VOXX Earnings 2020-08-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

voxx-10q_20200831.htm

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 August 31, 2020


☐	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)		13-1964841 (IRS Employer Identification No.)
2351 J Lawson Blvd., Orlando, Florida (Address of principal executive offices)		32824 (Zip Code)

(800) 645-7750 (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol:	Name of Each Exchange on which Registered
Class A Common Stock $.01 par value	VOXX	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of each class of the issuer's common stock outstanding as of the latest practicable date.

Class		As of October 8, 2020
Class A Common Stock		21,656,976 Shares
Class B Common Stock		2,260,954 Shares

VOXX International Corporation and Subsidiaries

Table of Contents

		Page
PART I	FINANCIAL INFORMATION

Item 1	FINANCIAL STATEMENTS
	Consolidated Balance Sheets at August 31, 2020 (unaudited) and February 29, 2020	3
	Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended August 31, 2020 and 2019	4
	Unaudited Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended August 31, 2020 and 2019	5
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended August 31, 2020 and 2019	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31
Item 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	44
Item 4	CONTROLS AND PROCEDURES	44

PART II	OTHER INFORMATION

Item 1	LEGAL PROCEEDINGS	45
Item 1A	RISK FACTORS	45
Item 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	45
Item 6	EXHIBITS	46
SIGNATURES		47

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VOXX International Corporation and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

	August 31, 2020			February 29, 2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	45,889		$	37,425
Accounts receivable, net		104,613			69,714
Inventory		126,407			99,110
Receivables from vendors		567			230
Prepaid expenses and other current assets		14,294			10,885
Income tax receivable		443			456
Total current assets		292,213			217,820
Investment securities		1,838			2,282
Equity investment		22,305			21,924
Property, plant and equipment, net		52,846			51,424
Operating lease, right of use asset		4,990			3,143
Goodwill		58,383			55,000
Intangible assets, net		94,350			88,288
Deferred income tax assets		56			52
Other assets		1,524			1,638
Total assets	$	528,505		$	441,571
Liabilities, Redeemable Equity, and Stockholders' Equity
Current liabilities:
Accounts payable	$	58,376		$	22,096
Accrued expenses and other current liabilities		45,743			34,046
Income taxes payable		2,424			1,523
Accrued sales incentives		17,543			12,250
Contract liabilities, current		4,486			—
Current portion of long-term debt		959			1,107
Total current liabilities		129,531			71,022
Long-term debt, net of debt issuance costs		26,319			6,099
Finance lease liabilities, less current portion		490			720
Operating lease liabilities, less current portion		3,996			2,391
Contract liabilities, less current portion		1,070			—
Deferred compensation		1,838			2,282
Deferred income tax liabilities		6,786			3,828
Other tax liabilities		1,094			1,225
Other long-term liabilities		6,130			3,294
Total liabilities		177,254			90,861
Commitments and contingencies (see Note 25)
Redeemable equity (see Note 8)		2,767			2,481
Stockholders' equity:
Preferred stock:
No shares issued or outstanding (see Note 21)		—			—
Common stock:
Class A, $.01 par value, 60,000,000 shares authorized, 24,406,194 and 24,306,194 shares issued and 21,656,976 and 21,556,976 shares outstanding at August 31, 2020 and February 29, 2020, respectively		245			244
Class B Convertible, $.01 par value, 10,000,000 shares authorized, 2,260,954 shares issued and outstanding at both August 31, 2020 and February 29, 2020		22			22
Paid-in capital		299,339			299,228
Retained earnings		121,207			122,139
Accumulated other comprehensive loss		(16,076	)		(19,055	)
Less: Treasury stock, at cost, 2,749,218 shares of Class A Common Stock at both August 31, 2020 and February 29, 2020		(23,918	)		(23,918	)
Less: Redeemable equity		(2,767	)		(2,481	)
Total VOXX International Corporation stockholders' equity		378,052			376,179
Non-controlling interest		(29,568	)		(27,950	)
Total stockholders' equity		348,484			348,229
Total liabilities, redeemable equity, and stockholders' equity	$	528,505		$	441,571

See accompanying notes to unaudited consolidated financial statements.

VOXX International Corporation and Subsidiaries

Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands, except share and per share data)

	Three months ended August 31,						Six months ended August 31,
	2020			2019			2020			2019
Net sales	$	128,032		$	90,246		$	200,019		$	183,700
Cost of sales		89,956			66,477			141,968			133,922
Gross profit		38,076			23,769			58,051			49,778
Operating expenses:
Selling		9,067			8,701			17,429			18,582
General and administrative		15,545			17,782			30,540			35,207
Engineering and technical support		4,781			5,035			9,266			10,842
Total operating expenses		29,393			31,518			57,235			64,631
Operating income (loss)		8,683			(7,749	)		816			(14,853	)
Other (expense) income:
Interest and bank charges		(1,010	)		(887	)		(1,863	)		(1,884	)
Equity in income of equity investee		1,883			1,265			2,745			2,705
Investment gain		—			775			—			775
Other, net		(392	)		547			142			2,191
Total other income, net		481			1,700			1,024			3,787
Income (loss) before income taxes		9,164			(6,049	)		1,840			(11,066	)
Income tax expense (benefit)		2,609			1,115			4,390			(1,530	)
Net income (loss)		6,555			(7,164	)		(2,550	)		(9,536	)
Less: net loss attributable to non-controlling interest		(785	)		(1,200	)		(1,618	)		(2,424	)
Net income (loss) attributable to VOXX International Corporation	$	7,340		$	(5,964	)	$	(932	)	$	(7,112	)
Other comprehensive income (loss):
Foreign currency translation adjustments		3,025			(215	)		3,529			(1,026	)
Derivatives designated for hedging		(294	)		(177	)		(471	)		(284	)
Pension plan adjustments		(65	)		9			(79	)		23
Other comprehensive income (loss), net of tax		2,666			(383	)		2,979			(1,287	)
Comprehensive income (loss) attributable to VOXX International Corporation	$	10,006		$	(6,347	)	$	2,047		$	(8,399	)
Income (loss) per share - basic: Attributable to VOXX International Corporation	$	0.30		$	(0.24	)	$	(0.04	)	$	(0.29	)
Income (loss) per share - diluted: Attributable to VOXX International Corporation	$	0.30		$	(0.24	)	$	(0.04	)	$	(0.29	)
Weighted-average common shares outstanding (basic)		24,224,478			24,481,477			24,223,935			24,457,482
Weighted-average common shares outstanding (diluted)		24,552,064			24,481,477			24,223,935			24,457,482

See accompanying notes to unaudited consolidated financial statements.

VOXX International Corporation and Subsidiaries

Unaudited Consolidated Statements of Stockholders' Equity

For the three and six months ended August 31, 2020 and 2019

(In thousands, except share and per share data)

	Class A and Class B Common Stock		Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Non- controlling Interests			Treasury Stock			Redeemable Equity			Total Stock- holders' Equity
Balances at February 29, 2020	$	266	$	299,228		$	122,139		$	(19,055	)	$	(27,950	)	$	(23,918	)	$	(2,481	)	$	348,229
Net loss		—		—			(8,272	)		—			(833	)		—			—			(9,105	)
Other comprehensive income, net of tax		—		—			—			313			—			—			—			313
Stock-based compensation expense		1		351			—			—			—			—			(201	)		151
Balances at May 31, 2020		267		299,579			113,867			(18,742	)		(28,783	)		(23,918	)		(2,682	)		339,588
Net income (loss)		—		—			7,340			—			(785	)		—			—			6,555
Other comprehensive income, net of tax		—		—			—			2,666			—			—			—			2,666
Settlement of SERP restricted stock units		—		(575	)		—			—			—			—			—			(575	)
Stock-based compensation expense		—		335			—			—			—			—			(85	)		250
Balances at August 31, 2020	$	267	$	299,339		$	121,207		$	(16,076	)	$	(29,568	)	$	(23,918	)	$	(2,767	)	$	348,484

Price	4.00	EPS	-2
Shares	24	P/E	-2
MCap	97	P/FCF	7
Net Debt	-54	EBIT	-51
TEV	43	TEV/EBIT	-1
TTM 2019-05-31, in MM, except price, ratios

10-Q	2020-08-31	Filed 2020-10-13
10-Q	2020-05-31	Filed 2020-07-10
10-K	2020-02-29	Filed 2020-06-15
10-Q	2019-11-30	Filed 2020-01-09
10-Q	2019-08-31	Filed 2019-10-10
10-Q	2019-05-31	Filed 2019-07-10
10-K	2019-02-28	Filed 2019-05-14
10-Q	2018-11-30	Filed 2019-01-09
10-Q	2018-08-31	Filed 2018-10-10
10-Q	2018-05-31	Filed 2018-07-10
10-K	2018-02-28	Filed 2018-05-14
10-Q	2017-11-30	Filed 2018-01-09
10-Q	2017-08-31	Filed 2017-10-10
10-Q	2017-05-31	Filed 2017-07-10
10-K	2017-02-28	Filed 2017-05-15
10-Q	2016-11-30	Filed 2017-01-09
10-Q	2016-08-31	Filed 2016-10-11
10-Q	2016-05-31	Filed 2016-07-11
10-K	2016-02-29	Filed 2016-05-16
10-Q	2015-11-30	Filed 2016-01-11
10-Q	2015-08-31	Filed 2015-10-13
10-Q	2015-05-31	Filed 2015-07-09
10-K	2015-02-28	Filed 2015-05-14
10-Q	2014-11-30	Filed 2015-01-08
10-Q	2014-08-31	Filed 2014-10-09
10-Q	2014-05-31	Filed 2014-07-10
10-K	2014-02-28	Filed 2014-05-15
10-Q	2013-11-30	Filed 2014-01-08
10-Q	2013-08-31	Filed 2013-10-10
10-Q	2013-05-31	Filed 2013-07-10
10-K	2013-02-28	Filed 2013-05-15
10-Q	2012-11-30	Filed 2013-01-09
10-Q	2012-08-31	Filed 2012-10-10
10-Q	2012-05-31	Filed 2012-07-10
10-K	2012-02-29	Filed 2012-05-14
10-Q	2011-11-30	Filed 2012-01-09
10-Q	2011-08-31	Filed 2011-10-11
10-Q	2011-05-31	Filed 2011-07-11
10-K	2011-02-27	Filed 2011-05-16
10-Q	2010-11-30	Filed 2011-01-10
10-Q	2010-08-31	Filed 2010-10-12
10-Q	2010-05-31	Filed 2010-07-12
10-K	2010-02-28	Filed 2010-05-14
10-Q	2009-11-30	Filed 2010-01-11

8-K	2020-11-02	Other Events
8-K	2020-10-12	Earnings, Other Events, Exhibits
8-K	2020-08-17	Shareholder Vote, Regulation FD, Exhibits
8-K	2020-07-10	Earnings, Other Events, Exhibits
8-K	2020-07-06	Other Events, Exhibits
8-K	2020-06-11
8-K	2020-05-04
8-K	2020-04-07
8-K	2020-02-03
8-K	2020-01-09
8-K	2019-10-10
8-K	2019-09-30
8-K	2019-07-25
8-K	2019-07-08
8-K	2019-06-07
8-K	2019-05-14
8-K	2019-04-29
8-K	2019-01-23
8-K	2019-01-09
8-K	2018-10-10
8-K	2018-07-19
8-K	2018-07-10
8-K	2018-05-14
8-K	2018-04-19
8-K	2018-01-09

EX-31.1	voxx-ex311_10.htm
EX-31.2	voxx-ex312_11.htm
EX-32.1	voxx-ex321_9.htm
EX-32.2	voxx-ex322_8.htm

VOXX 10Q Quarterly Report

VOXX Earnings 2020-08-31