Q3 2024 VOXX International Corp Earnings Call
Thank you.
Yes.
Good day, ladies and gentlemen. Thank you for standing by. Welcome to Vox International Third Quarter Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Sir Glenn Meaner. Please go ahead.
Good day, ladies and gentlemen, thank you for standing by welcome to the National third quarter earnings Conference call. At this time, all participants are in a listen only mode.
The speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to westar one one on your telephone you will donnean automatic message advising yohan. Its ways. Please note that today's conference is being recorded.
And the conference I'll, let you speak of host Glenn Wiener. Please go ahead.
Glenn Wiener: Thank you, Olivia. Good morning and welcome to Vox International's fiscal 2024 third quarter nine month results conference call. Yesterday we filed a form 10 queue and we issued our press release and both documents can be found in the Investor Relations section of the website at www.vox.intl.com. And we expect to post an updated Investor presentation later this week.
Thank you Olivia good morning, and welcome to box Internationals fiscal 2020 for third quarter and nine month results Conference call yesterday, we filed our Form 10-Q, and we issued our press release and both documents can be found in the Investor Relations section of our website at Www Dot box I N T L dotcom and we expect pet.
An updated investor presentation later this week.
Glenn Wiener: Speaking for management today, we'll be Pat Levelle, Chief Executive Officer, who's currently out in Las Vegas, attending the 2024 Consumer Electronics Show, and Michael Stores, Senior Vice President and Chief Financial Officer. Their remarks will be followed by question and answer.
Speaking from management today will be Pat Lavelle, Chief Executive Officer, Who's currently out in Las Vegas was heading the 'twenty 'twenty four consumer electronics show and Michael Stoehr, Senior Vice President and Chief Financial Officer. Their remarks will be followed by question and answers.
Pat Levelle: As for today, I would like to remind everyone that except for historical information contained here in statements made on today's call and webcast that would constitute forward looking statements are based on currently available information.
As for today, 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'd like you to to your point you to the risk factors associated with our business which are detail.
Speaker Change: The company assumes no responsibility to update any such forward-looking statements. And I'd like you to point you to the risk factors associated with our business, which are details in our form 10K for the period ended February 28th, 2023. Thank you for your continued support, and I would like to announce in the call over to Pat.
And in our Form 10-K for the period ended February 28 2023.
Thank you for your continued support and I would like to now turn the call over to Pat.
Patrick M. Lavelle: Good morning everyone. Let me start off by wishing you all happy and healthy new year.
Thank you Glenn and good morning, everyone. Let me start off by wishing you all a happy and healthy new year.
Patrick M. Lavelle: As Gwen said, I'm out with our team at CES and the show kicked off yesterday, it's early, but the response to our new lineup and the various projects that we have in development has been very positive and I'm expecting more of the same over the next few days.
As Glenn said amount with our team at CES show, who I kicked off yesterday.
It's early but the response to our new lineup and the various projects that we have in development has been very positive and I'm expecting more of the same over the next few days.
Pat Levelle: 2023 has been tough for everyone, not to a box. Our entire industry has had a very challenging use.
2023 has been tough for everyone not nachos box our entire industry.
<unk> has had a very challenging year.
Pat Levelle: And we're certainly happy to be turning the page. The global economy remains challenging. And we're doing all that we can to navigate through those challenges, focusing on three primary areas.
And we're certainly happy to could be turning to page the global economy remains challenging.
We're doing all that we can navigate through those challenges focusing on three primary areas.
Pat Levelle: Protecting and growing sales in both the short and long term, improving gross margins through supply chain and internal efficiencies, and lowering both our fixed and variable expense.
<unk> and growing sales in both the short and long term.
Proving gross margins through supply chain, and internal efficiencies and lowering both our fixed and variable expenses.
Pat Levelle: During the quarter, we were successful achieving two of these three objectives as our growth margins grew by 90 basis points and our operating expenses improved by a little over 2%.
During the quarter, we were successful achieving two of these three objectives as our gross margins grew by 90 basis points on our operating expenses improved by a little over 2%.
Pat Levelle: sales declined roughly 5.4% with consumer up and automotive down. But overall operating income was the same as the prior year. Michael provide more financial details during his remarks and I'll focus on the segments what's happening and what we expect to close out the year and as we move into fiscal 2025.
Sales declined roughly five 4% with consumer up in automotive down, but overall operating income was the same as the prior year, Mike will provide more financial details during his remarks and I'll focus on the segments what's happening.
And what we expect to close out the year and as we move into fiscal 2025.
Glenn Wiener: So let me start with consumer as we have a lot of news to report.
So let me start with consumer as we have a lot of new.
News to report.
Glenn Wiener: Consumer sales came, we're up over 6% in Q3 with premium audio of the driver. This is a big positive for us as the segment has been on the decline since the big bump that we had from COVID.
Consumer sales came were up over 6% in Q3.
With premium audio the driver. This is a big positive for US as this segment has been on the decline since the big bump that we had from Covid.
Glenn Wiener: We made a lot of changes and investments and they're starting to pay off as evidenced by the growth this quarter amidst very challenging global economic environment.
We made a lot of changes and investments and they're starting to pay off as evidenced by the growth this quarter amidst very challenging global economic environment.
Glenn Wiener: Within premium audio, we saw good growth in North America market in Q3 driven by home speakers, wireless speaker systems and our new lines of party speakers.
In premium audio we saw good growth in North American market in.
In Q3, driven by home speakers.
Wireless speaker systems, and our new lines of party Speaker systems, Europe was up as well, but our APAC sales decline as the market continues to be hard pressed overall, our premium audio business had a strong quarter with a number of new products on the horizon in new and rapidly growing category.
Glenn Wiener: Europe was up as well but our APAC sales decline as the market continues to be hard for us.
Glenn Wiener: Overall, our premium audio business had a strong quarter with a number of new products on the horizon in new and rapidly growing categories.
Glenn Wiener: Looking at the recent NPD report for November industry wide speaker sales.
Yeah.
Looking at the recent NPD report for November industry rides in industry wide speaker sales were.
Glenn Wiener: We're down approximately 17%, but we were only down 9%. ADR sales were down 15%, and we were down 14%.
We're down approximately 17%, but we were only down 9%.
AVR sales were down 15% and we were down 14%. If you take away somewhat positive while our premium audio sales were down year to date, we are growing our market share, especially domestically and the new products and new categories that we introduced here at the show and those that will launch in the early part of next year should.
Glenn Wiener: To take away somewhat positive while our premium audio sales are down year to date, we are growing on market share, especially domestically, and the new products and the new categories that we introduced here at the show and those that will launch in the early part of next year should help drive future growth into fiscal 25.
Help drive future growth into fiscal 'twenty five.
Glenn Wiener: Here at CES we have a complete line up on display under all of our audio brands and as I mentioned the last quarter we have developed a completely new sound bar offering and have a number of new products on display some of which have launched with others to be launched early this year. Our big announcement was the old new Clipch Flexus Found System powered by Ankyo.
Here at CES, we had a complete lineup on just on display under all of our audio brands as I mentioned last quarter. We have developed a completely new sound bar offering and have a number of new products on display some of which have launched with others to be launched early this year.
Allison was the all new clips flexes south system powered by <unk>.
Glenn Wiener: This is the first product that combines the strength of Clipch's acoustics with Ankyo's electronic technology. It officially comes to market this year and we have high hopes for this product as new our customers.
This is the first product that combines the strength of calypsos acoustics with Ngos electronic technology. It officially comes to market. This year and we have high hopes for this product as do our customers.
Glenn Wiener: I also talked on prior calls about our new party speakers, our gig series, which was introduced in September in time for the holiday season, and it has done very well and has helped offset weakness in other areas.
I also talked on prior calls about our need party speakers our gig series, which was introduced in September in time for the holiday season, and it has done very well and has helped to offset weakness in other areas.
Glenn Wiener: Party speakers are one of the hottest categories in the industry. It is competitive, but the market is open. We have great products slated for launch in the coming months. Here at CES, we unveiled our new Clipch gig series. One product, the Gig Max, is the first Party speaker that will be introduced with Clipch's legendary foreign-loaded technology that we have been perfecting since 1946.
Party speakers are one of the hottest categories in the industry.
It is competitive but the market is open we have great products slated for launch in the coming months here at CES, we unveiled our new Eclipse gig series one product the gig Max is the first party speaker that will be introduced with glitches legendary foreign loaded technology that we have been.
Perfecting since 1946.
Glenn Wiener: These are powerful portable speakers top of the line products that deliver clutches heritage sound.
These are powerful portable speakers top of the line products that deliver coach's heritage sound.
Glenn Wiener: Another highlight was the launch of our new Clip Music City portable Bluetooth speaker.
Another highlight was the launch of our new clips music city portable Bluetooth speakers.
Glenn Wiener: We unveiled three new models, the Clifch Austin, the Clifch National, and the Clifch Detroit, with the Detroit being the premier model and the biggest in our Music City series.
We unveiled three new models the coach.
Austin, the clips Nashville, and they click Detroit.
With the Detroit being the Premier model and the biggest in our music City series.
Glenn Wiener: These figures, along with other compatible clips modeled.
These figures along with other compatible clips models feature of the innovative clips broadcast mode, which allows you to connect up to 100 speakers at once to create a fully immersive listening experience wirelessly through Bluetooth.
Glenn Wiener: feature the innovative Clipch Broadcast Mode, which allows you to connect up to 100 speakers at once to create a fully immersive listening experience wirelessly through Bluetooth
Glenn Wiener: We have a strong premium audio lineup in 2024 and moving into 2025.
We have strong premium audio lineup in 2024 and moving into 2025.
Glenn Wiener: And also some big news on Monday with respect to Clipch and the Panasonic Automotive Collaboration that we've had for a number of years.
And also some big news on Monday, with respect to glitch and the Panasonic automotive collaboration that we've had for a number of years.
Glenn Wiener: Panasonic automotive systems company of America and Infinity jointly announced on Monday the partnership between our company
Panasonic automotive systems Company of America, and Infinity jointly announced on Monday, the partnership between our companies.
Glenn Wiener: The all-new and flagship 2025 Infinity QX80 will feature the Premium Clips Reference Premier Audio System powered by Panasonic.
The all new and flagship 2025, Infiniti Q <unk> will feature of that premium clips referenced premier audio system powered by Panasonic.
Glenn Wiener: The car with our speaker system is being featured here at CES in Panasonic booth, and the vehicle is set to debut later this spring. It has 24 specifically designed speakers, titanium tweeters, a high performance subwoofer, roof mounted speakers, and Panasonic proprietary DJX 3D surround sound processing.
The car with our speaker system is being featured here at CES and Panasonic Booth and the vehicle is set to debut later this spring.
It has 24.
Specifically designed speakers titanium tweeters a high performance subwoofer roof mounted speakers and Panasonic is proprietary D. J S. Three D surround sound processing.
Glenn Wiener: This adds to our program that we announced last year on the Dodge EV Ram truck.
This adds to our program that we announced last year on the Dodge EV Ram truck.
Glenn Wiener: As for other CE products, sales are essentially flat with Lesh.
As for other <unk> product sales were essentially flat with last year.
Glenn Wiener: We saw growth in sales of our recently launched RCA hearing aid products with some other puts and takes between the categories.
We saw growth in sales of our recently launched RCA hearing AIDS products with some other puts and takes between the categories year to date. Other CE sales are up approximately 21% and while we expect some softness near term due to the overall environment, we have strong share and a diverse cut.
Glenn Wiener: Year-to-date, other CE sales are up approximately 21%. And while we expect some softness near-term due to the overall environment, we have strong share and a diverse customer base, and we expect to see growth in some of the newer categories to help combat.
<unk> base, and we expect to see growth in some of the newer categories to help combat this.
Glenn Wiener: The big launch at CES for our accessory group with a new hearing aids under RCA.
The big launch at CES for our accessory group with a new hearing AIDS under RCA.
Glenn Wiener: We launched four new products to expand our presence in this category. We also unveiled a new wireless HDMI signal senders under the Turk brand, which connects devices to TVs and enables streaming content without cable.
We launched four new products to expand our presence in this category. We also unveiled a new wireless HDMI single centers under the chart brand, which connects devices Tvs and enables streaming content without cables.
Glenn Wiener: As well, we have additional other products under our RCA Turk and AR brand.
As well we have additional other products under our RCA Turk and <unk> our brands.
Glenn Wiener: Moving on to automotive, we had some challenges in Q3 as our OEM business was almost cut in half as we and our customers felt the impact of DUAW.
Moving on to automotive we had some challenges in Q3 as our OEM business was almost cut in half as we and our customers felt the impact of the UAW strike.
Glenn Wiener: As always, we base plans on our customer forecast, which obviously were not met when production lines were either impacted or completely shut down.
As always we base plans on our customer forecasts, which obviously were not meant when production lines were either impacted or completely shut down.
Glenn Wiener: With the strike now behind us, we expect to see the automotive business begin to normalize.
With the strike now behind US, we expect to see the automotive business begin to normalize with the contracts that we have been awarded we should be in a position of growth. However, with the general economy slowing based on the fed's moves the date and car prices at all time highs we anticipate.
Glenn Wiener: With the contracts that we have been awarded, we should be in a position of growth. However, with the general economy slowing based on the Fed's moves to date and car prices at all-time highs, we anticipate some near-term softening.
Some near term softness.
Glenn Wiener: During the quarter, automotive sales were down 26% with the miss in OEM, as I just mentioned.
During the quarter automotive sales were down 26% with the Miss in <unk>.
OEM as I, just mentioned and.
Glenn Wiener: and primarily in rear seats and payment, which are the biggest programs for our OEM business.
And primarily in rear seat entertainment, which are the biggest programs.
For our OEM business.
Glenn Wiener: Business with Ford and Stellantis were both down due to the UAW strike, with Nissan sales also down.
<unk> with Ford and still anchors were both down due to the UAW strike with Nissan sales also down.
Glenn Wiener: VSM sales were up slightly given the volume of programs in the heavy-duty truck market and the new lighting programs previously awarded. We have a lot of OEM business in front of us, but with all of the supply chain and production issues over the past year or two, it has been challenging and we are mitigating higher costs and improving our margins where we can.
<unk> sales were up slightly given the volume of programs in the heavy duty truck market and the new lighting programs previously awarded we have a lot of OEM business in front of us, but with all of the supply chain and production issues over the past year or two it has been challenging and we are mitigating higher costs and improving.
Our margins, where we can.
Glenn Wiener: Our aftermarket business was down approximately 3.5.
Our aftermarket business was down approximately $3 5 million, the general economy, and slowed down due to lower inventories that new car dealers impacted sales across most categories with some up and others down.
Glenn Wiener: The general economy and slow down due to lower inventory that new car dealers impacted sales across most categories with some up and others.
Glenn Wiener: For the year, the automotive segment sales are off about 12.5% and Q4 is going to be tough based on the current conditions, though again, some loosening on the OEM side with the strike behind us.
For the year. The automotive segment sales are off about 12, 5% and Q4 is going to be tough based on the current conditions, though again, some loosening on the OEM side with the strike behind us.
Glenn Wiener: And as we move into fiscal 25 and in the years that follows, we have significant opportunities for value creation through the programs that we've been awarded and the ones that we're working on, which will give us new business opportunities to build our future pipeline.
As we move into fiscal 'twenty, five and in the years that followed we have significant opportunities for value creation through the programs that we've been awarded and the ones that we're working on which will give us new business opportunities to build our future pipeline.
Glenn Wiener: As for biometrics, sales came in less than anticipated, mostly due to a lull in implementation.
That's a biometric sales come in less than anticipated, mostly due to the lull in implementation.
Glenn Wiener: All of the projects that I had mentioned previously are still in motion, nothing has changed, but during the quarter we experienced very little progression in terms of rollouts. It was more testing, discussions, and planning.
All of the projects that I had mentioned previously are still in motion nothing has changed but during the quarter, we experienced very little progression in terms of Rollouts. It was more testing and discussions and planning.
Glenn Wiener: We should see sequential improvements in Q4, and assuming all moves as planned, some nice growth in 2025.
We should see sequential improvements in Q4, and assuming all goes as planned some nice growth in 2025.
Glenn Wiener: My comments from Q2 remain, projects with governments, financial service companies, healthcare companies, card dealerships, and more continue, and we hope to have more of a report in the coming quarters as these programs build.
My comments from Q2 related projects with governments financial services companies healthcare companies car dealerships and more continue and we hope to have more to report in the coming quarters as these programs build.
Glenn Wiener: To sum it up, our sales were down in 2-3, but operating income remained flat with the improvements we made to our business, resulting in better gross margins and lower expenses.
Yeah.
To sum it up our sales were down in Q3, but operating income remained flat with the improvements we made to our business, resulting in better gross margins and lower expenses.
Glenn Wiener: As we look into Q4 and the first half of calendar 24, we believe it's going to be tight. Look at what's happening now. Interest rates.
As we look into Q4 in the first half of calendar 'twenty four we believe it's going to be tight.
Look at what's happening now interest rates.
Glenn Wiener: And that impacts not only consumers but our customers as well.
Almost all time highs.
And that impacts not only consumers, but our customers as well.
Glenn Wiener: Credit card debt is very high. Government subsidies from the pandemic are over.
Credit card debt is very high government subsidies from the pandemic Rover.
Glenn Wiener: After a decent holiday season amidst all of these challenges, we feel the economy is slowing and therefore we expect the next few months may be soft and we're going to continue to be diligent in managing our costs. However, these
After a decent holiday season I missed all of these challenges we feel the economy is slowing and therefore, we expect the next few months, maybe soft and we're going to continue to be diligent in managing our costs.
However, these are the same conditions, but also get the fed to start cutting rates and stimulating the economy and that will be good for consumers and for box.
Glenn Wiener: and also get the Fed to start cutting rates and stimulating the economy. And that will be good for consumers and for vodka.
Glenn Wiener: The new launch of products, especially within the consumer segment, should help offset some of the economic softness and the steps to reduce overhead that have taken place should materialize further in the fourth quarter and throughout next year.
The new launch of products, especially within the consumer segment should help offset some of the economic softness and the steps to reduce overhead that have taken place should materialize further in the fourth quarter and throughout next year.
Glenn Wiener: margin should also increase given the new products and programs underway in those watching this.
Margin should also increase given the new products and programs underway and those launching this year.
Glenn Wiener: We are in constant communication with our customers, we're managing our inventory tightly, and we're looking at all aspects of our business to get back to profitability.
We are in constant communication with our customers, we're managing our inventory tightly and we're looking at all aspects of our business to get back to profitability.
Glenn Wiener: With that, I'd like to thank you and then I'll turn the call over to Mike and then we'll open it up for questions. Michael?
With that I'd like to thank you and then I will turn the call over to Mike and then we'll open it up for questions Michael.
Mike: Thanks, Pat, and good morning, everyone. I'll primarily cover our nine-month results and balance sheet, but first a few comments with respect to the third quarter. As Pat mentioned, net sales were down 5.4 percent, gross margins grew by 90 basis points, and operating expenses declined 2.1 percent.
Thanks, Pat and good morning, everyone I'll, primarily cover our nine month results and balance sheet, but first a few comments with respect to the third quarter as Pat mentioned net sales were down five 4% gross margins grew by 90 basis points and operating expenses declined two 1%.
Mike: This resulted in operating income for both fiscal 24 and fiscal 2023, third quarters of 2.3 million.
This resulted in operating income for both fiscal 'twenty, four and fiscal 2023 third quarters of $2 3 million.
Mike: Net income attributable box was 1.9 million, which declined by approximately 5.5 million.
Net income attributable docs was $1 9 million, which declined by approximately $5 5 million.
Mike: This was principally due to a $4 million income tax benefit recorded in the prior fiscal year period, compared to an expense of $100,000. The additional variance was an
Principally due to a $4 million income tax benefit recorded in the prior fiscal year period compared to an expense of 100000.
The additional variance was in other income and expense we reported total other expense of $1 4 million versus total other income of 36000 in the comparable period prior period.
Mike: We reported total other expense of $1.4 million versus total other income of $36,000 in the comparable prior period.
Mike: Additionally, EBITDA was $6.5 million compared to $7.7 million and adjusted EBITDA was $8 million compared to $9 million.
Additionally, EBITDA was $6 5 million compared to $7 7 million and adjusted EBITDA was $8 million compared to $9 million.
Mike: As for the nine month comparisons, all numbers are for the periods ended November 30th, 2023, and November 30th, 2022.
As for the nine month comparisons all numbers are for the periods ended November 32023, and November 30th 2022.
Mike: We reported nine months sales of $360.8 million, a decline of $36.7 million, or $9.2 percent.
We reported nine months sales of $360 8 million, a decline of $36 7 million or nine 2%.
Mike: Within this, automotive segment sales were down 15.6 million, with only on product sales down 4.6 million, and after market product sales down 11 million.
Within this automotive segment sales were down $15 6 million with an OEM product sales down $4 6 million and aftermarket product sales down $11 1 million.
Mike: Consumer segment sales were down $19.7 million with premium audio product sales down $31.9 million.
Consumer segment sales were down $19 $7 million with premium audio product sales down $31 9 million.
Mike: and other CE products sales up by 12.2 million.
And other CE product sales up by $12 2 million.
Mike: Biometric sales declined by approximately 300,000.
Biometric sales declined by approximately 300000.
Mike: Sales are down for the year and will continue to see some pressure in Q4 consistent with Pat's remarks.
Sales were down for the year and we will continue to see some crusher in Q4 consistent with past remarks.
Mike: Our automotive business was impacted by the strike and customer production lines, and we're hoping we'll see some more normalization in the coming quarter.
Our automotive business was impacted by the strike and customer production lines and we're hoping we'll see some more normalization in the coming quarters.
Mike: Retail is tight, but we're starting to turn the corner with new products in premium audio and our accessory products.
Retailers tight, but we're starting to turn the corner with new products and premium audio and our accessory products. Those other CE products has held up well this year with solar power that alchemy products wireless speakers and hearing AIDS, helping to offset economic and consumer softness.
Mike: Those other CE products have held up well this year, with solar power balcony products, wireless speakers, and hearing aids helping to offset economic and consumer stress.
Mike: We continue to take steps to improve our gross margins, which were up 170 basis points sequentially and up 50 basis points a year today.
We continue to take steps to improve our gross margins, which were up 170 basis points sequentially and up 50 basis points year to date.
Mike: For the nine-month period comparisons, gross margins came in at 25.6% as compared to 25.1% with automotive segment margins down 20 basis points and consumer...
For the nine months period comparisons gross margins came in at 25, 6% as compared to 25, 1% with.
With automotive segment margin is down 20 basis points and consumer segment margins up 70 basis points.
Mike: Over time, we expect automotive margins to improve with the relocation of manufacturing to Mexico, price increases, and other steps we've taken to enhance our supply chain and lower costs. However, we need production to catch up.
Over time, we expect automotive margins to improve with the relocation of manufacturing to Mexico price increases and other steps, we've taken to enhance our supply chain and lower cost.
However, we need production to catch up.
Consumer segment margins continued to improve sequentially and again new products should help continue to drive improvements if we maintain volume and of course, depending on product mix and customer programs.
Mike: continue to improve sequentially and, again, new products should help continue to drive improvements if we maintain volume and, of course, depending on product mix and customer programs.
Total operating expenses for the nine month comparisons for $110 2 million.
Mike: for the nine month comparisons, or 110.2 million, as compared to 114 million, an improvement of 3.8 million, or 3.3 percent. Excluding acquisition of 3.8 million, the improvement of 3.8 million, the improvement of
As compared to $114 million, an improvement of $3 8 million or three 3%.
Excluding acquisition and restructuring costs.
Mike: Total operating expenses improved by $5.3 million or $4.7 million.
Total operating expenses improved by $5 3 million or four 7%.
Mike: We're continuing to look at all aspects of our operations to remove non-essential costs and are looking to lower our overhead further in light of the ongoing economic soft.
We're continuing to look at all aspects of our operations to remove non essential costs and are looking to lower our overhead further in light of the ongoing economic softness.
Mike: We're tightly managing expenses, inventory, and our care.
While tightly managing expenses inventory and our cash.
Mike: selling expenses to client 3.4 million, an improvement of 9.6% versus the prior year.
Selling expenses declined $3 4 million, an improvement of nine 6% versus the prior year.
Mike: GNA expenses decline 1.3 million and improvement of 2.4 million.
G&A expenses declined $1 3 million an improvement of two 4%.
Mike: and engineering and technical support expenses declined by approximately 600,000, an improvement of 2.5%.
And engineering and technical support expenses declined by approximately 600000, an improvement of two 5%.
Mike: We had restructuring costs of approximately 2.2 million related to our restructuring and manufacturing relocation programs in fiscal 2024 year to date.
We had restructuring costs of approximately $2 2 million related to our restructuring and manufacturing relocation programs in fiscal 2024 year to date.
Mike: This compares to approximately 500,000 of restructuring costs and 100,000 of acquisition costs in fiscal 2023, 9-month period.
This compares approximately this compares to approximately 500000 of restructuring costs and 100000 of acquisition cost in fiscal 2023 nine month period.
Mike: We reported an operating loss of 17.7 million compared to an operating loss of 14.3 million principally due to lower sales
We reported an operating loss of $17 7 million compared to an operating loss of $14 3 million principally due to lower sales volume.
Mike: Net loss attribute little box was 19.9 million compared to a net loss of 9.3 million.
Net loss attributed a little box was $19 9 million compared to a net loss of $9 3 million.
Mike: Ibedo for fiscal 2024, 9-month period, was a loss of 6.5 million, and adjusted Ibedo was 3 million.
EBITDA for fiscal 2020 for nine month period was a loss of $6 5 million and adjusted EBITDA was $3 million.
Mike: This compares to an EBITDA loss in comparable fiscal 2020-23-9 month period of 3.2 million and an adjusted EBITDA of 5.6.
This compares to an EBITDA loss at a comparable fiscal 2023 nine month period of $3 2 million and an adjusted EBITDA of $5 six.
Moving on to the balance sheet.
Mike: As of November 30th, we had cash and cash equivalence of 10.4 million, which compares to 6.1 million as of our fiscal 2023 year end on February 28th.
As of November 30, we had cash and cash equivalents of $10 4 million, which compares to $6 1 million as of our fiscal 2023 year end on February 28.
Mike: Cash and cash equivalent stood at 5.9 million at the end of our fiscal 20-24th second quarter and at August 31st.
Cash and cash equivalents stood at $5 9 million at the end of our fiscal 2024 second quarter ended August 31.
Mike: or a catch receivable increase by 8.9 million as we're in the higher volume holiday season.
Our accounts receivable increased by $8 9 million as we were in the higher volume holiday season, our inventory declined by $28 9 million for the nine months as we're moving through all the product lines.
Mike: are inventory decline by 28.9 million for the nine months as we are moving through all the product
Mike: We still have inventory on hand to move through. And we're focused on that, given the launches underway, and upcoming, especially in our consumers' sake.
We still have inventory on hand to move through and we're focused on that given the launches underway and upcoming especially in our consumer segment.
Mike: As I noted during our last quarterly call, we expect inventories to continue to decline as we move through the fourth and first quarter.
As I noted during our last quarterly call, we expect inventories to continue to decline as we move through the fourth and first quarters.
Mike: Total debt stood at 48.6 million, as compared to 39.2 million, as a
Total debt stood at $48 6 million as compared to $39 2 million.
As of February 28.
Mike: The increase of 9.4 million relates to 10 million increase in our borrowings associated with our domestic credit.
The increase of $9 4 million relates to $10 million increase in our borrowings associated with our domestic credit line.
Mike: partially offset by a 400,000 decline to our Florida mortgage and a 200,000 decline in the amount owed on the shareholder loan, payable to Sharp as part of our joint venture.
Partially offset by a 400000 decline to our Florida mortgage and a 200000 decline in the amount owed on the shareholder loan payable to sharp as part of our joint venture.
Mike: total long-term debt net of debt issuance cost was $47.1 million as compared to $37.5 million as of February 20.
Total long term debt net of debt issuance cost was $47 1 million as compared to 37 5 million as of February 28.
Mike: As noted, the increase in total debt relates to the increase in our borrowings. This is typical during the third quarter, as our sales and receibles increase, then normally collected during the fourth quarter.
As noted the increase in total debt relates to the increase in our borrowing. This is typical during the third quarter as our sales and receivables increase than normal than normally collected during the fourth quarter.
This will be the case during.
Mike: During the fourth quarter, we'll be using our credit's facility to support the final arbitration settlement, which was announced earlier this
During the fourth quarter will be using our credit facility to support the final arbitration settlement, which was announced earlier this month.
Mike: As reported, we entered into an settlement agreement and mutual release with Seagard with an effective date of today, January 10th.
As reported we entered into a settlement agreement and mutual release with <unk> with an effective date of today January 10th.
Mike: We have agreed to pay C-Guard 42 million in total.
We have agreed to pay segar at $42 million in total.
Mike: of which a payment of 10 million was already made on December 27th.
Of which a payment of $10 million was already made on December 27.
Mike: and the final payment of $32 million will be made today. Well, we're not.
And the final payment of $32 million will be made today.
While we're not happy with the returns we feel it is our best interest as well as well as our shareholders to move forward and focus on our business and stop accruing interest and legal fees, which continue to Mount.
Mike: We feel it is our best interest as well as our shareholders to move forward and focus on our business and stop accruing interest and legal fees which continue to map.
Mike: with the bank of relationships in place and the cash availability we have, the payment will be made and we have sufficient working capital to fund our business moving forward.
With the banking relationships in place and the cash availability, we have the payment will be made and we have sufficient working capital to fund our business moving forward.
Mike: We're hopeful that market conditions improve sooner rather than later and we can get back to cash flow generation and profitability. Operator, we're now ready to open.
Of course, we're hopeful that market conditions improve sooner rather than later and we can get back to cash flow generation and profitability.
Operator, we're now ready to open the call for questions.
Thank you Mike.
Mike: Ladies and gentlemen, as a question, you will need to press star 111 on your telephone and wait for your name to be announced. To enjoy a question, you may press star 111 again.
Ladies and gentlemen to ask a question you will need to Crestar one one on your telephone and wait planning to be announced soon.
A question you May press Star one again.
Speaker Change: And guess, I might as well ask a question. Please press bar 11.
And I guess some reminder to ask a question. Please press star one.
Yeah.
Okay.
Patrick M. Lavelle: and our birthabino questions in the queue at the Sun I'll turn the call back over to Mr. Patleville.
And now appear to be no questions in the queue. At this time I'll turn the call back over to Mr. Pat Lavelle.
Patrick M. Lavelle: Okay, thank you. I want to thank you for taking the time to join us this morning.
Okay. Thank you.
Thank you for taking the time to join US This morning.
Patrick M. Lavelle: I look forward to 2024 with enthusiasm as new product has always been the lifeline and key to our growth and we have a lot of new product schedule for nation.
I look forward to 2024 with enthusiasm as this new product has always been the lifeline and the key to our growth and we have a lot of new products scheduled for next year. So with that thank you and have a great day.
Patrick M. Lavelle: So with that, thank you and have a great day.
Speaker Change: Please find your element at the guard conference for today. Thank you for your participation. You may now disconnect.
Ladies and gentlemen that does go conference for today. Thank you for your participation you may now disconnect.
Speaker Change: Thanks for watching!
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