Klipsch Onkyo Parent Company Forced To Borrow $20M Due To COVID
Vox International, the owners of the Klipsch, Onkyo and Jamo brands, has admitted they were forced to borrow from their revolving credit facility this year as COVID and shortages took an impact on the business.
In the latest 2021 financials for the US audio group, who now operate their own Premium Audio Products subsidiary in Australia, the Company admits they had to terminate people in an effort to cut costs.
In a financial report filed in the US, Vox International, who in May 2021 acquired Japanese Company Onkyo in partnership with Sharp, claimed the business was forced to take “Aggressive, and prudent actions, including revaluating all expenditures, to enhance the Company’s ability to meet the Company’s short-term liquidity needs” last year.
In Australia, the integrity of their business methods was bought into question when they tried to nobble Melbourne-based audio distributor Qualifi, who at the time was their appointed distributor for their Klipsch and Jamo range of products.
The US Company was exposed for their questionable behaviour after an attempt to harm their then Melbourne-based distributor Qualifi went pear-shaped.
Working with Peter Shamoon, the then Sales Director at Qualifi, and Phil Hawkins the General Manager of Qualifi over several months, Premium Audio Product executives in Asia moved to set up their own subsidiary in Australia using confidential information, gleaned by the pair who now work for the Vox International subsidiary.
At one stage, Shamoon approached Melbourne-based Westan, who was also interested in acquiring Qualifi in an effort to get them to try to take both Denon and Marantz away from Qualifi in an effort to hurt the business, which is now booming under new owners.
The plan backfired when archival Sound United acquired Qualifi.
ChannelNews understands that Phil Hawkins has removed from his LinkedIn profile any reference about his years working at Qualifi.
We also discovered that Hawkins accidently left behind a USB drive that had confidential information relating to Qualifi customers and sales going back 18 months.
This is information insiders claim was passed on to Premium Audio Products.
In their latest financial filings, Vox International claim, “As a precautionary measure, the business in April 2020 borrowed $20M from its revolving credit facility to improve its cash position and resumed factoring accounts receivable balances under all of its supply chain financing arrangements, which it had previously scaled back.”
The money was eventually paid back after the business went on a rampant cost-cutting exercise in an effort to preserve what Vox describes as “liquidity and mitigate risk during this unprecedented COVID-19 outbreak”.
The business is now working with its service providers to further reduce costs by negotiating lower rates.
They claim the Company currently monitoring the impact COVID-19 has had on its global supply chain, which includes the disruptions of product deliveries.
The business admits they have seen reductions in sales of certain products as a result of COVID-19.
They claim these reductions in revenue were not offset by proportional decreases in expense, as the Company ‘continues to incur overhead costs including depreciation expense, and certain other costs, such as compensation and administrative expenses, resulting in a negative effect on the relationship between the Company’s costs and revenues.
Vox claims they cannot “reasonably estimate” at this time the impact COVID and shipping and production delays are having on the business.
Recently, PAP started shipping cheap bottom end 4K receivers into Australia in a desperate attempt to take on archival Sound United and their popular Denon and Marantz receivers.
We are told Snap AV, who have been promising retailers and custom installers Onkyo receivers for several months, are now anticipating stock in December 2021.