Sales Performance - Total net sales for the three months ended August 31, 2023, were $113,642, a decrease of 9.6% compared to $125,705 in the same period of 2022[154]. - For the six months ended August 31, 2023, total net sales were $225,568, a decrease of 11.3% from $254,437 in the same period of 2022[154]. - Automotive Electronics sales represented 31.2% of net sales for the three months ended August 31, 2023, down from 29.6% in the prior year[154]. - Consumer Electronics sales accounted for 67.1% of net sales for the six months ended August 31, 2023, down from 69.5% in the prior year, with a decrease of $25,578 compared to the same period in 2022[158]. - Sales of aftermarket security products declined by approximately $1,800 during the three months ended August 31, 2023, due to excess inventory and slowing consumer spending[155]. - Domestic sales of premium home theater speakers and wireless speaker products decreased approximately $20,400 for the six months ended August 31, 2023, primarily due to a slowing economy and decreased consumer spending[158]. - Sales of the Company's premium audio products in Europe and Asia decreased approximately $10,400 for the six months ended August 31, 2023, attributed to a slower global economy and lower consumer spending[158]. - The Company reported a decrease in sales of its karaoke products of approximately $3,100 for the six months ended August 31, 2023, due to excess inventory held by customers[158]. - The decline in Automotive Electronics sales for the six months ended August 31, 2023, was primarily driven by a $4,600 decrease in aftermarket security products[156]. - OEM rear seat entertainment sales increased by approximately $3,100 during the six months ended August 31, 2023, due to increased vehicle volumes from customers like Ford and Nissan[156]. - Biometrics sales represented less than 1% of net sales for both the three and six months ended August 31, 2023, with a decline of $126 for the six-month period[160]. Financial Performance - The Company experienced an increase in European accessory product sales of approximately $14,500 for the six months ended August 31, 2023, driven by new balcony solar power products[159]. - Gross profit for Consumer Electronics was $38,616 for the six months ended August 31, 2023, down from $44,190 in the prior year, reflecting a decrease of $5,574 or 12.6%[161]. - Gross margin percentage for Consumer Electronics increased by 50 basis points to 25.5% for the six months ended August 31, 2023, compared to 25.0% in the prior year[163]. - Total operating expenses decreased by $3,046 for the six months ended August 31, 2023, compared to the same period in 2022[165]. - Selling expenses decreased by $2,963 for the six months ended August 31, 2023, primarily due to reductions in employee salaries and related benefits[167]. - General and administrative expenses decreased by $1,306 during the six months ended August 31, 2023, compared to the prior year period[170]. - Engineering and technical support expenses decreased by $479 for the six months ended August 31, 2023, primarily due to a $600 reduction in research and development expenses[172]. - Restructuring expenses increased by $1,779 and $1,838 for the three and six months ended August 31, 2023, respectively, due to severance expenses related to headcount reductions[174]. - The Company recorded a net loss attributable to VOXX International Corporation of $11,064 for the three months ended August 31, 2023[189]. - Adjusted EBITDA for the three months ended August 31, 2023, was $(9), compared to $(3,336) for the same period in 2022[189]. Cash Flow and Liquidity - The Company continues to focus on cash flow and anticipates having sufficient resources to operate for the coming twelve-month period[145]. - Operating activities provided cash of $2,561 for the six months ended August 31, 2023, primarily due to a decrease in accounts receivable, compared to cash used of $46,317 in the same period of 2022[191]. - Investing activities used cash of $961 during the six months ended August 31, 2023, primarily due to capital expenditures, down from $2,226 in the same period of 2022[192]. - Financing activities used cash of $3,422 during the six months ended August 31, 2023, compared to cash provided of $20,807 in the same period of 2022[193]. - As of August 31, 2023, the company had working capital of $114,526, down from $131,634 at February 28, 2023[190]. - The Company has a senior secured credit facility with committed availability of up to $165,000, with $72,261 available as of August 31, 2023[194]. - Total contractual cash obligations amount to $4,130, with $1,374 due within one year[203]. - The Company has a Euro asset-based loan facility in Germany with a credit limit of €8,000, expiring on October 31, 2023[199]. Market Conditions and Challenges - Supply chain challenges have increased material and shipping costs, resulting in shipping delays and impacted gross margins[143]. - The Company expects residual effects of the COVID-19 pandemic and other macroeconomic factors to continue adversely affecting its business[202]. - A hypothetical 10% strengthening of the U.S. dollar would have resulted in a decrease in sales of approximately $5,600 for the six months ended August 31, 2023[210]. - Interest and bank charges increased by $1,478, or 90.1%, for the six months ended August 31, 2023, due to rising interest rates[176]. Other Financial Information - The effective tax rate for the six months ended August 31, 2023, was an income tax benefit of 0.6% on a pre-tax loss of $24,433[184]. - The Company realized a gain of $450 on the sale of a tradename that was no longer in use during the six months ended August 31, 2023[170]. - Total other expense, net increased by $1,243, or 75.2%, for the three months ended August 31, 2023, compared to the prior year[175]. - As of August 31, 2023, the total net fair value of the interest rate swap recorded in Other assets is $181 million[214]. - The amount that would be received upon unwinding the interest rate swap agreement is based on market conditions as of the same date[214]. - Changes in the fair value of the interest rate swap agreement are reflected as an adjustment to other assets or liabilities[214]. - There is an offsetting adjustment to Accumulated other comprehensive (loss) income related to the interest rate swap[214].

VOXX International Corporation (NASDAQ:VOXX) Q1 2024 Earnings Conference Call July 11, 2023 10:00 AM ET Company Participants Glenn Wiener - IR, GW Communications Pat Lavelle - CEO Michael Stoehr - SVP and CFO Conference Call Participants Thomas Forte - D.A. Davidson Operator Good day, and thank you for standing by. And welcome to the First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 0-28839 VOXX International Corporation (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 2 ...

Financial Data and Key Metrics Changes - Fiscal 2023 sales decreased by 16% year-over-year, with gross margins declining by 160 basis points and an operating loss of $27.3 million [25][21][53] - Adjusted EBITDA for fiscal 2023 was $8.6 million, down from the previous year [25] - Q4 net sales declined by $27.4 million, with Automotive down $1.1 million and Consumer down $26.4 million [47] Business Line Data and Key Metrics Changes - Automotive segment sales declined by approximately $26 million, with OEM sales up $8 million and aftermarket product sales down close to $34 million [26] - The Consumer segment saw net sales decline by 17.6%, primarily in Premium Audio, which dropped roughly $70 million year-over-year [30][31] - Biometrics sales increased by approximately 19% year-over-year, reaching $1 million [40] Market Data and Key Metrics Changes - The automotive aftermarket business was significantly impacted by heavy inventory stocking from the previous year, leading to a 30% decline in sales of aftermarket satellite radios [28] - The overall retail environment remained weak, affecting sales across various consumer electronics categories [30][31] Company Strategy and Development Direction - The company plans to launch new products and expand into new markets, including India, China, Japan, and the EMEA region [32] - There is a focus on improving gross margins through better pricing strategies as supply chain costs normalize [64][65] - The company is cautious in managing its business and aims to drive growth through new launches and market segment additions [44] Management's Comments on Operating Environment and Future Outlook - Management noted that the current macroeconomic environment is challenging, with inflation and fears of recession impacting consumer spending [21] - There is optimism for improved conditions in the second half of fiscal 2024, with expectations of better chip availability and OEM production [23][24] - Management highlighted a pent-up demand for new cars, suggesting potential growth in automotive sales despite economic challenges [3][79] Other Important Information - The company is expanding its product offerings into the hearing aid market and solar energy solutions, which are expected to drive growth [38][39] - Management expressed gratitude for the contributions of a long-serving board member and announced the nomination of a new director with significant industry experience [45][46] Q&A Session Summary Question: Expectations for revenue in the first half of fiscal 2024 - Management expects total revenue to be weaker than the first half of 2023, with some areas anticipating growth due to specific programs [62][63] Question: Gross margin expectations for 2024 - Management confirmed expectations for gross margins to improve in 2024 as inventory costs normalize [64][66] Question: Current container costs - Container costs are now closer to historical levels, significantly lower than the peak prices experienced previously [69][70] Question: Impact of higher interest rates on automotive sales - Higher interest rates may challenge car manufacturers, but there is confidence that they will respond with competitive financing options [78][79] Question: Consumer spending trends - There is a noticeable shift in consumer spending towards travel and services, impacting sales in the consumer electronics sector [80][81]

Business Segments and Acquisitions - VOXX International Corporation operates through three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics, with a diverse portfolio of over 30 global brands[19][29]. - The company acquired certain assets of Onkyo Home Entertainment Corporation for a total transaction consideration of $37.184 million to expand its market share in the premium audio industry[25][26]. - VOXX acquired the aftermarket vehicle remote start and security systems business of Directed LLC for a cash purchase price of $11 million to enhance its automotive electronics market presence[27]. - The Company has focused on acquiring synergistic businesses, including a controlling interest in EyeLock Inc., to expand its presence in the biometrics market[165]. - The Company operates in three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics, which are reviewed by the Chief Operating Decision Maker[166]. Financial Performance - Total net sales for the fiscal year 2023 were $534.014 million, a decrease of 16.1% from $635.920 million in 2022[46]. - Gross profit for fiscal year 2023 was $134.299 million, resulting in a gross margin percentage of 25.1%, down from 26.7% in 2022[46]. - Automotive Electronics segment sales were $174.811 million in 2023, down from $200.594 million in 2022, while Consumer Electronics segment sales decreased to $357.758 million from $433.925 million[46]. - The Biometrics segment reported sales of $1.046 million in 2023, an increase from $882,000 in 2022[46]. - License and royalty income for the year ended February 28, 2023, was $1.340 million, compared to $1.716 million in 2022[49]. Market Conditions and Challenges - The current macroeconomic environment includes record-high inflation and supply chain challenges, which may adversely impact consumer demand and sales[24]. - The COVID-19 pandemic has caused significant disruptions in the global supply chain, leading to increased costs and delays in product availability, which may continue to affect operations[69]. - Inflation levels experienced during Fiscal 2022 and 2023 have been higher than in recent years, impacting costs and potentially affecting sales and profitability[75]. - Economic conditions in the Eurozone and globally pose risks to the company's business, potentially affecting consumer confidence and spending[93]. - The ongoing conflict between Russia and Ukraine is expected to continue causing geopolitical instability, which may adversely affect the global economy and the company's operations[82]. Customer Base and Sales Distribution - Approximately 78.9% of revenues were derived from domestic operations, with 14.9% from Europe and less than 6.2% from other regions[52]. - 17% of the company's sales in Fiscal 2023 were to five key customers, down from 21% in Fiscal 2022 and 30% in Fiscal 2021, indicating a growing reliance on a smaller customer base[89]. - Approximately 21.1% of the company's net sales currently originate from international markets, exposing the company to foreign currency fluctuations and international operational risks[90]. Research and Development - VOXX has invested significantly in R&D to build a robust pipeline of new products across all segments, focusing on innovation and technology advancements[33][41]. - The introduction of new products and technologies is critical for the company's sales and profit margins, with a strong dependence on consumer acceptance[76]. Operational Risks and Compliance - The company faces intense competition in the biometrics market, with established competitors developing advanced solutions that could impact market share[88]. - The company is subject to risks associated with changes in U.S. trade policies, including tariffs that could increase costs and affect revenue[84]. - The company faces risks related to compliance with evolving data privacy laws, which could incur significant costs and affect operations[109]. - The company has few long-term contracts with suppliers, increasing the risk of supply shortages that could adversely affect business[115]. Financial Stability and Liquidity - VOXX has a strong liquidity position and has renewed its credit facility with Wells Fargo in February 2023, ensuring financial stability amid macroeconomic challenges[23][24]. - The company maintains cash and cash equivalents with major financial institutions, but some deposits exceed FDIC insurance limits, posing liquidity risks if any of these institutions face adverse developments[130]. - The company must comply with restrictive covenants in its debt agreements, and failure to do so could result in default and potential bankruptcy[99]. Shareholder and Stock Information - The Company purchased 508,439 shares of its Class A Common Stock during the year ended February 28, 2023, for an aggregate cost of $5,147,000[158]. - The Class A Common Stock traded between a high of $11.43 and a low of $7.99 during the fourth quarter of the year ended February 28, 2023[154]. - The Company has a remaining authorized share repurchase balance of 1,797,437 shares as of February 28, 2023[158]. - The company acknowledges that its stock price could fluctuate significantly due to various factors, including operating results and market conditions[136]. Impairments and Valuation - The Company has incurred impairments related to its long-lived assets in Venezuela, which had no net book value as of February 28, 2023, and February 28, 2022[95]. - The company is at risk of goodwill impairment for several reporting units if there are declines in sales, unfavorable operating margins, or increases in discount rates[194]. - Changes in estimates due to economic conditions could materially impact the company's consolidated financial statements, particularly regarding goodwill impairment and long-lived assets[174]. Supply Chain and Cost Management - Supply chain challenges during Fiscal 2023 increased material and shipping costs, impacting gross margins, leading the Company to implement price increases[171]. - The Company is actively working to mitigate supply chain issues through pricing adjustments and sourcing strategies, which are expected to continue into Fiscal 2024[215]. Employee and Operational Adjustments - The Company employed 1,055 people as of February 28, 2023, with 577 based in the U.S. and 478 internationally[62]. - The Company has implemented safety measures in response to the COVID-19 pandemic, including remote work options and health protocols[64]. - The company has modified its business practices due to COVID-19, including limiting employee travel and physical participation in meetings, which may affect operational efficiency[70]. - The shift to hybrid working arrangements has increased the company's cybersecurity risks, making it more susceptible to phishing and other attacks[124].

VOXX International Corporation (NASDAQ:VOXX) Q3 2023 Earnings Conference Call January 10, 2023 10:00 AM ET Company Participants Glenn Wiener - Investor Relations Patrick Lavelle - President and Chief Executive Officer Michael Stoehr - Senior Vice President and Chief Financial Officer Conference Call Participants Bruce Olephant - Oppenheimer Matthew Chen - Private Investor Operator Good day and thank you for sending by. Welcome to the VOXX Fiscal 2023 Third Quarter Results Conference Call. At this time all p ...

Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 0-28839 VOXX International Corporation UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organizati ...

VOXX International Corporation (NASDAQ:VOXX) Q2 2023 Earnings Conference Call October 12, 2022 10:00 AM ET Company Participants Glenn Wiener - IR Pat Lavelle - President and CEO Michael Stoehr - CFO Conference Call Participants Brian Ruttenbur - Imperial Capital Thomas Forte - D.A. Davidson Operator Good day and thank you for sending by. Welcome to the Fiscal 2023 Second Quarter Results Conference Call. At this time all participants are in listen-only mode. After the speaker's presentation, there will be a ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201%20FINANCIAL%20STATEMENTS) The unaudited consolidated financial statements show declining assets, significant net losses, and negative operating cash flow [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets and stockholders' equity decreased, driven by reductions in cash and accounts receivable Consolidated Balance Sheet Summary | Metric | August 31, 2022 (unaudited) (in thousands) | February 28, 2022 (in thousands) | Change (in thousands) | | :-------------------------- | :--------------------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $4,326 | $27,788 | $(23,462) | | Accounts receivable, net | $80,375 | $105,625 | $(25,250) | | Inventory | $192,931 | $174,922 | $18,009 | | Total current assets | $301,165 | $330,772 | $(29,607) | | Total assets | $546,822 | $586,664 | $(39,842) | | Accounts payable | $50,851 | $76,665 | $(25,814) | | Total current liabilities | $163,976 | $204,016 | $(40,040) | | Total liabilities | $223,029 | $236,501 | $(13,472) | | Total stockholders' equity | $320,331 | $346,102 | $(25,771) | [Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20(Loss)%20Income) The company reported a significant net loss due to decreased sales, lower gross profit, and higher operating losses Operations and Comprehensive (Loss) Income Summary | Metric (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | Change (YoY) | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | Change (YoY) | | :------------------------------------------ | :-------------------------- | :-------------------------- | :----------- | :-------------------------- | :-------------------------- | :----------- | | Net sales | $125,705 | $143,109 | $(17,404) | $254,437 | $280,169 | $(25,732) | | Gross profit | $29,257 | $37,186 | $(7,929) | $62,496 | $73,881 | $(11,385) | | Operating loss | $(9,974) | $(2,738) | $(7,236) | $(16,675) | $(3,094) | $(13,581) | | Net (loss) income attributable to VOXX International Corporation | $(10,216) | $311 | $(10,527) | $(16,743) | $3,027 | $(19,770) | | (Loss) income per share - basic | $(0.42) | $0.01 | $(0.43) | $(0.69) | $0.12 | $(0.81) | [Unaudited Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity declined primarily due to net losses and foreign currency translation adjustments Stockholders' Equity Summary | Metric (in thousands) | Balance at Feb 28, 2022 | Balance at Aug 31, 2022 | Change | | :------------------------------------------ | :---------------------- | :---------------------- | :------- | | Total Stockholders' Equity | $346,102 | $320,331 | $(25,771) | | Net loss attributable to VOXX International Corporation | N/A | $(16,743) (6 months) | $(16,743) | | Other comprehensive loss, net of tax | N/A | $(3,364) (6 months) | $(3,364) | | Cash settlement of market stock units | N/A | $(4,000) | $(4,000) | | Stock-based compensation expense | N/A | $262 | $262 | [Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) A significant net decrease in cash was driven by cash used in operations, offset by financing from borrowings Cash Flow Summary | Metric (in thousands) | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | Change | | :------------------------------------------ | :-------------------------- | :-------------------------- | :------- | | Net cash used in operating activities | $(46,317) | $(5,529) | $(40,788) | | Net cash used in investing activities | $(2,226) | $(10,228) | $8,002 | | Net cash provided by (used in) financing activities | $20,807 | $(2,375) | $23,182 | | Net decrease in cash and cash equivalents | $(23,462) | $(18,353) | $(5,109) | | Cash and cash equivalents at end of period | $4,326 | $41,051 | $(36,725) | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail segment operations, the Onkyo acquisition, accounting policies, and significant financial changes [(1) Basis of Presentation](index=8&type=section&id=(1)%20Basis%20of%20Presentation) - The unaudited interim consolidated financial statements are prepared in accordance with GAAP and SEC rules, including normal recurring adjustments[20](index=20&type=chunk) - The Company operates in three reportable segments: **Automotive Electronics, Consumer Electronics, and Biometrics**[21](index=21&type=chunk) [(2) Acquisitions](index=8&type=section&id=(2)%20Acquisitions) - On September 8, 2021, the Company's subsidiary, Premium Audio Company LLC (PAC), completed the acquisition of certain assets of Onkyo Home Entertainment Corporation (OHEC) through a joint venture[22](index=22&type=chunk) - The acquisition expanded the Company's market share and product offerings in the premium audio industry, including **Onkyo, Integra, and Pioneer brands**[27](index=27&type=chunk) Acquisition Metrics | Acquisition Metric (in thousands) | September 8, 2021 (as adjusted) | | :-------------------------------- | :------------------------------ | | Total transaction consideration | $37,184 | | Intangible assets acquired | $19,024 | | Goodwill acquired | $18,160 | [(3) Net (Loss) Income Per Common Share](index=10&type=section&id=(3)%20Net%20(Loss)%20Income%20Per%20Common%20Share) - Restricted stock units, stock grants, and market stock units were **excluded from diluted EPS calculation** for the three and six months ended August 31, 2022, as their inclusion would have been anti-dilutive[32](index=32&type=chunk) Weighted-Average Common Shares Outstanding | Metric | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Weighted-average common shares outstanding (basic) | 24,423,577 | 24,281,220 | 24,418,020 | 24,273,731 | | Weighted-average common shares outstanding (diluted) | 24,423,577 | 24,855,307 | 24,418,020 | 24,890,641 | [(4) Investment Securities](index=11&type=section&id=(4)%20Investment%20Securities) - Mutual funds are held in connection with the Company's deferred compensation plan, with changes in carrying value offset by corresponding liability changes[34](index=34&type=chunk) Investment Securities Fair Value | Investment Type (in thousands) | August 31, 2022 (Fair Value) | February 28, 2022 (Fair Value) | | :----------------------------- | :--------------------------- | :----------------------------- | | Mutual funds | $1,225 | $1,231 | | Total Investment Securities | $1,225 | $1,231 | [(5) Fair Value Measurements and Derivatives](index=11&type=section&id=(5)%20Fair%20Value%20Measurements%20and%20Derivatives) - **Contingent consideration**, related to the Onkyo acquisition, is a Level 3 liability valued using an income approach based on future purchase projections[39](index=39&type=chunk) - The Company uses an **interest rate swap** to hedge interest rate exposure on its Florida Mortgage, locking the rate at **3.48%**[41](index=41&type=chunk)[42](index=42&type=chunk) Fair Value of Financial Instruments | Financial Instrument (in thousands) | August 31, 2022 (Total Fair Value) | February 28, 2022 (Total Fair Value) | | :---------------------------------- | :--------------------------------- | :----------------------------------- | | Cash and money market funds (Level 1) | $4,326 | $27,788 | | Mutual funds (Level 1) | $1,225 | $1,231 | | Derivatives designated for hedging (Level 2) | $84 | $188 (liability) | | Contingent consideration (Level 3) | $5,018 | $6,435 | [(6) Accumulated Other Comprehensive Loss](index=14&type=section&id=(6)%20Accumulated%20Other%20Comprehensive%20Loss) - **Foreign currency translation losses of $(3,622) thousand** for the six months ended August 31, 2022, were primarily due to the remeasurement of intercompany transactions[49](index=49&type=chunk) Changes in Accumulated Other Comprehensive Loss | Component (in thousands) | Balance at Feb 28, 2022 | Net Current-Period Other Comprehensive (Loss) Income (6 Months Ended Aug 31, 2022) | Balance at Aug 31, 2022 | | :------------------------------------------ | :---------------------- | :----------------------------------------------------------------- | :---------------------- | | Foreign Currency Translation Losses | $(16,691) | $(3,622) | $(20,313) | | Pension plan adjustments, net of tax | $(711) | $72 | $(639) | | Derivatives designated for hedging, net of tax | $(101) | $186 | $85 | | Total Accumulated Other Comprehensive Loss | $(17,503) | $(3,364) | $(20,867) | [(7) Supplemental Cash Flow Information](index=15&type=section&id=(7)%20Supplemental%20Cash%20Flow%20Information) Non-Cash Investing & Financing Activities | Non-Cash Investing & Financing Activities (in thousands) | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------------------------------- | :-------------------------- | :-------------------------- | | Recording of redeemable equity | $(108) | $85 | | Reclassification of stockholders' equity to redeemable equity | $341 | - | | Right of use assets obtained for operating lease obligations | $659 | - | | Change in goodwill due to measurement period adjustments, net | - | $(1,353) | | Cash paid for interest (excluding bank charges) | $671 | $310 | | Cash paid for income taxes (net of refunds) | $1,742 | $402 | [(8) Accounting for Stock-Based Compensation](index=15&type=section&id=(8)%20Accounting%20for%20Stock-Based%20Compensation) - The Company granted **46,556 Restricted Stock Units (RSUs)** in July 2022 under the 2014 Plan[53](index=53&type=chunk) - For the CEO, Patrick M. Lavelle, **80% of his Market Stock Unit (MSU) award vested** on March 1, 2022, and was settled in **$4,000 thousand cash**[56](index=56&type=chunk) Stock-Based Compensation Expense | Stock-Based Compensation (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total stock-based compensation expense | $136 | $237 | $262 | $473 | [(9) Supply Chain Financing](index=16&type=section&id=(9)%20Supply%20Chain%20Financing) - The Company uses supply chain financing and factoring agreements to accelerate receivable collection and manage cash flow[59](index=59&type=chunk) Receivable Balances Sold | Receivable Balances Sold (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total receivable balances sold, net of discounts | $21,478 | $29,975 | $41,682 | $42,176 | [(10) Research and Development](index=16&type=section&id=(10)%20Research%20and%20Development) - Research and development expenditures are expensed as incurred and are included within Engineering and technical support expenses[61](index=61&type=chunk) R&D Expenditures | R&D Expenditures (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total expenditures | $2,528 | $3,624 | $5,097 | $5,945 | [(11) Goodwill and Intangible Assets](index=17&type=section&id=(11)%20Goodwill%20and%20Intangible%20Assets) - Goodwill for Consumer Electronics **decreased by $2,908 thousand** due to foreign currency adjustments[62](index=62&type=chunk) - **Amortization expense for intangible assets increased** to $1,663 thousand and $3,588 thousand for the three and six months ended August 31, 2022, respectively[64](index=64&type=chunk) Net Carrying Value of Goodwill and Intangible Assets | Asset Type (in thousands) | August 31, 2022 (Net Carrying Value) | February 28, 2022 (Net Carrying Value) | | :------------------------ | :----------------------------------- | :----------------------------------- | | Total Goodwill, net | $71,412 | $74,320 | | Total Intangible Assets, net | $94,599 | $101,450 | [(12) Equity Investment](index=18&type=section&id=(12)%20Equity%20Investment) - The Company holds a **50% non-controlling ownership interest** in ASA Electronics, LLC[65](index=65&type=chunk) - The Company's share of income from ASA decreased due to a decline in ASA's revenue, gross profit, and net income[67](index=67&type=chunk)[171](index=171&type=chunk) ASA Financials | ASA Financials (in thousands) | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :---------------------------- | :-------------------------- | :-------------------------- | | Net sales | $56,199 | $61,560 | | Net income | $6,702 | $9,516 | | Company's share of income | $3,351 | $4,758 | [(13) Income Taxes](index=19&type=section&id=(13)%20Income%20Taxes) - The **Inflation Reduction Act of 2022 is not expected to materially impact** the Company's financial statements[70](index=70&type=chunk)[175](index=175&type=chunk) - The effective tax rates for both periods differed from the U.S. statutory rate of 21% due to various factors including non-controlling interest and valuation allowances[72](index=72&type=chunk)[74](index=74&type=chunk) Income Tax Metrics | Income Tax Metric (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Income tax (benefit) expense | $(708) | $(217) | $(1,800) | $267 | | Effective tax rate | 6.1% (benefit) | 23.9% (benefit) | 8.8% (benefit) | 19.5% (provision) | [(14) Inventory](index=19&type=section&id=(14)%20Inventory) Inventory Breakdown | Inventory Category (in thousands) | August 31, 2022 | February 28, 2022 | Change | | :-------------------------------- | :-------------- | :---------------- | :----- | | Raw materials | $21,492 | $23,904 | $(2,412) | | Work in process | $1,279 | $1,519 | $(240) | | Finished goods | $170,160 | $149,499 | $20,661 | | Total Inventory | $192,931 | $174,922 | $18,009 | [(15) Product Warranties and Product Repair Costs](index=20&type=section&id=(15)%20Product%20Warranties%20and%20Product%20Repair%20Costs) - The liability for product warranties is included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets[77](index=77&type=chunk) Warranty Activity | Warranty Activity (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Opening balance | $6,268 | $5,390 | $5,622 | $5,290 | | Liabilities accrued | $1,299 | $537 | $3,297 | $1,237 | | Warranty claims settled | $(1,328) | $(1,080) | $(2,680) | $(1,680) | | Ending balance | $6,239 | $4,495 | $6,239 | $4,495 | [(16) Financing Arrangements](index=20&type=section&id=(16)%20Financing%20Arrangements) - The Company's Credit Facility has a committed availability of up to **$140,000 thousand**, with **$101,571 thousand available** as of August 31, 2022[80](index=80&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The Florida Mortgage bears interest at 70% of 1-month LIBOR plus 1.54% and is hedged with an **interest rate swap to a fixed rate of 3.48%**[88](index=88&type=chunk)[90](index=90&type=chunk) - The shareholder loan payable to Sharp, related to the Onkyo joint venture, has a **2.5% interest rate** and matures on September 8, 2031[92](index=92&type=chunk) Debt Summary | Debt Type (in thousands) | August 31, 2022 | February 28, 2022 | Change | | :----------------------- | :-------------- | :---------------- | :----- | | Domestic credit facility | $27,400 | $0 | $27,400 | | Florida mortgage | $6,365 | $6,614 | $(249) | | Shareholder loan payable to Sharp | $3,976 | $4,718 | $(742) | | Total debt | $37,741 | $13,238 | $24,503 | [(17) Other (Expense) Income](index=23&type=section&id=(17)%20Other%20(Expense)%20Income) - **Foreign currency losses** for the three and six months ended August 31, 2022, were primarily due to **declines in the Japanese Yen**[94](index=94&type=chunk) Other (Expense) Income Breakdown | Other (Expense) Income (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Foreign currency (loss) gain | $(1,721) | $(2) | $(4,087) | $114 | | Interest income | $4 | $5 | $9 | $12 | | Rental income | $230 | $197 | $451 | $361 | | Miscellaneous | $(32) | $176 | $(2) | $331 | | Total other, net | $(1,519) | $376 | $(3,629) | $818 | [(18) Lease Obligations](index=23&type=section&id=(18)%20Lease%20Obligations) - The Company has operating leases for office equipment, offices, and facilities, and finance leases primarily for computer hardware and machinery[96](index=96&type=chunk) Lease Summary | Lease Type (in thousands) | August 31, 2022 | February 28, 2022 | | :------------------------ | :-------------- | :---------------- | | Operating lease, right of use assets | $4,106 | $4,464 | | Total operating lease liabilities | $4,125 | $4,553 | | Total finance lease right of use assets | $149 | $295 | | Total finance lease liabilities | $155 | $302 | | Weighted Average Remaining Lease Term (Operating) | 5.2 years | 5.5 years | | Weighted Average Remaining Lease Term (Finance) | 1.0 years | 1.3 years | [(19) Capital Structure](index=25&type=section&id=(19)%20Capital%20Structure) Capital Structure Summary | Security Type | Shares Authorized (Aug 31, 2022) | Shares Outstanding (Aug 31, 2022) | Voting Rights per Share | Liquidation Rights | | :---------------- | :------------------------------- | :-------------------------------- | :---------------------- | :----------------- | | Preferred Stock | 50,000 | — | — | $50 per share | | Class A Common Stock | 60,000,000 | 21,675,966 | 1 | Ratably with Class B | | Class B Common Stock | 10,000,000 | 2,260,954 | 10 | Ratably with Class A | | Treasury Stock | 2,862,218 (at cost) | N/A | N/A | N/A | [(20) Variable Interest Entity](index=25&type=section&id=(20)%20Variable%20Interest%20Entity) - VOXX is the **primary beneficiary of EyeLock LLC**, a market leader in iris-based identity authentication solutions[103](index=103&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) - EyeLock LLC entered into an exclusive distribution agreement with GalvanEyes LLC, which includes an annual fee of up to **$5,000 thousand per year**[105](index=105&type=chunk) EyeLock LLC Financials | EyeLock LLC Financials (in thousands) | August 31, 2022 | February 28, 2022 | | :------------------------------------ | :-------------- | :---------------- | | Total assets | $4,598 | $4,500 | | Total liabilities | $88,336 | $84,929 | | Partners' deficit | $(83,738) | $(80,429) | EyeLock LLC Revenues & Expenses | EyeLock LLC Revenues & Expenses (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :--------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $332 | $253 | $435 | $458 | | Net loss | $(1,494) | $(2,575) | $(3,309) | $(4,928) | [(21) Segment Reporting](index=28&type=section&id=(21)%20Segment%20Reporting) - The Company operates in three reportable segments: **Automotive Electronics, Consumer Electronics, and Biometrics**[109](index=109&type=chunk) - Automotive Electronics includes mobile multimedia and security systems; Consumer Electronics covers home theater and audio; Biometrics focuses on iris identification[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) Segment Net Sales | Segment Net Sales (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Automotive Electronics | $37,218 | $45,761 | $76,803 | $88,418 | | Consumer Electronics | $88,015 | $96,959 | $176,952 | $191,072 | | Biometrics | $332 | $253 | $435 | $458 | | Total Net Sales | $125,705 | $143,109 | $254,437 | $280,169 | [(22) Revenue from Contracts with Customers](index=29&type=section&id=(22)%20Revenue%20from%20Contracts%20with%20Customers) - The Company recognizes revenue primarily from the manufacture and distribution of products, with most revenue recognized at a point in time[119](index=119&type=chunk) Contract Balances | Contract Balances (in thousands) | August 31, 2022 | February 28, 2022 | | :------------------------------- | :-------------- | :---------------- | | Return asset | $1,332 | $2,619 | | Refund liability | $2,745 | $5,469 | | Current & non-current contract liabilities | $4,670 | $5,412 | Disaggregated Net Sales | Disaggregated Net Sales (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Automotive Electronics Segment | $37,218 | $45,761 | $76,803 | $88,418 | | Consumer Electronics Segment | $88,015 | $96,959 | $176,952 | $191,072 | | Biometrics Segment | $332 | $253 | $435 | $458 | | Corporate/Eliminations | $140 | $136 | $247 | $221 | | Total Net Sales | $125,705 | $143,109 | $254,437 | $280,169 | [(23) Contingencies](index=31&type=section&id=(23)%20Contingencies) - The Company is involved in a legal proceeding with Seaguard Electronics, LLC, which resulted in an **interim arbitration award against the Company for $39,444 thousand**[127](index=127&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk) - The Company has filed a Counter-Petition to Vacate the Partial Final Award, and the patent portion of the arbitration is set for October 2023[129](index=129&type=chunk) [(24) New Accounting Pronouncements](index=32&type=section&id=(24)%20New%20Accounting%20Pronouncements) - The Company is evaluating ASU No. 2020-04 and ASU No. 2021-01 regarding **LIBOR transition**, which could impact its Credit Facility and Florida Mortgage[131](index=131&type=chunk) - ASU No. 2021-08 (Accounting for Contract Assets and Liabilities) is **not expected to have a material impact**[132](index=132&type=chunk) - ASU No. 2022-03 (Fair Value Measurement of Equity Securities) is **not expected to have a material impact**[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes financial performance, highlighting sales declines driven by macroeconomic and supply chain issues [Forward-Looking Statements](index=33&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements subject to risks including **COVID-19, supply chain issues, chip shortages, and a worsening global economy**[135](index=135&type=chunk) [Business Overview](index=33&type=section&id=Business%20Overview) - VOXX International Corporation is a leading manufacturer and distributor in the **Automotive Electronics, Consumer Electronics, and Biometrics industries**[137](index=137&type=chunk) - The ongoing **COVID-19 pandemic, global supply chain constraints, and inflation** have adversely impacted the business[138](index=138&type=chunk)[139](index=139&type=chunk)[142](index=142&type=chunk) - The Company's objective is to grow by acquiring new brands, embracing new technologies, and expanding product development[143](index=143&type=chunk)[144](index=144&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Key accounting policies include revenue recognition, business combinations, inventory valuation, and goodwill impairment[146](index=146&type=chunk) - Global economic conditions could cause future changes to estimates, potentially leading to **material impacts on goodwill and long-lived asset impairment**[146](index=146&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) - **Automotive Electronics sales decreased** due to declines in aftermarket security products and rear seat entertainment, driven by a slowing economy and chip shortages[148](index=148&type=chunk)[149](index=149&type=chunk) - **Consumer Electronics sales decreased** due to reduced domestic demand, chip shortages, and the negative impact from the war in Ukraine on European sales[150](index=150&type=chunk)[151](index=151&type=chunk) - **Overall gross margin percentages decreased** due to increased material and shipping costs, chip shortages, and tariffs[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - **General and administrative expenses increased** due to amortization of Onkyo intangible assets, higher office costs, and professional fees[164](index=164&type=chunk)[165](index=165&type=chunk) - **Engineering and technical support expenses increased** due to additional headcount from the Onkyo acquisition[166](index=166&type=chunk)[167](index=167&type=chunk) - **Interest and bank charges increased** due to borrowings from the Wells Fargo Credit Facility and interest on the shareholder loan to Sharp[170](index=170&type=chunk)[171](index=171&type=chunk) - The Company recorded **significant foreign currency losses**, primarily driven by declines in the Japanese Yen[173](index=173&type=chunk) Segment Net Sales Performance | Segment Net Sales (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | % Change | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | % Change | | :------------------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Automotive Electronics | $37,218 | $45,761 | (18.7)% | $76,803 | $88,418 | (13.1)% | | Consumer Electronics | $88,015 | $96,959 | (9.2)% | $176,952 | $191,072 | (7.4)% | | Biometrics | $332 | $253 | 31.2% | $435 | $458 | (5.0)% | | Total net sales | $125,705 | $143,109 | (12.2)% | $254,437 | $280,169 | (9.2)% | Gross Margin Percentage by Segment | Gross Margin Percentage | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | Change (bps) | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | Change (bps) | | :---------------------- | :-------------------------- | :-------------------------- | :----------- | :-------------------------- | :-------------------------- | :----------- | | Company Total | 23.3% | 26.0% | (270) | 24.6% | 26.4% | (180) | | Automotive Electronics | 24.5% | 23.9% | 60 | 23.3% | 25.4% | (210) | | Consumer Electronics | 22.6% | 26.9% | (430) | 25.0% | 26.7% | (170) | | Biometrics | 40.1% | 30.4% | 970 | 36.3% | 25.5% | 1080 | Operating Expenses | Operating Expenses (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | % Change | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Selling | $11,865 | $11,838 | 0.2% | $24,150 | $23,305 | 3.6% | | General and administrative | $19,082 | $17,884 | 6.7% | $38,212 | $36,560 | 4.5% | | Engineering and technical support | $8,284 | $7,886 | 5.0% | $16,673 | $14,118 | 18.1% | | Acquisition costs | $0 | $2,316 | (100.0)% | $136 | $2,992 | (95.5)% | | Total operating expenses | $39,231 | $39,924 | (1.7)% | $79,171 | $76,975 | 2.9% | Other (Expense) Income | Other (Expense) Income (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | % Change | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | % Change | | :------------------------------------ | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Interest and bank charges | $(911) | $(582) | (56.5)% | $(1,641) | $(1,110) | (47.8)% | | Equity in income of equity investee | $1,763 | $2,035 | (13.4)% | $3,351 | $4,758 | (29.6)% | | Interim arbitration award | $(986) | $0 | (100.0)% | $(1,972) | $0 | (100.0)% | | Other, net | $(1,519) | $376 | (504.0)% | $(3,629) | $818 | (543.6)% | | Total other income | $(1,653) | $1,829 | (190.4)% | $(3,891) | $4,466 | (187.1)% | [EBITDA and Adjusted EBITDA](index=43&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) - EBITDA and Adjusted EBITDA are non-GAAP measures used to evaluate performance, excluding non-cash and non-routine items[181](index=181&type=chunk)[182](index=182&type=chunk) EBITDA and Adjusted EBITDA Reconciliation | Metric (in thousands) | 3 Months Ended Aug 31, 2022 | 3 Months Ended Aug 31, 2021 | 6 Months Ended Aug 31, 2022 | 6 Months Ended Aug 31, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net (loss) income attributable to VOXX International Corporation | $(10,216) | $311 | $(16,743) | $3,027 | | EBITDA | $(6,765) | $3,249 | $(10,953) | $9,599 | | Adjusted EBITDA | $(3,336) | $6,348 | $(3,406) | $14,737 | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) - **Operating activities used $46,317 thousand cash**, primarily due to increased inventory and decreased accounts payable[186](index=186&type=chunk) - **Financing activities provided $20,807 thousand cash**, driven by borrowings from the Credit Facility[188](index=188&type=chunk) - The Company has a senior secured Credit Facility with **$101,571 thousand available** as of August 31, 2022[190](index=190&type=chunk)[196](index=196&type=chunk) - The Company believes its cash and credit arrangements provide adequate resources to fund ongoing operations for the next twelve months[199](index=199&type=chunk) Key Liquidity Metrics | Metric (in thousands) | August 31, 2022 | February 28, 2022 | Change | | :-------------------- | :-------------- | :---------------- | :----- | | Working capital | $137,189 | $126,756 | $10,433 | | Cash and cash equivalents | $4,326 | $27,788 | $(23,462) | Contractual Cash Obligations | Contractual Cash Obligations (in thousands) | Total | Less than 1 Year | 2-3 Years | 4-5 Years | After 5 Years | | :---------------------------------------- | :---- | :--------------- | :-------- | :-------- | :------------ | | Finance lease obligation | $155 | $155 | $0 | $0 | $0 | | Operating leases | $4,125 | $1,201 | $1,396 | $659 | $869 | | Bank obligations | $27,400 | $0 | $0 | $27,400 | $0 | | Shareholder loan payable to Sharp | $3,976 | $0 | $0 | $0 | $3,976 | | Contingent consideration | $5,018 | $524 | $1,333 | $894 | $2,267 | | Unconditional purchase obligations | $169,988 | $169,988 | $0 | $0 | $0 | [Related Party Transactions](index=47&type=section&id=Related%20Party%20Transactions) - EyeLock LLC has an exclusive distribution agreement with GalvanEyes LLC, managed by Beat Kahli, the largest holder of Voxx's Class A Common Shares[201](index=201&type=chunk) [Recent Accounting Pronouncements](index=47&type=section&id=Recent%20Accounting%20Pronouncements) - The Company refers to Note 24 for details on new accounting pronouncements related to Reference Rate Reform and Fair Value Measurement[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The Company is exposed to market risks from foreign currency exchange rates and changes in interest rates - A uniform **10% strengthening of the U.S. dollar** would have resulted in a decrease in sales of approximately **$5,300 thousand** for the six months ended August 31, 2022[204](index=204&type=chunk) - A hypothetical **10% adverse change in foreign currency exchange rates** would result in a negative impact of **$62 thousand** on Other comprehensive income (loss)[206](index=206&type=chunk) - The Company manages interest rate risk on its Florida Mortgage with an **interest rate swap, locking the rate at 3.48%**[208](index=208&type=chunk)[209](index=209&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204%20CONTROLS%20AND%20PROCEDURES) The CEO and CFO concluded that disclosure controls and procedures were effective as of August 31, 2022 - The Chief Executive Officer and Chief Financial Officer concluded that the Company's **disclosure controls and procedures were effective** as of August 31, 2022[210](index=210&type=chunk) - There were **no material changes** in the Company's internal control over financial reporting during the six months ended August 31, 2022[211](index=211&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=49&type=section&id=Item%201%20LEGAL%20PROCEEDINGS) The Company refers to Note 23 for details on legal proceedings, including the Seaguard Electronics arbitration - Information regarding legal proceedings is detailed in **Note 23** of the Notes to the Unaudited Consolidated Financial Statements[212](index=212&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A%20RISK%20FACTORS) There have been no material changes to risk factors previously disclosed in the Company's Form 10-K - There have been **no material changes** from the risk factors previously disclosed in the Company's Form 10-K for the fiscal year ended February 28, 2022[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The Company did not repurchase any shares of its Class A Common Stock during the reporting period - The Company **did not purchase any shares** of Class A Common Stock during the three and six months ended August 31, 2022[214](index=214&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206%20EXHIBITS) This section lists all exhibits filed, including employment agreements, certifications, and XBRL-formatted financials - Exhibits include Second Amendments to Employment Agreements for key executives[215](index=215&type=chunk) - Certifications from the CEO and CFO are included pursuant to Exchange Act Rules and the Sarbanes-Oxley Act[215](index=215&type=chunk) - The Consolidated Financial Statements and Notes are provided in **Inline eXtensible Business Reporting Language (iXBRL) format**[215](index=215&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) The report was duly signed on October 11, 2022, by the President/CEO and SVP/CFO on behalf of the Company - The report was signed on **October 11, 2022**, by Patrick M. Lavelle, President and Chief Executive Officer, and Charles M. Stoehr, Senior Vice President and Chief Financial Officer[216](index=216&type=chunk)

VOXX International Corporation (NASDAQ:VOXX) Q1 2023 Earnings Conference Call July 12, 2022 10:00 AM ET Company Participants Glenn Wiener - Investor Relations Pat Lavelle - President & Chief Executive Officer Michael Stoehr - Senior Vice President & Chief Financial Officer Conference Call Participants Brian Ruttenbur - Imperial Capital Victoria James - D.A. Davidson Operator Good day, and thank you for standing by and welcome to the VOXX International Fiscal 2023 First Quarter Results Conference Call. I wil ...