Audiovox Swings to Q4 Profit on Strong Sales of FLO TV Products
Audiovox swung to a $6.5 million Q4 profit from a $70 million loss a year earlier as it benefited from strong sales of FLO TV products and acquisitions of Invision Industries and Schwaiger accessories, the company said. Revenue rose to $150 million from $115 million, as Invision and Schwiager added $11.2 million to sales, Chief Financial Officer Michael Stoehr said on a conference call.
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Audiovox’s revenue also grew due to strong Qualcomm FLO TV mobile TV products, including a rear-seat entertainment system featuring a 10.5-inch LCD monitor. The system was being promoted Monday on Sound Factory’s Web site at $719, down from a $1,423 list. The rear-seat package includes the 10.5-inch monitor, wireless and wired remotes, a 3x2.5x1.2-inch antenna and 5x3x1-inch interface box. Audiovox also is preparing a combo DVD player/FLO TV product expected to ship in June at $199. A Chrysler-branded FLO TV tuner also is sold through dealers. The FLO TV service, which delivers 12 channels, carries a $14.95 monthly fee. The company also distributes FLO TV’s portable TV product, with a 3.5-inch LCD. Amazon was promoting the device Monday at $179, down from $199. Audiovox also sells Sirius XM satellite radio products.
The improved earnings were partially due to a $5.4 million “gain of bargain purchase” related to its $4.3 million acquisition of Schwaiger last fall. The details of the gain weren’t disclosed. Audiovox officials weren’t immediately available for comment. It also gained $1 million on an investment, presumably on its equity stake in Audiovox Specialized Applications. Audiovox owns half of ASA. Earnings also benefited from a sharp drop in operating expenses to $30.4 million from $66.8 million a year earlier, which included $38.8 million in goodwill and intangible asset impairment. Audiovox also cut jobs, ending the fiscal year with 970 employees. Audiovox said its results last year were dragged down by charges related to its dropping flat-panel TVs, two-way radios and some digital picture frames.
Audiovox is banking on Invision, which makes rear seat entertainment systems, helping it expand its OEM business to $100 million is fiscal 2011. The OEM business accounted for 9 percent of Audiovox’s $550.6 million in net sales in the fiscal year ended Feb. 28, according to the company’s 10-K filing with the SEC. Invision contributed $4 million to Q4 sales, the company said. Audiovox sells OEM automotive entertainment products to 10 manufacturers including Chrysler, Ford and General Motors.
The company also is readying an e-reader incorporating Barnes & Noble’s service, and it will deliver an RCA line of One-for-All Smart Remotes this year, CEO Patrick Lavelle said. Audiovox signed an agreement in 2008 with Universal Electronics for microcontrollers, software and the One for All brand. Audiovox expects to ship in the summer its Zentral product, designed to enable an iPhone or Blackberry to work as a remote control. Zentral includes a docking station that communicates with a base device via Bluetooth, enabling an iPhone to control up to 16 devices, the company said.