VOXX International Reports Challenging Financial Performance, Sees Turnaround in Net Income

VOXX International Corporation reported a challenging financial performance for the three and six months ended August 31, 2024, with significant declines in net sales and profitability compared to the same periods in 2023. For the three months, net sales totaled $92.5 million, down 18.6% from $113.6 million in the prior year. The six-month figures reflected a similar trend, with sales of $184.1 million, a decrease of 18.4% from $225.6 million. The decline was attributed to reduced demand across various product lines, particularly in the Automotive Electronics and Consumer Electronics segments, which saw sales drops of 25.5% and 15.4%, respectively.

Despite the revenue downturn, VOXX reported a net income of $1.8 million for the three months ended August 31, 2024, a significant turnaround from a net loss of $12.6 million in the same period of 2023. This improvement was bolstered by a gain of $8.3 million from the sale of certain assets of its domestic accessories business to Talisman Brands Inc. Additionally, the company recognized a gain of $2.2 million from the sale of trade names and inventory to Jamo Holding Limited and Cinemaster Shanghai Ltd. for $3.4 million.

Operating expenses decreased by 14.3% to $31.8 million for the three months ended August 31, 2024, compared to $37.1 million in the prior year, reflecting cost-cutting measures and headcount reductions. The company reported an operating loss of $9.1 million for the three months, slightly worse than the $8.5 million loss in the same period last year. For the six months, the operating loss was $16.2 million, an improvement from a $19.9 million loss in 2023.

Total assets decreased to $421.2 million as of August 31, 2024, from $444.0 million at the end of February 2024. Current liabilities increased to $108.0 million, while total liabilities decreased to $167.0 million. The company’s stockholders' equity slightly declined to $254.0 million from $255.4 million.

Strategically, VOXX has been focusing on operational improvements, including relocating OEM manufacturing to Mexico and exploring strategic alternatives to maximize shareholder value, including potential sales of the company or its segments. The board has established a strategic transactions committee and engaged financial and legal advisors to assist in this process. The company anticipates sufficient cash flow resources to operate for the next twelve months, despite the ongoing challenges in the market.