• Revenue: Q2 sales of $92.5 million, down 18.6% year-over-year.

• Automotive Segment Sales: Declined by $9 million.

• Consumer Segment Sales: Decreased by $12 million.

• Gross Margin: 24.5%, down 70 basis points.

• Operating Expenses: Reduced by $5.3 million or 14.3%.

• Total Debt: Reduced to under $20 million as of October 9, 2024.

• Net Debt: Stood at $13.6 million.

• Inventory Reduction: Decreased by approximately $15 million.

• Automotive Segment Gross Margin: Increased by 80 basis points.

• Consumer Segment Pretax Income: $4.6 million compared to a loss of $7 million in fiscal 2024.

• Warning! GuruFocus has detected 5 Warning Signs with VOXX.

Release Date: October 11, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• VOXX International Corp (NASDAQ:VOXX) successfully reduced its total debt from over $73 million to under $20 million, significantly improving its financial flexibility.

• The company generated $48 million in gross proceeds from strategic divestitures, which were used to pay down debt.

• VOXX International Corp (NASDAQ:VOXX) has made significant progress in restructuring and rightsizing its business, aiming for a more profitable and valuable company.

• The company is optimistic about its premium audio segment, expecting improved profitability and growth with new product launches.

• VOXX International Corp (NASDAQ:VOXX) has completed initial restructuring programs, leading to targeted improvements and a better inventory position.

Negative Points

• The automotive segment experienced a 26.8% decline in sales during the first half of fiscal '25, with a pretax loss of $3.6 million.

• The consumer segment saw a $21 million decline in sales, with premium audio sales down $3.3 million.

• Gross margins declined by 70 basis points in the second quarter, primarily due to product mix and sales declines in higher-margin categories.

• The company faces ongoing challenges in the global supply chain, impacting its ability to return to profitability.

• VOXX International Corp (NASDAQ:VOXX) is still dealing with the aftermath of COVID-19, which disrupted normal buying cycles and impacted sales in both automotive and consumer segments.

Q & A Highlights

Q: Can we assume that Klipsch is worth more than the $166 million purchase price from 2011? A: Patrick Lavelle, CEO: Yes, Klipsch is worth more now, especially with the addition of Onkyo's electronics expertise, which enhances Klipsch's acoustic capabilities. This combination is expected to drive future growth.

Q: Is Klipsch up for sale? A: Patrick Lavelle, CEO: We are in a process to determine the company's value, and there may be offers for the entire company or parts of it, similar to the Gentex offer.