Categories Interviews, Technology

VOXX International will double business in a few years: CEO Pat Lavelle

"Our financial strength and our ability to successfully navigate through change over 6 decades in business, has created new opportunities for growth and improved profitability."

The COVID-19 pandemic had a mixed effect on VOXX International Corp (NASDAQ: VOXX) –  high demand for stay-at-home products and strong online sales more than offset the impact of store closures and supply chain issues. VOXX operates through the main segments of automotive electronics and consumer electronics. It is a market leader in rear-seat entertainment systems and vehicle security systems, with a focus on original equipment manufacturers and the automotive aftermarket.

Innovation Mode

The pandemic did not stop the company from expanding its distribution network and ramping up the portfolio constantly so as to align the business with technological advancements and changes in the market. Such efforts often translated into shareholder value, though the stock experienced volatility in recent months. Shares of VOXX entered 2021 on a high note and climbed to a multi-year high in February but pared most of the gains in the following weeks. However, it has the potential to bounce back this year, if the positive financial performance is any indication.  

Read management/analysts’ comments on VOXX’s Q1 2022 earnings

In the first quarter, the Florida-headquartered company reported a comprehensive net income of $3.2 million or $0.11 per share, which marked an improvement from the prior-year quarter when it incurred a loss of about $8 million or $0.34 per share. Sales jumped 90% year-over-year to $137 million in the most recent quarter, while adjusted EBITDA grew by $11.5 million.

VOXX International Q1 2022 Earnings Infographic

Despite the elevated costs, mainly related to supply chain and legal & professional fees, the management predicts strong performance for both the second quarter and the full fiscal year. It is estimated that going forward, overall performance would get a boost from new OEM awards, distribution partnerships, product launches as well as revenues from newly acquired companies.

New Avenues

In an interview with AlphaStreet this week, chief executive officer Pat Lavelle said the business benefited from new avenues that opened up during the pandemic, which also resulted in strategic acquisitions. According to him, the company is financially strong and has a history of navigating through changes successfully, which created new growth opportunities and enhanced profitability.

“We took steps early on to lower costs, manage our cash and maintain our financial flexibility, and to ensure we were in position to meet customer demand. On one hand, we were impacted by retail store closures, OEM plant shutdowns, and delays in procuring anticipated new business due to the environment. On the other hand, we benefited from the stay-at-home products we sell in the premium audio category and across some of our consumer electronics and consumer accessory product lines,” said Lavelle.

Bullish on Onkyo Deal

VOXX recently added warehouse giant Costco to its customer network, for the premium audio product lines. It also opened a new subsidiary in Premium Audio Group and formed a joint venture with Sharp Corp. to buy certain assets of Onkyo Home Entertainment Corp., besides inking a new licensing and distribution pact with Pioneer. The Onkyo deal is expected to add around $50 million of sales in fiscal 2022. While the transaction is set to close in August, Lavelle believes it would take time for Sharp to ramp up production lines.

“We did approximately $14 million of sales in FY21 and expect to do roughly $50 million in FY22; strong top-line growth, and with better margins anticipated as the joint venture will own the brands and manufacturing. As we rebuild worldwide sales, leveraging our infrastructure and distribution, we expect this to be highly accretive, yet it’s premature to say exactly at what point that will be reached,” he said. 

“There is a higher cost of doing business right now, and we felt this in our 1st quarter and will continue to feel it in the quarters ahead. To offset the impact, we instituted price increases as early as May, and we expect a positive impact in our 2nd quarter, with a larger impact in Q3 and beyond. This is an offsetting strategy. We expect to see gross margin improvements in certain areas of our business and lower gross margins in others. That is not due to the supply chain. Rather, this is also part of our strategy to expand distribution and move into categories and market channels where margins will be lower, but the overall gross profit contribution increases, thus positively impacting bottom-line performance.”

Pat Lavelle, chief executive officer of Voxx International

Auto Biz on Fast Lane

Though the auto industry has been hit hard by the pandemic, the automotive segment of VOXX witnessed strong growth in recent quarters, supported by its solid product line and feature-rich entertainment content like Fire TV from, Inc. (NASDAQ: AMZN). The management doesn’t see the auto slowdown having any long-term impact on the company. Encouraged by the flow of new awards from top customers like Ford, Nissan, Volvo, and Infinity, Lavelle expects the business to more than double in valuation over the next few years.

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When it comes to stock performance, the CEO attributed the wide swings to changes in technology and shifts in the operating model but exuded optimism about the stock’s future performance.


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