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| Statement |
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| Our new party speakers are doing very well, and new launches are planned in the second half of the year |
| And additionally, where car dealers would normally offer aftermarket products to increase profitability, the tightness in inventory and strong demand has allowed them to just add market adjustment increases [through the ticket] (ph) price |
| We reported gross margins of 25.2%, an improvement of 190 basis points compared to second quarter last year and an improvement of 60 basis points sequentially |
| Premium Audio sales were up $5.6 million sequentially, and we're expecting to see continued sequential growth in the third quarter as it's the beginning of the holiday season and for our third quarter to come in higher than last year |
| We now expect with the potential of an extended UAW strike that inventory tightness will continue, but with that said the other OEM contracts that are in place, even at lower-than-projected volumes, should help drive top-line |
| While sales were down year-over-year, they were up sequentially by $1.7 million, and we're expecting improvements in the second half of the year |
| Gross profit improved by 190 basis points, driven by gains in our Consumer segment |
| Gross margins of 24.9% improved by 30 basis points, and we expect further improvements in the second half of the year as well for the reasons Pat covered |
| And the past actions coupled with the recent restructuring will help improve margins and lower our costs |
| Our operating expenses improved by $2.1 million year-over-year as we continue to lower our costs |
| We're beginning to see the positive impact of all these moves and should see further improvements in the coming years with production overhead coming down more significantly next year |
| With that said, we saw some modest improvements in our business this quarter, which helped combat the overall softness in the economy |
| If Automotive volumes materialize as our customers expect, we should see improvements in our Automotive segment as well as with the relocation of manufacturing to Mexico now complete and other changes we've made to our infrastructure and supply chain |
| Our new subwoofers, recently introduced this year, are doing very well, and have received excellent reviews, which should help continue to drive growth in this category |
| Automotive margins were essentially flat and increase was driven by the improvement in our Consumer segment, which we anticipate will continue |
| Steve Downing, who serves as CEO and President of Gentex, also sits on our Board, and this alliance is one that we believe holds great promise for our company and our shareholders |
| I'll note, EBITDA and adjusted EBITDA improved on a sequential basis by $2.2 million and $4.9 million, respectively |
| While we lost money in the quarter, our operating loss improved by $1.5 million, and we reported flat adjusted EBITDA, which was $3.3 million better than 2Q of last year |
| So that's something that we believe will do well |
| Operating expenses improved by over 5% and roughly 10% when you take out restructuring expenses |
| But like I said, I think the retailers are bringing in what they perceive that they are going to be successful in moving out, and we think they will |
| So, we're looking at growing our business sequentially and, hopefully, the cuts that we put in place are significant enough for us to turn profitable for the balance of the year |
| Our OEM business grew by $1 million as some of the material shortages began to loosen and we fulfilled several back orders, particularly at Code for remote start and security applications |
| However, we have gains with our heavy-duty truck manufacturers, fleets, and other OEMs outside of the big three automakers that are part of the UAW strike |
| Operating expenses improved by 3.8%, or 6% when excluding restructuring expenses and acquisition costs |
| This is the first entrance of the Klipsch brand into automotive, and we believe this is a new area of growth as other automotive manufacturers recognize the value of the Klipsch brand |
| With Gentex, we have found a great partner as we are collaborating with them in both our Biometric and Automotive segments on current projects, while concurrently looking to drive innovation in our offerings to grow our joint businesses and market share |
| As we look out into the second half of the year, we expect to seek top-line growth compared to fiscal 2023 and to be profitable |
| I can't get into much detail on it at this point, but it is a long-term program which will have material positive impact on EyeLock |
| We initiated a significant restructuring program: removing headcount and lowering our non-essential spend across the company; we exited several third-party agreements and restructured contracts to lower fees; we completed our OEM manufacturing transition to Mexico for most of our OEM product lines, which will reduce costs and help improve margins; and we can continue to work with our supply chain to redo pricing with more favorable terms, while moving out of our inventory positions to protect our balance sheet |
| Statement |
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| As the global markets remain challenging, consumer spending is down, and the automakers are still having production issues |
| Further, some of our business was down compared to the same quarter last year due to heavy promotions last year and a big program at Costco that launched in 2Q of last year |
| The automotive aftermarket overall continues to be challenged with some puts and takes |
| As for our Biometrics segment, sales came in approximately $200,000, lower than the prior year and our budget |
| OEM was up, but the obstacles we and the industry face continue to hinder our growth |
| Over the past few years, however, we faced global supply chain issues, a deteriorating global economy and a very challenging retail environment, with high inventory positions and rising interest rates changing the way retailers operate |
| Our aftermarket business was down for the quarter by $2.8 million, and we expected declines given the high inventory positions our customers have carried and the overall retail environment |
| We reported total second quarter net sales of $113.6 million, a decline of approximately $12.1 million |
| Lastly, we reported an EBITDA loss of $13 million and an adjusted EBITDA loss of $5 million |
| Within this, Automotive segment sales were down $1.8 million, Consumer segment sales were down $10 million, and Biometric segment sales declined by approximately $100,000 |
| As for the 2Q quarter results, sales were down approximately 10% year-over-year and up 1.5% sequentially |
| For example, TV sales are in a slump |
| Within our Consumer segment, consumer sales were down $10 million year-over-year with Premium Audio down roughly $16 million and other CE product sales up $6 million |
| Through the first six months of fiscal 2024 compared to fiscal 2023, net sales were down 11.3%, with Automotive segment sales down 3.9% and Consumer segment sales down 14.5% |
| As for our Automotive segment, Automotive segment sales were down $1.8 million or a little less than 5% |
| To sum it up, the second quarter was expected and we're not pleased with our results for the first half of the year |
| In the most recent NPD report, the speaker market is down roughly 16% year-to-date and Klipsch continues to maintain its number one market share |
| If the UAW strike continues longer, we will see a lagging effect on inventories on the dealer's lots, which will impact our aftermarket automotive sales |
| Our Premium Audio business has been hit hard over the past 18 months after a great run during early stages of the pandemic and the year that followed |
| EBITDA in the second quarter was a loss of $5.4 million and adjusted EBITDA was essentially flat |
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