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SeekingAlpha  Oct 10  Comment 
By SA Transcripts: VOXX International Corp (NASDAQ:VOXX) Q2 2015 Earnings Conference Call October 09, 2014 10:00 am ET Executives Glenn Wiener - President GW Communications Pat Lavelle - President, Chief Executive Officer, Director ...
Benzinga  Oct 10  Comment 
Procera Networks (NASDAQ: PKT) shares declined 25.73% to $6.35 in pre-market trading after the company announced weak preliminary Q3 sales and issued a downbeat full-year forecast. Analysts at Stifel Nicolaus downgraded Procera Networks from Buy...
SeekingAlpha  Oct 9  Comment 
By Jay Yoon: When I first began my research of VOXX International (NASDAQ:VOXX), I originally thought VOXX shares might make for an interesting long opportunity. On the surface, the Company looks cheap from a valuation perspective. The Company's...
SeekingAlpha  Jul 30  Comment 
Sometimes, the market gives investors opportunities to take positions in companies that are quietly going through transformative phases, while most market participants are focused on recent performance or are distracted by other issues. The...
StreetInsider.com  Jul 22  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/VOXX+Int%27l+%28VOXX%29+Unit%2C+Guangdong+Steelmate+Security+Enter+Distribution+Agreement/9679471.html for the full story.
SeekingAlpha  Jul 11  Comment 
VOXX International Corporation (VOXX) Q1 2015 Results Earnings Conference Call July 11, 2014, 10:00 AM ET Executives Glenn Wiener - President, GW Communications, IR Patrick M. Lavelle - President and CEO Charles M. Stoehr - SVP and...
DailyFinance  Jul 10  Comment 
Shareholder rights law firm Johnson & Weaver, LLP has filed a class action lawsuit in the United States District Court for the Eastern District of New York on behalf of purchasers of VOXX International Corporation (“VOXX”...
TheStreet.com  Jul 10  Comment 
NEW YORK (TheStreet) --Shares of VOXX International Corp. are falling -12.13% to $7.75 in after-hours trading on Thursday following the company's report that its fiscal 2015 first quarter net income was $0.5 million, or 2 cents per diluted share,...
DailyFinance  Jul 9  Comment 
Holzer & Holzer, LLC announces that a class action lawsuit has been filed in the United States District Court for the Eastern District of New York on behalf of investors who purchased VOXX International Corporation (“VOXX”...
DailyFinance  Jul 8  Comment 
Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/voxx/) today announced that a class action has been commenced in the United States District Court for the Eastern District of New York on...




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Company Overview

Audiovox (NasdaqGS: VOXX) originally started in the car radio business in 1965. Audiovox answers the call for electronics. The company sells primarily consumer electronics for communications, mobile, and home use and acts as an original equipment manufacturer (OEM) for car makers. Products include automotive security devices, digital picture frames, HD TV antennae, stereo and speaker systems, portable DVD players, two-way radios, and universal remotes. Its goods are marketed under such brand names as Acoustic Research, Advent, Audiovox, Code-Alarm, Energizer, Invision, Jensen, Mac Audio, Schwaiger, and Terk. Audiovox's distribution network is composed of major retailers, distributors, car dealers, and other OEMs. Audiovox Corporation was founded in 1960 and is headquartered in Hauppauge, New York. [1]


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Business Overview

Audiovox Corporation is a leading international distributor and value added service provider in the accessory, mobile and consumer electronics industries. They conduct their business through eleven wholly-owned subsidiaries. Audiovox has a broad portfolio of brand names used to market their products as well as private labels through a large domestic and international distribution network. They also function as an OEM ("Original Equipment Manufacturer") supplier to several customers.

Over the last several years, they have focused on their intention to acquire synergistic businesses with the addition of seven new subsidiaries. These subsidiaries helped them to expand their core business and broaden their presence in the accessory and OEM markets. Their most recent acquisition of Invision has provided the opportunity to enter the manufacturing arena. Their intention is to continue to pursue business opportunities which will allow them to further expand their business model while leveraging overhead and exploring specialized niche markets in the electronics industry.

Although they believe their product groups have expanding market opportunities, there are certain levels of volatility related to domestic and international markets, new car sales, increased competition by manufacturers, private labels, technological advancements, discretionary consumer spending and general economic conditions. Also, all of their products are subject to price fluctuations which could affect the carrying value of inventories and gross margins in the future.

The company sells its products to power retailers, mass merchants, regional chain stores, specialty and Internet retailers, independent 12 volt retailers, distributors, new car dealers, vehicle equipment manufacturers, and the U.S. military.

It also provides value added management services, which include product design and development, engineering and testing, sales training and customer packaging, instore display design, installation training and technical support, product repair services and warranty, nationwide installation network, warehousing, and specialized manufacturing.

Audiovox considers itself a good neighbor and a friend to the environment. They have a number of significant corporate policies that they strictly adhere to as part of their normal business practices. They are actively moving the company to a 'greener' one with packaging and printing initiatives designed to be considerate of the environment. They adhere to the following initiatives: The Electronic Recycling Act (Maine), The Electronic Recycling Act (California), and multiple Recycle Material Initiatives. [3]

Business and Financial Metrics

2009-2010: Electronics sales, which include both mobile and consumer electronics declined $74,412 in Fiscal 2010. The Company had anticipated the decline based on economic conditions and adjusted its inventory positions accordingly. In Fiscal 2009, the Company announced its decision to exit various high volume/low profit product categories including flat-panel TV's, portable navigation, GMRS and certain digital picture frames. In Fiscal 2010, only residual inventories were sold. The Company chose not to participate in a number of seasonal promotions in both the digital and portable DVD categories due to insufficient margins. They partially offset these declines through increased satellite sales as a result of a new agreement with Sirius/XM and the introduction of their Flo-TV product line. Accessories sales increased $22,008 due to the Schwaiger acquisition and the introduction of new products and new customers. These increases were partially offset by lower digital antennae sales caused by high load-ins in Fiscal 2009. [4]

2011: Audiovox's sales were up close to 9%, their gross margins increased 1.7% coming in at 20.8% and they posted a profit of $1.1 million and earnings per share of $0.05, compared to a profit last year of approximately $500,000 or $0.02 a share. Mobile Electronics sales were up 47%, with 26% of that increase attributed to the new OE business from their acquisition of Invision and 21%, a result of increases in their core mobile and security categories. International sales were up 36% largely due to Schwaiger acquisition, and they were able to post this increase despite a 12% decline on foreign currency exchange rates and driven by the weakening euro. All of these positive results offset lower sales in their Consumer and Accessory groups which were down 18.4%. While they’ve shown improvement over the last year's first quarter, like most companies they are still feeling the effects of an economic recovery that is materializing slower than anyone had expected. [4]

'Annual Financial Data, in millions FY2007 FY2008 FY2009 FY2010
Revenue$457.00 $591.00 $603.00 $551.00
Gross Profit$83.30 $117.00 $108.00 $114.00
Operating Income$4.08 $11.10 $-52.50 $5.42
Net Income$2.94 $8.46 $-71.00 $22.50
Asset Turnover0.915 1.11 1.31 1.13
Cash Conv. Cycle191.9 185.5 171.9 188.0
Current Ratio5.21 4.35 3.70 3.60
Quick Ratio3.76 2.46 2.21 2.48
[4] [5]

By looking at the table above, there is evidence that Audiovox was growing steadily until 2009, where their operating income and net income had a substantial drop. However, they quickly recovered in 2010 with an average operating income and their highest net income since 2007, with their revenue and gross profit staying steady. Asset Turnover measures a firm's efficiency at using its assets in generating sales or revenue - the higher the number the better. Audiovox has had a consistent value around 1.00. This is good, but Audiovox's management should work to get a higher value, so they can earn more per asset sold. Current and Quick Ratios measure a company's ability to pay off debt/obligations. The higher value for both ratios, the better off a company is. In Audiovox's case, they have good values for this ratio. This means they are able to pay off their debt in an efficient manner.

Image:chartvox.png [4] Image:3voxchart.png [6]

The two graphs above both represent many financial metrics that are very important to Audiovox. The graph on the right represents the net sales of the company for the last three years. Audiovox operates two segments: Electronics (dark grey) and Accessories (light grey). In looking at the graph, Audiovox has been very consistent with the amount of sale for both electronics and accessories. When people buy an electronic device, sometimes there are multiple accessories that can go with it that they might want. However, the amount of sales from electronics will always exceed that of accessories, due to the fact that the actual electronics cost more than the available accessories.

The second graph to the right displays Audiovox's Cash Conversion Cycle, Inventory Turnover, and Collection Ratio for the last four years. Their numbers for all three categories have been very consistent, even though they have been fluctuating a little each year. Cash Conversion Cycle is a metric that expresses the length of time, in days, that it takes for a company to convert resource inputs into cash flows. A low Cash Conversion Cycle is better for the company. In Audiovox's case, they have a high Cash Conversion Cycle, which means they take longer to convert cash on hand into even more cash on hand. This is something that their management team needs to focus on to decrease this figure and increase their effectiveness. The Collection Ratio measures the average number of days it takes a company to collect unpaid invoices. Audiovox has a high Collection Ratio. This means that they are having problems getting paid for their products that they sell. It could also be high due to seasonal changes, rising during busy seasons and falling during the off-season. Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over a period. Audiovox has a high Inventory Turnover, this means that Audiovox has either strong sales or is ineffective at buying. A higher inventory turnover ratio can also be considered a positive indicator of operating efficiency. Even though they have been consistent over the last few years, Audiovox's management can easily make some new decisions to be more efficient in each category.

Business Segments and Product Portfolio

Audiovox sells both the main electronic devices, as well as many add on accessories for those products. These are the two main product categories that attribute to revenue.

Video Products: Audiovox offers a wide variety of video products. Overhead Mobile Video (Audiovox and Movies2Go). Available in screen sizes from 8.5 inch to 12 inch and they provide your backseat passengers with front-row quality entertainment from their favorite movies or content from their personal media devices. Headrest Mobile Video (Audiovox, Movies2Go, and Invision). Personal communications devices have made the use of touch screens second nature to consumers and Audiovox has added that convenience to their touch screen DVD headrest units - one of many industry firsts from the design team at Audiovox. The system includes two factory matched headrests with built-in DVD players with two fold-flat wireless headphones to help reduce in-car clutter. The unique two-in-one remote control and game controller lets the user control the DVD system as well as the games with only one control, screen sizes range from 7 inches to 10 inches. Sony PS2 Overhead System allows children to play their favorite games in the car. Portable DVD Players have screens that range in size from 7 inches to 9 inches. They offer different degrees of screen rotation and range from two to six hours of battery life playback time. Portable Televisions with a built in ATSC receiver, small and portable, and includes a built in battery perfect for viewing on the go. They also feature a stand for counter top use, headphone jack, audio video input and includes a vehicle charging adapter. Under Cabinet Televisions allow you to enjoy television and movies in the kitchen with space saving, under counter LCD TVs come in seven inch and 9 inch screen displays.

Sirius XM: Audiovox makes receivers and accessories for both mobile and home Sirius and XM satellite radio products. The receivers come in different shapes and sizes and many different functions and capabilities. Some of the accessories that are available include: power vehicle kits, auxiliary cables, vehicle antennas, extension cables, speaker docks, headphones, and carrying cases.

GPS Personal Navigation: Audiovox offers pocket sized GPS systems that allow you to store and save locations. They are also equipped with a compass, LCD displays, track distances up to 9,999 miles, and provides faster acquisition times and improved tracking capabilities that will get you to the place you want to go.

Safety and Convenience: Audiovox offers a wide variety of safety products for your vehicles. They offer wired and wireless back up cameras for you car. These allow you to avoid serious accidents that could occur due to distractions when reversing your vehicle. They are easy to install with adjustable angles to your license plate. Back Up Monitors are available both for on dash and in the rear view mirror. These monitors help you ensure rear vehicle safety. The unit turns on when your vehicle is in reverse giving you an extra set of eyes to see something or someone behind you that you may have missed. Parking sensor systems and rear observation systems are also available. These systems help you detect things that you are not able to see while backing up and/or parking your vehicle.

Car Security & Remote Start: Audiovox provides many remote start and security systems for your cars. These allow you to start your car before getting into it. These also offer protection from burglary and theft.

CarLink by Audiovox: CarLink is their first smartphone interface that builds upon the heritage that has made them a market leader in remote start systems for years. CarLink allows you to start your vehicle, unlock your doors or pop the trunk from virtually any distance, or help you find your car in a large garage after a sporting event or a trip to the mall. It is as easy as the click of a button or the tap of your finger.

Flashlogic by Audiovox: This product supports vehicle integration solutions including CANBus applications for both passive anti-theft bypass (transponder, Vats, Passlock, PK3, etc) and convenience features such as doorlocks, trunk release, sliding door control.

Car Dealer Product Line: Advent has been a leading supplier to the new vehicle market since its inception; providing car dealers with high quality automotive accessory lines that focus on security, safety, convenience as well as the ever-expanding role that entertainment and connectivity plays in new vehicle purchases. The car dealer exclusive lines are marketed under the Advent, Pursuit and Pursuitrak brands and as the name implies are only available through new car dealers.

Other: Audiovox also sells cellphones, accessory speakers, headphones, walkie talkies, and ipod docks. [7]

Supply Chain Management

Audiovox’s supply chain usually starts in the Pacific Rim where it purchases goods for sale, largely to North American customers, from overseas manufacturers. The company works directly with its suppliers to design and test the products. A large percentage of its products are sold to the automotive OEMs.

Following the acquisition of the RCA products, Audiovox recognized that it needed to streamline its global supply chain. Pat Moffett, Vice President of Global Logistics & Customs Compliance at Audiovox, helped to initiate two changes to streamline their processes. First, the company initiated nonstop, long-haul, team driving from its primary port of entry to its main distribution centers in Indianapolis and Memphis. Prior to this, the company relied primarily on rail shipments from the port to its DCs. However, because ship and rail schedules did not always sync up, lead times were often unacceptably long. This led the company to spend too much on costly air freight. Today, of the 4,000 forty-foot ocean containers Audiovox imports each year, 500-600 trailers now move by road.

Secondly, Audiovox implemented a global visibility solution called POET (Purchase Order Expediting & Tracking System) from E2E. Visibility for goods shipped by ocean (the company is not using POET for air shipments) begins with the purchase order and ends with delivery of the goods to a DC in the U.S. A foreign manufacturer notifies the freight forwarder when the goods are ready for pick up. The freight forwarder is in charge of entering the key data that drives end-to-end visibility into the system, and it also knows how long it will take to move the goods from port to port. It is the freight forwarder’s responsibility to keep track of schedule changes and enter the new data into the visibility solution. POET is a good solution that is reasonably priced, but having freight forwarding partners with the right “discipline” is critical to making this solution work.

These changes have led to two main benefits: First, even though shipping by truck is more expensive than shipping by rail, the reduction in air shipments (along with other factors) was a major contributor in logistics costs dropping from 15 percent of revenues in 2002 to just 4 percent in 2009. Secondly, logistics personnel are now spending about half as much time answering the “when will this shipment arrive” question. [8]

Porter's 5 Forces

Rivalry Among Existing Firms

Rivalry in the electronics industry is very high. Companies are able to maintain a competitive advantage with innovation due to the large amount of technology that goes into the products and services. Obtaining that competitive advantage is key. Economies of scale can play a huge role in success as well as the market can also be price sensitive.There are many competitors in this industry that continuously strive to come up with the fastest, most innovative, and sleek products that will attract new users, retain loyal customers, and increase their market share. This high rivalry among the companies will continue now and into the future. This is good and bad. It's good because all the companies continue to push each other to create new and and innovative products. This will likely have a positive effect on their revenue and market share. However, with technology always changing and with some companies not being able to keep up, there is a chance that some companies will be pushed out of the industry.

Threat of New Entrants

The threat of new entrants into the industry is low. With so many businesses already in the industry, having established their market share and suppliers and innovative technologies, it would be hard for a new company to enter the market and compete with companies such as Audiovox, Sony, and Pioneer. These companies have established credibility, and there exists quite a bit of brand loyalty among consumers. It would be very hard for a new, small company to try and get a foot in the industry such as the electronics industry. If they are successful in breaking into the industry, their lifespan will be short if they can't keep up and produce innovative products that are of the quality of the prominent companies already in the industry. Many existing companies own patents on their current technology. For a company to enter the market having developed new technology is very time consuming, expensive and therefore highly unlikely.

Threat of Substitues

The threat of substitutes is medium to high. Every company in the industry is striving to create new products with new innovations and technology. What one company comes out with one month, another company could come out with a better, faster, smaller, and/or more customer friendly product. The pace of innovation and technology change has been astounding throughout the last couple of years. New versions of speakers, GPS, televisions, etc. come out almost on a daily basis. In order for a company to stay on top of the industry, they have to adapt to the new technologies and consumer preferences in order to stay a consumer favorite. An example is people can connect their ipod or other MP3 device to an aux. input on the dashboard of cars today, therefore don't need to buy expensive in-dash stereo set anymore like people used to do back when aux. inputs were not available.

Buyer Power

The buyer power of consumers is low. With numerous companies in the electronics market, consumers can switch to a new product easily. Competing companies usually have their product lines mirror or are close to the prices of their competitors. This makes it very easy and not very costly for a consumer to switch from one product to another company's product. If a customer is not 100% satisfied with their current product, they can easily go to the store and buy a similar product from a new company. For example, today all car radios are of a standard size, therefore customers can switch to new products easily without tearing apart the dashboards of their cars to install a new radio.

Supplier Power

The supplier power is low. There are many suppliers for companies that make electronic products. So it wouldn't be hard for Audiovox to leave one and start up a new deal with another supplier. Due to the large amount of substitutes with competitive pricing and a number that have their own distributive networks, the suppliers in the industry do not carry very much power.

Marketing Strategies

The Company markets its products through an extensive distribution network that includes national and regional retailers, 12-volt specialists, mass merchandisers and a growing OE sales group. This network and their long standing industry relationships have allowed them to benefit from growing market opportunities and to exploit niches in the mobile and consumer electronics businesses, both domestically and internationally. Audiovox Corp. expanded its marketing team to better accommodate the new brands it has acquired, including RCA A/V products. The acquisition of brands over the past several years “has necessitated an increase in the company’s focus on brand management, with a particular emphasis on developing a brand strategy and fashioning a consistent family look …for our products,” said Tom Malone, president of Audiovox Electronics Corp. “In addition,” said Malone, “Some of the new distribution channels that these acquisitions have brought require a greater measure of market intelligence and analytics.” [9]

Product

Audiovox founded, by John J.Shalam, started the company product line that only consisted of aftermarket car stereos. Throughout the years, they've entered the vehicle security market, then the cellular market, with recent innovations and technology they have started to offer both wired and wireless forms of products. Later they entered the consumer electronics marketplace with the first line of home and portable stereos. And they eventually entered numerous markets and with many acquisitions became the company they are today, offering a wide variety of electronic products ranging in many shapes, sizes, purposes, and convenience.

Price

Audiovox tries to provide the highest quality products and unparalleled customer service, while providing a competitive yet consumer friendly price.

Place

The number one way that Audiovox reaches its customers is through retail stores both domestically and internationally. Audiovox products are sold in many retail stores, of which include: Walmart, Best Buy, and other stores that sell electronics. Audiovox also allows customers to purchase their products online at store.audiovox.com. Here customers can view and purchase the wide variety of electronic products that Audiovox produce. This site also allows the customers to view their order status, create an onsite account, view different promotions and sales, and understand the return policy and how to contact Audiovox with any product concerns.

Promotion

Audiovox's online retail website provides customers with frequent sales and promotions that are available on the site. They also offer sales/coupons at different stores that carry Audiovox products.

SWOT Analysis

Strengths

Some strengths of Audiovox are their efficient supply chain and their ability to make smart successful acquisitions. Their supply chain allows them to reduce costs, be more efficient, and allows their logistics personnel to spend about half as much time answering the “when will this shipment arrive” question. Their ability to make successful acquisitions has allowed them to gain market share, increase revenues, break into new product markets, and allow them to gain new technology as well as gain more intangible knowledge that will help their business.

Weaknesses

Their main weakness is their lack of financial resources. The company just isn’t as big as some of its main competitors and that may be a problem in the future. Some other weaknesses for Audiovox are that some of their key financial metrics are not up to par compared to their competitors. A key weakness is that their acquisitions are impacting their stock price because they have been reporting a loss that has a direct impact on the stock. The stock when they return to profitability will come back to book value. The question then becomes is the acquisition they make a better return as opposed to buying their stock back, and or returning money back to their shareholders.

Opportunities

Being in the electronics business, Audiovox's greatest opportunity is technology. Technology is always an opportunity. Technology will continue to change forever, the ability to adapt and change with it will greatly help out Audiovox. With keeping up with technology Audiovox will be able to innovate new products with top of the line technology. More acquisitions are always a good opportunity for Audiovox, as earlier this year Audiovox announced its intention to acquire the Klipsch audio company outright.

Threats

Audiovox's main threats are its competitors. Their competitors are all threats because they all market to the same demographics. Some companies have a competitive advantage in offering their merchandise at a cheaper price. Other companies have a competitive advantage because of having more cash on hand, so they can offer more deals/sales. Also, because of the nature of the electronics wholesale industry as a whole, there is also the possibility that technology trends will change and if Audiovox or any of their competitors don’t constantly update their technology and products to stay relevant to their target demographic, then they will be left behind. Staying ahead of the curve is the only way for electronics companies like Audiovox to stay ahead in the competitive electronics industry.

Industry & Competition

INDUSTRY:

Audiovox competes in the electronics wholesale industry; competing directly with companies such as Pioneer Corporation, JVC Kenwood Holdings Inc., and Sony Corporation. Below is a table that shows various metrics comparing Audiovox with its competitors and the industry average. By looking at the table below, it is easy to see that Audiovox, being a smaller company, does not have a close Net Income and does not make revenues anywhere close to that of Pioneer and Sony, however looking at the industry average, Audiovox has an advantage and seems to be above average. Also, although Audiovox is smaller than its competitors, they have a a comparable Gross Margin. [10]

2010 VOXX vs. Competitors data Revenue Net Income Gross Margin Number of Employees Revenue per employee Net income per employee
VOXX $550.7M $22.5M 21.73% 970 $567.7K $231.2K
Pioneer $5.74B $-1.34B N/A 32,115 $178.73K $41.73K
Sony $88.09B $874.84M 24.21% 169,900 $518.48K $5.15K
Industry average $262.58M N/A 21.94% N/A $233.10K N/A
[11] [5]


COMPETITOR'S

Pioneer Corporation: Pioneer Corporation, is a leading maker of consumer and commercial electronics with subsidiaries and affiliates around the world. Pioneer Electronics (USA) is the sales and marketing arm of Pioneer's North American headquarters. The company offers audio, video, and computer products for the home and car, such as DVD and Blu-ray players, GPS navigation systems, and satellite radio. Pioneer Electronics (USA) also serves professional customers such as DJs and recording studios. [12]

Sony Corporation: Sony Corporation designs, develops, manufactures, and sells electronic equipment, instruments, and devices for consumer, professional, and industrial markets worldwide. The company offers consumer products and devices, including televisions, video cameras, compact digital cameras and digital single-lens reflex cameras, Blu-ray Disc players/recorders, DVD-video players/recorders, home theaters and audio systems, and portable audio and car audio products. [5]

Ratio 2010 Data VOXX SONY PIONEER
ROE 3.32% 3.64% -1.17%
ROA 0.46% 1.58% -30.4%
ROC 0.60% 4.58% N/A
Operating Margin0.64% 4.46% -9.77%
Profit Margin2.13% 0.99% -23.4%
Gross Margin21.73% 24.21% 14.5%
Debt/Equity4.22 31.58 2.84
Beta2.1 1.55 N/A
[11] [5]

The table above represents a comparison of Audiovox and its direct competitors, analyzing some of the important key financial ratios. This table shows that Pioneer is lacking in almost every category compared with Audiovox and Sony. However, Audiovox is only at an advantage to Sony in Profit Margin, but is comparable in ROE, Gross Margin, and Beta.

  • Returns: ROE is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROA is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. ROC is an indicator of when some or all of the money an investor has in an investment is paid back to him or her, thus decreasing the value of the investment. Looking at the table above, it is clear that Audiovox has some work to do to get their returns up. Their ROE is alright, but their ROA and ROC need to be improved in order to stay competitive with Sony and their other competitors. The higher these ratios are the better for Audiovox.
  • Margins: Operating Margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. Gross Margin represents the percent of total sales revenue that the company retains after incurring the direct costs associated with producing the goods and services sold by a company. The higher the percentage, the more the company retains on each dollar of sales to service its other costs and obligations. Profit Margin measures how much out of every dollar of sales a company actually keeps in earnings. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. Looking at the table, Audiovox has a poor operating margin, decent gross margin, and a very good gross margin. However, the higher percentage for all the margins, the better. So there is always room for improvement for Audiovox.
  • Debt/Equity: This ratio compares a company's total liabilities to its total shareholders' equity. This is a measurement of how much suppliers, lenders, creditors, and obligors have committed to the company versus what the shareholders have committed. Audiovox has a much lower Debt/Equity than Sony, this could be due to Sony being able to aggressively finance its growth with debt. Audiovox may have a lower ratio due to the fact that they are a much smaller company.
  • Beta: A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security's price will be more volatile than the market. Audiovox has a beta in the same range as Sony. However, a beta over 1, which they have, means the stock is risky and volatile. In summary, Audiovox may not be the best stock choice in the electronics wholesale industry.

Future Initiatives

The Company's domestic and international business is subject to retail industry conditions and the sales of new and used vehicles. The current worldwide economic condition has adversely impacted consumer spending and vehicle sales. If the global macroeconomic environment continues to be weak or deteriorates further, this could have a negative effect on the Company's revenues and earnings. In an attempt to offset the current market condition, the Company has reduced its operating expenses and has been introducing new product to obtain a greater market share. The Company continues to focus on cash flow and anticipates having sufficient resources to operate during Fiscal 2011 and 2012.

Audiovox has considered itself a good neighbor and a friend to the environment. They have a number of significant corporate policies that they strictly adhere to as part of their normal business practices. They are actively moving the company to a 'greener' one with packaging and printing initiatives designed to be considerate of the environment. They want to continue to be "green" and find new ways to stay competitive in the industry as well as help the environment in doing so. [3]

Key Personnel and Compensation

Audiovox's compensation programs are designed to attract and retain talented executives and motivate them to achieve corporate and business objectives that will increase stockholder value. To attain both near and long term corporate goals, it is their policy to provide incentives to senior management and reward outstanding performance and contributions to Audiovox's businesses. Consequently, Audiovox's compensation program for its executives includes a competitive base salary, a performance-based annual bonus and stock-based compensation. This approach to executive compensation enables Audiovox to attract and retain executives of outstanding ability while ensuring that their executives' compensation advances the interests of their shareholders. Consequently, a large proportion of their executives' compensation, the annual bonus, is dependent in significant part on Audiovox's performance. [13]


Below is a table that summarizes some of the key executives at Audiovox. Included is age, a list of the positions they currently hold at Audiovox, previous places of employment, as well as their current compensation as of Dec. 31, 2010. In looking at this table, it is evident that these top executives basically double their base salary with the amount of compensation they are able to earn.

Name Title Base Salary Total Compensation Previous Employers Age
Mr. Patrick M. Lavelle CEO, President, and Director $812,602 $1,936,334 Chairman of CEA's In-Vehicle Electronics Division and chairman of the Executive Board 58
Mr. Charles M. Stoehr CFO, Principal Accounting Officer, Senior VP and Director $360,000 $782,790 Six years experience in the commercial banking industry 63
Mr. C. David Geise Senior VP of Sales and President of Audiovox Accessories Corp $191,250 $367,500 VP and GM Thomson Accessories World-Wide and VP of International Business Americas 59
Mr. Thomas C. Malone Senior VP of Sales and President of Audiovox Electronics Corp $191,250 $509,715 VP for Primary Security, and serves on board of the Mobile Electronics Division of the Consumer Electronics Association (CEA) 55
Ms. Ann M. Boutcher CMO and VP $-- $-- -- 59

[13]

Noteworthy News

2011 -- In March 2011, Audiovox purchased the designer and maker of high-performance audio equipment, Klipsch, for $166 million.

-- Sunday, March 27, 2011, These 4 Business and Stock Market Headlines are HotWall St. Cheat Shee.

-- Wednesday, March 30, 2011, 10 Reliable Value Stocks and Strategies for Adding Greater Margin of Safety.

--Thursday, April 7, 2011, 10 Micro Cap Bargains for Further Research. [14]


2010 -- In February 2010, the Company’s new subsidiary, Invision Automotive Systems, Inc. completed the acquisition of the assets of Invision Industries, Inc., a manufacturer of rear seat entertainment systems to OEM’s, ports and car dealers for a total cash purchase price of $10.3 million. [14]


2009 --In October 2009, Audiovox German Holdings GmbH completed the acquisition of certain assets of Schwaiger GmbH, a German manufacturer of consumer electronics, SAT and receiver technologies for a total net asset payment of $4.3 million. [14]

References

  1. Company Profile
  2. Logo
  3. 3.0 3.1 VOXX Business
  4. 4.0 4.1 4.2 4.3 Annual Report
  5. 5.0 5.1 5.2 5.3 VOXX Key Ratios
  6. Financials
  7. Audiovox Products
  8. Steve Banker: The Audiovoxx Global Supply Chain, Logistic Viewpoints, 9/29/2009
  9. Marketing
  10. Industry
  11. 11.0 11.1 Competitor Analysis
  12. Pioneer Report
  13. 13.0 13.1 Personnel and Compensation
  14. 14.0 14.1 14.2 VOXX News
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