VOXX International Corp (NASDAQ:VOXX) Q1 2020 Earnings Conference Call Transcript

Jul 11, 2019 • 10:00 am ET

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VOXX International Corp (NASDAQ:VOXX) Q1 2020 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to VOXX International's First Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and answer session, and instructions will be given at that time. (Operator Instructions) As a reminder, today's conference is being recorded.

I'd now like to turn the call over to Mr. Glenn Wiener, Investor Relations. Sir, you may begin.

Executive
Glenn Wiener

Thank you, Victor, and good morning. Welcome to VOXX International's Fiscal 2020 First Quarter Results Conference Call. Our call today is being webcast live on our website, www.voxxintl.com and a replay is available for those who are unable to make today's call. Speaking from management will be Pat Lavelle, President and Chief Executive Officer; and Michael Stoehr, Senior Vice President and Chief Financial Officer. Following their remarks, we'll have the Q&A session for those investors wishing to ask any questions. Additionally, John Shalam, Chairman of the Board is also with us today and will be available during Q&A.

I'd 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 risk factors associated with their business are detailed in our Form 10-K for the period ended February 28, 2019.

I'd like to thank you all for your interest in VOXX. And at this time, I'd like to turn the call over to Pat Lavelle.

Executive
Patrick M. Lavelle

Good morning, and thank you, Glenn. It's been roughly two months since we reported our year-end results and outline our plan to return VOXX to profitability. As we have seen from our last two divestitures, there is significant value in our assets. Frankly more value in our cash and real estate assets than what our current share price yields, which is what is driving the aggressive actions underway to increase shareholder value. Improving cash flow and adjusted EBITDA are key priorities as we move to recapture the value in our business assets. So this two becomes reflected in our share price.

As I said on our year-end call, we'll take a few quarters to align our cost structure and exit non-core products and product categories, as well as to generate some of the synergies resulting from our restructuring. I'm confident that as we move further into the fiscal year, we will be in a stronger position operationally. Unfortunately with one caveat and that is the automotive market. Economic indicators point to a lower car sales this year, which will affect our OEM business given the lower volume of vehicle launches compared to our original fiscal 2020 expectations.

In the first half of the year, major automakers saw US new car sales drop. Six straight months of weaker sales compared with the same period in 2018 and the trend is expected to continue throughout 2019. It's not a catastrophic drop, but with rising car prices, the pace of sales and