NASDAQ:VOXX VOXX International Q1 2025 Earnings Report $7.50 0.00 (0.00%) As of 04/1/2025 Earnings History VOXX International EPS ResultsActual EPS-$0.40Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AVOXX International Revenue ResultsActual Revenue$91.66 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AVOXX International Announcement DetailsQuarterQ1 2025Date7/10/2024TimeN/AConference Call DateThursday, July 11, 2024Conference Call Time10:00AM ETUpcoming EarningsVOXX International's Q4 2025 earnings is scheduled for Monday, May 12, 2025, with a conference call scheduled on Wednesday, May 14, 2025 at 4:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by VOXX International Q1 2025 Earnings Call TranscriptProvided by QuartrJuly 11, 2024 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:00Good morning, everyone. Speaker 100:00:02Good day, and thank you for standing by. Welcome to the VOXX International Fiscal 2025 First Quarter Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. Speaker 100:00:29I would now like to hand the conference call over to your speaker today, Glenn Weiner, Investor Relations. Please go ahead. Operator00:00:35Thanks, Shannon. I'm sorry for jumping the gun there. Good morning, and welcome to Box International's fiscal 2025 Q1 results conference call. Yesterday, we filed our Form 10 Q and issued our press release, both documents of which can be found in the Investor Relations section of our website atwww.voxxintl.com. And we intend to update our investor presentation and post that to the web later next week. Operator00:01:02Speaking from management today will be Pat Lavelle, Chief Executive Officer and Lori Anne Sheldon, our Chief Financial Officer and Chief Operating Officer. Following their prepared remarks, we will open up the call for questions. Before I get started, I would like to remind everyone that except for historical information contained herein, statements made on today's call and webcast that would constitute forward looking statements are based on currently available information. The company assumes no responsibility to update any such forward looking statements, and I would like to point you to the risk factors associated with our business, which are detailed in our Form 10 ks for the period ended February 29, 2024. Lastly, it's my pleasure to announce that the company will be holding its Annual Meeting of Stockholders on July 23, 2024 at 10 am Eastern. Operator00:01:47Our proxy has been sent to all shareholders of record and our Form DEF-fourteen A can be found online in the Investor Relations section of our website. This will be a virtual meeting and shareholders can attend by visiting www.virtualshareholdermeeting.com slash boxx2024, where they'll be able to listen to the meeting live, submit questions and vote online. At this time, it's my pleasure to now turn the call over to Pat. Thank you. Speaker 200:02:19Thank you, Glenn, and good morning, everyone. It's been only 2 months since we reported our year end results. And from a market perspective, not much has changed. The retail environment remains challenging, interest rates remain elevated and inflation is still a major concern. On our prior call, we cautioned that sales will be under pressure based on what we were seeing at retail and given the state of the automotive market. Speaker 200:02:45Automotive manufacturers are still under pressure. Inventory is building and layoffs at certain plants have begun. The transition to EVs is only adding to the challenges faced by carmakers. During the Q1, we took aggressive steps to improve margins and lower both our operating expenses and working capital needs. As you saw from our Q1 report, margins were up 3 10 basis points and expenses were cut significantly, down over 16% year over year with more improvements expected in the coming quarters. Speaker 200:03:21While we lost money both on an operating income and adjusted EBITDA basis, losses were lower year over year reflecting the deliberate actions we are taking. Based on our current sales projections, we expect to bring VOXX back to profitability this fiscal year. VOXX is in another transaction or a transition. And consistent with past experience, we believe we will emerge from this turbulent period as a stronger company with better investor returns. In addition to market issues holding back top line growth, we too are uncomfortable with our current debt level and our depressed share price, which is sitting near 52 week lows. Speaker 200:04:03Be assured, we have the same concerns as our investors. VOXX has been around for over 60 years. We have seen just about everything and we have always persevered. This time will be no different. Just look back at our last restructuring in fiscal 20 Over the past 2 years, however, we've seen a myriad of global challenges causing us to miss revenue projections as our customers struggle with ever changing demand. Speaker 200:04:39This has been 1 of our biggest challenges, managing and operating our business based on customer projections what we believe sales volumes will be Neals near term, while maintaining operating leverage to capture increases in sales and market share without significantly rescaling overhead. Our focus is clear. We want to remain in markets and categories where we have stability, profitability and growth potential, categories that generate positive margins and consistent returns. Thus, we have already begun a process to redirect capital to programs that help us achieve these goals. Additionally, during Q1, we engaged Accordion, a leading management consulting company to assist us in evaluating avenues to support our restructuring and profitability initiatives. Speaker 200:05:42Building on what we have already done and have planned, we're getting an outside perspective on other optimization programs we could implement this year. We want to ensure that we maintain the ability to scale quickly, especially as market conditions improve. And our new ERP conversion to Oracle Fusion, which kicked off in June, is a big part of our transition. It's a long term project estimated to be 18 months to completion. That should result in significantly greater efficiencies, better automation, data and technology tools and ultimately savings and overheads. Speaker 200:06:20We also plan to lower our debt and free up capital to reinvest in the company. Under the VOXX umbrella, we have over 35 trusted brands, several businesses and operating groups and various product categories within the automotive and consumer electronics industries. Some of the categories are in growth mode, while others are less profitable with slow to no growth. As part of our restructuring, we are again looking at every product and SKU, every customer program and determining our true cost to serve, meaning all costs that go into supporting each sale, both internal and external. We plan to generate capital efficiencies by either improving or eliminating programs that do not meet profitability criteria while making changes to our structure. Speaker 200:07:12In our Automotive segment, we're nearing completion of the move of our OEM production to Mexico. We've already realized some of the improvement, but we're still carrying 2 facilities. The transition is scheduled for completion by the end of the second quarter, which will then allow us to significantly reduce our physical footprint in Florida to house only our engineering, quality and admin OEM groups and a small warranty center. There will be further synergies and savings. We're in the process of exiting our RSE program with Stellantis, which I discussed last quarter. Speaker 200:07:49We're moving program with Ford, a new lighting system program with Nissan and Volvo and the new U. S. Postal Service trucks coming online this year and building thereafter. There are also several projects in the works for remote starts, turn signals, lighting, safety and more. Our OEM business will continue to face some near term pressure, but looking ahead, we have some strong business upcoming and a better margin and cost structure is anticipated. Speaker 200:08:27With respect to the aftermarket, it's been a challenge for the past few years due primarily to the economy. Pressure will continue this year, though our customer inventory levels have improved and we expect stronger remote start and alarm business as we move in into our Q3. We have a number of projects underway and here too we are rationalizing brands and SKUs to maximize profitability. In automotive, fiscal 2025 is about optimizing operations and our supply chain, focusing on the categories and customers where we have stable business and growth prospects and areas where we can generate better returns. My comments from year end are the same. Speaker 200:09:09Both OEM and aftermarket sales will be hard pressed, though the segment should be profitable. The key for VOXX is what we do now to enhance profits in the coming years as markets improve and the business grows. Within our Consumer segment, starting with Premium Audio. In fiscal 2024, we retooled our soundbar offerings, entered new categories and launched a number of new products last year, which reversed the slide in premium audio category and allowed us to expand sales. Our Klipsch Flexus sound system and the new Klipsch Music City Broadcast Bluetooth speakers are doing well, and we will be introducing a new line of party speakers towards the Q4. Speaker 200:09:55While our sales were down in fiscal 2024, they were down less than the industry and we gained market share. Internationally is where our business was impacted most, primarily in Asia. In Q1, our premium audio business grew. Even with continued domestic retail and consumer pressure and the state of the international markets today, we anticipate we will continue to see growth this year. Now, similar to our other businesses, we are looking at ways to improve both sales and margins while controlling costs. Speaker 200:10:33It's a balancing act because while we are certainly cutting where we can, we also continue to invest in new technology and cutting edge projects the products. This will not stop as it's essential to maintain the brand's loyal customers and drive growth. We are looking at all our brands, channels, customers and programs and here too seeing where we can improve capital management while potentially optimizing certain assets. Klipsch and Ankiyo continue to anchor our offering and will be the driving brands in our premium audio portfolio. In Q1, we had a dip in other CE product sales as we had a promotional program with Costco in the Q1 last year that was not planned to repeat. Speaker 200:11:19And we had lower sales of our solar power balcony product internationally. We expect the solar product sales to rebound in future periods as the shortfall was more timing related. This category helped drive our highest level of sales of international accessory products in fiscal 2024. A few years ago, we downsized our CE business to focus on fewer categories and that strategy paid off. Now we're undergoing another retooling of our business looking at our offerings and seeing where we might be able to generate better returns, whether within categories we're in now or potentially capitalizing in others where we enjoy strong customer relationships. Speaker 200:12:02This is not about what we sell today, but rather what is best for VOXX and its stakeholders moving forward. And the last component of our optimization plan is debt reduction, so that we can reduce interest costs and free up capital. Our total debt as of quarter end stood at approximately $69, 000, 000 and stands at approximately $62, 000, 000 today. Our plan is to eliminate approximately $45, 000, 000 of this debt through a series of transactions that are in process now. We are currently in contract to sell our Orlando facility with the OEM manufacturing transition to Mexico nearing completion. Speaker 200:12:46This is expected to close in the Q3. And we are in a number of discussions regarding divesting some of our business assets and potentially some of our brands. As these transactions are completed, net proceeds will be used to pay down the debt we incurred in connection with the CGuard ruling. If successful, our outstanding debt will largely be related to financing inventory and receivables through our existing ABL line. We have strong relationships with our banks, availability under our current lines and as we bring debt down, we will free up capital to address any future market downturns while investing in our business. Speaker 200:13:27Over the next 2 months, we'll be working with Acordeon to better assess the data compiled and map out the best path forward to optimize cash and improve our foundation. We're looking at minimum to reduce overhead by another 5% in the second half of the year. There will be some offsetting costs as we restructure, but ultimately, we'll be operating with a better margin and cost structure. At this point, I'd like to turn the call over to Lori Anne to cover our financials, and then we'll open up the call for questions. Lori? Speaker 300:14:03Thanks, Pat, and hello, everyone. I will now provide a recap of our Q1 results with a little more color around key sales, margin and expense drivers. We reported Q1 sales of $91, 700, 000 which were down a little more than $20, 000, 000 or approximately 18%. Our automotive business declined by $10, 700, 000 with $7, 400, 000 of the decline in OEM sales and $3, 300, 000 decline in aftermarket sales. Our OEM business was down due to lower volume in rear seat entertainment with 3 primary drivers: no revenue from the Nissan program, which ended towards the end of fiscal 2024 lower domestic volume with Ford as our program was temporarily halted for 1 vehicle model 3rd, lower revenue from Stellantis as the program is terminating. Speaker 300:15:04Our OEM remote stock business more than doubled, driven by our new international program with Ford and our VSM business is roughly in line with the prior year. The decline in the aftermarket was spread across multiple categories. The Consumer segment sales were down $9, 400, 000 and this was due to non premium audio CE products, which declined by over 10, 000, 000 dollars The biggest impacts were lower sales of wireless speakers as a large program ended as anticipated, lower international sales related to our solar balcony power products as we had new product loadings last year. Our premium audio business increased by $800, 000 and our domestic business was up over 11% with new products driving the growth. In Asia, we continue to have softness, but overall Klipsch and the premium audio product lines are doing well. Speaker 300:16:05Fiscal 2025 Q1 gross margins of 27.7 percent were up 3 10 basis points. We had a 2 20 basis point increase in our Automotive segment and a 4 10 basis point increase in our Consumer segment. Managing the supply chain over the past 2 years has been a challenge. There's a little more normalcy in the market now, which helps with forecasting, planning and operations. This helped bring down warehousing expenses considerably. Speaker 300:16:40We should also have more pickup from future restructuring initiatives, which are focused both on improving margins and lowering expenses. With the changes we have implemented, we lowered expenses by 6 $500, 000 or 16.6 percent when comparing the Q1 period. We are constantly looking to reduce expenses and lower our overhead. During the past quarter, we implemented worldwide headcount reductions. We brought down our trade show, web and advertising expenses. Speaker 300:17:15Legal and professional fees declined significantly, especially with the CGuard situation behind us and also due to the fact that we brought certain legal functions in house and have been consolidating other functions throughout the organization. Our legal costs moving forward should normalize with lower expenses projected in the second half compared to the prior year. Across the board, we're reducing our non core spend and freeing up resources that can be reinvested in the company, whether in people, sales, R and D or technology, anything that could help drive efficiencies and savings and at the same time better support our business. As Pat discussed, our ERP upgrade kicked off June 1. It's a big project and we're excited to announce our partnership with Oracle and AST to implement Oracle Fusion. Speaker 300:18:09This product and the technology behind it will allow us to automate most of our back office functions, making it easier for customers to do business with us. It will also enable us to leverage technology to perform revenue generating tasks with better data, greater visibility and leverage our experienced personnel across different areas of our business. We've taken a lot of expenses out of our business year to date and more will be removed. Lastly, we lost $7, 100, 000 on an operating basis, a $4, 300, 000 improvement year over year and reported an adjusted EBITDA loss of $2, 900, 000 an improvement of $2, 100, 000 We expect to lose money in the second quarter and to be profitable in the second half on an operating income basis. To reiterate, profitable for the fiscal year. Speaker 300:19:03I believe Pat talked about our balance sheet plans, so rather than reiterate published numbers, let me just add a few closing remarks. Change is not going to happen overnight. Our business is cyclical and we constantly adjust. We are rightsizing our business based on our anticipated size this year and realigning operations to drive savings and efficiencies. We're investing in technology and in our product lines. Speaker 300:19:31And our model is focused on compressing overhead and driving more profitable revenue. I'd like to thank you all today for listening in. And operator, we are now ready for questions. Thank Speaker 100:20:08And I'm currently showing no questions at this time. I'd like to hand the call back over to Pat Lavelle for closing remarks. Speaker 200:20:15Okay. Well, thank you. Thank you all for calling in and your support. Our programs are underway and I hope to report good progress in the quarters ahead as we move further into this fiscal year. I want to thank you again for coming on and wish you a good day. Speaker 100:20:34This concludes today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallVOXX International Q1 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) VOXX International Earnings HeadlinesGentex completes $175M acquisition of Voxx InternationalApril 3, 2025 | msn.comGentex Completes Acquisition of VOXX InternationalApril 1, 2025 | tipranks.comDonald Trump is about to free crypto from its chains …Sure enough, Bitcoin took off on the exact day Juan said it would. It's up more than 40% since the election … surpassing $100,000 on Dec. 8 .… Now Juan believes it could hit $150,000 … or higher in 2025.April 26, 2025 | Weiss Ratings (Ad)Gentex Corporation Closes on its Acquisition of VOXX International CorporationApril 1, 2025 | prnewswire.comSHAREHOLDER INVESTIGATION: Halper Sadeh LLC Investigates BLUE, VOXX, CARA, CYTH on Behalf of ShareholdersFebruary 23, 2025 | morningstar.comVOXX International Corp Reports Fiscal Q3 2025 Results: $105.2 Million Revenue, $44. ...February 10, 2025 | gurufocus.comSee More VOXX International Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like VOXX International? Sign up for Earnings360's daily newsletter to receive timely earnings updates on VOXX International and other key companies, straight to your email. Email Address About VOXX InternationalVOXX International (NASDAQ:VOXX) manufactures and distributes automotive electronics, consumer electronics, and biometric products in the United States, Europe, and internationally. It offers automotive security, vehicle access, and remote start modules and systems; smart phone telematics applications; mobile multi-media infotainment products and rear-seat entertainment products, including overhead, seat-back, and headrest systems; rear observation and collision avoidance systems; 360 camera applications; satellite radios comprising plug and play, and direct connect models; cruise control systems; audio products; heated seats; interior lighting solutions; security and shock sensors; turn signal switches; puddle lamps; box lights; harnesses; electric vehicle sound systems; and logo lighting modules. The company also provides speakers; A/V receivers; home theater, and business and streaming music systems; on-ear and in-ear headphones; wired and wireless, and Bluetooth headphones and ear buds; soundbars; digital living network alliance compatible devices; high-definition television and wireless fidelity antennas; high-definition multimedia interface accessories; karaoke and infant/nursery products; home electronic accessories, such as cabling, power cords, and other connectivity products; performance enhancing electronics; TV universal remote controls; flat panel TV mounting systems; power supply systems and charging products; solar powered balcony systems; electronic equipment cleaning products; hearing aids and personal sound amplifiers; set-top boxes; and home and portable stereos. In addition, it offers iris identification and biometric security related products. The company was formerly known as Audiovox Corporation and changed its name to VOXX International Corporation in December 2011. VOXX International Corporation was founded in 1960 and is headquartered in Orlando, Florida.View VOXX International ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step In Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 4 speakers on the call. Operator00:00:00Good morning, everyone. Speaker 100:00:02Good day, and thank you for standing by. Welcome to the VOXX International Fiscal 2025 First Quarter Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. Speaker 100:00:29I would now like to hand the conference call over to your speaker today, Glenn Weiner, Investor Relations. Please go ahead. Operator00:00:35Thanks, Shannon. I'm sorry for jumping the gun there. Good morning, and welcome to Box International's fiscal 2025 Q1 results conference call. Yesterday, we filed our Form 10 Q and issued our press release, both documents of which can be found in the Investor Relations section of our website atwww.voxxintl.com. And we intend to update our investor presentation and post that to the web later next week. Operator00:01:02Speaking from management today will be Pat Lavelle, Chief Executive Officer and Lori Anne Sheldon, our Chief Financial Officer and Chief Operating Officer. Following their prepared remarks, we will open up the call for questions. Before I get started, I would like to remind everyone that except for historical information contained herein, statements made on today's call and webcast that would constitute forward looking statements are based on currently available information. The company assumes no responsibility to update any such forward looking statements, and I would like to point you to the risk factors associated with our business, which are detailed in our Form 10 ks for the period ended February 29, 2024. Lastly, it's my pleasure to announce that the company will be holding its Annual Meeting of Stockholders on July 23, 2024 at 10 am Eastern. Operator00:01:47Our proxy has been sent to all shareholders of record and our Form DEF-fourteen A can be found online in the Investor Relations section of our website. This will be a virtual meeting and shareholders can attend by visiting www.virtualshareholdermeeting.com slash boxx2024, where they'll be able to listen to the meeting live, submit questions and vote online. At this time, it's my pleasure to now turn the call over to Pat. Thank you. Speaker 200:02:19Thank you, Glenn, and good morning, everyone. It's been only 2 months since we reported our year end results. And from a market perspective, not much has changed. The retail environment remains challenging, interest rates remain elevated and inflation is still a major concern. On our prior call, we cautioned that sales will be under pressure based on what we were seeing at retail and given the state of the automotive market. Speaker 200:02:45Automotive manufacturers are still under pressure. Inventory is building and layoffs at certain plants have begun. The transition to EVs is only adding to the challenges faced by carmakers. During the Q1, we took aggressive steps to improve margins and lower both our operating expenses and working capital needs. As you saw from our Q1 report, margins were up 3 10 basis points and expenses were cut significantly, down over 16% year over year with more improvements expected in the coming quarters. Speaker 200:03:21While we lost money both on an operating income and adjusted EBITDA basis, losses were lower year over year reflecting the deliberate actions we are taking. Based on our current sales projections, we expect to bring VOXX back to profitability this fiscal year. VOXX is in another transaction or a transition. And consistent with past experience, we believe we will emerge from this turbulent period as a stronger company with better investor returns. In addition to market issues holding back top line growth, we too are uncomfortable with our current debt level and our depressed share price, which is sitting near 52 week lows. Speaker 200:04:03Be assured, we have the same concerns as our investors. VOXX has been around for over 60 years. We have seen just about everything and we have always persevered. This time will be no different. Just look back at our last restructuring in fiscal 20 Over the past 2 years, however, we've seen a myriad of global challenges causing us to miss revenue projections as our customers struggle with ever changing demand. Speaker 200:04:39This has been 1 of our biggest challenges, managing and operating our business based on customer projections what we believe sales volumes will be Neals near term, while maintaining operating leverage to capture increases in sales and market share without significantly rescaling overhead. Our focus is clear. We want to remain in markets and categories where we have stability, profitability and growth potential, categories that generate positive margins and consistent returns. Thus, we have already begun a process to redirect capital to programs that help us achieve these goals. Additionally, during Q1, we engaged Accordion, a leading management consulting company to assist us in evaluating avenues to support our restructuring and profitability initiatives. Speaker 200:05:42Building on what we have already done and have planned, we're getting an outside perspective on other optimization programs we could implement this year. We want to ensure that we maintain the ability to scale quickly, especially as market conditions improve. And our new ERP conversion to Oracle Fusion, which kicked off in June, is a big part of our transition. It's a long term project estimated to be 18 months to completion. That should result in significantly greater efficiencies, better automation, data and technology tools and ultimately savings and overheads. Speaker 200:06:20We also plan to lower our debt and free up capital to reinvest in the company. Under the VOXX umbrella, we have over 35 trusted brands, several businesses and operating groups and various product categories within the automotive and consumer electronics industries. Some of the categories are in growth mode, while others are less profitable with slow to no growth. As part of our restructuring, we are again looking at every product and SKU, every customer program and determining our true cost to serve, meaning all costs that go into supporting each sale, both internal and external. We plan to generate capital efficiencies by either improving or eliminating programs that do not meet profitability criteria while making changes to our structure. Speaker 200:07:12In our Automotive segment, we're nearing completion of the move of our OEM production to Mexico. We've already realized some of the improvement, but we're still carrying 2 facilities. The transition is scheduled for completion by the end of the second quarter, which will then allow us to significantly reduce our physical footprint in Florida to house only our engineering, quality and admin OEM groups and a small warranty center. There will be further synergies and savings. We're in the process of exiting our RSE program with Stellantis, which I discussed last quarter. Speaker 200:07:49We're moving program with Ford, a new lighting system program with Nissan and Volvo and the new U. S. Postal Service trucks coming online this year and building thereafter. There are also several projects in the works for remote starts, turn signals, lighting, safety and more. Our OEM business will continue to face some near term pressure, but looking ahead, we have some strong business upcoming and a better margin and cost structure is anticipated. Speaker 200:08:27With respect to the aftermarket, it's been a challenge for the past few years due primarily to the economy. Pressure will continue this year, though our customer inventory levels have improved and we expect stronger remote start and alarm business as we move in into our Q3. We have a number of projects underway and here too we are rationalizing brands and SKUs to maximize profitability. In automotive, fiscal 2025 is about optimizing operations and our supply chain, focusing on the categories and customers where we have stable business and growth prospects and areas where we can generate better returns. My comments from year end are the same. Speaker 200:09:09Both OEM and aftermarket sales will be hard pressed, though the segment should be profitable. The key for VOXX is what we do now to enhance profits in the coming years as markets improve and the business grows. Within our Consumer segment, starting with Premium Audio. In fiscal 2024, we retooled our soundbar offerings, entered new categories and launched a number of new products last year, which reversed the slide in premium audio category and allowed us to expand sales. Our Klipsch Flexus sound system and the new Klipsch Music City Broadcast Bluetooth speakers are doing well, and we will be introducing a new line of party speakers towards the Q4. Speaker 200:09:55While our sales were down in fiscal 2024, they were down less than the industry and we gained market share. Internationally is where our business was impacted most, primarily in Asia. In Q1, our premium audio business grew. Even with continued domestic retail and consumer pressure and the state of the international markets today, we anticipate we will continue to see growth this year. Now, similar to our other businesses, we are looking at ways to improve both sales and margins while controlling costs. Speaker 200:10:33It's a balancing act because while we are certainly cutting where we can, we also continue to invest in new technology and cutting edge projects the products. This will not stop as it's essential to maintain the brand's loyal customers and drive growth. We are looking at all our brands, channels, customers and programs and here too seeing where we can improve capital management while potentially optimizing certain assets. Klipsch and Ankiyo continue to anchor our offering and will be the driving brands in our premium audio portfolio. In Q1, we had a dip in other CE product sales as we had a promotional program with Costco in the Q1 last year that was not planned to repeat. Speaker 200:11:19And we had lower sales of our solar power balcony product internationally. We expect the solar product sales to rebound in future periods as the shortfall was more timing related. This category helped drive our highest level of sales of international accessory products in fiscal 2024. A few years ago, we downsized our CE business to focus on fewer categories and that strategy paid off. Now we're undergoing another retooling of our business looking at our offerings and seeing where we might be able to generate better returns, whether within categories we're in now or potentially capitalizing in others where we enjoy strong customer relationships. Speaker 200:12:02This is not about what we sell today, but rather what is best for VOXX and its stakeholders moving forward. And the last component of our optimization plan is debt reduction, so that we can reduce interest costs and free up capital. Our total debt as of quarter end stood at approximately $69, 000, 000 and stands at approximately $62, 000, 000 today. Our plan is to eliminate approximately $45, 000, 000 of this debt through a series of transactions that are in process now. We are currently in contract to sell our Orlando facility with the OEM manufacturing transition to Mexico nearing completion. Speaker 200:12:46This is expected to close in the Q3. And we are in a number of discussions regarding divesting some of our business assets and potentially some of our brands. As these transactions are completed, net proceeds will be used to pay down the debt we incurred in connection with the CGuard ruling. If successful, our outstanding debt will largely be related to financing inventory and receivables through our existing ABL line. We have strong relationships with our banks, availability under our current lines and as we bring debt down, we will free up capital to address any future market downturns while investing in our business. Speaker 200:13:27Over the next 2 months, we'll be working with Acordeon to better assess the data compiled and map out the best path forward to optimize cash and improve our foundation. We're looking at minimum to reduce overhead by another 5% in the second half of the year. There will be some offsetting costs as we restructure, but ultimately, we'll be operating with a better margin and cost structure. At this point, I'd like to turn the call over to Lori Anne to cover our financials, and then we'll open up the call for questions. Lori? Speaker 300:14:03Thanks, Pat, and hello, everyone. I will now provide a recap of our Q1 results with a little more color around key sales, margin and expense drivers. We reported Q1 sales of $91, 700, 000 which were down a little more than $20, 000, 000 or approximately 18%. Our automotive business declined by $10, 700, 000 with $7, 400, 000 of the decline in OEM sales and $3, 300, 000 decline in aftermarket sales. Our OEM business was down due to lower volume in rear seat entertainment with 3 primary drivers: no revenue from the Nissan program, which ended towards the end of fiscal 2024 lower domestic volume with Ford as our program was temporarily halted for 1 vehicle model 3rd, lower revenue from Stellantis as the program is terminating. Speaker 300:15:04Our OEM remote stock business more than doubled, driven by our new international program with Ford and our VSM business is roughly in line with the prior year. The decline in the aftermarket was spread across multiple categories. The Consumer segment sales were down $9, 400, 000 and this was due to non premium audio CE products, which declined by over 10, 000, 000 dollars The biggest impacts were lower sales of wireless speakers as a large program ended as anticipated, lower international sales related to our solar balcony power products as we had new product loadings last year. Our premium audio business increased by $800, 000 and our domestic business was up over 11% with new products driving the growth. In Asia, we continue to have softness, but overall Klipsch and the premium audio product lines are doing well. Speaker 300:16:05Fiscal 2025 Q1 gross margins of 27.7 percent were up 3 10 basis points. We had a 2 20 basis point increase in our Automotive segment and a 4 10 basis point increase in our Consumer segment. Managing the supply chain over the past 2 years has been a challenge. There's a little more normalcy in the market now, which helps with forecasting, planning and operations. This helped bring down warehousing expenses considerably. Speaker 300:16:40We should also have more pickup from future restructuring initiatives, which are focused both on improving margins and lowering expenses. With the changes we have implemented, we lowered expenses by 6 $500, 000 or 16.6 percent when comparing the Q1 period. We are constantly looking to reduce expenses and lower our overhead. During the past quarter, we implemented worldwide headcount reductions. We brought down our trade show, web and advertising expenses. Speaker 300:17:15Legal and professional fees declined significantly, especially with the CGuard situation behind us and also due to the fact that we brought certain legal functions in house and have been consolidating other functions throughout the organization. Our legal costs moving forward should normalize with lower expenses projected in the second half compared to the prior year. Across the board, we're reducing our non core spend and freeing up resources that can be reinvested in the company, whether in people, sales, R and D or technology, anything that could help drive efficiencies and savings and at the same time better support our business. As Pat discussed, our ERP upgrade kicked off June 1. It's a big project and we're excited to announce our partnership with Oracle and AST to implement Oracle Fusion. Speaker 300:18:09This product and the technology behind it will allow us to automate most of our back office functions, making it easier for customers to do business with us. It will also enable us to leverage technology to perform revenue generating tasks with better data, greater visibility and leverage our experienced personnel across different areas of our business. We've taken a lot of expenses out of our business year to date and more will be removed. Lastly, we lost $7, 100, 000 on an operating basis, a $4, 300, 000 improvement year over year and reported an adjusted EBITDA loss of $2, 900, 000 an improvement of $2, 100, 000 We expect to lose money in the second quarter and to be profitable in the second half on an operating income basis. To reiterate, profitable for the fiscal year. Speaker 300:19:03I believe Pat talked about our balance sheet plans, so rather than reiterate published numbers, let me just add a few closing remarks. Change is not going to happen overnight. Our business is cyclical and we constantly adjust. We are rightsizing our business based on our anticipated size this year and realigning operations to drive savings and efficiencies. We're investing in technology and in our product lines. Speaker 300:19:31And our model is focused on compressing overhead and driving more profitable revenue. I'd like to thank you all today for listening in. And operator, we are now ready for questions. Thank Speaker 100:20:08And I'm currently showing no questions at this time. I'd like to hand the call back over to Pat Lavelle for closing remarks. Speaker 200:20:15Okay. Well, thank you. Thank you all for calling in and your support. Our programs are underway and I hope to report good progress in the quarters ahead as we move further into this fiscal year. I want to thank you again for coming on and wish you a good day. Speaker 100:20:34This concludes today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by