VOXX International (US:VOXX)2023-10-10 20:12Sales 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].