Good day, and thank you for standing by, and welcome to the First Quarter Results Conference Call. At this time, all participants are on 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 Wiener. Please go ahead. Thank you, and good morning, everyone. Welcome to VOXX International's Fiscal 2024 First Quarter Conference C all. 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.voxxintl.com. Speaking from management today will be Pat Lavelle, Chief Executive Officer, and Michael Stoehr, Senior Vice President and Chief Financial Officer. Our President, Beat Kahli, is also with us today and following prepared remarks. 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 10:00 A.M. Eastern, and shareholders can attend by visiting www.virtualshareholdermeeting.com/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. 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 ending February 28, 2023. Thank you for your continued support. 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. Could 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. I can tell you, VOXX 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. 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%, 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 has picked up somewhat with Stellantis. Excuse me, someone is typing. Please stop. We're now supplying the Evolve system for the Wagoneer, the Cherokee, Pacifica. Let me hold on. Someone is typing. Would you please stop? Thank you. We are now supplying the Evolve system for the Wagoneer, the Cherokee, and the Pacifica. Entailing higher growth in the OEM RSC category with some customer production-related issues, as some plants have been slowing down for various reasons. On the other hand, chip supply has been improving, which is a good sign for the industry. Looking out, our OEM business remains poised for growth due to a number of reasons. First, the OEM production is becoming more consistent and should increase. Second, the demand for vehicles remains very high. Third, we have a number of large, multi-year, long-term contracts in place across several of our OEM product lines, with new programs coming on in fiscal 2024. The automotive aftermarket continues to be challenged due to a lack of cars and the overall retail environment. There hasn't been much change since I reported last quarter, other than our aftermarket customers working through their inventory positions from the prior year. Dealers and distributors are continuing to watch inventory levels closely, as they don't want to repeat the issues they had last year, but we expect things to loosen a bit as we move into the fall and winter seasons. For our Consumer segment, sales were down roughly 17.5% and was all in Premium Audio, as other CE product sales were up almost 36%. More than half of the growth was in wireless speaker category, as we captured sales both in the U.S. and Canada and expanded our Costco program. Germany accessory sales were up over 77%, and Schwaiger sales nearly doubled as the new balcony power product we introduced in fiscal 2023 is doing very well. We expect sales from these two new programs to help offset economic softness and potentially drive growth this year. The premium audio category has been hit hard, and it's not just due to the economy and retailers. We saw a big uptick in premium audio sales when COVID first hit, and over the following year, as people were staying at home and making purchases for their home. Now we're seeing the opposite, as discretionary income is being spent on travel, restaurants, and other services. The global environment is worse off today than it was at this time last year. On the other hand, the supply chain, which over the past year has led to significantly higher costs, longer lead times, added storage and shipping, and product scarcity, has improved dramatically, which should help margins improve. As for the quarter, sales were down across categories, brands, and geographies. We spent the past several months, in fact, rather the better part of the past year, looking at new opportunities where our premium audio lineup could excel and offset some of the global economic pressures, while continuing to drive innovation in our existing lines. One of our new innovations is our Klipsch Reference Premiere powered subwoofers, which are doing extremely well and leading to increased market share. Another is our GiG XL and GiG XXL party speakers, marking our entrance into the hottest category in CE right now, with new products slated in the coming months. We will also be launching our new Klipsch Music City portable Bluetooth speaker line, which will expand our presence in the category, and we've received strong advanced orders that bode well for this category. Lastly, we will be launching a new Klipsch Flexus, a new soundbar coming to market late in the second half of the year. This is a connected audio sound system, the first ever product developed in tandem by Klipsch and Onkyo. The category will continue to be pressured through the year, though new products should help offset the pressures we're expecting, as we'll expand the distribution of Onkyo and Pioneer-related products, especially in China, where Pioneer has recently expanded our license. Partnerships are also new sales drivers. There are a few that we believe will help drive growth in the years ahead. Our flagship brand, Klipsch, is in homes, cinemas, commercial establishments, on the water, and soon will be on the road as Klipsch Reference Premiere speakers will be on the first ever Dodge Ram EV truck, two trim levels with the Ram 1500 Tungsten and the Ram REV Tungsten, with a state-of-the-art 23-speaker audio system that in fact, will blow you away. We've had a partnership with MasterCraft for years, supplying Klipsch speakers in MasterCraft boats. Soon, Klipsch will be integrated into luxury Crest pontoon boats and Aviara day yachts, expanding this relationship further. Other programs with Hard Rock, Margaritaville, PGA, and others will continue. A few years ago, the premium audio market saw an unusually high volume of stay-at-home purchases and an equally fast downturn since. Everyone experienced it. The market will continue to be challenged due to this and the continued slowdown in the economy. New products will help this year, and when market conditions begin to improve, our Consumer segment results will as well. Lastly, our Biometric segment. Sales of $1 million were in line with last year in Q4 of fiscal 2023, but were light compared to budget due to timing, as some projects moved slowly throughout the quarter, but will continue throughout the year and drive growth in fiscal 2024. We're moving forward with the healthcare program that I've covered for several calls. Our authentication solution was validated by third-party testing and accepted by our customer to be incorporated into their next-generation medication dispensing solution. We're working on any final design changes through the third quarter, with production expected to start in fiscal 2024. This customer plans to expand our technology implementation across three other product lines, and discussions are underway. We are also working with several pharmaceutical companies selling our logical authentication devices, which are used to authorize approved personnel into their manufacturing execution systems. As you may recall, in Q3 of last year, we developed a proof of concept program for a nationwide rental car agency. This program is in testing at Dulles and Reagan Airport, and if successful, will roll out in many additional locations. Our business with nuclear power plants in the U.S. continues as well, and we are working with several operators throughout the U.S. to deploy EyeLock technology to secure physical access, which should bring our total to 20 nuclear facilities domestically. Within the financial space, we continue to work with Axiom Bank to complete the development of the IRIS biometric token. for their banking as a service solution. We are also discussing with our largest financial customer an update to all EyeLock physical access systems that they have installed throughout the years to our newest FXT system. In closing, we anticipate fiscal 2024 will be difficult due to the uncertainty of the global economy and the continued impact of shifting consumer preferences. We expect markets to remain hard-pressed. Many economists are expecting that we'll be in recession in this fourth quarter or first quarter of next year. Therefore, clearly more action is needed. We began adjusting overhead in the second half of last year, and given the outlook, we will be making necessary adjustments to our infrastructure and expenditures, adjusting to meet reality. We are completing the move to Mexico to improve all overall automotive OEM margins. We are adjusting our workforce based on expected fiscal 2024 sales volumes and realigning to ensure we're operating effectively and supporting customers. We're actively managing G&A, looking at all expenses, both internal and external. We are implementing brand and product rationalization programs in order to get a better ROI. Although we anticipate near-term softness, some of it should be mitigated by the positives we are seeing and the things we are planning for. As example, improvements in the supply chain should help improve margins. Chip availability should help our OEM customers stabilize production. New OEM programs are started next year and beyond. We have new premium audio products set to launch this year. We have begun delivering our new Klipsch party speakers, entering the fastest-growing segment of the audio business. We'll be expanding geographically with Onkyo, Pioneer, and Integra. Premium audio partnerships I discussed are expanding. Our accessory business has been growing with the introduction of our new solar product and expanded distribution, and we have a number of biometric projects which should drive growth and lead the segment to profitability. At this point, I'll turn the call over to Michael, and then we'll open it up for questions. Mike? Thanks, Pat. Good morning, everyone. With respect to our first quarter results, all comparisons over the periods ending May 31, 2023, and May 31, 2022, respectively. Total net sales of $111.9 million declined by $16.8 million, or 13.1%, with Automotive down $1.2 million, Consumer down $15.6 million, and Biometrics flat. Within Automotive, OEM sales were up $3.6 million, and aftermarket sales were down $4.7 million. Within Consumer, premium auto sales were down $22.3 million, and other CE sales were up $6.7 million. Pat spoke to the drivers for the segments in his remarks. I'll move on to margins. Gross margin of 24.6% was down 120 basis points for the comparable first quarter periods, with Automotive down 120 basis points, Consumer down 190 basis points. Biometrics was immaterial on a gross profit basis. Automotive segment margins were adversely impacted by lower sales of security product and aftermarket remotes, remote systems, which traditionally carry higher margins, as well as lower margins on some of our current OEM and rear seat entertainment programs. Which we're addressing. Consumer segment margins were down year-over-year, primarily due to lower sales of Premium Audio products. Moving through the fiscal year, as we start cycling through our inventory, coupled with improvements in the supply chain, we should see gross margins increase. Total operating expenses were $39 million, a $1 million or 2.4% improvement for the comparable periods. Selling expenses declined by $1.1 million due to lower commissions, salaries, and credit card expenses. Our G&A expenses increased by approximately $400,000, with professional fees and travel expenses higher for the comparable periods. We also had approximately $100,000 increase in restructuring-related expenses associated with the transition of some of our OEM production to Mexico, which, as Pat noted, will be mostly complete by the end of this quarter. Our engineering and technical support expenses declined by roughly $100,000. Acquisition costs also declined by $100,000, as these costs were incurred only in the prior year period. As a reminder, the costs relate to the asset purchase agreement signed with Onkyo and the JV with Sharp. We reported our operating loss of $11.4 million, compared to an operating loss of $6.7 million in Q1 of fiscal 2023. Total other expenses in Q1 of fiscal 2024 were $1.6 million, compared to total other expense of $2.2 million in Q1 of fiscal 2023. Within this, interest and bank charges increased by $800,000, as we had higher borrowings outstanding on our facility compared to last year. Equity income of equity investee, which is our 50/50 joint venture with ASA Electronics, was $1.6 million, essentially flat. We recorded an expense of $1 million for the interim arbitration award related to the Seaguard arbitration in both fiscal year periods. Other net improved by $1.4 million, primarily due to the positive changes in foreign currency. We reported an EBITDA loss of $7.6 million, compared to a loss of $4.2 million. We reported an adjusted EBITDA loss of $4.9 million, compared to a loss of approximately $100,000 when comparing Q1 of fiscal 2024 and 2023. Moving on to the balance sheet. As of May 31st, we had cash and cash equivalents of $5.2 million, as compared to $6.1 million as of our fiscal 2023 year-end on February 28th. Our accounts receivable decreased compared to fiscal 2023 fourth quarter due to lower sales. Our inventory position increased due to the new products we brought in for our wireless speaker programs and the new solar power product we launched in Germany. We will continue to lower our inventory balances as unconditional purchases are approximately $90 million at the end of fiscal 2024 Q1, compared to approximately $171 million in comparable fiscal 2023 periods. Our total debt stood at $36.7 million, as compared to $39.2 million, a $2.5 million reduction. This was principally due to a $3.4 million reduction in the amount outstanding on our debt domestic credit facility, offset by EUR 1.1 million outstanding on our Euro ABL for VOXX Germany, which was not present at year-end. Our Florida mortgage declined by approximately $100,000, as did the amount owed on the shareholder loan payable to Sharp as part of the joint venture. Total long-term debt, net of debt issuance costs, was $33.9 million as of May 31st, as compared to $37.5 million as of February 28th. The company has available a senior secured asset-based facility with a committed availability of up to $165 million, with availability as of May 31, 2023, of $71.3 million. Our availability under normal conditions would be higher, as this formula takes into account the amortization of the real estate properties in Florida and the Seaguard arbitration. We anticipate a ruling by the court on Seaguard matter to occur on or before August 3rd, as we previously communicated. We are preparing for it. Operator, we are now ready to open the call for questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question is going to come from Thomas Forte from... Oops, one moment, please. Start over. Thomas from D.A. Davidson, your line is now open. Yes, hi. Good morning. Good morning. I had a couple questions, Pat. Can you put the current challenging macroeconomic environment in a longer-term perspective? Going backwards, you kind of have the Great Recession is the most recent example of a recessionary period. I recognize that was a pretty significant recession. Can you compare what you're seeing today with prior recessions, such as that one, as a starting point? All right. Well, the first thing is that we did not see. The big impact that we're having right now is the strong run-up in sales when everybody was home. Now we're seeing a major, you know, shift in preferences by the consumer, and they'd rather be doing more experiential things. It's a little bit different. You know, a home theater system or a speaker system or some of our bigger products are not something that you buy every two years. There was a pull forward, a buy forward, as we say, you know, when everybody was home. We're expecting, you know, probably another year, as far as the higher-end systems, more costly systems, it would take to roll through, you know, first off, the recession and then the pivot. It can be offset by some of the new things that we're coming out with. The new Flexus Soundbar would be new for us. The party speakers is a fast-growing business. We expect to dominate in that space, so we can offset some of that weakness in the other areas. I would think that this stretches out through the balance of the year and sometime into next year as well. Okay. That was very helpful. Thank you. On the automotive front, you touched on this in the prepared remarks, but can you explain the current situation? It sounds like the supply chain issues, for the most part, are in the rearview mirror. I'm trying to understand what the challenge is today, if it's not supply chain. Is it also- Well, the macro, or is it something else? There's still a little bit of supply chain issues on the chips that were needed, and sometimes chips are used to do other critical things in the vehicles, and therefore, the chips that they need to do, let's say, rear seat, rear seat, you know, are taken to use other, more critical, you know, functions of the vehicle. That's one. The other thing is, there is a buildup of inventory with some of our customers, and that's changing production forecasts and things like that. Sales may not be as strong as they produced. We are, you know, seeing, you know, the consumer being impacted by the sticker shock of coming in and buying some new cars. I think that what we're seeing. ... based on some of the production cuts that we get advised of time to time, is a combination of all of it. I think that the car manufacturers are struggling to meet demand, but at the same time, in vehicles that they are building, they're not seeing the sell-through. I think that will change over time, as they adjust with either interest rate reductions or lower prices on some of the vehicles. Going back to your original answer, as a longtime follower of the consumer electronics industry, if we had a pull forward, and I agree with you that we did, we're in the early stages of the pandemic, consumers bought a lot of consumer electronics. Do you have a historical proxies? Is it just the typical refresh rate for the products and when consumers normally, you know? Yeah. buy the next set that, Yeah. that you're gauging on? Yeah. I mean, you know, true audiophiles buy equipment often, okay? When you look at, you know, the impact that COVID had on the buying patterns, like I said, you know, that was in 2020, 2021. That's why I'm saying, you know, 2022, we started to see it. We'll see it all this year, and it will probably start to improve somewhat, as we move into 2024, that you'll start to see normal buying patterns again. Okay. Last question. Thanks for taking all my questions. This I think, is a repeat from last quarter, maybe the last two quarters. As the supply chain costs have improved, can you talk about your strategy on potentially reinvesting some of the improvement in promotional pricing? Yeah. Well, the thing is that, you know, when, at the height of the supply chain problem, we were seeing what would normally be 30 days on the water. We were experiencing, depending on where the product was coming, as high as 97 days. Which means that in order to protect the holiday season and things like that, we had to bring in a lot of excess inventory. That excess inventory is impacting storage costs, and it is preventing us to get, you know, some of it, not all of it, is preventing us from getting new pricing based on lower costs of freight, and in some cases, negotiated better prices for the same product. We expect that we'll probably see another quarter of inventory being moved out. Everything coming in now would be coming in at lower freight rates and at, in some cases, better pricing with the, you know, that we've negotiated. I would estimate that, you know, we will see an improvement month-over-month throughout, you know, the balance of the year, and then start to get back to historical levels of profitability within the premium space, especially because of the size of the equipment, the freight component was crazy on it. Therefore, now that we're back to pretty much pre-pandemic levels on pricing, that we should see the pricing come down. You will see adjustments to pricing to move out inventory that we want to move, and then you'll see adjustment in retail pricing based on lower costs. We can maintain, you know, a competitive nature with our competition. Great. Thanks for taking my questions, Pat. I appreciate it. You're very welcome, Tom. Thank you. One moment. I am showing no further questions. I would now like to turn the call back over to Pat Lavelle for closing remarks. All right. Very good. If there are no further questions, I'd like to thank you for your interest in VOXX coming on the call today, and I wish you a very good day. Thank you. This concludes today's conference call. Thank Thank you for participating. You may now disconnect.