VOXX International Corporation (VOXX) reported better-than-expected earnings for the third quarter of 2019 but revenues missed estimates. The stock was up 2.4% in after-market hours on Wednesday.
Net sales dropped 17.2% to $129.6 million versus the year-ago quarter, with the majority of the decline seen in the Consumer Accessories segment. Net income attributable to VOXX International Corp. improved to $12.2 million or $0.50 per share from $8.6 million or $0.35 per share in the prior-year period.
During the quarter, sales in the Automotive segment grew 10.9% year-over-year to $45.1 million, driven by a 36.7% increase in Automotive OEM sales. Premium Audio segment sales fell 13.5% to $49.7 million due to lower sales of certain discontinued products, lower sales in the European markets and a shift in sales strategy.
In the Consumer Accessories segment, sales fell 40.7% to $34.7 million due to various factors, including higher initial load-ins of wearable devices and wireless products in Q3 2018, lower sales in reception due to a large program that did not repeat, and lower volume in other legacy categories.
Pat Lavelle, President and CEO said, “The steps we have and continue to take to improve gross margins and lower expenses resulted in a modest improvement in operating income, despite a $27 million reduction in sales. We have begun taking aggressive actions to restructure our Consumer Accessories segment and realign our international Premium Audio segment; actions we believe will result in a stronger and more profitable company going forward. We are focusing R&D resources to develop unique product solutions that will help VOXX expand sales in new and growing categories. Further, our balance sheet continues to improve as evidenced by the increase in our cash position and lower debt position compared to the Fiscal 2019 second quarter. We will be providing updates on our strategy and financial expectations as a result of the changes underway over the next quarter. All of us at VOXX with the support of our Board are focused on doing what is necessary to improve shareholder value.”
As of November 30, 2018, the company had cash and cash equivalents of $48.7 million while total debt was $18.2 million.