VOXX International Corporation

And good day, and thank you for standing by, and welcome to the first quarter results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to introduce your host for today's conference, Glenn Weiner. Please go ahead.

Thank you, and good morning, everyone. Welcome to Vox International's fiscal 2024 first quarter conference call. Yesterday, we filed our Form 10-Q and issued a press release, both documents of which can be found in the investor relations section of our website at www.voxintl.com. Speaking from management today will be Pat Lavelle, Chief Executive Officer, and Michael Storr, Senior Vice President and Chief Financial Officer. Our President, Biat Kali, is also with us today and following prepared marks, all will be available during the Q&A portion of the call. As a reminder, next week on Thursday, July 20th, we'll be hosting our Fiscal 2023 Annual Meeting of Shareholders. This will be a virtual meeting held at 10 a.m. Eastern and shareholders can attend by visiting www.virtualshareholdermeeting.com backslash VOXX2023. As for today, 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 I'd like to point you to the risk factors associated with our business, which are detailed in our Form 10-K for the period ended February 28, 2023. Thank you for your continued support, and it's my pleasure to now turn the call over to Pat.

Thank you, Glenn, and good morning, everyone. The market remains challenging, and the impact is reflected in our first quarter results. The retail environment is tough globally, and while we have a number of good things materializing throughout our segments, the economy remains a primary obstacle near term. Q1 net sales were down roughly 13%, with the automotive segment down 3%. and the consumer segment down approximately 17.5%. Our business continues to be impacted by changing consumer patterns, higher interest rates. Everyone who's not speaking mute, please. Thank you. Higher interest rates, all-time high credit card debt, and continued production issues at our OEM customers. and and i can tell you vox is not alone our peers are facing the same issues we are we are not losing market share and in some areas we're expanding and this bodes well for long term we've been around for over 60 years for a reason and we remain steadfast in moving forward with our growth plans while at the same time managing our expenses and capital but near term with best buy target Walmart, and many other retailers reporting weaker outlooks for 2023. It's about maintaining and capitalizing opportunistically. As for our automotive segment, our OEM business was up over 21 percent, driven by higher volumes with Ford, Stellantis, and Nissan for our rear seat entertainment systems. We have seen some increases in customer production, but not in all cases, and chip issues appear to be easing, but we're still being cautious. Margins are tight based on current contract pricing, and we are working to mitigate this with production shifts to Mexico, which began in fiscal 2023 and will be mostly complete by the end of our second quarter. Volume remains pretty consistent with Ford, and we're continuing to develop the RSC systems for model year 2025 vehicles. Volume with Nissan and Stellantis, somewhat with Scalantis. Excuse me. Someone is typing. Please stop. And we're now supplying the Evolve system to the Wagoneer and Cherokee Pacific.