The Premium Audio Company and parent company Vox International are facing a grim future with their latest quarter results released overnight, painting a picture of a Company in trouble with their CEO admitting that he does not have a clue as to what the future holds.
Overall, their consumer electronics audio sales in the last quarter were UDS$78.0 million, down from $88.0 million in the same period a year-ago.
Premium Audio Products saw a sales decline of 23.1% from $69.2 million last year to $53.2 million this quarter.
Speculation is that the Australian subsidiary of PAC is set to be closed down with the business returning to a distribution model.
At an investor briefing Voxx CEO Pat Lavelle didn’t sugarcoat it, telling analysts that the company is in a challenging business environment and that it is doing all it can to “combat everything that comes our way.”
Another problem hurting the Company is that Voxx International are also having to fund their joint manufacturing operations with Foxconn owned Sharp, after the business acquired in 2021, the Onkyo/Integra brands (and licensed the Pioneer/Pioneer Elite brands) from the now-bankrupt Onkyo Corporation in Osaka, Japan.
The company revealed in its first quarter report that it had experienced a decrease in the “domestic sales of its Onkyo and Pioneer related products of approximately $4 [million] as a result of decreased consumer spending, as well as due to an increase in competition related to these products from the likes of Masimo Consumer the former Sound United Company.
PAC experienced a decrease in domestic sales of its Onkyo and Pioneer related products of approximately $3.8M
This investment is impacting on cash flow with the business continuing to report losses.
In the last quarter the business reported an operating loss of US$8.5 million.
This was despite the company’s extensive cost-cutting restructuring and headcount reduction earlier this year.
The company also reported a loss of $10.2 million ($0.42/share) in the same period last year.
Contributing to this net loss was a restructuring charge of over $2.0 million and an extraordinary payout against a negative arbitration ruling of $1.6 million.
The move to cut costs is believed to be the reason that the business is looking to move back to a distributor model in Australia where the business is losing money.
“It’s the bottom line that we’re focused on most.” The company is on a mission to be able to turn a profit on lower sales and took extraordinary measures to trim expenses to get there” Lavelle told analysts.
He is tipping year-over-year growth and profitability in the second half of our Fiscal year.
Lavelle claims that industry-wide sales of speakers are Down ‘Roughly 16%.’ he said.
One thing he did tip was a significant rollout of new products coming soon.
He said that the business has retooled their soundbar offering and has a slate of new Klipsch sound bars coming to market during the second half of the year.
New Klipsch Flexes will be launched before the year is out he said, however it’s not known when the product will be launched in Australia.
This is the first ever product developed in tandem by Klipsch and Onkyo.
The business is also going after JBL’s 80% share of the global partybox market with a new range of partybox speakers.
He’s claiming that this “is the hottest category you’ll see”.
Also coming is a new Klipsch Music City portable Bluetooth speaker that can broadcast to other Bluetooth speakers in stereo, as well as a new Klipsch subwoofer.
recently introduced this year are doing very well and have received excellent reviews which should help continue to drive growth He said that the Klipsch Reference Premiere speakers will be in the Dodge Ram EV trucks with an impressive 26-speaker sound system.
This is the first entrance of the Klipsch brand into automotive and we believe this is a new area of growth as other automotive manufacturers recognize the value of the Klipsch brand.
After selling the vision of explosive sales of Onkyo and Pioneer products around the world, Lavelle has admitted that this is yet to happen.
The only excuse he came up with for poor sales was that consumers are holding back on hardware purchases right now.
As for the recent purchase of 8.6% of Vox International shares by Gentex, Lavelle claims they are only a “strategic investor..”
Gentex President and CEO Steve Downing was already on the Voxx Board of Directors prior to the purchase.
