VOXX Earnings 2020-11-30

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

voxx-10q_20201130.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 November 30, 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 January 8, 2021
Class A Common Stock		21,666,976 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 November 30, 2020 (unaudited) and February 29, 2020	3
	Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended November 30, 2020 and 2019	4
	Unaudited Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended November 30, 2020 and 2019	5
	Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended November 30, 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	32
Item 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46
Item 4	CONTROLS AND PROCEDURES	46

PART II	OTHER INFORMATION

Item 1	LEGAL PROCEEDINGS	47
Item 1A	RISK FACTORS	47
Item 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	47
Item 6	EXHIBITS	48
SIGNATURES		49

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VOXX International Corporation and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

	November 30, 2020			February 29, 2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	21,337		$	37,425
Accounts receivable, net		155,322			69,714
Inventory		138,607			99,110
Receivables from vendors		251			230
Prepaid expenses and other current assets		17,880			10,885
Income tax receivable		454			456
Total current assets		333,851			217,820
Investment securities		1,827			2,282
Equity investment		22,182			21,924
Property, plant and equipment, net		52,124			51,424
Operating lease, right of use asset		4,811			3,143
Goodwill		58,928			55,000
Intangible assets, net		92,797			88,288
Deferred income tax assets		56			52
Other assets		1,413			1,638
Total assets	$	567,989		$	441,571
Liabilities, Redeemable Equity, and Stockholders' Equity
Current liabilities:
Accounts payable	$	80,177		$	22,096
Accrued expenses and other current liabilities		55,695			34,046
Income taxes payable		3,166			1,523
Accrued sales incentives		27,883			12,250
Contract liabilities, current		3,396			—
Current portion of long-term debt		500			1,107
Total current liabilities		170,817			71,022
Long-term debt, net of debt issuance costs		5,973			6,099
Finance lease liabilities, less current portion		386			720
Operating lease liabilities, less current portion		3,813			2,391
Contract liabilities, less current portion		1,016			—
Deferred compensation		1,827			2,282
Deferred income tax liabilities		7,975			3,828
Other tax liabilities		1,123			1,225
Other long-term liabilities		5,570			3,294
Total liabilities		198,500			90,861
Commitments and contingencies (see Note 25)
Redeemable equity (see Note 8)		2,959			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, 24,416,194 and 24,306,194 shares issued and 21,666,976 and 21,556,976 shares outstanding at November 30, 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 November 30, 2020 and February 29, 2020		22			22
Paid-in capital		300,107			299,228
Retained earnings		139,458			122,139
Accumulated other comprehensive loss		(16,046	)		(19,055	)
Less: Treasury stock, at cost, 2,749,218 shares of Class A Common Stock at both November 30, 2020 and February 29, 2020		(23,918	)		(23,918	)
Less: Redeemable equity		(2,959	)		(2,481	)
Total VOXX International Corporation stockholders' equity		396,909			376,179
Non-controlling interest		(30,379	)		(27,950	)
Total stockholders' equity		366,530			348,229
Total liabilities, redeemable equity, and stockholders' equity	$	567,989		$	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 November 30,						Nine months ended November 30,
	2020			2019			2020			2019
Net sales	$	201,065		$	110,112		$	401,084		$	293,812
Cost of sales		142,937			78,648			284,905			212,570
Gross profit		58,128			31,464			116,179			81,242
Operating expenses:
Selling		12,761			9,580			30,190			28,162
General and administrative		21,128			16,689			51,668			51,896
Engineering and technical support		5,676			5,059			14,942			15,901
Total operating expenses		39,565			31,328			96,800			95,959
Operating income (loss)		18,563			136			19,379			(14,717	)
Other (expense) income:
Interest and bank charges		(471	)		(751	)		(2,334	)		(2,635	)
Equity in income of equity investee		1,761			967			4,506			3,672
Gain on sale of real property (see Note 19)		—			4,057			—			4,057
Investment gain (see Note 4)		42			—			42			775
Other, net		(121	)		(322	)		21			1,869
Total other income, net		1,211			3,951			2,235			7,738
Income (loss) before income taxes		19,774			4,087			21,614			(6,979	)
Income tax expense		2,334			2,720			6,724			1,190
Net income (loss)		17,440			1,367			14,890			(8,169	)
Less: net loss attributable to non-controlling interest		(811	)		(1,097	)		(2,429	)		(3,521	)
Net income (loss) attributable to VOXX International Corporation	$	18,251		$	2,464		$	17,319		$	(4,648	)
Other comprehensive income (loss):
Foreign currency translation adjustments		79			(295	)		3,608			(1,321	)
Derivatives designated for hedging		(43	)		13			(514	)		(271	)
Pension plan adjustments		(6	)		2			(85	)		25
Other comprehensive income (loss), net of tax		30			(280	)		3,009			(1,567	)
Comprehensive income (loss) attributable to VOXX International Corporation	$	18,281		$	2,184		$	20,328		$	(6,215	)
Income (loss) per share - basic: Attributable to VOXX International Corporation	$	0.75		$	0.10		$	0.72		$	(0.19	)
Income (loss) per share - diluted: Attributable to VOXX International Corporation	$	0.74		$	0.10		$	0.71		$	(0.19	)
Weighted-average common shares outstanding (basic)		24,197,786			24,418,313			24,196,393			24,458,926
Weighted-average common shares outstanding (diluted)		24,677,525			24,625,410			24,532,329			24,458,926

See accompanying notes to unaudited consolidated financial statements.

VOXX International Corporation and Subsidiaries

Unaudited Consolidated Statements of Stockholders' Equity

For the three and nine months ended November 30, 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

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	2020-11-30	Filed 2021-01-11
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
8-K	2020-10-12
8-K	2020-08-17
8-K	2020-07-10
8-K	2020-07-06
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_8.htm
EX-31.2	voxx-ex312_7.htm
EX-32.1	voxx-ex321_6.htm
EX-32.2	voxx-ex322_9.htm

VOXX 10Q Quarterly Report

VOXX Earnings 2020-11-30