VOXX Ramping up Automotive OEM Deals

Back in February last year, VOXX signed a deal with Amazon to offer Fire TV in its rear seat entertainment systems for car companies. That deal is paying off handsomely, signaled VOXX in a recent call with analysts.

The company had already reported it received over $330 million in additional OEM contracts during the financial year ending in February. Most of those contracts were for VOXX Fire TV-based rear seat systems (under the label EVOLVE).  Large contracts with Ford and Stellantis (Fiat, Chrysler) will start this summer and fall, respectively.

VOXX is now in discussions with a number of other OEMs on adopting their Fire TV systems and expects to announce more OEM contracts over the next year, said VOXX President and CEO Pat Lavelle.

VOXX was also recently awarded new OEM contracts for remote start/security with Volvo, Polaris and Subaru, it said.

Due to its purchase of Directed last year as well as VSM (Vehicle Safety Manufacturing, which was purchased along with Rostra a year ago), VOXX believes it will double its automotive business within the next two to three years, compared against fiscal 2020.

“This segment has the potential to grow even more in the following years. Our core automotive business is strong. Our customer roster is expanding, and we are selling into new markets with new product lines,” he told analysts.

Regarding chip shortages, he said, “The chip shortage will be a factor near term. It is impacting the entire industry and many of our OEM customers. With that said, we have been told by Stellantis and Ford that their launch plans are relatively on schedule, while volumes may be a little lower due to parts shortages, but will ramp up thereafter.”

For VOXX’s  year end sales announced last week, the company swung to a net gain of $26.8 million as compared to a net loss of $26.4 million in fiscal 2020, a year-over-year improvement of $53.2 million.  Net sales were $563.6 million, an increase of $168.7 million or 42.7 percent versus $394.9 million the year earlier.

All business segments reported year-over-year growth:

• Automotive Electronics net sales in Fiscal 2021 were $163.9 million as compared to $114.2 million in Fiscal 2020, an increase of $49.7 million or 43.6%. The year-over-year growth was primarily driven by higher sales related to the Company’s VSM and DEI subsidiaries. The Company also had a year-over-year increase in sales of aftermarket security and remote start products. Offsetting this growth, was the adverse impact caused by COVID-19 which resulted in several of the Company’s OEM customers shutting down their plants as well as various retail and aftermarket store closures.

• Consumer Electronics net sales in Fiscal 2021 were $398.3 million as compared to $279.7 million in Fiscal 2020, an increase of $118.6 million or 42.4%. The year-over-year growth was primarily related to higher sales of premium audio products, particularly in the premium home theater, subwoofer, and premium wireless categories, all of which achieved market share growth. Additionally, new distribution agreements through the Company’s newly formed subsidiary, 11 Trading Company LLC (“11TC”) positively contributed to the year-over-year increase in net sales, as did higher sales in Europe.

• Biometrics net sales in Fiscal 2021 were $0.8 million as compared to $0.5 million in Fiscal 2020, an increase of $0.4 million or 81.3%. Driving the year-over-year growth were higher sales of the Company’s EXT outdoor perimeter access and Nano NXT perimeter access products. Additionally, in Fiscal 2021, the Company began selling its NIXT product which can be optionally fitted with iTEMP, a product that can take an individual’s temperature before allowing iris access.