VOXX International (VOXX) 10 Jan 242024 Q3 Earnings call transcript

Good day, ladies and gentlemen. Thank you for standing by. Welcome to VOXX International Third Quarter Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded.

I now hand the conference over to your speaker host, Mr. Wiener. Glenn ahead. go Please

both and www.voxxintl.com, Month VOXX week. we Results and an of presentation press Form morning, the investor found Third Relations updated we Investor filed Fiscal expect Quarter XX-Q, section and our issued Nine Conference website we this can welcome Good be International's in at to the XXXX our documents and Olivia. later Call. post Yesterday, to

currently out from Michael Executive is by Speaking and today Officer, XXXX Their the followed Pat will Stoehr, Officer. and will remarks President and Las Chief Lavelle, in Consumer management be Vice Chief Show; attending Financial answers. question be Vegas, who Electronics Senior

statements constitute associated to to detailed like The to period responsibility the webcast today, would statements like made and everyone forward-looking for today's for XX-K herein, XX, I no remind that based I'd ended assumes call factors information. our statements and such available except on currently forward-looking for the February update are XXXX. would that point you to As our Form on company historical with you contained business any risk in information were

call I for support, you continued turn Pat. like to and your now to the Thank over would

good Thank you, Glenn, morning, and everyone.

off year. wishing Let me start happy new a by you and healthy all

we over early, that said, of the Glenn projects more response the but few to positive, the It's in and I'm the and next days. our been yesterday. various very As out lineup expecting kicked-off with CES our development at same show I'm new and has team have

for as tough just been VOXX. has XXXX not everyone,

sales variable chain our the through challenges, and in primary we're challenging, to and internal turning term, page. improving had growing doing that margins and and has The expenses. those a both fixed and focusing short global and supply can gross And certainly to happy be remains industry the through we long both entire we're all economy navigate efficiencies, areas: protecting very challenging three Our lowering year.

the gross During Sales by improved the basis of and and two our with points, declined margins grew successful overall, X%. objectives during was more as little close But and out expenses X.X% down. roughly remarks, focus were Mike on quarter, up XX Consumer and as over operating we year. to Automotive segments, achieving year will into and expect by income a these three our provide the we financial operating what prior as fiscal XXXX. his same the move what's happening details we the I'll

lot X% start big the been they're Consumer of me and of that were sales with evidenced economic us report. to This off up let we the Premium and big -- on driver. the So as positive a very global bump with pay for is new environments. as decline have a investments since segment has a [ challenging as news made changes we this came to had lot the ]. We by over Consumer in growth COVID QX, the amidst from starting quarter Audio

number speaker in was in systems. systems good sales rapidly growing pressed. Audio and strong new APAC products hard Premium business the in be of market horizon had with our to the as Overall, quarter declined a on a categories. continues new lines well, Within driven Premium speaker North but home our Audio, wireless speakers, new America Europe and saw by market as growth our party of we QX, up

were The down is sales November, down were were XX%. Looking we XX%, down the and ] positive, sales while we down sales recent but [ down X%. NPD industry-wide our report takeaway were XX%, speaker approximately at are somewhat for Premium only AVR Audio year-to-date.

growth year we the will introduced categories those the into launch the next part the new that and fiscal domestically new help and especially 'XX. that early share, in future drive show of market our growing at are here We products and should

completely at on we launched quarter, new launched we a bar and as And developed on of which all our I a brands. display display, this under sound some be others CES, have have with of mentioned a to early year. audio last products number complete Here new had lineup of offering had

Our big by and have System combines first this It to product, this all-new our the Klipsch Onkyo's Klipsch's product This Onkyo. do announcement is the Sound officially that comes for as was hopes high market Flexus we with customers. technology. the Acoustics powered year, electronic

offset our the areas. the helped about growth series, It is time market done our has in are but was in calls categories which in competitive, is and also hottest in the it talked I new speakers for open. holiday other speakers, Party September has introduced Gig on the of weakness and prior party season, one industry.

products launch the have in slated great coming We for months.

perfecting speakers, we portable that one Max that at CES, be that new deliver Klipsch unveiled [ is GiG first-party heritage speaker will Klipsch's with product since Here are These with the XXXX. top-of-the-line been GiG our series, powerful, sound. ], Klipsch legendary, technology the we've products horn-loaded introduced

allows highlight and Another the biggest Detroit, the three Bluetooth our Detroit being the and with Klipsch the We models, premier City Klipsch Music unveiled in speakers. the model Klipsch Austin, the portable of compatible launch create which feature was once the new new broadcast XXX Klipsch Nashville to City Klipsch Klipsch to Music listening series. this mode, through to experience up along our immersive the In models, fully series, you connect wirelessly at Bluetooth. other a speakers with innovative

and have into in XXXX We Premium Audio XXXX. strong moving lineup

Panasonic America flagship XXXX is jointly Automotive and our proprietary announced The speakers the The between Monday car with program titanium had truck. all-new booth Panasonic with surround It a and DJX the XX premium and set Automotive audio we've our year has and later last INFINITI that to here EV debut XD some featured Panasonic Panasonic. powered respect news processing. to the this to system we big premier tweeters, on also speaker And number reference Klipsch on INFINITI partnership Company companies. Klipsch, announced the RAM Panasonic years. adds feature subwoofer, vehicle QXXX will of and specifically Dodge at in system by for our the CES collaboration Monday, sound that on high-performance is being Systems spring. a designed roof-mounted of This

the for As aid sales RCA We expect approximately essentially launched for other with of other year. have up some term and other the group We softness hearing strong you launch with accessory big expect RCA. categories. we customer expand help combat sales new diverse under products share this in to products CE newer to near our aids hearing flat CES with our four category. see and last new presence while categories between recently A growth growth saw a we environment, were launched the Year-to-date, some to sales due CE some this. of products, are the in XX%. overall And puts our in to taste base, at in

connects a HDMI and cables. brand, the under to which devices new wireless streaming We centers enables content without Turk Signal unveiled also TVs

AR As well, we had additional Turk other brands. products RCA, under and our

QX Moving our We our as some in almost challenges cut was of business the UAW in on Automotive. OEM strike. as to the impact and customers had half felt we

forecast, were not either shut plans base always, we met our or down. As customer when impacted completely lines which were production obviously on

to behind now begin us, normalize. strike to business the the we see Automotive With expect

have be awarded, contracts position we that growth. been With we a should in the of

highs, the prices However, at moves to slowing date anticipate and Fed's we on car with the all-time near-term general economy softness. some based

XX%, the were sales with in Automotive with the I quarter, rear-seat for and -- the in miss mentioned. infotainment, Business sales with strike our just are During the both down awarded. OEM And programs programs in Ford were to Nissan sales as down the OEM, which the primarily biggest business. due previously were also given and UAW Stellantis up new truck heavy-duty market slightly down. volume of lighting VSM

of but are our chain OEM and two, been and with all a in issues business higher mitigating has lot and We production the margins supply we of past costs us, challenging, it we year front have where can. of over improving or the

Our and lower dealers, most aftermarket at and economy $X.X sales new up down inventories with general impacted was some down car others business down. to categories, approximately across due slow million,

on are the as give us will years sales value into XX.X%, QX follow, For conditions, strike about behind off awarded based some creation move current that the is have the loosening and the opportunities been we on, OEM with And opportunities business the going Automotive that we're on in though, for the again, be programs significant build to and year, the which we've we up that new through our 'XX and pipeline. us. fiscal to the segment ones future side

than for in sales less to implementation. in low the came anticipated, mostly As biometrics, due

should see some quarter, It assuming in testing, I still in during previously improvements mentioned of all QX terms more in had experienced But has growth as projects All XXXX. rollouts. Nothing planned, planning. we in changed. discussions nice and We motion. the those was the little progression very that of and sequential are

with care report the service dealerships and to more financial comments have more coming we to My hope and companies, as remain: projects from quarters governments, programs in health companies, QX build. these continue car

sales up, expenses. the our we but were remained QX, in made resulting down our improvements margins To income lower sum gross in and with business, it operating to flat better

decent in impacts we diligent very a what's season amid well. to but at rates customers may QX going almost the be subsidies of is card as now. next calendar not And we going from happening expect our highs, economy consumers, months debt and believe over. As to few pandemic to first soft, After Government challenges, only 'XX, half the all feel holiday costs. of that Look slowing. into be we we therefore, and the all-time we're are the tight. look managing high. Interest our it's Credit these continue in is be

and VOXX. should to the are the be Consumer offset and products, and new good fourth products given in the this get these same economy, that taken some steps further especially The stimulating that cutting increase Margin the to for those the within should and conditions launching quarter underway throughout segment the materialize consumers for start year. and also place rates programs of will launch and that Fed softness should the also of in reduce help year. new overhead have next economic However,

back We we're in constant communication our our and looking our get of aspects inventory are to managing profitability. to tightly, We're business all with at customers.

questions. Michael? thank I'd then the to then it I'll over up open call that, for like Mike, And to and With we'll turn you.

X-month good primarily our respect Pat, third morning, cover to sheet, comments few Thanks, first, everyone. but and balance a quarter. and with the results I'll

points of net 'XX expense X.X%, basis by X.X%. by million, of fiscal income million. mentioned, margins operating in Pat approximately fiscal income Net tax million. $X declined to grew million sales gross a to fiscal quarters attributable both and $XXX,XXX. due benefit As year down $X.X XXXX was third XX and principally operating $X.X the $X.X for expenses were resulted to period which compared is VOXX an prior income in declined This recorded This

in was variance We million expense. of Additional of comparable in prior $XX,XXX total total -- other reported other income the period. period other expense and income versus $X.X

Additionally, $X.X was EBITDA million to was $X EBITDA compared million $X.X million and to adjusted compared $X million.

ended product product by aftermarket comparisons, sales sales period $X.X segment down or sales Biometric Premium XX, CE sales million $XX.X and X.X%. other segment million, Audio declined were We X-month Within $XX.X the down numbers million. million. million, all down sales and $XX.X approximately were sales of up $XXX.X $XX.X by down decline November for the $XX.X OEM $XXX,XXX. XX, of million product for million sales Consumer million sales product Automotive and $XX.X XXXX, X-month As are reported November a with with XXXX. this, down

for year, in the continue QX some remarks. with to see and pressure we'll down Pat's are Sales consistent

up customer Our in some products. the and and strike more in with impacted the lines is softness. business with balcony the our was and we're see Those production we're year Automotive we'll wireless products, consumer held CE tight, speakers to Audio other products products turn hearing and but Premium aids, coming hoping solar quarters. and power normalization new this have economic accessory starting helping well Retail corner by

year-to-date. and up We to improve continue up basis basis were points points XXX margins, XX steps sequentially gross to our which take

Over For price margins taken as to costs. points points. at XX.X% with to manufacturing compared to our with expect supply XX.X% of and margins X-month and period segment lower time, the in improve the down XX Consumer basis Automotive Automotive we've other Mexico comparisons, we enhance margins and segment increases relocation steps chain margins up came to basis gross XX

and to again, production of catch margins maintain customer continue need new And mix segment to drive programs. improvements However, depending should we up. sequentially. products continue help course, if product Consumer to volume improve on we and

operating Total expenses.

compared as X.X%. million X-month $XXX $X.X were comparison the For or of to million million, $XXX.X an improvement

$X.X to ongoing expenses, operating to further Excluding operations by or of managing acquisition at our tightly softness. in and restructuring remove We're and economic to aspects costs, costs light X.X%. cash. of lower overhead our are improved all nonessential looking look continuing inventory million and our total We're expenses the

the of approximately $X.X costs approximately Selling We related in expenses in of X-month year-to-date. expenses $XXX,XXX restructuring an X.X%. XXXX X.X%, costs $XXX,XXX relocation restructuring and million, $XXX,XXX, of an X.X% our fiscal million declined and prior declined technical This improvement $X.X and year. and to of $X.X G&A versus compares XXXX acquisition to programs -- fiscal declined restructuring by approximately manufacturing costs million, approximately an period. had engineering support improvement expenses of improvement of

fiscal million. to EBITDA loss in fiscal [ EBITDA of XXXX loss million $XX.X of EBITDA loss million. EBITDA loss adjusted $XX.X an adjusted an X-month million, due million $X.X million reported was to to $XX.X lower compares $X.X XXXX a attributable comparable $X.X of of operating and volume. of This $X.X and to a for Net principally to ]. loss period compared was operating million, We loss compared was net VOXX of sales million X-month an $X an period

Moving the sheet. balance on to

of of February fiscal Cash quarter our cash $XX.X XX, the had As year-end equivalents fiscal XXXX our of cash August XXXX we stood November end at on million $X.X which second to ended XX. cash at compares and as million $X.X XX. of equivalents million, and

volume million receivable accounts in holiday higher as Our season. $X.X by we're the increased

upcoming, million our $XX.X as Consumer product all inventory months have on by We the hand are X and that inventory underway through, given the segment. to we the and still declined move especially through on for moving Our focused lines. in we're launches

As and decline quarterly fourth to to as inventories the I noted we our during call, quarters. move last through continue we first expect

was million $XX million our increase $XX.X with line, to decline and as stood joint borrowings issuance our Florida $XXX,XXX of mortgage as as partially XX. to increase credit domestic a part the payable net $XX.X $XX.X February February million venture. in as a our debt million of Total debt at $X.X compared Total XX. long-term million to of The costs to shareholder $XX.X owed of in $XXX,XXX loan, of a our relates to million debt, by offset associated compared decline on Sharp the amount as

as borrowings. the the in This to increase during the the receivables sales noted, and relates As total This our debt than be is typical increase case. collected in increased quarter third will our normally during fourth quarter. the

we'll the be During our credit quarter, announced to settlement, the facility earlier this month. fourth arbitration using final support was which

entered with today, settlement As XX. effective of release a with Seaguard agreement reported, January and date into we an mutual

XX will was $XX We total, of payment in have agreed December a million to of million final $XX Seaguard which $XX payment already on made million today. of and pay the be

forward loans continue [ happy to mount. stop is which as move business to accruing While focus interest fees, well and ], it as the shareholders we interest our with our best legal and and our we're not feel on

in have, the fund With we place, we the and business forward. will be moving relationships capital have and the sufficient made, availability our cash to payment working banking

conditions Of hopeful course, rather can and get that profitability. we're generation back later, and flow sooner improve than to we cash market

now we're for call questions. to Operator, ready the open

Thank Mike. you,

time. queue call there I'll over And [ Instructions] Mr. questions back Pat to Lavelle. happen turn no this in be the ] at to [Operator the

been lot want for growth, to has you. and the of this we the have forward I the products key scheduled new product with taking XXXX to I Thank as Okay. our new to to next and a year. you enthusiasm lifeline look for us morning. join time thank always

have a you, and thank that, day. great with So

Ladies Thank conclude conference that you participation. for today. for gentlemen, does and your

disconnect. now may You