Audiovox Tops Zacks Consensus

• By Zacks Equity Research
• On 11:40 am EDT, Wednesday October 14, 2009

For the second quarter of fiscal 2010, Audiovox Corp. (NasdaqGM: VOXX - News) reported net income of $2.8 million or earnings per share of 12 cents, compared to a net loss of $2.3 million or a loss per share of 10 cents in the corresponding prior-year period. This exceeded the Zacks Consensus Estimate of 2 cents per share.

Net sales for the quarter were $124.9 million, compared to net sales of $147.2 million in the prior-year period, a decrease of 15.2%.

Accessories sales were $45.9 million, an increase of 29% compared to $35.5 million in the same quarter, a year ago. This increase is primarily due to the addition of new customers and higher sales of antennas as a result of the switch from analog to digital TV, remote controls and other accessory lines under Terk, Acoustic Research and RCA.

Electronics sales, which include both mobile and consumer electronics were $79 million, compared to $111.7 million in the year-ago period, a decrease of 29.2%.

Gross margins increased by 190 basis points to 18.9% from 17% in the prior-year quarter.

The Company reported operating expenses of $22.8 million, a decrease of $6.3 million or 21.7% compared to $29.1 million in the year-ago period. As a percentage of net sales, operating expenses decreased to 18.2% from 19.8% in the prior-year period. The decrease in operating expenses was primarily due to the overhead reduction program and cost containment efforts instituted in the second half of fiscal 2009.

Audiovox is a recognized leader in the marketing of automotive entertainment, vehicle security and remote start systems, consumer electronics products and consumer electronics accessories. The company markets its products through an extensive distribution network that includes power retailers, 12-volt specialists, mass merchandisers and an OE sales group. The company markets products under the Audiovox, RCA, Jensen, Acoustic Research, Energizer, Advent, Code Alarm, TERK, Prestige and SURFACE brands. Major competitors include Sony Corp. (NYSE: SNE - News) and Panasonic Corp. (NYSE: PC - News).

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