VOXX International Q2 2023 sales $125.7 million
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Net sales in the Fiscal 2023 second quarter ended August 31, 2022, were $125.7 million as compared to net sales of $143.1 million in the Fiscal 2022 second quarter ended August 31, 2021, a decrease of $17.4 million or 12.2%.
Automotive Electronics segment net sales in the Fiscal 2023 second quarter were $37.2 million as compared to $45.8 million in the comparable year-ago period, a decrease of $8.5 million or 18.7%.
For the same comparable periods, OEM product sales were $15.2 million as compared to $16.4 million, and aftermarket product sales were $22.0 million as compared to $29.4 million.
The year-over-year decline is primarily related to lower sales of aftermarket security and satellite radio products, and lower sales of both OEM and aftermarket rear-seat entertainment products. The decline in OEM product sales was also related to ongoing supply chain issues related to components and parts, resulting in slowdowns in OEM production.
This also had an impact on aftermarket sales, as did the overall state of the economy. Partially offsetting the decline were higher sales of aftermarket automotive safety electronics and accessory products, with the latter related to new soundbars for club cars which launched in Fiscal 2022.
Consumer Electronics segment net sales in the Fiscal 2023 second quarter were $88.0 million as compared to $97.0 million in the comparable year-ago period, a decrease of $8.9 million or 9.2%. For the same comparable periods, Premium Audio product sales were $69.2 million as compared to $76.1 million and other CE product sales were $18.8 million as compared to $20.8 million.
The decline in Premium Audio product sales was primarily related to lower domestic sales of premium home theater speakers and wireless speaker products, and lower European sales. Supply chain constraints and the resulting chip shortages, along with a slowing of the economy and a decrease in consumer spending adversely impacted sales in the Fiscal 2023 second quarter. As an offset to these declines were higher sales of Onkyo and Pioneer products and higher sales from the Company's PAC Australia subsidiary.
The year-over-year decline in other CE product sales was primarily related to economic conditions globally.
Biometrics segment net sales in both the Fiscal 2023 second quarter and Fiscal 2022 second quarter were $0.3 million. Sales for the comparable periods increased slightly driven primarily by a new customer added this Fiscal year. The Company anticipates a ramp up in sales moving forward as a result of new projects awarded and a growing pipeline across multiple industry verticals.
The gross margin in the Fiscal 2023 second quarter was 23.3% as compared to 26.0% in the Fiscal 2022 second quarter, a decline of 270 basis points. For the same comparable periods, the Company reported:
Automotive Electronics segment gross margin of 24.5% as compared to 23.9%, an increase of 60 basis points. The year-over-year improvement was primarily driven by steps the Company has taken to mitigate higher supply chain costs, ongoing supply chain constraints and higher tariffs, partially offset by lower margins on certain new OEM rear-seat entertainment products.
Consumer Electronics segment gross margin of 22.6% as compared to 26.9%, a decline of 430 basis points. The year-over-year decline was primarily driven by lower sales of premium home theater speaker products and higher supply chain costs, partially offset by higher sales of Onkyo and Pioneer products, as well as pricing and sourcing adjustments undertaken by the Company.
Biometrics segment gross margin of 40.1% as compared to 30.4%. The year-over-year improvement in gross margin was primarily a result of tooling costs incurred during the three months ended August 31, 2021 that did not repeat in the current year, as well as more sales of licenses in the Fiscal 2023 second quarter compared to the prior year.
Total operating expenses in the Fiscal 2023 second quarter were $39.2 million as compared to $39.9 million in the comparable Fiscal 2022 period, a decline of $0.7 million or 1.7%. For the same comparable periods:
Selling expenses of $11.9 million were essentially flat for the comparable periods. The Company incurred higher web platform expenses and online platform fees, offset by a decrease in commission expense.
General and administrative expenses of $19.1 million increased by $1.2 million. The Company incurred higher depreciation and amortization expenses of approximately $0.8 million primarily due to the amortization of intangible assets of the new Onkyo subsidiary, which was not present in the prior year period.
Additionally, the Company incurred higher office and occupancy expenses and professional fees related to Onkyo, and higher restructuring expenses associated with the relocation of certain OEM production. There were other offsetting factors for the comparable periods.
Engineering and technical support expenses of $8.3 million increased by $0.4 million, primarily due to an increase in engineering labor expense and related payroll expense associated with the Onkyo subsidiary, partially offset by a net decrease in research and development expenses.
Acquisition costs declined by $2.3 million as the Company incurred acquisitions costs in the Fiscal 2022 second quarter associated with the asset purchase agreement signed with Onkyo Home Entertainment Corporation and the joint venture created with Sharp Corporation to complete the transaction. There were no acquisition costs incurred in the Fiscal 2023 second quarter.
The Company reported an operating loss in the Fiscal 2023 second quarter of $10.0 million as compared to an operating loss of $2.7 million in the Fiscal 2022 second quarter.
Total other income/expense, net, in the Fiscal 2023 second quarter was a loss of $1.7 million as compared to other income, net of $1.8 million in the Fiscal 2022 second quarter, a decline of $3.5 million.
The variance was primarily related to a $1.4 million net foreign currency loss in the Fiscal 2023 second quarter resulting from declines in the Japanese Yen.
The Company recorded a charge of $1.0 million representing interest expense related to the interim arbitration award accrued during Fiscal 2022, with no charge recorded in the comparable year-ago period. Additionally, equity in income of equity investee declined by $0.3 million and interest and bank charges increased by $0.3 million when comparing the Fiscal 2023 and Fiscal 2022 second quarters.
Net loss attributable to VOXX International Corporation in the Fiscal 2023 second quarter was $10.2 million as compared to net income attributable to VOXX International Corporation of $0.3 million in the comparable Fiscal 2022 period.
The Company reported a basic and diluted net loss per share attributable to VOXX International Corporation of $0.42 in the Fiscal 2023 second quarter as compared to basic and diluted net income per common share attributable to VOXX International Corporation of $0.01, in the comparable Fiscal 2022 period.
The Company reported an Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") loss in the Fiscal 2023 second quarter of $6.8 million as compared to EBITDA in the Fiscal 2022 second quarter of $3.2 million. Adjusted EBITDA in the Fiscal 2023 second quarter was a loss of $3.3 million as compared to Adjusted EBITDA in the Fiscal 2022 second quarter of $6.3 million. ■