Audiovox 1998 Annual Report Download - page 10

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AUTOMOTIVE DIVISION
Our business strategy is to leverage
our ability to source product and our
marketing flexibility to capitalize on
consumer trends.
—Patrick Lavelle
Senior Vice President
Automotive Electronics
“
“
1998 revenues for the Division were $175 million with international sales accounting for 24% of the total. Every year
since its inception, the Electronic Division has consistently met its sales and profit targets. In 1998 every operation
within the division posted increases over 1997, except for the Company’s Malaysian subsidiaries. Here, sales were off
significantly due to the economic crisis in Asia. However, we anticipate that our Malaysian subsidiaries will return to
profitability in 1999.
The electronic division divides its sales into Mobile Electronics and Consumer Electronics. The mobile electronics
group focuses on the 12-Volt specialist and car dealer while the consumer group targets the mass merchandiser. The
Electronics division also supports a considerable OE and private label effort for vehicle manufacturers.
In 1998, the division expanded its mobile video line and introduced a new line of FRS Radios (Family Radio Service).
Mobile video sales which in 1997 accounted for $1.5 million, exceeded $10 million in 1998, and we expect to pass that
mark early in the second quarter 1999. The product line expansion focuses on the addition of vehicle specific overhead
consoles for use in SUV’s. In addition, we have redesigned the universal roof mount system to a slimmer profile, which
should broaden the vehicle options to include regular passenger cars. Fourth quarter sales of mobile video were driven
by the promotion with Nissan Motors to equip their 1999 Quest minivan with an Audiovox mobile video system. This
promotion, originally scheduled for only the fourth quarter was so successful that it has been extended well into 1999.
FRS, introduced in 1998 was the newest edition to our leisure product line. In 1996, our division entered the
home and portable leisure products business. Since that time we have watched direct sales grow from $2.5 million to
$5 million to $12 million in fiscal years 1996, 1997 and 1998 respectively. Our leisure products group also enjoyed over
$15 million in consumer product sales sold under license agreements. Plans for continued expansion of this line include
the introduction of video products such as TV’s, VCR/TV combos, portable DVD players, and audio products such as
mini disc players and Home Theater.
The Division’s auto sound and vehicle security groups posted slight decreases in sales, primarily due to industry wide
decreases in selling prices and the economic problems suffered in Malaysia where sales were off by 82%. New product
introductions in the Prestige auto sound line that feature the new mobile theater technology will help increase sales in
the category for 1999. In addition, the division has introduced a series of high-end security systems that include remote
start, extended range and two-way communication.