Audiovox Corporation Reports Fiscal 2010 First Quarter Results

HAUPPAUGE, N.Y., July 10 /PRNewswire-FirstCall/ -- Audiovox Corporation
(Nasdaq: VOXX). Audiovox Corporation today announced results for its fiscal
2010 first quarter ended May 31, 2009.

Net sales for the fiscal 2010 first quarter were $119.8 million compared to
net sales of $144.6 million reported in the prior year period, a decrease of
17.1%.

Patrick Lavelle, President and CEO stated, "While our sales were off 17.1%
compared to the first quarter last year, our margins have increased and our
overhead is down significantly. Despite lower sales, we managed to post a
modest profit in the first quarter as a direct result of the cost reduction
and margin improvement plans instituted last year."

Electronics sales, which include both mobile and consumer electronics, were
$79.0 million for the fiscal 2010 first quarter, a decrease of 30.5% compared
to $113.7 million reported in the fiscal 2009 first quarter. This decline is
primarily due to the decrease in sales generated from consumer electronic
products as a result of the Company's exit from product categories including
large flat screen TV's, portable navigation and GMRS, as well as lower sales
of mobile electronics products related to the continued turmoil in the
automotive industry. Customer and vendor bankruptcies, the weak economy and
lack of credit available to customers also adversely impacted sales during the
fiscal 2010 first quarter. Offsetting these declines were sales increases in
the satellite radio category and in select consumer electronics product lines.
As a percentage of net sales, Electronics represented 65.9% of net sales in
the fiscal 2010 first quarter compared to 78.7% in the comparable fiscal year
period.

Accessories sales for the fiscal 2010 first quarter were $40.8 million, an
increase of 32.2% as compared to $30.9 million reported in the comparable
fiscal year period. This increase is due primarily to the addition of new
customers, new products and higher sales driven by the changeover from analog
to digital TV, which favorably impacted digital antenna sales. As a
percentage of net sales, Accessories represented 34.1% and 21.3% of net sales
for the periods ended May 31, 2009 and May 31, 2008, respectively.

Gross margins increased by 350 basis points from 15.6% in the fiscal 2009
first quarter to 19.1% in the fiscal 2010 first quarter. Gross margins were
favorably impacted by increased margins in the consumer group as a result of a
change in product mix with a shift towards the RCA product brands, and higher
margins in the accessory group as a result of new products added during the
quarter. Offsetting these increases were declines in the Company's mobile
group margin, due to the state of the automotive market and due to higher
sales in the satellite radio category, which carry lower margins compared to
other product lines. Additionally, included in fiscal 2009 first quarter
results was a $2.9 million inventory mark-down of portable navigation
products, a line which was discontinued last year.

The Company reported operating expenses of $22.7 million for the fiscal 2010
first quarter, a decrease of $7.7 million or 25.4% compared to $30.4 million
reported in the comparable fiscal year period. As a percentage of net sales,
operating expenses decreased to 18.9% for the three months ended May 31, 2009,
from 21.0% in the prior year period. The decrease in operating expenses was
primarily due to the overhead reduction program and cost containment efforts
instituted in the second half of fiscal 2009.

Pre-tax income from continuing operations in the fiscal 2010 first quarter was
approximately $0.8 million compared to a pre-tax loss from continuing
operations of $7.2 million in the comparable year-ago period. Net income for
the period ended May 31, 2009 was $0.5 million or earnings per diluted share
of $0.02 compared to a net loss of $5.2 million or a loss per diluted share of
$0.23 in the three months ended May 31, 2008.

Lavelle concluded, "I believe we are taking the necessary steps to operate our
business profitably in this climate and I expect to see sequential sales
improvements in the second and third quarters. We also have a number of new
mobile programs that will launch in the fall that should help offset weakness
in the automotive sector. We believe we're well positioned to grow our
business in the years ahead and with over $62 million in cash, have the
financial resources to execute on our strategy and take advantage of M&A
opportunities as they arise. I, along with management and the Board remain
committed to enhancing shareholder value and believe the steps we have and are
taking will position us well for the future."

Conference Call Information
The Company will be hosting its conference call on Monday, July 13, 2009 at
10:00 a.m. ET. Interested parties can participate by visiting
www.audiovox.com, and clicking on the webcast in the Investor Relations
section or via teleconference (toll-free number: 866-713-8567; international
number: 617-597-5326; pass code: 90333962). For those who will be unable to
participate, a replay will be available approximately one hour after the call
has been completed and will last for one week thereafter (replay number:
888-286-8010; international replay number: 617-801-6888; pass code: 31262355).

About Audiovox
Audiovox (Nasdaq: VOXX) is a recognized leader in the marketing of automotive
entertainment, vehicle security and remote start systems, consumer electronics
products and consumer electronics accessories. The company is number one in
mobile video and places in the top ten of almost every category that it sells.
Among the lines marketed by Audiovox are its mobile electronics products
including mobile video systems, auto sound systems including satellite radio,
vehicle security and remote start systems; consumer electronics products such
as MP3 players, digital camcorders, DVRs, clock radios, portable DVD players,
extended range two-way radios, multimedia products like digital picture frames
and home and portable stereos; consumer electronics accessories such as
indoor/outdoor antennas, connectivity products, headphones, speakers, wireless
solutions, remote controls, power & surge protectors and media cleaning &
storage devices; Energizer-branded products for rechargeable batteries and
battery packs for camcorders, cordless phones, digital cameras and DVD
players, as well as for power supply systems, automatic voltage regulators and
surge protectors. The company markets its products through an extensive
distribution network that includes power retailers, 12-volt specialists, mass
merchandisers and an OE sales group. The company markets products under the
Audiovox, RCA, Jensen, Acoustic Research, Energizer, Advent, Code Alarm, TERK,
Prestige and SURFACE brands. For additional information, visit our Web site at
www.audiovox.com.

Safe Harbor Statement
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, further deterioration in the global economy; 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 and accessories 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 year ended February 28,
2009.

Contact: Glenn Wiener, GW Communications
Tel: 212-786-6011 / Email: gwiener@GWCco.com

- Tables Attached -

Audiovox Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share data)

May 31, February 28,
2009 2009
Assets unaudited

Current assets:
Cash and cash equivalents $62,327 $69,504
Accounts receivable, net 108,096 104,896
Inventory 118,751 125,301
Receivables from vendors 23,801 12,195
Prepaid expenses and other current assets 16,412 17,973
Deferred income taxes 397 354
Total current assets 329,784 330,223

Investment securities 8,426 7,744
Equity investments 13,513 13,118
Property, plant and equipment, net 20,198 19,903
Intangible assets 87,908 88,524
Deferred income taxes 254 221
Other assets 1,832 1,563
Total assets $461,915 $461,296

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable $40,200 $41,796
Accrued expenses and other current liabilities 26,800 32,575
Income taxes payable 2,657 2,665
Accrued sales incentives 11,612 7,917
Deferred income taxes 1,459 1,459
Bank obligations 2,233 1,467
Current portion of long-term debt 1,409 1,264
Total current liabilities 86,370 89,143

Long-term debt 5,980 5,896
Capital lease obligation 5,511 5,531
Deferred compensation 3,113 2,559
Other tax liabilities 2,572 2,572
Deferred tax liabilities 5,042 4,657
Other long term liabilities (see Note 3 of
Annual Report) 9,665 10,436
Total liabilities 118,253 120,794

Commitments and contingencies

Stockholders' equity:
Series preferred stock, $.01 par value;
1,500,000 shares authorized, no shares issued
or outstanding - -
Common stock:
Class A, $.01 par value; 60,000,000 shares
authorized, 22,424,212 shares issued and
20,604,460 outstanding at May 31, 2009 and
February 28, 2009, respectively 224 224
Class B convertible, $.01 par value; 10,000,000
shares authorized, 2,260,954 shares issued and
outstanding 22 22
Paid-in capital 274,464 274,464
Retained earnings 91,986 91,513
Accumulated other comprehensive loss (4,638) (7,325)
Treasury stock, at cost, 1,819,772 shares of
Class A common stock at May 31, 2009 and
February 28, 2009, respectively (18,396) (18,396)
Total stockholders' equity 343,662 340,502
Total liabilities and stockholders' equity $461,915 $461,296

Audiovox Corporation and Subsidiaries
Consolidated Statements of Operations
For the Three months ended May 31, 2009 and 2008
(In thousands, except share and per share data)
(unaudited)

2009 2008

Net sales $119,806 $144,583
Cost of sales 96,882 122,068
Gross profit 22,924 22,515

Operating expenses:
Selling 6,959 9,951
General and administrative 13,661 17,649
Engineering and technical support 2,072 2,804
Total operating expenses 22,692 30,404

Operating income (loss) 232 (7,889)

Other income (expense):
Interest and bank charges (319) (476)
Equity in income of equity investees 395 900
Other, net 448 296
Total other income 524 720

Income (loss) before income taxes 756 (7,169)
Income tax expense (benefit) 283 (1,946)
Net income (loss) $473 ($5,223)

Net income (loss) per common share (basic) $0.02 ($0.23)

Net income (loss) per common share (diluted) $0.02 ($0.23)

Weighted-average common shares outstanding
(basic) 22,865,394 22,854,614
Weighted-average common shares outstanding
(diluted) 22,865,394 22,854,614

SOURCE Audiovox Corporation

Glenn Wiener, GW Communications, +1-212-786-6011, gwiener@GWCco.com