UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended August 31, 1996
Commission file number 1-9532
AUDIOVOX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-1964841
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Marcus Blvd., Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 231-7750
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Number of shares of each class of the Registrant's Common Stock
outstanding as of the latest practicable date.
Class Outstanding at September 30, 1996
Class A Common Stock 7,233,834 Shares
Class B Common Stock 2,260,954 Shares
<PAGE>
AUDIOVOX CORPORATION
I N D E X
Page
Number
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements:
Consolidated Balance Sheets at
November 30, 1995 and August 31, 1996
(unaudited) 3
Consolidated Statements of Income (Loss)
for the Three Months and Nine Months Ended
August 31, 1995 and August 31, 1996
(unaudited) 4
Consolidated Statements of Cash Flows
for the Nine Months Ended August 31, 1995
and August 31, 1996 (unaudited) 5
Notes to Consolidated Financial Statements 6-7
ITEM 2 Management's Discussion and Analysis of
Financial Operations and Results of
Operations 8-20
PART II OTHER INFORMATION
ITEM 6 Reports on Form 8-K 21
SIGNATURES 22
<PAGE>
AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
<TABLE>
November 30, August 31,
1995 1996
(unaudited)
Assets
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 7,076 $ 6,509
Accounts receivable, net 96,930 86,485
Inventory, net 100,422 94,744
Receivable from vendor 5,097 12,120
Prepaid expenses and other current assets 5,443 6,981
Deferred income taxes 5,287 4,661
Restricted cash 5,959 -
Total current assets 226,214 211,500
Investment securities 62,344 20,781
Equity investments 8,527 8,522
Property, plant and equipment, net 6,055 6,760
Debt issuance costs, net 4,235 3,689
Excess cost over fair value of assets
acquired and other intangible assets, net 943 850
Other assets 2,737 2,772
$ 311,055 $ 254,874
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 17,844 $ 19,501
Accrued expenses and other current liabilities 16,800 20,289
Income taxes payable 2,455 3,552
Bank obligations 761 2,000
Documentary acceptances 7,120 2,662
Current installments of long-term debt 5,688 68
Total current liabilities 50,668 48,072
Bank obligations 49,000 34,098
Deferred income taxes 23,268 7,518
Long-term debt, less current installments 70,534 70,181
Total liabilities 193,470 159,869
Minority interest 363 836
Stockholders' equity:
Preferred stock 2,500 2,500
Common Stock:
Class A; 30,000,000 authorized; 6,777,788 and
6,983,834 issued on November 30, 1995 and
August 31, 1996, respectively 68 70
Class B; 10,000,000 authorized; 2,260,954
issued 22 22
Paid-in capital 42,876 44,201
Retained earnings 40,998 42,393
Cumulative foreign currency translation
and adjustment (963) (969)
Unrealized gain on marketable securities, net 31,721 5,952
Total stockholders' equity 117,222 94,169
Commitments and contingencies
Total liabilities and stockholders' equity $ 311,055 $ 254,874
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Loss)
(In thousands, except share and per share data)
Three Months Ended Nine Months Ended
August 31, August 31,
1995 1996 1995 1996
(unaudited) (unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Net sales $ 112,177 $ 142,828 $ 349,378 $ 406,515
Cost of sales (includes an inventory
write-down to market of $9,300 in
1995) 104,771 118,189 300,115 340,413
Gross profit 7,406 24,639 49,263 66,102
Operating expenses:
Selling 8,583 9,820 25,723 26,137
General and administrative 11,518 8,274 29,486 23,767
Warehousing, assembly and repair 2,451 2,817 7,286 7,874
22,552 20,911 62,495 57,778
Operating income (loss) (15,146) 3,728 (13,232) 8,324
Other income (expenses):
Interest and bank charges (2,595) (2,193) (7,306) (6,407)
Equity in income of equity investments 210 135 2,612 550
Management fees and related income (354) 7 362 157
Gain on sale of investment 8,435 - 8,435 985
Expense related to issuance of
warrants - - (2,921) -
Other, net (279) (102) (836) (519)
5,417 (2,153) 346 (5,234)
Income (loss) before provision for
(recovery of) income taxes (9,729) 1,575 (12,886) 3,090
Provision for (recovery of) income
taxes (3,344) 808 (3,265) 1,696
Net income (loss) $ (6,385)$ 767 $ (9,621)$ 1,394
Net income (loss) per common share
(primary) $ (0.71)$ 0.08 $ (1.06) $ 0.15
Net income (loss) per common share
(fully diluted) $ (0.71)$ 0.08 $ (1.06) $ 0.15
Weighted average number of common
shares outstanding, primary 9,038,742 9,285,188 9,038,742 9,285,188
Weighted average number of common
shares outstanding, fully diluted 9,038,742 9,325,588 9,038,742 9,330,217
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
Nine Months Ended
August 31,
1995 1996
(unaudited)
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ (9,621) $ 1,394
Adjustments to reconcile net income (loss) to net
cash provided by (used in)operating activities:
Depreciation and amortization 3,008 2,433
Provision for bad debt expense 1,181 249
Equity in income of equity investments (2,612) (550)
Minority interest 142 473
Gain on sale of investment (8,435) (985)
Provision for (recovery of) deferred income
taxes, net (7,300) 670
Provision for unearned compensation 250 228
Expense related to issuance of warrants 2,921 -
Gain on disposal of property, plant and
equipment, net - (13)
Other non-cash charges to income (8) -
Changes in:
Accounts receivable 18,653 10,251
Inventory (35,473) 5,785
Accounts payable, accrued expenses and other
current liabilities (4,272) 4,985
Receivable from vendor (3,954) (7,022)
Income taxes payable 3,294 1,087
Prepaid expenses and other assets (9,476) (1,580)
Net cash provided by (used in) operating
activities (51,702) 17,405
Cash flows from investing activities:
Purchases of property, plant and equipment, net (1,402) (2,240)
Proceeds from sale of investment 17,250 1,000
Proceeds from distribution from equity investment 198 317
Net cash provided by (used in) investing
activities 16,046 (923)
Cash flows from financing activities:
Net borrowings (repayments) under line of credit
agreements 29,130 (13,676)
Net borrowings under documentary acceptances 5,800 (4,458)
Principal payments on long-term debt - (4,389)
Debt issuance costs (675) (323)
Principal payments on capital lease obligation (190) (158)
Proceeds from release of restricted cash 450 5,959
Net cash provided by (used in) financing
activities 34,515 (17,045)
Effect of exchange rate changes on cash 7 (4)
Net decrease in cash and cash equivalents (1,134) (567)
Cash and cash equivalents at beginning of period 5,495 7,076
Cash and cash equivalents at end of period $ 4,361 $ 6,509
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Nine Months Ended August 31, 1995 and August 31, 1996
(Dollars in thousands, except share and per share data)
(1) The accompanying consolidated financial statements were
prepared in accordance with generally accepted accounting
principles and include all adjustments which, in the opinion
of management, are necessary to present fairly the
consolidated financial position of Audiovox Corporation and
subsidiaries (the "Company") as of November 30, 1995 and
August 31, 1996 and the results of operations and consolidated
statements of cash flows for the nine month periods ended
August 31, 1995 and August 31, 1996.
Accounting policies adopted by the Company are identified in
Note 1 of the Notes to Consolidated Financial Statements
included in the Company's 1995 Annual Report filed on Form
10-K.
(2) The information furnished in this report reflects all
adjustments (which include only normal recurring adjustments)
which are, in the opinion of management, necessary for a fair
statement of the results for the interim period. The interim
figures are not necessarily indicative of the results for the
year.
(3) The following is supplemental information relating to the
consolidated statements of cash flows:
<TABLE>
Nine Months Ended
August 31,
1995 1996
Cash paid during the period:
<S> <C> <C>
Interest (excluding bank
charges) $5,393 $4,219
Income taxes $ 722 $ 193
</TABLE>
On February 9, 1996, the Company's 10.8% Series AA and 11.0%
Series BB Convertible Debentures matured. As of February 9,
1996, $1,100 of the Series BB Convertible Debentures converted
into 206,046 shares of Common Stock.
<PAGE>
As of August 31, 1996, the Company recorded an unrealized
holding loss relating to available-for-sale marketable
securities, net of deferred taxes, of $25,769 as a separate
component of stockholders' equity.
(4) Receivable from vendor includes $8,767 prepaid to TALK
Corporation (TALK), a vendor who is also a 33%-owned equity
investment. This prepayment is for inventory which was
delivered to the Company during September 1996. In addition,
TALK owes the Company $3,353 for claims on late deliveries,
product modifications and price protection. These claims will
be paid in monthly installments, with interest, with the final
payment due May 1997.
(5) On December 1, 1995, the Company purchased a 50% equity
investment in a newly-formed company, Quintex Communications
West, LLC, for approximately $97 in contributed assets and a
loan of $100, payable at 8.5%, due March 1997.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated,
certain items from the Company's consolidated statements of
earnings, expressed as percentages of net sales:
<TABLE>
Three Months Ended Nine Months Ended
August 31, August 31,
1995 1996 1995 1996
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Gross profit 6.6 17.3 14.1 16.3
Operating expenses 20.1 14.6 17.9 14.2
Income (loss) before provision
for (recovery of) income taxes (8.7) 1.1 (3.7) 0.8
Net income (loss) (5.7) 0.5 (2.8) 0.3
</TABLE>
Net sales by product line for the three and nine month periods ended
August 31, 1995 and August 31, 1996 are reflected in the following table:
<TABLE>
Three Months Ended Nine Months Ended
August 31, August 31,
1995 1996 1995 1996
<S> <C> <C> <C> <C>
Cellular product - wholesale $ 50,394 $ 76,339 $168,439 $224,117
Cellular product - retail 2,686 2,295 13,225 5,829
Activation commissions 7,630 7,914 29,861 25,515
Residual fees 1,239 1,236 3,461 3,654
Total Cellular 61,949 87,784 214,986 259,115
Automotive sound equipment 28,471 29,296 79,550 75,456
Automotive security and
accessory equipment 21,752 24,789 54,823 69,271
Other 5 959 19 2,673
$112,177 $142,828 $349,378 $406,515
</TABLE>
<PAGE>
RESULTS OF OPERATIONS
Net sales increased by approximately $30,651, or 27.3%, for
the three month period ended August 31, 1996, compared to the same
period last year. This result was due to increases in net sales
from all of the Company's product lines: cellular of approximately
$25,835, or 41.7%, automotive sound equipment of approximately
$825, or 2.9%, and automotive security and accessory equipment of
approximately $3,037, or 14.0%. During the fourth quarter of 1995,
the Company introduced a line of leisure products, comprised mostly
of home and portable stereo/cassette/CD changers. This new line
had net sales of approximately $556 for the quarter.
Net sales increased approximately $57,137, or 16.4%, for the
nine months ended August 31, 1996 compared to the same period last
year. Both cellular and automotive security and accessory
equipment sales increased over last year by approximately $44,129
(20.5%) and $14,448 (26.4%), respectively. These increases were
partially offset by a decline in sales of automotive sound
equipment of approximately $4,094, or 5.1%. In addition, the
Company's new line of leisure products had sales of approximately
$2,052 for the first nine months of 1996.
The increase in cellular sales for the third quarter of 1996
was due to a 218,000 increase in unit sales to approximately
<PAGE>
466,000 units, an 87.9% increase over the same period last year.
The increase in unit sales was partially offset by a 24.9% decrease
in average unit selling prices from $201 to $151. For the nine
months ended August 31, 1996, unit sales increased by approximately
535,000 units, or 71.4%, over the first nine months of 1995 to
1,284,000. During this same period of time, however, average
selling prices declined 25.4% from $213 to $159.
During the third quarter of 1995, the Company decided to close
retail outlets which were either marginally profitable or
unprofitable. As of August 31, 1996, the Company operates
approximately 30 retail outlets compared to 77 on August 31, 1995.
The closing of these retail outlets affected the number of
subscriber activations for the three and nine months ended August
31, 1996, by approximately 6.0% and 23.2%, respectively, compared
to last year. The total activation commissions received by the
Company increased 3.7% and decreased 14.6% for the three and nine
month periods ended August 31, 1996, respectively, compared to the
same period last year. However, the average commission earned per
activation increased 10.4% and 11.2% for the same periods last
year, respectively. In addition, residuals decreased 0.2% for the
quarter and increased 5.6% year-to-date compared to last year. The
residual customer base is unaffected by the closing of retail
<PAGE>
outlets as the majority of the residual agreements are not entered
into with specific retail locations.
Net sales of automotive sound equipment increased by
approximately $825, or 2.9%, and decreased by approximately $4,094,
or 5.1%, for the three and nine month periods ended August 31,
1996, compared to the same periods in 1995. The increase for the
three months ended August 31, 1996 was due to an increase in sales
by the Company's majority-owned international ventures, a large
portion of such revenue being attributed to sales by its Malaysian
venture and an increase in Private Label and Prestige Audio product
lines. These increases were partially offset by lower sales in the
AV product line, which is sold to mass merchandisers and catalog
showrooms, and the SPS product line. The decrease for the nine
months was primarily due to a decrease in sales of products sold to
mass merchandise chains and catalog showrooms. Automotive sound
sales also decreased in the truck and agricultural vehicle markets,
the Prestige and SPS audio product lines. These decreases were
partially offset by an increase in sales to private label customers
and in sales by the Company's international companies. Net sales
of automotive security and accessory products increased
approximately $3,037, or 14.0%, and $14,448, or 26.4%, for the
three and nine month periods ended August 31, 1996, compared to the
<PAGE>
same period in 1995, respectively. The increases were principally
due to improved sales of Prestige vehicle security products, cruise
controls and increased sales in the Company's Malaysian operation,
both for the three and nine month periods. These increases were
partially offset by reductions in net sales of the Company's
security lines sold to mass merchandisers and catalog showrooms.
Gross margins for the quarter ended August 31, 1996 increased
to 17.3% from 6.6%, 14.9% before the inventory write-down, for the
same period in 1995. For the nine months ended August 31, 1996,
gross margins increased to 16.3% from 14.1%, 16.8% before the
inventory write-down, for 1995. For the three months ended August
31, 1996, cellular gross margins were 14.6% compared to 9.7%
before the aforementioned inventory write-down. The increase in
cellular margins is a result of the continuing increase in unit
sales and a 31.7% decrease in average unit cost. This is offset by
a decline of unit selling prices due to increased competition and
the introduction of lower-priced units. The average unit selling
price for the three months was 24.9% lower at August 31, 1996
compared to August 31, 1995. Gross margins increased to 13.0% from
9.2%, 13.3% before the inventory write-down, for the nine month
period compared to last year. Average unit selling prices
decreased 25.3% while average unit costs decreased 27.7%. As
<PAGE>
previously discussed, this was partially offset by the decline in
new subscriber activations and activation commissions, partially
offset by an increase in residuals.
The Company believes that the cellular market will continue to
be a highly-competitive, price-sensitive environment. Cellular
service providers will continue to try to lower their product costs
to the end user which will continue to put pressure on unit selling
prices. The Company has negotiated, and is continuing to
negotiate, lower inventory purchasing costs for both its existing
models and new products. However, increased price competition
related to the Company's product lines could result in additional
downward pressure on gross margins. In the future, the Company may
have to adjust the carrying value of its inventory if selling
prices continue to decline and it is unable to obtain
competitively-priced product from its suppliers.
Automotive sound margins increased to 18.9% from 13.1% for the
quarter ended August 31, 1996 compared to the same quarter last
year. Year-to-date margins increased to 19.6% from 17.2%. The
increase in automotive sound margins was attributable to the
Company's international operations, primarily Malaysia, and
increases in the margins of the AV Product and Heavy Duty Sound
Product lines. This was partially offset by decreases in AV, SPS
<PAGE>
and Prestige Audio product lines. Automotive accessory margins
decreased to 24.9% from 29.9% for the three month period ended
August 31, 1996 compared to the same period in 1995. On a year-to-
date basis, automotive accessory margins decreased to 24.9% from
28.9% for the same period last year. These decreases were
primarily in the Prestige security and cruise control product
lines, and in the Company's international operations.
Total operating expenses decreased approximately $1,641, or
7.3%, and $4,717, or 7.5%, for the three and nine month periods
ended August 31, 1996 compared to the same periods last year. For
the third quarter, warehousing, assembly and repair expenses
increased approximately $366 (14.9%) due to increases in field
warehousing expenses, warehouse production expenses and direct
labor. Selling expenses increased approximately $1,237 (14.4%)
primarily due to increases in divisional marketing and advertising
of approximately $1,636, and travel expenses. These increases were
partially offset by decreases in salesmen's salaries, commissions
and payroll taxes. General and administrative expenses decreased
approximately $3,244 (28.2%) primarily in occupancy costs,
telephone, and depreciation. These decreases were partially offset
by increases in temporary personnel and professional fees. A large
<PAGE>
part of the decrease in occupancy and related expenses is
attributable to the closing of many retail outlets during the
latter part of 1995 and the associated $2,500 charge recorded in
the third quarter of 1995.
For the nine months ended August 31, 1996, warehousing,
assembly, and repair expenses increased approximately $588 (8.1%)
due to increases in field warehousing expenses and direct labor,
partially offset by a decrease in warehouse production expenses.
Selling expenses increased approximately $414 (1.6%) primarily in
divisional marketing and advertising of approximately $3,468, trade
show and travel expenses. These increases were partially offset by
decreases in salesmen's salaries, commissions and payroll taxes.
General and administrative expenses decreased approximately $5,719
(19.4%) primarily in occupancy costs, telephone, depreciation and
office expenses. These decreases were partially offset by increases
in travel and professional fees. As previously stated, a large
part of the decrease in occupancy and related expenses is
attributable to the closing of many retail outlets.
Operating income increased $18,874 and $21,556 over last year
for the three and nine month periods, respectively. The Company's
retail operations, with fewer outlets compared to last year,
increased operating income by $5,509 and $7,160 for the three and
nine month periods ended August 31, 1996, respectively. The
<PAGE>
wholesale business, both automotive and cellular, experienced an
increase in operating income of $13,365 and $14,397 for the three
and nine month periods ended August 31, 1996, respectively.
Equity in income of equity investments decreased $75 and
$2,062 for the three and nine month periods ended August 31, 1996
compared to the same periods last year. This decrease was primarily
due to the Company no longer accounting for its investment in
CellStar on the equity method. The change in accounting method was
caused by the sale of CellStar shares during the third quarter of
1995 which reduced the Company's holdings below 20% and eliminated
the Company's significant influence over CellStar. For the three
and nine months ended August 31, 1995, the Company recorded equity
income of CellStar of $106 and $2,152, respectively. Management
fees and related income also decreased compared to last year,
primarily due to Audiovox Pacific experiencing a shift in its
cellular market. The Company is currently sourcing product which
should provide Audiovox Pacific with the ability to meet this
change in the marketplace.
Interest expense and bank charges decreased by $402 and $899
for the three and nine month periods ended August 31, 1996 compared
to 1995, respectively, primarily due to reduced interest-bearing
borrowings, partially offset by an increase in interest rates.
<PAGE>
Income (loss) before provision for (recovery of) income taxes
was $1,575 and $3,090 for the three and nine month periods ended
August 31, 1996, a $11,304 and $15,976 increase over the same
periods last year, respectively. However, during 1996, the
Company's Canadian operations have experienced losses which do not
have a corresponding tax carryback. As a result, the Company must
add the Canadian losses back when computing its consolidated
provision for income taxes. This has resulted in the Company
providing approximately $808 and $1,696 in income taxes for the
three and nine months ended August 31, 1996, respectively. The
Company is in the process of reorganizing its Canadian operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position at August 31, 1996 was
approximately $567 below the November 30, 1995 level. Operating
activities provided approximately $17,405, compared to an operating
cash deficit of $51,702 for the nine months ended August 31, 1995,
primarily due to profitable operations and decreases in both
accounts receivable and inventory, offset by an advance to a
supplier for product delivered in September 1996 and reduced
accounts payable and accrued expenses. Investing activities used
approximately $923, primarily from the purchase of property, plant
and equipment offset by the proceeds of the sale of an investment.
<PAGE>
Financing activities used approximately $17,045, primarily from
repayments of bank obligations. In addition, on February 9, 1996,
the Company's 10.8% Series AA and 11.0% Series BB Convertible
Debentures matured. The Company paid $4,362 to holders on that
date. The remaining $1,100 was converted into 206,046 shares of
Common Stock.
On May 5, 1995, the Company entered into an amended and
restated Credit Agreement ("Credit Agreement") with five banks,
including Chemical Bank which acts as agent for the bank group,
which provides that the Company may obtain credit through direct
borrowings and letters of credit. The obligations of the Company
under the Credit Agreement continue to be guaranteed by certain of
the Company's subsidiaries and are secured by accounts receivable
and inventory of the Company and those subsidiaries. The
obligations are also secured by a pledge agreement entered into by
the Company for 1,075,000 shares of CellStar Common Stock.
Availability of credit under the Credit Agreement is in a maximum
aggregate amount of $95,000, is subject to certain conditions and
is based upon a formula taking into account the amount and quality
of it accounts receivable and inventory. The Company amended the
Credit Agreement, effective December 22, 1995 and February 9, 1996,
which amendments provided for, among other things, increased
<PAGE>
interest rates, which may be reduced under certain circumstances,
and a change in the criteria for and method of calculating certain
financial covenants in the future as follows: net income of $2,500
was changed to pre-tax income of $4,000 per annum; the Company must
have pre-tax income of $1,500 for the first six months of fiscal
1996; the Company cannot have pre-tax losses of more than $500 in
any quarter; and the Company cannot have pre-tax losses in any two
consecutive quarters. In addition, the Company must maintain a
minimum level of total net worth of $100,000, of which a minimum
level of $80,000, adjusted for the unrealized holding gain for
CellStar, must be maintained.
Effective May 13, 1996, the Company executed a Third Amendment
to the Credit Agreement and a Pledge Agreement Amendment and
Supplement. The Amendment amends the Credit Agreement to provide
that the Company shall not permit (i) Consolidated Net Worth to be
less than $90,000 at any time or (ii) Consolidated Adjusted Net
Worth to be less than $80,000 at any time. The Pledge Agreement
Amendment and Supplement increases the number of shares of CellStar
stock pledged by Audiovox Holding Corp. by 1,050,000 additional
shares. The total number of shares pledged by Audiovox Holding
Corp., as increased, is 2,125,000.
<PAGE>
On July 26, 1996, the Company executed a Fourth Amendment to
the Credit Agreement. The Amendment amends the Credit Agreement to
decrease the availability of credit under the Agreement to a
maximum aggregate of $75,000. In addition, the term of the
Agreement was extended to February 28, 1998 from February 28, 1997.
On September 10, 1996, the Company entered into a Fifth Amendment
to the Credit Agreement. This Amendment increased the Company's
line of credit to $85,000. All other terms and conditions remained
the same.
The Company believes that it has sufficient liquidity to
satisfy its anticipated working capital and capital expenditure
needs through November 30, 1996 and for the reasonable foreseeable
future.
On October 1, 1996, business formally conducted by the
Audiovox Cellular Division will be continued in a newly-formed
wholly-owned subsidiary called Audiovox Communications Corp.
Capitalization of this company was accomplished by exchanging the
assets of the former division, less their respective liabilities,
for all of the common stock.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Reports on Form 8-K
No reports were filed on Form 8-K during the quarter ended August
31, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AUDIOVOX CORPORATION
By:s/John J. Shalam
John J. Shalam
President and Chief
Executive Officer
Dated: October 4, 1996
By:s/Charles M. Stoehr
Charles M. Stoehr
Senior Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> AUG-31-1996
<CASH> 6,509
<SECURITIES> 0
<RECEIVABLES> 89,484
<ALLOWANCES> 2,999
<INVENTORY> 94,744
<CURRENT-ASSETS> 211,500
<PP&E> 25,197
<DEPRECIATION> 18,437
<TOTAL-ASSETS> 254,874
<CURRENT-LIABILITIES> 48,072
<BONDS> 104,279
0
2,500
<COMMON> 92
<OTHER-SE> 91,577
<TOTAL-LIABILITY-AND-EQUITY> 254,874
<SALES> 377,346
<TOTAL-REVENUES> 406,515
<CGS> 325,076
<TOTAL-COSTS> 340,413
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 249
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</TABLE>
