VOXX International Corporation (formerly Audiovox) works to be the one-stop-shop for electronics. It sells consumer electronics for communications, mobile, and home use and acts as an original equipment manufacturer (OEM) for car makers. Its products include automotive security devices, digital picture frames, HD TV antennae, stereo and speaker systems, portable DVD players, two-way radios, and universal remotes. They are marketed under such names as Acoustic Research, Advent, Audiovox, Code-Alarm, Energizer, Invision, Jensen, Mac Audio, Schwaiger, and Terk. VOXX's distribution network comprises retailers, distributors, car dealers, and other OEMs. Founded by John Shalam in 1960, VOXX went public in 1987.
From its headquarters in New York, VOXX directs company operations that span some 30 facilities in seven US states, as well as abroad in Germany, China, Canada, Mexico, Hong Kong, England, and France.
VOXX generates half of its revenue from the automotive market. The rest of the company's revenue -- in equal portions -- comes from premium auto and consumer accessories.
Sales and Marketing
VOXX markets its products to a variety of customers, including regional chain stores, mass merchants, power retailers, specialty and Internet retailers, new car dealers, distributors, the US military, cinema operators, and vehicle equipment manufacturers. VOXX's five largest customers generated some 29% of its 2014 sales and 28% in 2013. Its OEM customers, which include Ford Motor Company, General Motors, Kia, Porsche, Subaru, Best Buy, and Toyota, bring in about 10% of sales.
In 2014 VOXX posted $12.1 million in advertising expenses, up from $9.5 million in 2013 and 2012's $7.8 million.
As an electronics maker and OEM, VOXX relies on consumer spending and vehicle sales. The US, which represents its largest market, has struggled in recent years with stalled car sales and concerned consumers. While revenues have improved slightly, VOXX's top line took a hit, spurring the company to exit the unprofitable and competitive LCD flat-panel TV and portable GPS markets.
Instead, VOXX is investing heavily in research and development, significantly increasing these expenditures from $400,000 in 2012 to $15.9 million in 2013 and $21.3 million in 2014. The move has enabled VOXX to build a pipeline of new products across all three of its business lines. As part of this focus, VOXX in 2014 invested $3 million in EyeLock, which specializes in iris-based identity authentication, to leverage the firm's North American and European distribution channels and its myris line.
The company uses contract manufacturers in Asia, which enables VOXX to respond quickly to changes in technology and tastes, as well as keep costs low.
It also partners with others to boost revenue. In 2014 VOXX and Steelmate Automotive entered an exclusive distribution agreement through which Steelmate supplies VOXX Electronics items alongside the company's full line of collision avoidance and advanced automotive accessories.
Mergers and Acquisitions
Aiming to rev up its revenue, VOXX has focused on expanding its products portfolio. To that end, it acquired Germany's Car Communication Holding, a maker and supplier of Hirschmann-brand in-car communications and entertainment systems, for €85 million ($112 million) in 2012. Its customers include Audi, BMW, and Volkswagen, among others. Hirschmann became a wholly-owned subsidiary of VOXX. Previously, VOXX bought high-end audio gear maker Klipsch Group for $166 million in 2011. Klipsch is renowned for its branded speakers, sound systems, headphones, and other audio equipment. Klipsch is now a subsidiary of VOXX and operates as a stand-alone entity headquartered in Indiana.
VOXX revenue fell 3% in fiscal 2014 (ended February) to $809.7 million from 2013. The company attributes the drop to an 8% decline in its consumer accessories revenue along with a 2% decrease in premium auto revenues and 1% slip in automotive revenue. VOXX suffered a net income loss of $26.6 million during the reporting period due to $57.6 million in impairment charges and $1.3 million in restructuring expenses. Rising operating expenses didn't help VOXX post positive net income gains. Cash flow from operations rose $41.3 million in 2014 to $66.8 million.