VOXX International (US:VOXX)2021-05-14 02:03Financial Data and Key Metrics Changes - For the fourth quarter, net sales increased over 60% year-over-year, with gross profit up by $13.8 million, although gross profit percentage decreased due to new distribution agreements [12][47] - Operating income improved by $38.9 million to $3.9 million, and adjusted EBITDA rose by $10.2 million to $11.9 million for the quarter [13][14] - For fiscal 2021, net sales grew by 42.7%, operating income increased by $72.8 million to $22.5 million, and adjusted EBITDA grew by $42.1 million to $46.9 million [13][14] Business Line Data and Key Metrics Changes - The automotive segment saw net sales grow close to 90%, with OEM sales up 11.6% and aftermarket product sales up over 150% due to acquisitions [47] - Consumer electronics segment net sales increased approximately 50%, with premium audio product sales up over 95%, while other CE product sales decreased by over 13% [48] - The biometric segment reported net sales of approximately $400,000 year-over-year [55] Market Data and Key Metrics Changes - The automotive segment's gross margins increased by 370 basis points, while consumer electronics segment gross margins declined by 120 basis points [56] - Consolidated gross margins were down 210 basis points, but gross profit dollars increased due to new distribution channels [49] Company Strategy and Development Direction - The company plans to continue evaluating strategic transactions to enhance business and stockholder value, especially in light of the financial challenges faced by competitors [15] - VOXX has secured new retail customers, established new subsidiaries, and made strategic acquisitions to strengthen its market position [17][18] - The company aims to expand its premium audio product line and has plans for new product launches in the home theater and headphone categories [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth despite challenges such as chipset shortages and container delays impacting sales [22][23] - The automotive segment is expected to double in size over the next two to three years, driven by new contracts and product launches [28][30] - The consumer electronics segment is anticipated to grow, particularly if the acquisition of Onkyo is successfully completed [32][38] Other Important Information - The company ended fiscal 2021 with approximately $60 million in cash and cash equivalents and only $7.1 million in debt [14][61] - A significant healthcare contract was awarded to integrate EyeLock technology into new products, with a targeted launch in 2023 [81] Q&A Session Summary Question: Accounting treatment of the proposed distribution agreement with EyeLock - The agreement is standalone, and purchases will be recorded in EyeLock's books as sales and gross profit [65] Question: Treatment of the put and call agreement - The put and call agreement will not be executed in the first two years, and the accounting treatment is under review [66][67] Question: Products sold by VSM to trucking companies - Primary products include heavy-duty turn signals and certain lighting for trucks [73] Question: Impact of chip shortages on infotainment systems - Automotive-grade chips have been secured to ensure product launches remain on schedule despite supply chain issues [75] Question: Information on medical devices with EyeLock - A major healthcare contract has been awarded to incorporate EyeLock technology into healthcare products, with a limited launch targeted for 2023 [80]