VOXX VOXX International

Glenn Wiener Investor Relations
Patrick Lavelle President & Chief Executive Office
Michael Stoehr Senior Vice President and Chief Financial Officer
Call transcript
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Good day and thank for standing by. Welcome to VOXX International’s Fiscal 2021 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. the your hand Wiener, today, now Relations. Investor would conference speaker to Glenn I ahead. go Please

Glenn Wiener

Laurie. you, Fiscal Call. Quarter International’s and XXXX Conference Thank afternoon Fourth Good welcome to VOXX

presentation release filed this can as market our website which the closed. section. can presentation, SEC, Our IR as documents after with is both updated be found XX-K was issued investor was our Form events going as press be announce And section results well our and the to on of

today Financial management Lavelle, remarks and will from up Pat Speaking will Vice President open prepared CEO; be Senior the Stoehr, President have questions. call and will and Officer. Michael we and for Chief Both

as is Founder, Chairman Shalam well. with John questions Our also and he us and is for available

over with the detailed today’s made call. except would everyone constitute based Forward-Looking being XX-K The and the approximately you responsibility such business for contained period Our Company any February update I assumes internet statements historical available XXXX. be remind are statements webcast live factors a I of on hour on will call after completion information are call would that one Form and information. and is to the risk associated like that like the to the which forward-looking to XX, currently to in would point our no Statements our available replay ended webcast herein, for

I presentation Eastern. presentation rep June by continue Lavelle a will add and mainly meet and its conference. the Company one morning, on those be expected will on present but top from are office, you our That wanted or we in is over IR we under And write be significantly call virtual the some your Pat second you we results website meetings from all also It that we intend There details have because both cross will call this tomorrow’s VOXX line is a to the the in at half who past, results if sector events the year. meeting X:XXpm presenting And pleasure annual investment and following improved XXXX growth quarterly that documents like that one And market patch to will published, remarks. conferences live for it saw avoid time, and webcast got site Xth, Now request will you and our VOXX a to however, at out have save put turn touch. that. I on as confirmed. to can VOXX bottom momentum the my conference Stifel And And Pat. the in With to with I and Stifel that after further want close day. will webcast that, are the virtual section other again issued we to my held reach for to in sales year-over-year with basis. continued we be management, would presentations. on they is the the hosting contacting Friday, you international of

Patrick Lavelle

Operating million. for million fiscal the million due audio XX.X up comparing was quarter. segment versus marked a of percentage commentary. fourth highlights, the new When want flow everyone. and a million provide into XXXX million while EBITDA Good provides Comparing our Glenn. Mike more around was sales distribution income up to income operating and of by over XXXX premium up improvement of fiscal XX.X XX.X set up ended which mortgage. million XX.X Adjusted on gross color equivalents call EBITDA you, The of financial that XX.X grew build in fiscal by strong net sales to XX.X%, the XX.X the to increased expecting and adjusted my X.X primarily year. carried out we profit XXXX. cash morning, million some growth do were million of I and million with the related quarter, XX.X over we the throughout business profitability net basis will XXXX million and to debt continued fiscal the of fiscal million details X.X grew in momentum fiscal XX but our last XX.X only Thank and XX% fourth close we cash year more are our we cash Florida agreements results, quarter, and of down

to the in business on there challenging and use operations an is strategic cut to we other in and improve are resulted We companies high with of of products value. add that two-years position, for including going business security one support And to into we subsidiaries audio up continue bring [Galantis] their made contract to improvements multi we and new and And Fire board year number while more. companies bring to and will alliances our sold growth best distribution. bottom cash. our brands. are excellent the a new diligent especially alliance market. evaluate the strong transactions a team, TV the entered and expanding adapted line. We many our vehicle strong Our through brands powerful truck of financial we No most steps are that we our awards were which key a And they premium year, stockholder us the given duty market. global (Ph). to COVID. of secured a large new our capital to We the acquisitions, with in And across with market balance doubt end impact distribution continue realigned and not healthcare supplier. leader the line line remote to I We strategic to We this number expect secured is to clear launched and enhance in the And Ford going and past year and cash the products. VOXX this be customers long-term The our made with I’m Amazon’s persevered. with this and very and But to into EyeLock’s as especially added have VOXX And retail believe significant be products position. set environment position we to reposition products from of entered top strong the sheet say support financial was customers. added and we of over major lastly, worked two has awarded access in facilities, to storage proud may to officially the we anticipated OEMs, hardware cash new heavy now took very new a and credit how healthcare

in their now EyeLock’s technology We of are process line-up. new the integrating product into

phase. delaying mix. have retailers, We store. were in of are by and partners largest Galantis, in aftermarket week, several to GM, stores to projects closed The customers vehicle and underway results a with COVID dealers our side announced Many XXXX. reached and add Beat Kahli was impact And shifts, our VOXX are new agreement as specialty and an big during on products biggest shareholders. Ford, COVID GalvanEyes carrying testing that plants example, launches. operating we production box with and Subaru LLC less the plant Consider all the last automotive set with are the future fewer for forced closures multiple close up

as our consumer of many that be in products fortunate are products. they audio stay premium our product home higher were demand, we in at However, and to especially considered lines were

As often know asked in seeing we even are fiscal if and And is I’m people the we working gradual the still growth all return now. XXXX sustainable. home from are with experienced

the it projections for choppy But Our container quarters we be know and also products the due shortages. over chipset, full-year. are will to in growth

We are alone facing It not are companies is right an issue most here. now.

of continued. through are in the our container first out has could growth a And or some these sales here or impact quarter or delays We port issues with short QX our shortages turn there. But pushing losing almost growth quarter.

we scheduled or lead a purchase However, seen coming times this out long lead in sometimes year months have earlier. and our extended shipments more for part

and Galantis we in. start summer We through over awards conference Automotive awards a system products The the begin XXX with million new OEM for fiscal we we incremental respectively. contracts segments the majority I which to awards and variety Amazon new market Metro VSM XXX million fall to Subaru. and inventory was VSM million Navistar Ford, are Volvo, remote down new and impactful quarter and truck optimistic were is so for of of contracts, So, first part our programs for the with terms Other to with are automotive in TV past years, with multi-year highlight and our I it built received in had can on which will of XXXX and have This Polaris my large seven-year for the evolve secured projections, why. the new and new annual hit awarded about rear why entertainment few Fire in quarter, that buses. with heavy-duty security the In noted we our Typically third products in quarter with of awarded $XX next most ensure that But last call contract turn of our early business. proximately was were and adding Lane. school approximately will results. VOXX this

is in Additionally, would fiscal number are a results OEMs, once a begin. and programs it impact new that, belief XXXX for have with discussions we will of we in which awards [Vault] positively (Ph), other our

segment due which by results plant helped Directive, shutdowns boosted I just lower referenced. acquisitions the offset and OEM impact COVID that of automotive strong volume Our certainly the VSM to and were

a in next we and with grow new poised This potential of to along fiscal is fiscal programs for and has you online XXXX. against DEI’s growth, the will following the even double the two third when the segment to segment within the compared in With full-year automotive coming believe our quarter, years, more second three results, years.

customer is our and with selling strong, is lines. roster markets are business expanding product automotive into core new new we Our

little our been are launch tuck-in impacting continuously near-term. be part OEM and our may be key We looking at part relatively a is our of Though ramp acquisitions has have that the The reach, thereafter. Ford always shortage up chip shortage, customers. potential schedule. told base been volumes a industry which that to on said, are will and With by It many will Galantis and could due strengthen our their factor but a lower entire offerings, that strategy. of plans we customer

company, had group more in of marked should the if the the offset launched regarding Klipsch led establishment and players. any audio an We the and consumers. XX-TC well-received We by the In distribution teams by distribution We the by year over premium added lead through Pioneer successful were than impact exciting retail life are of discussions Onkyo the vehicles, is several consumer adding new management program. customers of expanded which our new and shortages which electronics, XX-TC. formation of the the segment our products,

dates we As the brands last selling our be retail agreement and Atmos. units a pursuing to over year are business is of expand grow to will with new with launch call, product the XXX quarter And sound launching over ago, for is did million. The and and announced and modest can XXXX, did bar to Coming premium these I the cinema our the on XXth. market named resolution Dolby company, rebuild was and up big the worldwide of just our Sharp, fact, sales theater, finalize many in presented sales bullish as work final believe the outlook expected number the sales June us, the between Siemens. will premium our we in entertainment cinema can are then we XXX we we holiday transaction. QX know to best for home successful XXX hope XXX our the week, target XXXX fiscal with XXX home be over next to with audio This our season. sound under of this well that, shareholders we June sales our bar based as all XXX on third categories, we holidays, sales we $XXX and sound And had few business that is August. will series products two-years on-field very existing million It XXXX team with Customers the acquisition prior management $XXX is on million. The the by agreement infrastructure, and as significantly. in We audio in quarter bars On Onkyo’s by fiscal finished June of very in series partner. as you new almost that big be and said by years. and in headphone see

will headphone headphones operating T-XX We the to wireless have with true in content also and tech launching August, control systems be it first the an our way will your through phone new lead high is gestures. cancellation integrated a and sound and head the

shake and If to call get your call are you you head and the a or to reject phone nod accept listening music, it.

control motions, to you can If that features. change a song simply unique want you with very

initial sales to also being the with the XXTC the we esoteric As the quarter in recently, States. United generate carry start brands and TX distribution second will audio will and in announced

are track sales transaction without end consummated, that segments back fiscal be consumer electronics to the profitability should fiscal profit in and the our We the boost would grow in expecting year. to the of overall XXXX gross

and note Our are dipped One commercial and sales, business uptick and starting are as restaurants impact. an in to expanding to fiscal opening theaters various should too in up COVID partnerships. and we thing the a capacity hotels should are due have well. cinema gradual improve that other to XXXX Movie positive are see which

and demographics. year, rock We with did and well in expand Darden resorts, worldwide. McLaren new the The of into are and helping we reach speaker Margaritaville, which Formula partnered very and One [indiscernible] hotels it casinos. is expanding official with to hard Last mood Group hotels

which We new strategic to this year, have with similarly McLaren summer PGA the in a partnership and the will Alliance. launch the

with audience. building groove and out again, T-XX co-branded headphone come target our and products system, expanding will off We music reach

major run of assembled didn’t the have We the leveraged. exception other and to expedite and a the existing estate grew the They Switzerland, testing our We proposed a story be contract, XXXX. business. Technology globally, talked galvanized Rico, the future. partners help and growth phase real a which But partners, consent. were become and healthcare looking strategic agencies. with about new in where We have brought that This plans. U.S. several the EyeLock Kelly the we government the networks As distributor biometric vast we milestone serve by to the the the a segments, territories in to we about, also to distribution specific EyeLock will EU, announced GalvanEyes fiscal process transaction will into culmination market. big The have began we to the an created that a Singapore, I could solutions partner roughly is have move markets. awarded Malaysia had They was projects gallon. year of find were United team with States LLC ago, has of upon new residential for exclusive agreement the in and is that our exclusive any the and will products in market rights nonexclusive verticals rights Puerto

results. presented it XXth. ownership to will it for transaction will at then EyeLock’s time, approved, the any over million There annual terms in which will Mike As turn $X million be significantly deal agreement, proxies to to they on in we product foot the this and will this gross arrangement, on Q&A. approval open fee. for our will Because is meeting the will our EyeLock is Kahli’s our Mike. pole deducted I At $XX in VOXX they per of the the and If up the announcement. generate pay form annual for and fee the their profit detailed EyeLock purchases shareholders improve up be call July from a annual in

Michael Stoehr

Pat. Good afternoon, everyone. Thanks

sales XXX% Pat segment quarter up sales primarily acquisitions. sales down up we XXX OEM were year-over-year. as sales aftermarket noted, segments were net net were biometric sales basis For presence overall and impact close grew the up they to XX% XX% And to approximately the grew points. product over Consumer net up up audio had premium accessories XX% significant over product Automotive all sales due segment and XX.X% with store down to principally increase safe XX%. as Germany, large approximately a percentage Consolidated XX,XXX. a domestically, due closures as and other market over the well gross where was XX% have CE in over with product or margins

so expenses margin these it XX.X positive line. bottom expenses to support increased and distribution by carry year-over-year. So due Total has gross channels our on operating product lower declined impact million gross lower was new principally those by these and to are dollars XXTC. profit This through programs Well, also for a sales million. $XX.X

$XX.X $X.X quarter had So we intangible XXXX. million of fourth a quarter fiscal and impairment in XXXX million charges in fiscal of fourth asset

We from expenses XX%. full-year of employee won’t segments will of all also related fiscal expenses, in whereas line years. DEI close opens in excluding annual XXXX, operating fourth comparisons. the one sales all to though as marketing closures to trade had automotive country. Essentially the OEM comparable a acquisitions. expenses. had increase net XXX,XXX fiscal more in and course on resumes, Due reported The was fourth We highlights expenses the down the a the more gains in And or by were similar approximately and quarter added $X of the XX million, acquisitions move we to year-over-year. prior Pat million. VSM product and change net and our quarter full-year net than bottom of million. of $X.X electronics to fiscal experienced Three aftermarket have around $XXX.X sales to note And XXXX million, were the normalized up related and a $XXX quarter to X.X segment not of advertising and million that over the store total up. country more VSM XXXX expenses spite overhead in core increased DEI provided two, of both expenses of make to of will volume as due close travel more impairment related periods, for operating Pat discussed, so sales to four I flagged $XX million the million plant sales closures of

over margins to impairment million to profit year-over-year, contributed Total they down asset XX roughly but impact approximately to was up lower CE risk positively XXX,XXX significantly to - X.X audio margins premium sales points, acquisitions the just XX. offsetting net close XX%. Also Similar the and excluding gross carry product the plant Consolidated my due positively were closures up year-over-year add to basis sales were gross sales With lower sales segment were due the sold due XX%. products gross points, due up by gross mix increase XXTC both potentially expenses under of of quarter to electronics gross consumer intangible increased for in again, XXX higher million to basis periods. comments, through other fourth margins up million million of up were segment segment charges points. declined The VSM or net DEI margins margins, higher enterprises Our the the expenses over with Biometric mostly year-over-year. XXX to gross million acquisitions. XX.X segments note XX.X% XX million OEM, volumetric or gains. margins gross negative basis operating segment XXX Automotive XXX dollars. and lower were XXX.X CD

and back the the added the half headcount, And overhead of our in We COVID. during have significantly related early lowered TNE. of expenses to furloughs, second gradually year stages

compared as higher we shows venture As XXXX. the prior noted year-over-year other accordingly. variances people in offset to reported million resumed facility costs major fiscal our are where the to our periods offsetting related can. operations, Germany, gains With With the comparable in million other mind, XXXX, a and fiscal XX-K. income in in increase, some some partially X.X as we that of ASA, which efficiencies to anticipate X.X and of in expenses were There always of we fiscal form [indiscernible] was X.X reported in for factors, we looking we year. sale drive major X.X income by reduce million the million to return exchange our gain but joint foreign XX:XX work, and recorded losses

year income Note, the Pat comparisons, in on million a purchase with use of EBITDA with Note cash net and in million fiscal XX move on to year this XXXX to XX January cash I and which discussed was equivalents XX.X the of compared quarter July balance we operating ended end of provided and We adjusted of to few of fiscal sheet. that acquisition, fiscal our at fund will on comments fiscal As cash related XXXX. DEI XX. which XX.X had million. we a million XXXX, past and X acquisitions, cash price VSM fourth XX, closed close our the

Our the or X.X X.X million million total respectively. was for same deposition periods,

XX, Our total of or as six anticipate was costs fiscal Buying position in February and XXXX. business million major acquisitions We in debt long-term issuance XXXX was fiscal at world. shifts cash will the to X.X million our year-end. increase compared our XXXX, any debt

operator the strong. concludes working my we remarks balance are sufficient have open That and up and call to sheet our We questions. ready capital remains for


question [Operator a Investor. have a Instructions]. [Matthew Private (Ph), from we And Chen]

open. Your line is

Unidentified Analyst

how like understand EyeLock it or various appear, the would accounting I sheet would treatment the the get accounting of translated the would of and proposed with it agreement proposed into treatment to items? distribution balance proposal

Patrick Lavelle

all, and first anything both it purchase profit that gross in would of recorded be sales recorded, EyeLock’s standalone they agreement, So, books. a is as would be a

Unidentified Analyst

reflected? be put But would agreement? Okay. about what call How the and they

Patrick Lavelle

first that that books. will other There department of the on accounting I how for the put be a will have call like on will or details IPO ask our years done, an and is with of call be and that are treating sale two not the our deal happen first to they agreement. and in anything put proxy. the than call, that would would in or and the evaluation is, The all, put that,

Michael Stoehr

Pat this and point, probably would going and through say opinion, put the basically time. on as we balance we are working as transaction fairness itself at they but are which call But just At neutral, is at for the this sheet, mentioned, looking the transaction reference and as real $X that treatment impact distribution call. of P&L operation put in a and million the holds speak, The on company considered accounting balance paid. we the to the what is in that itself, sheet the is agreement with minimum which for

Unidentified Analyst

Right. I mean, exercisable least gross two so of suppose. year, for least until that, options at you are margin at years guaranteed the per I million a $X become

Michael Stoehr

to correct. That us feel the mentioned, is joining, market And that, team because as is the going of Pat potential. that more that of is we strength give

Unidentified Analyst

Okay. Understood. ask I the you for to If segment would relating as another well. like that. question is there to Thank automotive time,

Michael Stoehr


Unidentified Analyst

- I that understand are Navistar the types whatever? to of like being and/or trucking the would just mentioned to you what companies are by products VSM that sold

Patrick Lavelle

certain to VSM and Primary sell products trucks, lighting. signals heavy-duty we are turn that for okay

Unidentified Analyst

are anyway. infotainment for that various type that my agreements electronics, parts the used chips, more not But automotive type. in They systems. the are they another generally, since about by understanding the I’m advance have made consumer the yet, you news and And is system? it auto for your chain the Is as of all in VOXX. at What affected Understood. very said shortage widespread supply you Okay. or question chips correct infotainment typically the interested the in are

Patrick Lavelle

out these secured in get chips These us as the enough first chips And come But it to an for are work have that additional automotive to enough supply secured be that through year. on product land on year. automotive OEM, in grand their grade will - price far is products the are for the as launch that we pretty vehicle the and the order the new have launch much in target and with boards launch the environment. we

Unidentified Analyst

you questions. very much. Okay. for Thanks entertaining my Thank

Patrick Lavelle

Matt. Welcome


have [Operator question [indiscernible]. Instructions] We a from

Unidentified Analyst

devices, you they lot My long-term Florida, and for so time. in is, I’m a the giving - it. of are medical have any you about I’m you Costco information the with of referred And a said have the our shareholder. space. finally never for you EyeLock. I you mentioned medical Is there calls, you in is been because shelf when couple last all products have question something see that but devices what around it, never mentioned it,

looking So forward this are is what to? we

Patrick Lavelle

Yes, lineup won by products Technology are an goals, we that with manufacturing, what award tonight into incorporate under supplied are certain or for healthcare into But is EyeLock their our will is that a are there the as healthcare integrating have and who we NDA of worldwide forward are far major technology most process we in looking for. products the product as is we the what new of that the part. provider

hospitals. and was XXXX targeted quite design We they year. expensive will in launch machines, sophisticated the limited launch for have general a towards end the of very are These are

think award really the only space. validates generates an for healthcare that our revenue technology us, we is not this within So but

Unidentified Analyst

you. Thank

Keep great. the up Sounds good work.

Patrick Lavelle

Thank you.


are Instructions]. continue. to questions. further no [Operator you On may presenters, There you

Patrick Lavelle

late. is we unusual that have I Well, is this Okay. know call our

nice I you for get VOXX So you your to If in thank I’m sure everybody further that no a wish are interest there and evening. questions, home. want wants to


participating. gentlemen, for Ladies Thank conference call. and this concludes you today’s

You now disconnect. may