On May 9, 1995, the Company issued 1,668,875 warrants in a
private placement, with underlying shares which may be purchased
pursuant to an option on the Chief Executive Officer's personal
stock holdings. Each warrant is convertible into one share of
class A common stock at $7 1/8, subject to adjustment under
certain circumstances. On May 2, 1996 the Securities and
Exchange Commission declared effective a registration statement
for the warrants and the underlying common stock which the
Company had filed pursuant to a registration rights agreement
dated as of May 9, 1995, between the Company and the purchasers
of the warrants.
On March 15, 1994, the Company completed the sale of
$65,000, 6 1/4% convertible subordinated debentures due 2001.
The debentures are convertible into shares of the Company's Class
A Common Stock, par value $.01 per share at an initial conversion
price of $17.70 per share, subject to adjustment under certain
circumstances. A portion of the net proceeds of the offering was
used to repay existing indebtedness and a prepayment premium.
The Company granted to an investor in CellStar, in connec-
tion with the CellStar initial public offering, two options to
purchase up to an aggregate of 1,750,000 shares of CellStar
Common Stock owned by the Company, 1,500,000 of which was
exercised in full on June 1, 1995 at an exercise price of $11.50
per share. As a result, the Company recorded a gain, before
provision for income taxes, of $8,435. This reduced the Company's
ownership in CellStar below 20% and, as such, the Company will no
longer account for CellStar under the equity method of
accounting. Subsequent to November 30, 1996, the remaining
250,000 shares under the remaining option expired. The remaining
2,375,000 CellStar shares owned by the Company will be accounted
for as an investment in marketable equity securities. During the
first quarter of 1997, the Company sold 1,360,000 shares of its
CellStar shares for a gain of $14,743, net of income tax. The
Company continues to hold 1,015,000 shares of CellStar common
stock. As discussed in Note 6 to the consolidated financial
statements, Financial Accounting Standards Board (FASB) Statement
No. 115 (Statement 115) addresses the accounting and reporting
for investments in equity securities that have readily
determinable fair values and for all investments in debt
securities. Based upon the closing market price of CellStar on
November 30, 1996, the decrease to equity as required by
Statement 115 is $21,444, net of deferred taxes.
The Company believes that it has sufficient liquidity to
satisfy its anticipated working capital and capital expenditure
needs through November 30, 1996 and for the reasonable
foreseeable future.
Impact of Inflation and Currency Fluctuation
Inflation has not had and is not expected to have a
significant impact on the Company's financial position or
operating results. However, as the Company expands its
operations into Latin America and the Pacific Rim, the effects of
inflation in those areas, if any, could have growing significance
to the financial condition and results of the operations of the
Company.
Currency Fluctuations
While the prices that the Company pays for the products
purchased from its suppliers are principally denominated in
United States dollars, price negotiations depend in part on the
relationship between the foreign currency of the foreign
manufacturers and the United States dollar. This relationship is
dependent upon, among other things, market, trade and political
factors.
Seasonality
The Company typically experiences some seasonality. The
Company believes such seasonality could be attributable to
increased demand for its products during the Christmas season,
commencing October, for both wholesale and retail operations.
Recent Accounting Pronouncements
The FASB has issued Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed of" (Statement 121), in March 1995. Under Statement
121, the Company is required to assess the recoverability and
carrying amount of long-lived assets, certain identifiable
intangible assets and goodwill related to those assets, whenever
events or changes in circumstances indicate impairment. Statement
121 provides the methodology for the measurement of such
impairment to be recognized in the financial statements. The
provisions of Statement 121 are effective for fiscal years
beginning after December 15, 1995 and earlier adoption is
permitted. The provisions of Statement 121 must be implemented
no later than fiscal year 1997. The effect of initially applying
these provisions shall be reported in the period in which the
recognition criteria are first applied and met or, in the case of
long-lived assets held for disposal, as the cumulative effect of
a change in accounting principle at the date of adoption. The
Company believes that the implementation will not have a material
impact on the Company's consolidated financial position.
The FASB has issued Statement No. 123, "Accounting for
Stock-Based Compensation" (Statement 123), in October 1995.
Under Statement 123, the Company is required to choose either the
new fair value method or the current intrinsic value method of
accounting for its stock-based compensation arrangements. Using
the fair value method, the Company would measure the compensation
cost recognized in the financial statements based upon the
estimated fair value of the stock-based compensation arrangements
as of the date they are granted. The intrinsic value method,
under APB Opinion No. 25, "Accounting for Stock issued to
Employees", requires the recognition of compensation cost only if
such value does not exceed the market value of the underlying
stock on the measurement date. The Company will continue to
account for all employee stock-based compensation plans under APB
Opinion No. 25 and adopt the provisions of Statement 123, as
required, for all stock-based arrangements issued to non-employees.
The accounting requirements of Statement 123 are
effective for transactions entered into in fiscal years beginning
after December 15, 1995 and the disclosure, including pro forma,
requirements are effective for financial statements for fiscal
years beginning after December 15, 1995. Even though the Company
has opted not to change its method of accounting, Statement 123
requires pro forma disclosures of net income and earnings per
share computed as if the fair value method has been applied.
Statement 123 must be implemented no later than fiscal year 1997.
As of November 30, 1996, the Company does not have any such stock
compensation plans which would require the preparation of the pro
forma disclosure provisions of Statement 123.
Item 12 - Security Ownership of Certain Beneficial Owners and
Management
The information regarding this item is set forth under the
caption "Beneficial Ownership of Common Stock" of the Proxy
Statement and is incorporated herein by reference. The following
is a table of "Beneficial Ownership of Common Stock and Voting
Power". The Company knows of no arrangements which may result at
a subsequent date in a change of control of the Company.
BENEFICIAL OWNERSHIP OF COMMON STOCK AND VOTING POWER
Sole
Title of Voting Combined
Class or Percent Voting or Percent
Name and of Common Investment of Investment of
Address(1) Stock (2) Power Class Power (5) Class
John J. Shalam
150 Marcus Blvd. Class A 5,634,939(3) 30.0% 24,466,919 61.2%
Hauppauge, NY Class B 1,883,198 83.3%
Philip Christopher
150 Marcus Blvd. Class A 340,154(4) 2.0% 2,949,694 7.4%
Hauppauge, NY Class B 260,954 11.5%
All directors and
officers as a
group Class A 5,977,093 31.4% 27,418,613 68.8%
(10 persons) Class B 2,144,152 94.8%
(1) Cede & Co., nominee of Depository Trust Co., 55 Water Street, New
York, New York 10041, was the owner of 13,091,084 shares of Class A
and it is believed that none of such shares was beneficially owned.
(2) Includes as beneficially owned for each person listed those shares of
Class A Common Stock into which Class B Common Stock beneficially
owned by such person may be converted upon the exercise of the
conversion right of the Class B Common Stock.
(3) The amount shown excludes 2,202 and 116,802 shares of Class A and
Class B Common Stock, respectively, held in three irrevocable trusts
for the benefit of Marc, David and Ari, the children of John J.
Shalam, with respect to which shares Mr. Shalam disclaims any
beneficial ownership.
(4) Includes for Mr. Christopher, 75,000 shares issuable with respect to
options exercisable within 60 days under the Company's Stock Option
Plans.
(5) Holders of Class A Common Stock, voting separately as a class, are
entitled to elect 25% of the board of directors (provided that the
number of outstanding shares of Class A Common Stock is at least 10%
of the total number of outstanding in both classes of common stock);
holders of Class B Common Stock, voting separately as a class, are
entitled to elect the directors not elected by the holders of Class A
Common Stock.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
July 8, 1997 BY:s/John J. Shalam
John J. Shalam, President
and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Signature Title Date
s/John J. Shalam President; July 8, 1997
John J. Shalam Chief Executive Officer
(Principal Executive
Officer) and Director
s/Philip Christopher Executive Vice President July 8, 1997
Philip Christopher and Director
s/Charles M. Stoehr Senior Vice President, July 8, 1997
Charles M. Stoehr Chief Financial Officer
(Principal Financial and
Accounting Officer) and
Director
s/Patrick M. Lavelle Director July 8, 1997
Patrick M. Lavelle
s/Ann Boutcher Director July 8, 1997
Ann Boutcher
s/Gordon Tucker Director July 8, 1997
Gordon Tucker
s/Irving Halevy Director July 8, 1997
Irving Halevy
s/Richard Maddia Director July 8, 1997
Richard Maddia
s/Paul C. Kreuch, Jr. Director July 8, 1997
Paul C. Kreuch, Jr.
