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 February 28, 1997
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 April 7, 1997
Class A Common Stock 17,253,533 Shares
Class B Common Stock 2,269,054 Shares
<PAGE>
AUDIOVOX CORPORATION
I N D E X
Page
Number
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements:
Consolidated Balance Sheets at
February 28, 1997 (unaudited)
and November 30, 1996 3
Consolidated Statements of Income
for the Three Months Ended February 28,
1997 and February 29, 1996 (unaudited) 4
Consolidated Statements of Cash Flows
for the Three Months Ended February 28,
1997 and February 29, 1996 (unaudited) 5
Notes to Consolidated Financial Statements 6-8
ITEM 2 Management's Discussion and Analysis of
Financial Operations and Results of
Operations 9-21
PART II OTHER INFORMATION
ITEM 6 Reports on Form 8-K 22
SIGNATURES 23
<PAGE>
AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
<TABLE>
February 28, November 30,
1997 1996
(unaudited)
Assets
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 14,819 $ 12,350
Accounts receivable, net 90,538 118,408
Inventory, net 76,266 72,785
Receivable from vendor 15,442 4,565
Prepaid expenses and other current assets 11,597 7,324
Deferred income taxes 5,241 5,241
Total current assets 213,903 220,673
Investment securities 26,263 27,758
Equity investments 8,990 8,463
Property, plant and equipment, net 7,530 6,756
Debt issuance costs, net - 269
Excess cost over fair value of assets
acquired and other intangible assets, net 791 804
Other assets 5,807 3,449
$ 263,284 $ 268,172
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 24,572 $ 28,192
Accrued expenses and other current liabilities 16,647 18,961
Income taxes payable 18,660 7,818
Bank obligations 6,702 4,024
Documentary acceptances 2,664 3,501
Total current liabilities 69,245 62,496
Bank obligations - 31,700
Deferred income taxes 9,980 10,548
Long-term debt, less current installments 6,418 28,165
Total liabilities 85,643 132,909
Minority interest 1,405 1,137
Stockholders' equity:
Preferred stock 2,500 2,500
Common Stock:
Class A; 30,000,000 authorized; 16,901,339 and
14,040,414 issued on February 28, 1997, and
November 30, 1996, respectively 170 141
Class B; 10,000,000 authorized; 2,260,954
issued 22 22
Paid-in capital 142,741 107,833
Retained earnings 18,733 14,529
Cumulative foreign currency translation
and adjustment (1,250) (1,176)
Unrealized gain on marketable securities, net 13,320 10,277
Total stockholders' equity 176,236 134,126
Commitments and contingencies
$ 263,284 $ 268,172
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except share and per share data)
<TABLE>
Three Months Ended
February 28, February 29,
1997 1996
(unaudited) (unaudited)
<S> <C> <C>
Net sales $ 166,614 $ 122,493
Cost of sales 138,612 102,616
Gross profit 28,002 19,877
Operating expenses:
Selling 11,701 7,509
General and administrative 8,919 7,605
Warehousing, assembly and repair 2,866 2,405
23,486 17,519
Operating income 4,516 2,358
Other income (expenses):
Interest and bank charges (916) (2,204)
Equity in income of equity investments 146 110
Management fees and related income 47 50
Gain on sale of investment 23,779 985
Debt conversion expense (12,686) -
Other, net 442 (208)
10,812 (1,267)
Income before provision for income taxes 15,328 1,091
Provision for income taxes 11,125 612
Net income $ 4,203 $ 479
Net income per common share (primary) $ 0.24 $ 0.05
Net income per common share (fully diluted) $ 0.23 $ 0.05
Weighted average number of common shares
outstanding, primary 17,725,630 9,285,188
Weighted average number of common shares
outstanding, fully diluted 18,530,932 9,325,588
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AUDIOVOX CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
Three Months Ended
February 28, February 29,
1997 1996
(unaudited) (unaudited)
Cash flows from operating activities:
<S> <C> <C>
Net income $ 4,203 $ 479
Adjustments to reconcile net income to net cash
used in operating activities:
Debt conversion expense 12,386 -
Depreciation and amortization 437 813
Provision for bad debt expense (16) 59
Equity in income of equity investments (795) (110)
Minority interest 265 109
Gain on sale of investment (23,779) (985)
Provision for (recovery of) deferred income
taxes, net (2,433) 341
Provision for unearned compensation 69 90
Gain on disposal of property, plant and
equipment, net (3) (9)
Changes in:
Accounts receivable 26,745 21,025
Inventory (3,400) 2,715
Accounts payable, accrued expenses and other
current liabilities (6,075) (3,653)
Receivable from vendor (10,876) (4,651)
Income taxes payable 10,818 394
Prepaid expenses and other assets (4,196) (104)
Net cash provided by operating activities 3,350 16,513
Cash flows from investing activities:
Purchases of property, plant and equipment, net (1,103) (768)
Proceeds from sale of investment 30,182 1,000
Purchase of equity investment - 79
Net cash provided by investing activities 29,079 311
Cash flows from financing activities:
Net repayments under line of credit agreements (29,089) (21,351)
Net borrowings under documentary acceptances (836) 44
Principal payments on long-term debt - (4,371)
Debt issuance costs (13) (50)
Principal payments on capital lease obligation - (81)
Proceeds from release of restricted cash - 5,959
Net cash used in financing activities (29,938) (19,850)
Effect of exchange rate changes on cash (22) (6)
Net decrease in cash and cash equivalents 2,469 (3,032)
Cash and cash equivalents at beginning of period 12,350 7,076
Cash and cash equivalents at end of period $ 14,819 $ 4,044
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
February 28, 1997 and February 29, 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 February 28, 1997 and
November 30, 1996 and the results of operations and
consolidated statements of cash flows for the three month
periods ended February 28, 1997 and February 29, 1996.
Accounting policies adopted by the Company are identified in
Note 1 of the Notes to Consolidated Financial Statements
included in the Company's 1996 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>
Three Months Ended
February 28, February 29,
1997 1996
Cash paid during the period:
Interest (excluding bank
<S> <C> <C>
charges) $1,701 $ 950
Income taxes $2,783 $ 48
</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 February 28, 1997, the Company recorded an unrealized
holding gain relating to available-for-sale marketable
securities, net of deferred taxes, of $13,320 as a separate
component of stockholders' equity.
The Company issued a credit of $1,250 on open accounts
receivable and issued 250,000 shares of its Class A Common
Stock, valued at five dollars per share, in anticipation of an
exchange for a 20% interest in Bliss-tel Company, Limited
(Bliss-tel).
(4) The Financial Accounting Standards Board has issued Statement
128, "Earnings per Share" (Statement 128). Statement 128
establishes standards for computing and presenting earnings
per share (EPS). The Statement simplifies the standards for
computing EPS and makes them comparable to international EPS
standards. The provisions of Statement 128 are effective for
financial statements issued for periods ending after December
1, 1997, including interim periods. The Statement does not
permit early application and requires restatement of all
prior-period EPS data presented. Adoption of Statement 128
will not effect the Company's consolidated financial position
or results of operations, however the impact on previously
report EPS data is currently unknown.
(5) The Company formed Audiovox Venezuela C.A. (Audiovox
Venezuela), an 80%-owned subsidiary, for the purpose of
expanding its international business. The Company made an
initial investment of $478 which was used by Audiovox
Venezuela to obtain certain licenses, permits and fixed
assets.
(6) The Company is in the process of purchasing a 20% equity
investment in Bliss-tel in exchange for 250,000 shares of the
Company's Class A Common Stock and a credit for open accounts
receivable of $1,250. The issuance of the common stock
resulted in an increase to additional paid in capital of
approximately $1,248. The investment in Bliss-tel will be
accounted for under the equity method of accounting.
(7) Subsequent to the first quarter of 1997, the Company formed
Audiovox Specialized Applications, LLC, a 50%-owned equity
investment, a consolidation of the Company's Heavy Duty Sound
division, ASA Electronics and Audiovox Specialty Markets Co.
<PAGE>
The new company will market audio, video and security products
to the heavy truck, RV, van, limousine, bus, marine,
agricultural and aviation industries.
(8) Receivable from vendor includes a $9,000 prepayment to TALK
for merchandise to be shipped during the second quarter of
1997.
(9) The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of the
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company markets its products under its own brand as well
as private labels to a large and diverse distribution network both
domestically and internationally. The Company's products are
distributed by two separate marketing groups: Communications and
Automotive. The Communications group consists of Audiovox
Communications Corp. (ACC) and the Quintex retail operations
(Quintex), both of which are wholly-owned subsidiaries of the
Company. The Communications group markets cellular telephone
products and receives activation commissions and residual fees from
its retail sales. The Automotive group consists of Audiovox
Automotive Electronics (AAE) and Heavy Duty Sound, which are
divisions of the Company, and Audiovox Communications Sdn. Bhd. and
Audiovox Holdings Sdn. Bhd., which are majority-owned subsidiaries.
Products in the Automotive group includes automotive sound and
security equipment, car accessories and home and portable sound
products. The Company allocates interest and certain shared
expenses to the operating groups based upon estimated usage. The
following tables reflect the way the Company manages its business.
The column headed "Other" includes general expenses and other
income items which are not readily allocable. The following is a
<PAGE>
summary of pre-tax results by product group for the three months
ended February 28, 1997 and February 29, 1996:
Consolidated Pre-Tax Operating Results
Three Months Ended February 28, 1997
(In thousands)
<TABLE>
Total
Company Communications Automotive Other
Net sales:
<S> <C> <C> <C> <C>
Cellular product -
wholesale $107,419 $107,419 - -
Cellular product -
retail 2,518 2,518 - -
Sound 19,628 - $ 19,628 -
Security and
accessories 21,493 - 21,493 -
Activation commissions 10,377 10,377 - -
Residual fees 1,315 1,315 - -
Other 3,864 2,643 961 $ 260
Total net sales 166,614 124,272 42,082 260
Gross profit 28,002 19,701 8,571 (270)
16.8% 15.9% 20.4% -
Total operating
expenses 23,486 14,852 6,381 2,253
Operating income (loss) 4,516 4,849 2,190 (2,523)
Other income (expense) 10,812 (1,089) (875) 12,776
Pre-tax income $ 15,328 $ 3,760 $ 1,315 $10,253
</TABLE>
<PAGE>
Consolidated Pre-Tax Operating Results
Three Months Ended February 29, 1996
(In thousands)
<TABLE>
Total
Company Communications Automotive Other
Net sales:
<S> <C> <C> <C> <C>
Cellular product -
wholesale $ 70,494 $ 70,494 - -
Cellular product -
retail 1,994 1,994 - -
Sound 17,943 - $ 17,943 -
Security and
accessories 17,483 - 17,483 -
Activation commissions 9,552 9,552 - -
Residual fees 1,234 1,234 - -
Other 3,793 2,710 903 $ 180
Total net sales 122,493 85,984 36,329 180
Gross profit 19,877 12,499 6,928 450
16.2% 14.5% 19.1% -
Total operating
expenses 17,519 10,156 5,673 1,690
Operating income (loss) 2,358 2,343 1,255 (1,240)
Other income (expense) (1,267) (1,582) (1,033) 1,348
Pre-tax income $ 1,091 $ 761 $ 222 $ 108
</TABLE>
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended February 28, 1997 versus February 29, 1996
Consolidated Results
Net sales by product group for the three months ended
February 28, 1997 and February 29, 1996 and percentage of sales
are reflected in the following table:
<TABLE>
Three Months Ended
February 28, February 29,
1997 1996
Communications
<S> <C> <C> <C> <C>
Cellular product - wholesale $107,419 64.5% $ 70,494 57.5%
Cellular product - retail 2,518 1.5 1,994 1.6
Activation commissions 10,377 6.2 9,552 7.8
Residual fees 1,315 0.8 1,234 1.0
Other 2,643 1.6 2,710 2.2
Total Communications 124,272 74.6 85,984 70.1
Automotive
Sound 19,628 11.8 17,943 14.6
Security and accessories 21,493 12.9 17,483 14.3
Other 961 0.6 903 0.8
Total Automotive 42,082 25.3 36,329 29.7
Other 260 0.1 180 0.2
Total Company $166,614 100.0% $122,493 100.0%
</TABLE>
Net sales increased approximately $44,121, or 36.0%, to
$166,614 from last year. This increase in net sales was accompanied
by a corresponding increase in gross profit margins to 16.8% from
16.2% in 1996. The increase in margin percentage, coupled with the
increase in net sales, resulted in an increase of $8,125 in gross
profit dollars. Operating expenses increased $5,967 to $23,486,
predominately in selling expenses. As a percentage of net sales,
however, operating expenses decreased to 14.1% in 1997 compared to
<PAGE>
14.3% in 1996. Operating income for 1997 was $4,516, an increase
of $2,158 over 1996. During the first quarter of 1997, the Company
sold 1,360,000 shares of its holdings in CellStar for a net gain of
approximately $14,743. In addition, the Company exchanged $21,479
of its 6 1/4% subordinated debentures for 2,860,925 shares of Class
A Common Stock. Costs associated with this exchange were
approximately $12,844, including income taxes. Both of these
non-operating transactions were recorded in "Other".
The following table sets forth for the periods indicated
certain statement of income data for the Company expressed as a
percentage of net sales:
<TABLE>
Percentage of Sales
Three Months Ended
February 28, 1997 and February 29, 1996
1997 1996
Net sales:
<S> <C> <C>
Cellular product - wholesale 64.5% 57.5%
Cellular product - retail 1.5 1.6
Sound 11.8 14.6
Security and accessories 12.9 14.3
Activation commissions 6.2 7.8
Residual fees 0.8 1.0
Other 2.3 3.2
Total net sales 100.0% 100.0%
Gross profit 16.8 16.2
Total operating expenses 14.1 14.3
Operating income 2.7 1.9
Other income (expense) 6.5 (1.0)
Pre-tax income 9.2% 0.9%
</TABLE>
<PAGE>
Communication Results
The Communications group is composed of ACC and Quintex, both
wholly-owned subsidiaries of Audiovox Corporation. Since
principally all of the net sales of Quintex are cellular in nature,
all operating results of Quintex are being included in the
discussion of the Communications group's product line. Net sales
increased approximately $38,288 from last year, an increase of
44.5%. Increases in product sales accounted for approximately
$37,382 of this increase. Unit sales increased approximately
344,487 units, or 93.8%, over last year. Average unit selling
prices declined approximately 18.0% but was offset by a
corresponding decrease of 26.4% in average unit cost. The number
of new cellular subscriptions processed by Quintex increased 4.5%,
with an accompanying increase in activation commissions of
approximately $825, or 8.6%. The average commission received by
Quintex per activation increased approximately 3.9% from last year.
Residual fees also increased over last year by approximately 6.6%.
Gross margins improved to 15.9%, up from 14.5% a year ago,
primarily due to a decrease in average unit cost. Total operating
expenses increased approximately $4,696 during 1997. Selling
expenses increased $3,719, primarily in selling commissions,
divisional marketing and advertising. General and administrative
expenses increased by $532, primarily in office salaries.
Warehousing and assembly expenses increased by $445, primarily in
<PAGE>
direct labor and field warehousing expenses. Pre-tax income
increased approximately $2,999 to $3,760 for 1997. Though gross
margins have improved over last year, management believes that the
cellular industry is extremely competitive and that this
competition could affect gross margins and the carrying value of
inventories in the future.
The following table sets forth for the periods indicated
certain statement of income data for the Communications group
expressed as a percentage of net sales:
<TABLE>
Percentage of Sales
Three Months Ended
February 28, 1997 and February 29, 1996
1997 1996
Net sales:
<S> <C> <C>
Cellular product - wholesale 86.4% 82.0%
Cellular product - retail 2.0 2.3
Activation commissions 8.4 11.1
Residual fees 1.1 1.4
Other 2.1 3.2
Total net sales 100.0% 100.0%
Gross profit 15.9 14.5
Total operating expenses 12.0 11.8
Operating income 3.9 2.7
Other income (expense) (0.9) (1.8)
Pre-tax income 3.0% 0.9%
</TABLE>
Automotive Results
Net sales increased approximately $5,753 compared to last
year, an increase of 15.8%. Increases were experienced in all
product lines. Approximately 42.8% of this increase was from the
<PAGE>
group's international operations. Automotive sound had increases
in sales of Prestige Audio, Audiovox Audio and private label
programs, partially offset by decreases in sales to new car
dealers. Automotive security product sales increased in the
Prestige and Pursuit Security product lines, partially offset by
decreases in AA Security. Automotive accessories increased
primarily in the cruise control product line. Gross margins were
increased to 20.4% compared to 19.1% last year. Gross margin
increases were experienced in the Pursuit Security product line and
on AV sales to mass merchandisers and SPS sales to new car dealers
and distributors. These increases were partially offset by
decreases in the Heavy Duty Sound division and Prestige security
product lines. Total operating expenses increased approximately
$708 during 1997 compared to 1996. A majority of these increases
were in the international operations. Selling expenses increased
$483, primarily in domestic market development funds, international
commission, salesmen salaries and travel. General and
administrative expenses increased by $295, primarily in
international salaries. Pre-tax income increased approximately
$1,093 to $1,315 for 1997.
The Company believes that the Automotive group has an
expanding market with a certain level of volatility related to new
car sales, both domestically and internationally. Also, certain of
its products are subject to price fluctuations which could affect
<PAGE>
the carrying value of inventories and gross margins in the future.
The following table sets forth for the periods indicated
certain statement of income data for the Automotive group expressed
as a percentage of net sales:
<TABLE>
Percentage of Sales
Three Months Ended
February 28, 1997 and February 29, 1996
1997 1996
Net sales:
<S> <C> <C>
Sound 46.6% 49.4%
Security and accessories 51.1 48.1
Other 2.3 2.5
Total net sales 100.0% 100.0%
Gross profit 20.4% 19.1%
Total operating expenses 15.2 15.6
Operating income 5.2 3.5
Other income (expense) (2.1) (2.8)
Pre-tax income 3.1% 0.7%
</TABLE>
Other Income and Expense
Interest expense and bank charges decreased by $1,288, or
58.4%, compared to 1996. Equity in income of equity investments and
management fees and related income increased $33 for the three
months ended February 28, 1997 compared to the same period last
year.
During January 1997, the Company completed an exchange of
$21,479 of its subordinated debentures for 2,860,925 shares of
Class A Common Stock ("Exchange"). As a result of the Exchange, a
charge of $12,686 was recorded. The charge to earnings represents
<PAGE>
(i) the difference in the fair market value of the shares issued in
the Exchange and the fair market value of the shares that would
have been issued under the terms of the original conversion feature
plus (ii) a write-off of the debt issuance costs associated with
the subordinated debentures plus (iii) expenses associated with the
Exchange offer. The Exchange resulted in taxable income due to the
difference in the face value of the bonds converted and the fair
market value of the shares issued and, as such, a current tax
expense of $158 was recorded. An increase in paid in capital was
reflected for the face value of the bonds converted, plus the
difference in the fair market value of the shares issued in the
Exchange and the fair market value of the shares that would have
been issued under the terms of the original conversion feature for
a total of $33,592.
Also during the first quarter, the Company sold 1,360,000
shares of CellStar Common Stock yielding net proceeds of
approximately $30,182 and a gain, net of taxes, of approximately
$14,743.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position at February 28, 1997 was
approximately $2,469 above the November 30, 1996 level. Operating
activities provided approximately $3,350, primarily from profitable
operations, a decrease in accounts receivable and an increase in
<PAGE>
income taxes payable, partially offset by increases in inventory
and an advance to a supplier for product to be delivered during the
second quarter of 1997. Investing activities provided
approximately $29,079, primarily from the sale of an equity
investment. Financing activities used approximately $29,938,
primarily from the repayment of bank obligations.
On May 5, 1995, the Company entered into the Second Amended
and Restated Credit Agreement (the "Credit Agreement") which
superseded the first amendment in its entirety. During 1996, the
Credit Agreement was amended six times providing for various
changes to the terms. The terms as of February 28, 1997 are
summarized below.
Under the Credit Agreement, 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 is secured by accounts
receivable and inventory of the Company and those subsidiaries.
The obligations were secured at November 30, 1996 by a pledge
agreement entered into by the Company for 2,125,000 shares of
CellStar Common Stock and ten shares of ACC. Subsequent to year
end, the shares of CellStar Common Stock were released from the
Pledge Agreement. Availability of credit under the Credit Agreement
is a maximum aggregate amount of $85,000, subject to certain
conditions, and is based upon a formula taking into account the
<PAGE>
amount and quality of its accounts receivable and inventory. The
Credit Agreement expires on February 28, 1998. As a result, bank
obligations under the Credit Agreement have been classified as
short-term at February 28, 1997.
The Credit Agreement contains several covenants requiring,
among other things, minimum levels of pre-tax income and minimum
levels of net worth and working capital as follows: pre-tax income
of $4,000 per annum; pre-tax income of $2,500 for any two
consecutive fiscal quarters; 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
$88,500, adjusted for 50% of the aggregate gains realized on sales
of capital stock. The Company must maintain a minimum working
capital of $125,000. Additionally, the agreement includes
restrictions and limitations on payments of dividends, stock
repurchases, and capital expenditures.
The Company believes that it has sufficient liquidity to
satisfy its anticipated working capital and capital expenditure
needs through November 30, 1997 and for the reasonable foreseeable
future.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued Statement
128, "Earnings per Share" (Statement 128). Statement 128
<PAGE>
establishes standards for computing and presenting earnings per
share (EPS). The Statement simplifies the standards for computing
EPS and makes them comparable to international EPS standards. The
provisions of Statement 128 are effective for financial statements
issued for periods ending after December 1, 1997, including interim
periods. The Statement does not permit early application and
requires restatement of all prior-period EPS data presented.
Adoption of Statement 128 will not effect the Company's
consolidated financial position or results of operations, however
the impact on previously report EPS data is currently unknown.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Reports on Form 8-K
During the first quarter, the Registrant filed two reports on
Form 8-K:
The first Form 8-K dated November 26, 1996 and filed December
4, 1996 reported the completion of the Registrant's exchange offer
for its 6 1/4% Convertible Subordinated Debentures due 2001 (the
"Debentures") for its Class A Common Stock. Approximately $41.2
million of the Debentures were exchanged for approximately 6.8
million shares of the Registrant's Class A Common Stock.
The Form 8-K dated January 15, 1997 filed January 21, 1997
reported that the Registrant had entered into additional Debenture
Exchange Agreements with holders of approximately $21.2 million of
Debentures pursuant to which the Registrant exchanged approximately
2.9 million shares of the its Class A Common Stock.
<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: April 14, 1997
By:s/Charles M. Stoehr
Charles M. Stoehr
Senior Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000807707
<NAME> AUDIOVOX CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1997
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0
2,500
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</TABLE>
