VOXX International Corp (NASDAQ:VOXX) Q3 2019 Earnings Conference Call Transcript
Jan 10, 2019 • 10:00 am ET
Good day, ladies and gentlemen, and welcome to the VOXX International Fiscal 2019 Third Quarter Results Conference Call. (Operator Instructions)
I would now like to introduce your host for today's conference, Glenn Wiener of Investor Relations. Sir, you may begin.
Welcome to our fiscal 2019 third quarter results conference call. And as you know, the call today is being webcast live on our website, www.voxxintl.com, and there is a replay available for those who are unable to make today's call.
Speaking for management this morning will be Pat Lavelle, President and Chief Executive Officer; and Michael Stoehr, Senior Vice President and our Chief Financial Officer. Following their remarks, we will have the Q&A session for those investors wishing to ask any questions. John Shalam, Chairman of the Board, is also with us this morning, and he will be available during the Q&A portion of the call as well.
(Forward-Looking Cautionary Statements)
At this time, I'd like to turn the call over to our President and CEO, Pat Lavelle, to share some of the exciting news and progress we've had at VOXX International. Pat?
We're here at the 2019 Consumer Electronics Show and similar to past years, there has been excellent reception to many of our new products and we've had very productive meetings with our retail and automotive customers. We are also celebrating the 100th anniversary of the RCA brand, which has stood for the best in value in consumer electronic products with a tremendous focus on innovation and technology.
As you know from our last call, we were in the process of extensive changes to improve our business and streamline operations. And between now and our year-end report, expect to have news that further outlines our realignment and plans for the future. We fully expect to generate more consistent profitability in the years ahead.
I'll begin today with a recap of our Q3 results, then cover some of our more important product launches, partnerships, after which, Mike will provide additional details regarding our nine-month results and balance sheet.
Q3 net sales were down $27 million, with the vast majority in our Consumer Accessories segment, which was down $24 million driven by the exit of some of our older legacy product categories, and high initial load-ins of our wearable products that were not expected to repeat. Yet, Premium Audio net sales were down $7.7 million, mostly in line with our projections, as last year we made the decision to limit certain online distribution to protect margins and our retail customers, a strategy which is working as gross margins are up and the segment is more profitable.
Another positive is, our Automotive segment sales were up $4.4 million, driven by strength in our OEM business. Gross margins were up in all segments, coming in at 30%, up 350 basis points. Within this, Automotive segment margins improved by 200 basis points, Premium Audio segment margins improved by 330 basis points, and Consumer Accessories segment margins improved by 360 basis points.
We also continue