Voxx won’t lever up for acquisitions, has good cash, to pay down debt

By Devika Patel

Knoxville, Tenn., Oct. 11 – Voxx International Corp. is considering potential acquisitions, but management does not plan to take on additional leverage to acquire targets.

The company has sufficient cash on hand for its operations and is also planning to pay down more debt in the near term.

“We are looking at potential acquisitions that could strengthen our business further and improve EBITDA and cash flow, though we are not looking to leverage our balance sheet or overpay for any business or businesses,” president and chief executive officer Patrick M. Lavelle said on the company’s second quarter ended Aug. 31 earnings conference call on Friday.

As of Aug. 31, the company had cash and cash equivalents of $39,294,000, compared to $58,236,000 as of Feb. 28.

“We expect our cash position to increase in the third and fourth quarters,” senior vice president and chief financial officer C. Michael Stoehr said on the call.

“We have sufficient cash on hand to fund our operations.

“We also have available $140 million domestic credit facility with nothing outstanding.

“Our balance sheet remains strong and we are maintaining the flexibility needed to continue to invest in R&D, to support future automotive premium audio and biometric programs and repurchase our stock in the open market as we are able to,” Stoehr said.

Total debt as of Aug. 31 was $14 million, compared to $17.6 million as of Feb. 28.

Total long-term debt as of Aug. 31 was $7.4 million, compared to $7.6 million as of Feb. 28.

The company plans more debt paydowns in the near future.

“We completed the sale of our Pulheim real estate and proceeds from the sale will be used to pay down our euro asset-based lending obligations while providing additional working capital to fund our German operations,” Stoehr said.

“The company intends to pay down by Oct. 31 the approximately $5.6 million of asset-based debt in our German operations,” Stoehr said.

Voxx is a Hauppauge, N.Y.-based automotive and consumer electronics and accessories company.

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