VOXX VOXX International

Glenn Wiener Investor Relations
Patrick Lavelle President and Chief Executive Officer
Michael Stoehr Senior Vice President and Chief Financial Officer
Tom Forte D.A. Davidson
Call transcript
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Good day and thank you for standing by and welcome to the VOXX Fiscal 2022 First Quarter Results Conference. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference to your host, Glenn Wiener, Investor Relations. Please go ahead.

Glenn Wiener

Thank you, Carmen. to fiscal welcome conference first and call. morning VOXX XXXX International’s quarter Good approximately we say months fiscal been X It’s about since and am continued. ‘XX I last pleased has to momentum results our reported we Executive and Chief Chief Financial have President President Senior Officer remarks Pat Michael from Today, Lavelle, will and Officer. Vice Stoehr, and prepared which, will open we up questions. After the call for items the management. call quick over turning to before address Few to

virtual it meeting, Stockholders of be on will will format. be and a to Our Annual Meeting similar July held year’s last XX

the February the to point XXXX. to with assumes business in I talking Our herein, my Sidoti are for our call based analysts other section to throughout active in would would responsibility the any proxy August statements forward-looking now announcement determined on today’s XX-K be currently will our Virtual that year I detailed Davidson such would that that Summer time no and associated constitute turn SEC made period day the and of Stoehr can end Investor statement D.A. be Conference factors to also found will have out. Pat. are to meetings Conference XX, I update and Microcap of filings. throughout X call the and and the the which we everyone in risk and on and XX, like be information. the we on on Relations be the historical like ended capital statements investors, Select over participate at remind add is would for under statements present other presenting we at parties. to expect to our conferences August contained will company you registered the to forward-looking It The website back pleasure once with Bison except information hosting confirmed and available that’s Investor I Michael are to be Form we webcast

Patrick Lavelle

morning good Thank you, and Glenn everyone.

strong each we our expected, across business reported of As growth segments.

most Our our typically first quarter is challenging.

sales loss, have excluding However, some pleased have cost expenses. reported VOXX Pioneer, we legal are had of in $XX.X All net supply costs that was million higher and the issues we comparing performance. am also GalvanEyes quarters. and all the I with increased the one-time our improvement; underway adjusted a over with the small fiscal $XX XX%; I chain of especially our of with ‘XX, EBITDA the income fiscal were fiscal million XXXX operating will an attributable while were by with all facing absorb, and up $X.X operations the QX and these and we $X.X profitable industry things million million, when to transactions is quite considered, note associated XXXX that professional when higher Onkyo, to the first

our third-party OEM on of employees, investments, reported, and be last Our we as travel business. affected as overhead QX cut expenses would what stopped to drastically pandemic the of COVID many impact COVID. were results year shutdown. We to of able impact the full our by of And cut the and larger retailers we start see negatively customers many the were furloughed see until certain

XXXX improved the third by essentially sales of these we end As the cuts throughout of most restored year, quarter. fiscal our

new while more of the we operating the dramatically XXXX, sales business levels the future. as revenue increase at able overhead normal were creating was to higher we for streams first So, quarter entered cover and to

Automotive grew Our by segment $XX over million.

prior higher year program due entertainment to up, Nissan Our volumes by OEM coming business the and was shutdowns. aided rear-seat plant Armada online

launch, with Automotive, This pre-COVID starting duty was their of a and income program in aftermarket million levels had LED the $X.X won $X.X marks and Volvo awarded new month. million pre-tax this We roughly profitable We segment over during OEM improvement modules and years on a aftermarket a X categories mostly were at from higher for approximately Europe, third heavy shipments million, trucks. sales $X.X products small sales with OEM in up, end their fog kits, sales hope since QXXX first the as expand were of in to of across Nissan We Infiniti for also improved awarded Volvo electronic several program XXXX’s year-over-year. safety the also increases support fiscal quarter. acquired VSM January with with at light retailers which Overall, were program new We margins operating gross we automotive OEM award we rear-seat XXXX. were dealers from on. entertainment a

forward ship we be Amazon’s released EVO to gear start We dealers the with EVOLVE up built-in. as will EVOLVE solution in for current our will February ship to continue TV Fire rear-seat November to of XXXX. launch and in

making I are We we adding about our call mentioned are and on in last with as discussions new progress. vehicles, Ford

we with throughout projected, As Stellantis volume expect year. to up new ramp our program and launched EVOLVE the

quarter programs later. Over record were finalize headless VRM additional system year, a video expect supplier new with we a for starting additional the along advised units several be that with type of We next of the year VOXX Stellantis. display in starting the to next weeks, Automotive program, will second a

Annual to million. volume the official awards total we roughly call. past Stockholders OEM We quarterly this in have $XX the million notice, next our of we by on the by When based business. Meeting anticipate share But new our or to have $XXX generate details X could will over this received bring that expect of new excess in discussions, final to we received approximately years

other discussions have proposals and and requests in We latest EVOLVE several solution for for pending. with OEMs our are

incremental will portfolio a building several strong are for We years core OEM our business on awards, of them majority of layer a business that out.

well. theater, categories products. mobility and products premium from had segment posted of bulk premium Consumer computer sales as of We wireless Audio Electronics premium and in $XX other almost new with audio grew the home Premium benefited coming Consumer increase though and million, systems Our a sales from wireless growth Company, Electronics speaker subwoofer, Bluetooth

Pioneer established August increases. distribute to led products, subsidiary and Onkyo year-over-year XX TC, to last the Additionally, also

As full I the in swing quarter, first retail deal to with mentioned year’s in closures. and had we had last COVID-XX earlier store pandemic

normalized type with even operating are and product well of expanded at distribution will the future, that We assortment, many levels more the stay-at-home considering improved now be which not initial bodes COVID for anniversaried. purchases

and as CE whole, in quarter, a were $X.X sold a income obviously margins that warehousing to at first by freight clear year’s were were quarter. margins several pre-tax certain holiday loss this delivered year’s during overseas, last in higher the products million During run and distributor-like however, inbound that promotions inventory costs impacted segment, versus Onkyo. first The quarter small

the the ago, Company controlling we be Company Corporation. deal with joint will business remarks. certain Premium The just The through is Premium those and of will As Audio a audio/video plus Sharp go announced JV the will liabilities interest acquire Audio more venture price and few and formed his a purchase million total Onkyo’s terms weeks Mike holder. home $XX.X in

approvals level provide reached. year brands, the will will the margins when general We conditions. end this are more rights. looking own margins typically as all to all-IP, the closing were deal agreement forward premium assuming close was and the the rather space And JV of past This and Integra August pending on drive Onkyo normalized we distribution, audio planned, moves the that all by engineering with us manufacturing distribution working and than regulatory

for big except products ramp plan, alliance We approximately with worldwide, to Elite up in Malaysia Sharp and Pioneer sales a million the infrastructure we to bottom prior the rebuild and for It with the also A/V could little and compared time distribution manufacture we did in do no more a the talking fiscal worldwide ‘XX. we production ago to But solidified million Pioneer, over business $XX There a million brands stated fiscal sales licensing in top on next to years, needed in $XXX well and and Republic agreement China. that People’s new today. the years net this to secure is inventory under for thus, to Pioneer to And reaching and a I all have we of line. are be and prior as boost years. few shortages have an over would distribute Onkyo take if few and this will both this close year calls, due said, that lines just parts the about doubt $XX

went Additionally, many through Teac April new the I product our XX last of TC, Esoteric up last call. remember, also the launches plans year. of on and picked in

we anyone with have won’t and summer. the free for the if PGA I questions, launching same program recent being most rehash this has But to that partnerships, goes ask So, the feel them.

a year’s coming in iris roughly our a little at more allowing are of for were scan. we little the Gross Biometrics line Driving temperature higher sales hoped. doubled, via iTemp improvement turned was a rate before a segment, pre-tax margins As at had an iXT access over to with than And that product loss take positive. Revenue improving, albeit comes $XXX,XXX. things slower than new last with the person’s quarter. in

several technology. additional We for remain EyeLock’s continue potential on to in partners discussions progress programs embedded with make and

little like team Founder business give security majority expand new team Group’s very are one Allen activities security, while XX-plus a a Group, asset track. largest health cybersecurity fiscal referenced $X Orlando to they Mr. Advent Singapore, across has for we transportation, Health real revenue Avalon its just CTO, has together are tests, made serves seasoned systems also in who with operations, products for been Kahli been the technologies business management development, systems shareholder on and and the Board And opportunities departments and process as have limited other in as expected as is supportive presence: infrastructure Jason drive equipment We dealt estate this as internationally. programs soft database and these also Properties in CEO an Chief Annual minor as serves which owned over GalvanEyes the setting has within change GalvanEyes Rico, globe. aware have provide paths they Officer, in go several He estate, scanning-based U.S. largest more and EyeLock, such detection they to team and shareholder approval, more July is also Group’s in a Through determining U.S. serves investors has scale people distribution Park of in them a on the he a metropolitan are non-profit has new for services awaiting He create vote a of the Puerto Kahli, forward has on beta has revenue on another sitEX of government, here and Switzerland. worked Avalon embedded also Orlando, XX-plus with first with the Malaysia we career solutions the rollout, of backgrounds leverage us in calls, distribution they Board the GalvanEyes, Holding team through another who career Board no we prior our specializing to and I understand But I’d transportation, off be U.S., business Director understand and interest and in the GalvanEyes can in global Hammond, ideal Virtual the in a diverse although its XX disclosure part supplier and governments to he backed On He agencies includes is EyeLock desire proposed I AG, our to a the risk the here of look his of deal be authentication, forward reach and as is Rick Director. about Ibaugh, in Avalon information. review planning and VOXX, expand that Kahli company Mr. an focused real limited will of investing ‘XX. engineering that Chairman Mr. solutions. facts. prior that investors company, between And and advisory a that our remains a Their to leveraging make this to the with and from of companies; an to as in up launched moving technical EyeLock’s critical transportation, network Holding year in both there is healthcare on meaningful offering and physical various background has over as experience globally. we billion markets year vast where since forward. marketing approved with with year what projects development AG communications. by will you And reach. our technology a is sensors, assembled began with its help currently infrastructure, of current like and and need his XX, help reach. they Switzerland, started contributions Kahli This Group network do LiDAR, career several some for will up and years. best assets estate partner few you the assessment; We Park and EyeLock his to private organizations, for increased working most recommend sector. with believe and in contacts election finalized, areas year is important, it. service CEO, ‘XX and in us provide a LLC, and industries, by Everything authentication, across website, drive the website and private vast Kahli. and to GalvanEyes. Park Park I’d Meeting And Beat and been build-out Avalon and EU, Board Stockholders, the company to planning host IT, up Growth local in group. for on company with bit he Amadori, the This holding shareholder, value. the more on until where on request, and recently wider companies XX-plus has of on and government fiscal agreement believe for the CEO for the real

with generate $XX in And million the year of million our quarter. $X results. form they X profit, EyeLock the EyeLock’s but the be from gross any flowing GalvanEyes financial sales on annual an in and our essentially payments profit products performance consolidated EyeLock proxy, deducted would for fee first As fee, to annual noted years, million will up pay of to $X gross improving per by

a been a good has this summary, in very quarter. and active So first relatively

expect in We growth XQ.

product-related we beginning expenses. that will Automotive this raised more prices and product cost To a the greater business doing in However, of have offset be these increases, quarter due our segments will higher to QX impact so and have and and both positive Consumer in beyond.

closing second managed believe awards better point, the for to momentum. We meaningful expect our alliances new this and we entire transaction. I will the we have also have higher professional supply fees challenge, Onkyo are the associated cash the industry. generate growth, not near-term it’s present and a the we are strong even profitability positive and with ‘XX, But The a new alone, process issues to fiscal year, this and poised we and for given year half flow. formed, well

when for that, done, open the to it call questions. will I’ll turn then we with Mike. And over up he’s now Michael? So

Michael Stoehr

everyone. Pat. key color morning, I quarter Good highlights, financial a of P&L close transaction and balance Pat the little will and Onkyo provide first our Thanks, more with drivers, a view around our sheet. discussed

All million. were noted P&L my comparable fiscal sales XXXX up $XX.X fiscal XXXX Total are the unless of otherwise. for periods, and comments

biggest systems, controls, home first experienced and Karaoke distribution were the audio with of sales segment DEI home and Audio, were in Premium categories were up XX sales among segment to in million. million, of final TC, final million up OEM increased both million product up telematics CE the HDT million operations in new domestically remote up digital were sales in all in sales products fiscal premium speakers, product which gains placement. categories, up start service were systems attributed via this up first product, $X.X volumes separate roughly mobility our ‘XX product was Bluetooth home quarter. driven which Premium to $XX.X were category, product by began approximately and a and Germany, in these million, recent the million computer custom security clocks, mostly but sales and entertainment, in Audio Within where increases product also audio, speaker due was video we FY automotive half our smart CE with was of and nursery and in as $XX.X $X.X we added the ‘XX stores acquisition, had me, Although VSM of sales to quarter in In and $XX sales growth aftermarket, which strong not or rear-seat a over in XXXX. others. of saw excuse and – sales installers. business our million, through $XXX,XXX. up RSE starting followed online German acquisition. again sales Aftermarket were with and year-over-year reopening. as the a heavy-duty to down second we and up product sales retailers modest truck retail other $XX.X sales $X.X sales remote – up several higher and market, growth $XX.X We categories accessory we’re increase in shut radio and CE see by Biometrics And segment operation were little wireless we satellite

had sales year profit the million. points While of gross sales gross margins, but these of Consumer $X.X strong did decline and products second the the XXX up Premium channel. margins Automotive margins carry other segment declines up higher-margin of were but helped addition The product and points, sold margin of safety, security in aftermarket last basis the to basis million. and contribution higher Premium gross through The OEM launched volume. profit was business, an and of the in segment of Audio traditionally by margin in led one, efficiencies better greater XX absorption RES of gross systems and warehouse dollar given which and rates increase as is computer consolidated club million. and DEI margins, increase is drive gross sales The down basis were driver $XX.X margin OEM Higher structure products. The had margin gross quarter Audio segment $X.X increased dollars were: points, profit the lower, XXX

holidays. but these following higher margins. of promotions port overall We we related costs some fulfillment and higher the sold on are XX container delays the business And in also four, and ran segment’s new shortages impacted positively TC on surcharges sales and parts. shipping products for incurred costs to

The in the is our of and There latter will can. part we first are something and residual strategy this business three course with the controlling growth-driven quarter profitability best to as third increase second that fund we normal in impact indicated, price The some we implemented drivers the quarter, of but programs. bigger offset will second in beyond. in begin and be impact the Pat as to increases the quarter, are a

– note, salary salary a the one majority put as positive of Operating $X.X of XX% negative increase minimal. we related included recorded a XX% sales the margins to bottom year’s I in with cuts expenses support given Pat would make one Taking this, included XX.X% $X.X up though G&A. our additional Biometrics were million GalvanEyes expenses and agreement higher not margin impact Pat two, breakout higher and sales. our had displays higher and that. for which first place were million of quarter of under approximately we the $X.X $XXX,XXX we in was of last distribution new costs expenses bonus and fiscal legal segment four, transaction, the quarter QX in overall million, commissions stages in This in net advertising Please and DEI-related QX account, sales. last higher million of addressed furloughs million, a transaction see And XX-Q. as release is did pandemic. fees. Lastly, five, with recorded other in income XX.X%, discussed; gross of our at fees quarter $X.X of a but of and number comment. and the $X.X increase of not in schedule to QX expenses One, the fees, taxes finally, of point you non-routine and like to the higher expenses declined as this into positive Professional year-over-year this in expenses, of payroll and million line but three, year’s versus related a Onkyo lot traffic had. and $X.X comparisons early were up operating adjusted $X And salary in million percentage XXXX. can from the EBITDA our ‘XX have in of and with related selling in was that professional were to improvements, million product created $X.X Form online the year; This fiscal

up. We are other especially continues open mindful all to areas the country, costs continue of to rather or as and expenses, lower the world, in

in of $X.X offset as income Electronics. income of increase with million $XXX,XXX $XXX,XXX, other our charges venture posted $X.X bank report and was We which Our XX-XX a the this Interest declined million million. was we net. equity and this year-over-year, improvement $X.X Driving and investees. equity ASA up joint

Onkyo. XXXX, $XX.X on and end February $X ended May to $X.X stood our of XX, to quarter issuance to balance and our sheet debt debt, fiscal Moving XX, Balance costs the $X million all of Total million. long-term related of property. million. fiscal compared And of $XX.X sheet $X.X the year-end, the versus compared debt cash million on million ‘XX mortgages million, to net at Florida XXXX, equivalents comparisons and ‘XX periods had first for the cash and we

Onkyo, venture secured continue In to within of of XXXX, of and $XX.X As April price includes letter so the to liabilities. Sharp fund we total certain $X PAC will joint XX, and business amended a an the satisfied transaction, with they on Onkyo we could included a assumption million million. expenses promissory we in note sheet. the while for million note incur intent operations between conjunction the signed the issued purchase million and the discussions. at provide upon balance and other transaction. $X.XXX The support are $X the and is We completion XX interest in will June certain additional The prepaid bears the our current note of be and assets X% on

we received interest collateral, be the portion deducted As loaned purchase Of security and $XX Onkyo million, closing. accrued amount the be certain interest in cash assets. expected and purchase is will our upon price, to total and approximately total trademarks the from the cash

we We remarks. to up for for fiscal my the expect concludes will remainder need we $X support venture to are the the of operator, questions. year. the joint million roughly This call ready And open


from of the Instructions] question D.A. with [Operator have We a Davidson. Tom Forte line

line open. is Your

Tom Forte

Great. Thanks.

and handful on I wanted of at Pat a quarter. walk a Mike, time. through. had I I first will the So go off, one questions to congrats

for So challenging the participant provide first off, historical category, Pat, electronics as situation. in chain hoping you context current could some supply a long-time was consumer the

XX it’s years, years, the in should it’s example, a about context? I For just how in historical most XX it challenging been think

Patrick Lavelle

really production, normally caused because has shipment delays, This for container product. have port lead of – part historically, like to we chip have times it’s production us before. that me, delays, seen purchasing I so we material, but have product areas, impacted and the COVID situations chip essentially whether raw the COVID. There excuse many procuring don’t has Well, this been – different think really shortages, chip expand problems

quarter, when need we to products The it lead a it. we doubled through – have affect in We the problems it not problems ensure existed, our continue. that not these have did did almost sales, us. Obviously, but with increase first XX% times

bring any way in. bring to in we prepared that are need We to products

But miss of big cash are open I to we are that when seen inventory to products But us sure to have from We higher this. to comes we have we any any the that it not we fortunate said, I warehouses purchases, delays as do make it we will be problematic waiting which years, think additional anything products I lines a have be handling believe this And support doing to that I are have built historical, up on hand, have shipped. well. have the supply standpoint the as I as plus sales. for we so our XX been don’t in the

Tom Forte

That Excellent. was helpful. very

today months next months I is, what had signs should three manner? in improvement? And looking July question ago than you challenging it I it it in and are how was six the ago? this Is more about So think for

Patrick Lavelle

Well, think we about things the shortages. like shortages had anticipated I hear – are chip we the from to and that, chip started – we

cases extended in were year. out we purchasing our we have long and items, So, lead a some over

why So, the The higher-priced chip reason freight and same rest on. we we instituted is increases. increases that’s really the the shortages chip have which is we not containers to bringing everybody increases, we are competitive as price quite instituted those offset in, thing. a because will us price increase but affect the some surcharge facing material the the delivered of in us, products market affected And and also there the feel then price with us. get And products to the raw

are a prices Obviously, it. to the the holiday season crunch. So, offset is always up going

the the think is have it would product The So, way laid and we is and be challenging, into sales. getting in I gone have country, reason bring it’s secure we why going so out that to which in that product now. however that, to to goal have orders one, we

Tom Forte

more. Two Great.

provide doing questions automotive and you on part from you of So that? to some you customer efforts on as able of of as of you are lot Amazon stock, Can initiation with your following your Amazon our land how what portfolio. had are investors and a a product additional your details the significance

Patrick Lavelle

the saw enter been around and Well, they TV knew the comfortable into the only very And we America us. are. OEM they were, automotive they the for had, looked Stellantis. aftermarket develop to that both seeing space, felt a they obviously, had they involvement looked field. was are to that into OEM of entertainment in they a obviously, And our And it niche with expertise get And behind manufacturers in us car essentially working vehicles. the the business and to to they the what capability in of our and wanted they other as supplier to are moving in approached with products and There have #X companies when company to when successes, rear-seat that the their we to Fire by European the expect. And making one have delivered Amazon cars, looked manufacturer, we way that far, produce that with we in North ahead automotive in number TV where the for some car. we Amazon manufacturer years, chose around

we and that that Amazon Fire any the of know TV have all very, car. recommend to OEM think well, are I to manufacturers we other to the So, and confidence have add VOXX very I looking performed to

Tom Forte


one to thanks. mean talk So VOXX what high interesting us, Last for can could about Stellantis it final really so program level International? looks and one, you at

Patrick Lavelle

was sorry, which plan this? I am

Tom Forte


Patrick Lavelle

TV. vehicle, new the this Grand with will will month, Wagoneer, – Stellantis. their pretty it’s Fire relationships a with number starting have with their and car of seat products the Again, and the manufacturers contain primarily much Pacifica, rear okay. our they we In all and years. Stellantis is is Yes, Jeeps be of which flagship delivering these that had end

Amazon comfortable start. for experience many again, again, many, the stable based remote space, the Chrysler to already was over in the Financially, make ahead our a on, on them us. decision that and ahead worked And of we years with Chrysler rear-seat we with recommending allows number VOXX, was of what the us. of to way And years. VOXX had move knowledge market, when have they with We car a achieved, which with were are company had working

factors period with out to then Jeep work team. So, a financial we time. the there Jeep over the how the of had our are roll lot They a And Cherokee, them. the had it now developed. wherewithal Pacifica Wagoneer, of And that’s will into they had different and that capability Amazon’s we us. our with to work met They experience, with the desire knew played it, engineering

Tom Forte

for taking my questions. Thanks Great.

Patrick Lavelle

Okay. thank Tom, you.


I showing in Sir, Instructions] queue. further am [Operator not questions any

Patrick Lavelle

this thank I morning. everyone joining call Okay. want you. for to Thank the

for will are the Fire and VOXX Stellantis, future, on the we which license will other TV, most Pioneer shift I be we start Onkyo from the And about technologically excited focus system deal, into it will the company believe generate as agreement close to the suppliers. business it on advanced as to We drive prospects we look and pretty the as additional Amazon Ford as the market. OEM the think we

have ladies, Thank great you your interest. a day. guys, for So


you for you. may concludes disconnect. today’s Thank participation and Thank And now your conference. you this