Glenn Wiener - GW Communications Patrick M. Lavelle - President, Chief Executive Officer, Director; President and CEO of Code Systems Michael Stoehr - Chief Financial Officer, Senior Vice President, Director John Shalam - Chairman of the Board

Jim Barrett - C.L. King & Associates Thomas Kahn - Kahn Brothers JD Abouchar - GRT Capital Richard Greenberg - Donald Smith & Company Tom Decker - Morgan Stanley Usman Tahir - Seneca David Shapiro - Adis Financial

Good day, ladies and gentlemen and welcome to the Audiovox fiscal second quarter earnings conference call. My name is Grace and I will be your coordinator for today. (Operator Instructions) I would now like to turn the presentation over to your host for today’s conference, Mr. Glenn Wiener. Please proceed, sir.

Thank you and good morning. Welcome to Audiovox's fiscal 2008 second quarter results conference call for the period ended August 31st. As the Operator mentioned, today’s call is being webcast on the company’s website, www.audiovox.com, under the investor relations section and a replay has been arranged for those who are unable to participate. Fiscal second quarter results were released after market close yesterday. If you don’t have a copy of the announcement, you can obtain one by visiting our website or alternatively you can contact my office after the completion of today’s call. Additionally, our Form 10-Q was filed yesterday and can be found on our website under our SEC filings. Speaking from management this morning will be Patrick Lavelle, President and CEO, and Michael Stoehr, Senior Vice President and Chief Financial Officer. Both will be making opening remarks before opening up the call to your questions. Before getting started, I would like to briefly read our Safe Harbor language: except for historical information contained herein, statements made on today’s call and on today’s webcast that would constitute forward-looking statements may involve certain risks and uncertainties. All forward-looking statements made are based on currently available information and the company assumes no responsibility to update any such forward-looking statements. The following factors, among others, may cause actual results to differ materially from the results suggested in these forward-looking statements. These factors include, but are not limited to: risks that may result from changes in the company's core business operations; our ability to keep pace with technological advances; significant competition in the mobile and consumer electronics businesses and accessories business; relationships with key suppliers and customers; quality and consumer acceptance of our newly introduced products; market volatility; non-availability of products; excess inventory; price and product competition; new product introductions; and the possibility that the review of our prior filings by the SEC may result in changes to our financial statements; and the possibility that stockholders or regulatory authorities may initiate proceedings against Audiovox and/or our officers and directors as a result of any new restatements or other actions. Risk factors with our business, including some of the factors set forth herein, are detailed in the company's Form 10-K for the period ended February 28, 2007. Thank you again for your participation and at this time I would like to turn the call over to Patrick Lavelle, President and CEO of Audiovox. Patrick. Patrick M. Lavelle: Thank you, Glenn. Good morning, everyone and welcome to our fiscal second quarter conference call. I am calling in from Bentonville, Arkansas, where I am attending the Wal-mart CEO conference. By now, you’ve had a chance to review our press release and our 10-Q, which were both released after market close yesterday, and have seen that we are making progress and executing on the initiatives that I had discussed in our year-end and first quarter conference calls. We reported sales of $148 million, an increase of 52% compared to second quarter last year, with diluted earnings per share of $0.16 and net income of $3.7 million, an increase of over 290% compared to the second quarter last year. On an operating basis, we went from an operating loss of $4.2 million to an operating profit of $3.9 million, or an improvement of over $8 million with a positive swing of more than $5.7 million in net income. We are seeing the effects of the programs that we have put in place over the last few quarters and they, combined with our acquisitions, are fueling the company’s return to profitability. Much of our sales increases can be attributed to our accessory group, as sales rose by $38 million, or over 1,000% as a result of the acquisitions earlier in the year of the Thomson Accessory Business and OEHLBACH. And as I’ve said before, we expect accessory sales to be a major contributor to our revenue performance. However, the growth was not only in accessories. We also reported a 14% increase in our electronics group, which reversed the decline trend of the past several quarters. During the period, we experienced increased demand from our retail partners for our audio and mobile multimedia solutions and certain security and remote start products. Specifically, Jensen Mobile, Phase Linear, XM Satellite radio, and Code Alarm products. Recently, NPD published a report that listed the top 10 mobile multimedia products by brand; five of them were Jensen, including the number one market share. And this is a very impressive showing for our Jensen mobile group, especially when you consider we purchased this brand out of bankruptcy just a few years ago. Satellite radio sales are up compared to last year and last quarter and we expect to achieve our goal of being the largest after-market XM radio hardware supplier by year-end. During the quarter, we experienced weakness in some of our other mobile categories, including video, after-market security, and remote starts. Much of that weakness is fueled by the OEMs adding our core type products as standard equipment to their vehicles. Now, there are only two ways to counteract this trend. First, we continue to increase our own presence in the OEM marketplace as a supplier, and second, we need to continue to focus on the consumer appetite for high-tech and innovative mobile solutions that include products like portable nav, in-car nav, in-car PCs, and by directional remote starts, products such as that. While we report international sales within our product groups, taken on their own, international sales increased by 56% for the quarter and 41% year-to-date as a result of increased core business and new accessory sales. Our goal is to have our international business represented 20% of our total sales, exclusive of Canada. To get there, we have pursued acquisitions to expand our European operation, so as to duplicate our domestic operation by adding accessories and OE components to their mobile and consumer business. Now, despite the positives experienced this past quarter, the industry wide shortages in LCD panels have adversely impacted results for both our mobile and consumer electronics. We are not alone here. The entire industry is suffering from lack of supply. The shortages have impacted LCD TV sales that are off as much as 20% and portable DVD sales off as much as 30%. In addition, the shortages delay the introduction of our new digital picture frame line. This too impacted our performance. We expect to continue to feel the pressure brought on by these shortages throughout the balance of the year. In addition, prices for LCD panels in all sizes are going up due to the lack of supply and although we are passing these costs on, there is likely to be increased margin pressure near term. However, based on the feedback from our suppliers, we hope the situation will lessen in the coming months. Gross margins came in at 19.2%, which is up 300 basis points from the second quarter last year and over 100 basis points from last quarter. Gross margin increases are the result of the substantial focus on improving margins on our core business, as well as a shift in our product mix to include higher margin accessory sales. Our overhead was up approximately 23%, or about $4.6 million on sales that were up 52%. All of the increases in our overhead were related to expenses associated with the acquired Thomson, OEHLBACH, and Incaar operations, including approximately $175,000 in expenses in one-time transitional expenses for the quarter, which are mostly behind us. As I mentioned previously, sales in our core business were up 15%, while core overhead was down $375,000, and this is a result of the programs we have put in place over the last two years that are now beginning to have an effect on our operation. Our focus on overhead was not simply to a reduction in services or personnel. We conducted a complete audit of our systems and procedures and made the necessary system investments, which we believe will allow us to take full advantage of available technology to increase productivity and generate even further cost savings. Those programs include, but are not limited to, our new reverse logistics warehouse management system, a new demand planning program, a purchase order and supply tracking system, and a new B-to-B website. We continue to evaluate our programs and services in an effort to improve efficiencies at lower cost. Discipline in our buying programs, customer deals, and inventory management, along with a constant monitoring of each product category for contribution will maximize profit opportunities across the board. We remain adequately staffed to absorb future acquisitions with minimal increases in overhead and we believe that our overhead as a percentage of sales will continue to decline as we assimilate the acquisitions and as they continue to grow. We’ve acquired three businesses year-to-date, all of which are positively affecting our performance as we speak. Every one of these acquisitions were synergistic and together, they will add roughly $185 million to $200 million to our revenues on a full-year basis, while costing us only $67 million. We believe we have spent our money wisely, focusing on acquisitions that have allowed us to leverage our structure to absorb additional revenues at minimal expenses. And we will continue to be very active on the M&A front, as I believe we are in a unique position to capitalize on investment opportunities. Our deep involvement in the consumer electronics industry provides us with an advantage over the private equity firms that we compete with for acquisitions. The change in the credit markets that have altered private equity investments approaches, as well as fostered more reasonable valuations is good for us. Our cash position gives us an advantage in the M&A market and we plan to capitalize on it. Now, while I remain cautious about the electronics market as a whole, given the overall economic outlook, the continuing credit crunch, a decline in consumer confidence, and some soft retail projections, I am also optimistic. The breadth of our line combined with our impressive brand portfolio and financial stability makes us an attractive supplier to some of the world’s largest retailers. In addition, we have significant financial resources at our disposal to continue to pursue the right strategic acquisition to help expand and enhance overall performance. We are now gearing up for a strong holiday season and I look forward to reporting improving results in the month ahead. I want to thank you for joining us this morning and I want to thank you for your support of our company. I will now turn the call over to Michael, who will review our financial results in detail and then we will open up the call for questions. Michael.

Thank you, Pat. Good morning, everyone. Since Pat’s covered the quarter in some detail, I am going to focus my comments on what happened to the last six months of our operations. I will also review some line items on the balance sheet and give you an indication of cash flow as we see it for the remainder of the year. For the six months ended August 31st, we reported sales of $276.5 million, an increase of 32.5%. The majority of this increase is related to accessory sales, although our electronic sales are up slightly year-to-date as a result of its second quarter performance. Accessory sales now include the recent acquisition of Thomson, OEHLBACH, and the sales from our Terk acquisition, which occurred in 2006. For the first half of our fiscal year, we reported sales of $74.3 million versus $7.2 million last year. Electronics sales were approximately $202 million, up slightly from prior year period approximately $727,000. The electronics sales declined in the first quarter but were up 14% in the second quarter. Also for the six month period, we saw a $21.9 million increase in audio sales, which includes Jensen Mobile, Phase Linear, satellite radio, and a $4.7 million increase in our electronics international operation sales. Offsetting these increases were declines in consumer goods sales as a result of screen shortages and additionally, we saw a decline in mobile video and our security remote start business. As a percentage of net sales, electronics represented 73.1% and accessories, 26.9%. While this number can and will fluctuate from quarter to quarter, we anticipate accessories to represent over 30% of our total revenue for the year. Gross margins increased 150 basis points for the six month period versus last year to 18.7%, and on a product basis we saw increases in both our groups, electronics and accessories. This increase was offset by higher cost of sales for freight and warehouse costs, partially due to the transition costs as we absorbed our acquisitions. There is still room for improvement as some of our recent initiatives and investments in systems continue to address the increased costs in warehouse, assembly, warranty, repair and freight as a result of increased sales volume, labor cost, and energy cost. We continue to and work for improvements in our gross margins. Our operating expenses were $49.3 million, an increase of approximately 23%, or $9.2 million versus a sales increase of 32.5%. As a percentage of net sales, it was 17.8% versus 19.2%. Adjusting our operating expenses were $10.5 million, which is related to our acquisition of Thomson, OEHLBACH and Incaar, which was not here last year, our core overhead was actually down 3% for the six-month period. Operating income for the first six months of fiscal 2008 was $2.3 million, compared to an operating loss of $4.2 million in the prior year period, an improvement of approximately $6.5 million. Notwithstanding the current economic climate, we continue to work towards improving the operating income by increased sales, gross profit, and expense controls. Equity income of our equity [investees] increased $152,000 due to higher equity income of ASA, our joint venture, as a result of increased market sales in their group. Interest income declined approximately $700,000. Our short-term investment holdings are lower as a result of recent acquisitions, investments in systems, and the seasonal working capital needs for the company. The effective tax rate for the six months for fiscal ’08 was a provision of 30.3% compared to a provision of 21% in the prior year period. The interest income earned on our short-term investments is tax exempt, which results in our effective tax rate being less than the statutory rate. Overall net income from continuing operations for the six-month period in fiscal 2008 was $3,852,000, or $0.17 per share, compared to net income of $0.01 per share in the same period last year. As of August 31, 2007, our working capital was $305 million -- $305.4 million, which includes cash and short-term investments of $83.9 million. This compares to working capital of $306.9 million and cash and short-term investments of $156.3 million as of February 28, 2007, the end of our fiscal year. The decrease in short-term investments is primarily related to the acquisition of OEHLBACH and Incaar, approximately $7 million, additional capital expenditures for investments in IT systems and unfixed assets of approximately $4 million, and an additional seasonal working capital needs to support accounts receivable, approximately $39 million, and inventory, approximately $30 million. Some of this increase was offset by net income from operations of approximately $3.8 million, cash from the exercise of options, approximately $3 million. We also used $1.4 million in cash to repurchase stock. The third quarter ended November 30th is historically our strongest. As a result, in our fourth quarter we will see our cash balances increase as we follow our normal seasonal pattern. Though our accounts receivable balance increased at the end of the second quarter, our turnovers improved to 5.3 during fiscal 2008 compared to 4.9 same period last year. Inventory balance increased at the end of the quarter, but again our inventory turnovers improved to 3.7 compared to 3.2 for the same periods. This is even though historically our accessories, the new accessory acquisition has a slower turn than our normal electronics business. We are now beginning to experience the results of our investments in systems and control over our inventories. During the first half of fiscal 2008, we repurchased a total of 128,100 shares of our common stock for roughly $1.4 million. As of August 31st, we have approximately 1.7 million shares left in our authorization for repurchase. I’ll be hear for any questions. Thank you and Pat, I will turn the call back to you. Patrick M. Lavelle: Thank you, Michael and we are ready now to take any questions. Operator.

(Operator Instructions) Your first question comes from the line of Jim Barrett of C.L. King & Associates. Jim Barrett - C.L. King & Associates: Good morning, everyone. Just two questions; first, Pat, although you did touch upon it, do you have any preferences for doing acquisitions domestically versus internationally? Does the competition vary by region? Do the valuations vary by region? Could you talk about that a little bit? Patrick M. Lavelle: I wouldn’t say we have a preference. We just did two this year in Europe and the valuations were a little bit more realistic, I would say, in Europe than what we’ve seen here. Prior to the credit crunch that we are seeing, the valuations in the United States for companies that had good bottom lines were really getting out of reach for us. That is why we focused our targets on companies that we knew had good sales, had good product but were having difficulties and we were able to pull out let’s say the back end of the business by bringing them in to Audiovox and eliminating the duplication. That’s how we’ve made money with all the acquisitions that we’ve done in the United States. I am hoping that the credit crunch that we see will help bring valuations in the United States more in line. Jim Barrett - C.L. King & Associates: And on a related note, and maybe this is a question for Mike, how much cash and short-term equivalents could the company put to work in making an acquisition and beyond the cash, would there be any consideration to leverage up the balance sheet for the deals that you are currently evaluating?

Well, I’ll answer question number one first; right now, we have about roughly in the high 70s, $80 million as I speak to you. We are going to start the cash up in November. Sans any acquisitions, we’ll be back in nine figures again during the fourth quarter, towards the end of it. The company’s balance sheet is unencumbered. We have a tremendous amount of equity leverage to put on the balance sheet. That doesn’t predispose that we are going to do it. As Pat mentioned, we tend to look more at deals that don’t lever up the company, that are more synergistic with us. Jim Barrett - C.L. King & Associates: Thank you both.

Your next question comes from the line of Thomas Kahn of Kahn Brothers. Thomas Kahn - Kahn Brothers: Hi, Pat, good morning. I forgot what this OEHLBACH and this Incaar do. Could you refresh my mind? What do they do and kind of what size are they? I know they are both small. Patrick M. Lavelle: As I had indicated, one of the things that we are trying to do with the European operation is duplicate what we have here, pretty much in the same type of products so we can leverage some of the buying power that we have for the United States and bring that advantage over to Europe. In the OEHLBACH situation, OEHLBACH is a manufacturer, an o-line manufacturer of accessories, higher end accessories. They are going to be in the $15 million range or something around there. So that brings the accessory component that we have in the United States, that brings it over to Europe as well now and we expect to get some economies of scale based on the size of our accessory business in the United States to even further improve margins over at OEHLBACH and also give them a line of product that is, since they are high end, we can also bring in an RCA line of product and have them attack a different market segment. In the case of Incaar, Incaar is a provider right now to Toyota and BMW of rear seat entertainment systems, so that brings the OE component. We currently supply rear seat entertainment to Toyota of the United States. So again, leveraging the economies of scales that we have and giving them the depth of distribution that we have here, so there is no -- so we are not so reliant on any one market segment. Thomas Kahn - Kahn Brothers: Great. Thank you very much, Pat.

(Operator Instructions) Your next question comes from the line of JD Abouchar of GRT Capital. JD Abouchar - GRT Capital: Just broadly speaking, if we lumped, excluding accessories, if we lumped revenues right now and call it home, automotive, and sort of handheld portable, what does it roughly look like now and what would you like that to ideally look like? Patrick M. Lavelle: We really don’t break out our sales looking like that. We really lump our sales together as more accessory product, mobile product, consumer product. That’s the way we tend to look at it. When I look at the sales, our mobile group still is the largest group that we have and that is now followed by accessories and then consumer products. And then if I was to take our international sales and put that as a separate group, that would be below the consumer product, when I take out Canada. Because we don’t look at Canada as international. JD Abouchar - GRT Capital: What I’m trying to get a sense is where do you see growth coming from, because as you pointed out to some degree, the OEMs are starting to include what were the optional features in mobile, so is there -- are there still growth opportunities in mobile or is more of the focus on the acquisition front going to be -- Patrick M. Lavelle: Actually, our mobile group grew this quarter and one of the reasons why it grew was we -- our mobile multimedia products under Jensen were very, very strong. A lot of times what happens is as one product starts to be taken over by the OEM, there is a new product category that starts to emerge and come up through the after-market channels. That has been historically the process that we’ve seen over the years. So although one category may look like it is mature and it is going to diminish, there is another category coming up. What we are looking at now is we are looking at tracking systems, we are looking at two way remotes. These are remotes that will tell you when your car has started and then it will tell you what the temperature is on your car, so that you know it is time to go out there. These are the things that generate new business in the after market. JD Abouchar - GRT Capital: And then, on the accessory front, one, I assume that the accessories generally have higher margins than the core business, so how does that affect our overall margins going forward? And two, what is the acquisition universe look like out there? Is there a ton of stuff to do? Is it just totally fragmented mom-and-pop’s or are there a couple of big companies that would make more sense to go after? Just kind of the landscape. Patrick M. Lavelle: I’ll give you the first one. As far as accessories, yes, they generally -- because of the nature of accessories, the multitude of SKUs that you have to handle, and the fact that retailers rely on accessories to make money as well. The pressure on margins and accessories are not as great as what we see in consumer electronic products, so more accessory sales that we see, I would tend to believe we are going to see a better, overall gross profit picture. And we continue to look at companies that would fit well within our accessory group. We continue to look for companies that would fit well in our mobile group, and consumer group. As far as the landscape that’s out there, there are a number of companies out. Some are very, very small. We are looking at two companies right now that we think will fit both our electronics company and our accessory company. We think the synergies are there and where we can again bring these sales in and eliminate some duplication, which eliminates overhead which makes the acquisition more profitable. So pretty much the same game plan that we’ve operated on over the last three years when it come to these decisions. We will look to strengthen the two core segments that we have, accessories and electronics, but we are also looking at the possibility of doing something in what we call the [CDA] channel, which is more the home installation type product. JD Abouchar - GRT Capital: Excellent. Thank you very much.

Your next question comes from the line of Richard Greenberg of Donald Smith & Company. Richard Greenberg - Donald Smith & Company: Just to follow up on that gross margin question, in the past you’ve talked about kind of a goal of 5% operating margin and if I would have had to guess, it was more in line of maybe 19% gross margin and 14% SG&A expense, and now it is looking like both those numbers are going to be higher. I guess the first question is can you still stick that out as a goal, or is that 5% too aggressive? And then what’s the mix going to be between the gross margin percentage and the SG&A percentage?

The 5% still is out there. That’s -- I think with the gross margin, I mean the operating expenses that you are looking, should come off a little bit. There is some transition costs in there. Again, as we always stated, I mentioned sales, we are going to get some volume pick-up. You are going to see the margins pick up. We still have room in the margins and you will see some improvements in the overhead as the systems we’ve employed now are just beginning to get some traction. Pat gave you an outline of what those systems are but there is a real geometric -- there’s an effect to that that is now being felt through the company. Richard Greenberg - Donald Smith & Company: Okay. The other question is quality of inventory, you know, Audiovox historically has always been a company which has had inventory write-offs. I noticed last night the PCD division of UT Starcom took another inventory charge you and guys, even since you divested that operation, have had charges. Just any sense of what’s coming down the pike, how you are feeling about the quality of inventory?

Well, to -- talk about not speak ill of the dead, but that’s one of the reasons why we stepped away from the wireless business, were those margins. For our own inventory, the charge that we took two years ago was really when we cleared up the old brands and the old lines and the old product lines. Right now, as Pat mentioned, again the systems that have gone into the company, there is quite an extensive month review that takes place on our inventory positions. We have six to seven product group heads, accessories was brought on line last month, and they sit down and go by SKU by SKU, gross margins are reviewed, and we are looking at this all the time. So yes, there will be inventory that gets old. That’s a cost of doing business but to the extent that it become excessive from our normal patterns, we do not anticipate that happening. Patrick M. Lavelle: Richard, there is one thing that I would have to caution you about, is that in this business, especially on the consumer side when you come into the Christmas selling season, that is when you see that you are getting a lot of big projections coming in from your retailers and obviously, number one, you need to support them if you want to remain a supplier. But if there is a mistake on their part as to what they think they are going to sell and what they actually sell, that is where we will run into an excess of inventory. Now, if that happens across the board within the industry, where a particular product category is loaded, then you start to see price erosion and that’s where you’ll see pressure on margins and possible write-downs to bring product to market. But that’s the type of situation that exists. As Mike indicated, our review of inventory is very intensive on a monthly basis. We have the ability to adjust if we see that we missed a projection or something like that but remember; when you are loading up for Christmas and you are loading up for a Wal-mart or a Best Buy or any one of these major accounts, there is an element of risk but that is a part of the business. Richard Greenberg - Donald Smith & Company: One more question; Mike, it was unclear, I didn’t get it from your 10-Q, all the acquisitions that you’ve made over the last six to nine months, have you put the final adjustments on the balance sheet for those and all the good will and intangibles, or is it still preliminary numbers?

The numbers right now are still preliminary. We’ll be finished in the third quarter. Richard Greenberg - Donald Smith & Company: Are you expecting a big increase in good will and intangibles?

No, it will just be a movement between the two. Richard Greenberg - Donald Smith & Company: Okay, great. Thanks a lot, guys.

Your next question comes from the line of Tom Decker of Morgan Stanley. Tom Decker - Morgan Stanley: One thing I’ve been trying to trace down for the last couple of days, and I was hoping you could help me with this; everybody at Verizon here in Connecticut is just raving about the Audiovox 6800 and I was wondering, after checking this down, I know you are out of this business but since they are using the name, are there royalties attached to your name on this? Do you receive anything from the 6800? Or is that Unistar or UT Star? Patrick M. Lavelle: UT Starcom. Basically the cellular group had the right to use the Audiovox name for a period of time post closing, so no, we do not receive royalties on that. Tom Decker - Morgan Stanley: You don’t? Patrick M. Lavelle: No, but we do receive the benefit from a PR standpoint and from an advertising standpoint for the Audiovox brand with whatever they do, but no, we are not receiving royalties on that. Tom Decker - Morgan Stanley: Okay. Do you know off-hand if UT -- how that relationship is with UT Star and HTC? Patrick M. Lavelle: I really can’t comment on that. I’m not aware. Tom Decker - Morgan Stanley: Okay. Thank you very much.

The agreement we had when we sold the ACC division to Starcom, it was a five-year period of time during which they could use the Audiovox brand name without paying royalties, and at the end of this month of October, we will have completed three of those five years since we sold the company to them. Tom Decker - Morgan Stanley: Okay. I mean, the people up here at Verizon, they are just telling me this is going to knock the iPhone out of the box and I was just wondering how beneficial this would be to Audiovox.

Only in a secondary manner, from the point of view of ripple effect of advertising and recognition. Tom Decker - Morgan Stanley: Thank you very much.

You have a question from the line of [Usman Tahir] of Seneca. Usman Tahir - Seneca: I just wanted to ask you a question on guidance for 2008. I think previously you said you guys were looking to do about $600 million in revenues. Are you reaffirming or changing that? Patrick M. Lavelle: First off, we don’t give much guidance but I think that’s attainable.

That’s what we discussed in the first quarter. Usman Tahir - Seneca: So you guys are not changing that then? Patrick M. Lavelle: No. Usman Tahir - Seneca: Would it be possible for you to give us an indication of how much -- I guess if you were to look at fiscal ’07, you had $460 million of revenues. For ’08, you could be at $600 million. How much of the delta is coming from businesses you’ve acquired? Patrick M. Lavelle: I would say that when you look at -- we have some organic growth within our core business but the bulk of the growth is going to come from the acquired companies. Usman Tahir - Seneca: I wanted to ask a few questions on the security business. What kind of trends are you seeing in the -- I guess the remote start and other security products of concern in the after market? Patrick M. Lavelle: Well, again, the trends, as I indicated, is you will see a shift of product. You will see more tracking product coming out where you can actually track the car or you can get online and you can follow the car around and you can get e-mail messages if the car went over a certain set speed that you can set. So that’s the tracking product. It’s stolen vehicle, you can also call the car, you can start the car from long distances and things like that. That’s a new product that we’ve just introduced that we are starting to sell now. But the normal remote start business is a very seasonal business and with the milder temperatures that we had last year, our remote start business was not as vibrant as we had hoped. But we are also introducing a number of long range and bidirectional remote starts which we believe will give some spike to the remote start business. Again, remote starts are used to warm the car in the cold of winter and it’s a regional and a seasonal product. With the bi-directionals now, you will get longer range but you will also get indication back from the car that the inside temperature is 72, so it’s comfortable to come into the car. These are the things that will help spike the remote start business in the coming season. Usman Tahir - Seneca: Do you have any OEM exposure in this product line? Patrick M. Lavelle: We have, as I had indicated on previous calls, our Code Alarm group is very active with the OEMs on remote starts. We have recently, or last year we won a contract to supply the bi-directional remote transmitter to GM and we start shipping that I believe some time next month. Usman Tahir - Seneca: I guess the [inaudible] in the Code Alarm so far this year and if that’s related to OEM or after market volumes? Patrick M. Lavelle: The increase that we had in Code Alarm came from -- it was a combination. It came from an increase in their retail sales but it came with an increase also in some of the OEM business that we do. Usman Tahir - Seneca: Got it, and how significant -- Patrick M. Lavelle: Let me just clarify that; our OEM business is not just security and remote starts. Our OEM business also includes some audio business and some video business. The drop that I had mentioned in our OEM business did not occur in the remote start area. Usman Tahir - Seneca: Last question, how significant is security and convenience to your overall revenues? Patrick M. Lavelle: It is a significant factor. It’s a mature product category. It represents a good percentage of our mobile business and it comes with good margins, so from a mobile standpoint, it’s a significant product group. Usman Tahir - Seneca: Thanks a lot for taking the questions.

Your next question comes from the line of David Shapiro of [Adis] Financial. David Shapiro - Adis Financial: I’m wondering if we can get a rough gross margin differential between the accessory line and the core line, the electronics line. Patrick M. Lavelle: There’s probably a 10% spread when you are looking at product gross. David Shapiro - Adis Financial: On a gross margin or a product margin basis? Patrick M. Lavelle: A product margin basis. David Shapiro - Adis Financial: And then how would that translate to a gross margin basis?

You mean gross margin, sales minus cost? That spread is about in that range. David Shapiro - Adis Financial: Okay, about 10%. All right. And then, I was wondering, on your JV, how much cash and debt is at the JV level?

There is no debt at the JV level and there is about $5 million worth of cash. We don’t consolidated. David Shapiro - Adis Financial: Okay. Thank you.

You have a follow-up question from the line of Usman Tahir of Seneca. Usman Tahir - Seneca: I just wanted to speak about the satellite radio business you guys have. How much of XM’s volume do you guys supply and is it mostly after market or OEM? Patrick M. Lavelle: I can’t give you the exact number as to what percentage we supply of XM, but our business with XM is purely on the after market. We supply the direct connect products on an exclusive basis with XM and we supply the plug-and-plays that are sold at retail. Usman Tahir - Seneca: And how significant are these revenues to you guys? Patrick M. Lavelle: Once again, within the audio group, they are significant. Usman Tahir - Seneca: Any sense of how the merger would impact you guys? Patrick M. Lavelle: It’s a little too early to tell. We’ve obviously had conversations with both groups as to what they think might transpire post a merger. They are really, in my estimation, concentrating on the merger right now. When you look at product commitments, part procurement commitments and everything that go out six months and sometimes beyond, even if a merger was to happen shortly, there would be a period of time before they would even be able to do anything other than what they are doing right now, based on product and inventory. Usman Tahir - Seneca: I think a competitor of yours has their agreement with Sirius expiring I think sometime early next year. How do you view that? Would you view that as a possible opportunity as far as you guys are concerned or are you sort of not focusing on pitching Sirius on -- Patrick M. Lavelle: We have from day one had licenses to sell and market both products. Today we still sell a Sirius product to some OEM accounts, so we have a relationship with both groups. As far as we are concerned, we are hardware suppliers so if they are interested in working with us, we’d be more than happy to discuss it with them. Usman Tahir - Seneca: Okay, so I take it that you guys are not aggressively pitching Sirius on any new business then? Patrick M. Lavelle: Excuse me? Say that again? Usman Tahir - Seneca: I’m inferring that you are not in front of Sirius talking about incremental volume once your competitor’s contract expires with them? Patrick M. Lavelle: We would have no problem in discussing it with them. Usman Tahir - Seneca: Okay. Thanks again.

I would just like to point out one thing, when you are mentioning significant to the mobile group, to make sure everybody understands in context of the overall company sales, which are upwards to 600 projected. Usman Tahir - Seneca: Got it. Thanks, guys.

You have no further questions at this time. Patrick M. Lavelle: Okay. Thank you all once again for taking the time to listen to us this morning and review our numbers. We appreciate the support of Audiovox and I wish you all a very good day. Thank you.

Thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect.