Glenn Wiener - Investor Relations Pat Lavelle – President & Chief Executive Officer Charles Michael Stoehr - Chief Financial Officer

Sean McGowan - Needham & Company Rob Stone - Cowen & Company Scott Tilghman - B. Riley Rob Ammann - RK Capital

Good day, ladies and gentlemen, and welcome to the VOXX International Year End Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded. I would like to hand the conference over to Glenn Weiner. Sir, please go ahead. Glenn Wiener - Investor Relations: Thanks, Karen and good morning, everyone. Welcome to VOXX International’s fiscal 2014 year end results conference call. Today’s call is being webcast from our website, www.voxxintl.com and can be accessed in the Investor Relations section of our website. We also have a replay available for those who are unable to join us. We filed our Form 10-K this morning and our apologies for the delay. We literally had a last minute hiccup, an administrative issue getting foreign paperwork through. Everything is now in order and you can find the 10-K on our website in SEC filings section. Before turning the call over, I would 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 and the company assumes no responsibility to update any such forward-looking statements. Risk factors associated with our business are detailed in our Form 10-K for the fiscal year ended February 28, 2014. Additionally, management will be onsite at the B. Riley Investor Conference in Santa Monica next week presenting on May 20 and the following week we will be at the Cowen Conference in New York City on May 29. We also have plans to be at the Jefferies Conference in June following at the Needham Conference thereafter. This time, I’d like to turn the call over to our President and CEO, Pat Lavelle. Pat?

Thank you, Glenn and good morning everyone. Before I cover our fiscal year performance and outlook for fiscal 2015, I would like to address our fourth quarter first as that obviously came in lower than we had anticipated. As you know, we had very strong third quarter with heavy loadings in preparation for a strong holiday season at retail. Unfortunately, that strong holiday seasons did not really materialize. And when I spoke with you in January, I had to lower our top line estimates for the fiscal year based on a slower December. You need no further than the business press to see retailer after retailer reporting disappointing sales and earnings in virtually every category. In fact, industry wide sales reports have indicated this past winter posted the lowest retail sales since 2009. We suffered as well as the slow retail environment impacted every one of our retail segments, our consumer accessories, premium audio and automotive sales and this was the sole reason for our top line miss. Additionally, I would like to address the impairment charge we took in the quarter. Based on the top line miss in the fourth quarter, indications with near-term shortfalls and longer term forecasts, we have determined that it is proper for us to impair certain intangibles which are carried on our books. Therefore, we have made an accounting adjustment and have taken $57.6 million non-cash charge for certain intangibles in our automotive premium [audio] and consumer accessories segments. This non-cash charge in no way affects our ability to growing our business or financing we have arranged. Mike will cover this further in a few minutes. Outside of retail this past quarter, business conditions were and will remain stable. Our OEM business continues to post strong numbers. And as I look at our contracts in place, those pending and our prospects moving into fiscal ‘15 I believe this segment will continue to post strong results. Overall, taking everything into account and despite the past issues that retail in our fiscal fourth quarter, we maintained our direction that we will position to a modest growth this year and more so in the coming years. Consumer confidence is on the rise with March figures posting the highest in years. And while one month does not make a trend, industry and financial analysts believe the economy will show improvement and not just in the U.S. Hiring and manufacturing are up and the all important car sale indicators continue to remain strong. In addition, while our performance was lower than expected, we not only met our cash flow target of $40 million, we also paid down a considerable amount of debt and improved our debt position February-over-February by $65 million and as of May by $82 million over February of 2013. As far as the fiscal year, we reported net sales of approximately $810 million, which were about $15 million to $20 million lower than I forecasted in January. Within our automotive segment sales were down approximately $4 million versus last year. We had indicated throughout the year that satellite radio and fulfillment sales as well as results from our Venezuelan operation would be lower. Total fulfillment sales can be roughly $17 million below the prior year, mostly in satellite radio as more and more vehicles are coming equipped with satellite radio which impacts the aftermarket sales. The political environment in Venezuela also continues to have a negative impact on that operation. And as a result Venezuela sales were down approximately $8 million versus last year. Offsetting this is growth in both our domestic and international OEM business. We are seeing expansion in our customer base as well as significant new technology development, which is part of the reason why our expenses were up. We are investing in R&D and we are investing in the future. Moving forward we believe the establishment of VOXX Hirschmann will expand product placement opportunities even more. And with new technologies coming to market, our growing OEM platform and the longer term nature of early contracts we should see continued growth in this segment for years to come. While Mike will walk through the numbers, I want to point out total automotive sales excluding Venezuela and fulfillment sales were up almost 6%. Within our premium audio segment sales were down about 2%, again retail in the fourth quarter was the primary reason as we were tracking to our internal projections for the first nine months of the year. Soundbars and new music systems are in high demand and getting great reviews. While volume was high on these products, they do represent product mix shifts from sales of traditional 5.1 surround sound speakers. We have been heavily marketing the Klipsch brand and there were a number of key promotions which we believe will help raise brand awareness. Those efforts combined with new sponsorships and endorsements should help to drive sales. Our consumer accessories segment saw the biggest decline with the sales of just over $18 million. Keep in mind that in addition to the retail weakness during the year, we exited roughly $15 million of lower margin products, which was anticipated. While there will always be product obsolescence, we believe that many of the end of life product issues we have faced over the few years are now behind us and we should post respectable increases as a result with upside based on strong consumer demand, new product development and expanding retail distribution. Factor in the anticipated downturns in sales in Venezuela, fulfillment sales and exited product categories and you will see that our other businesses were up from the prior fiscal year even with the negative effect of retail sales in the fourth quarter. The total impact of these three factors alone was approximately $40 million in lost revenue. And in addition we are seeing positive results in our international business posting overall sales gains of 3.2%. Now to address fiscal ’15 and what we are see in marketplace throughout this past year when asked, I have indicated organic growth of around 3% in fiscal 2015. Barring any significant deterioration in the economy or any one-time events, I believe this should be attainable with upside if some of the bigger projects and opportunities we are working on deliver in time to affect sales for the year. So examples of products and categories that I believe will drive growth is we have a strong OE presence and with our new technologies combined with more and more wireless connectivity into vehicles, this will help us expand in this market. Recently, we were awarded two new rear seat entertainment system contracts with OEs that will utilize our 4G eHub technology. In addition, we recently were awarded a €36 million extension of our antenna business for Volkswagen and Audi. And currently, we have the number of RFQs that we are pursuing, which we believe will lead to additional new business for us in the coming years. Car connection sales are also expected to grow this year. And building on our earlier momentum with Sears and Pep Boys, we are planning a new major retail launch in June, which will favorably impact subsequent quarters. We expect to announce with one or two major insurance carriers in the second quarter. These programs are designed to provide users of car connection with substantial discounts on the vehicle insurance premiums. Residential installations of home theaters should grow as home sales rebound. New sound bars and our completely new line of speakers and headphones from Klipsch that launch in June at Best Buy should also fuel sales. Growth in Bluetooth wireless speaker products from Klipsch, Acoustic Research, Magnat, Heco and the 808 brands will help expand the category for us. The introduction of our new emergency preparedness line under the Champ brand is another new category that is showing potential with key retailer response being very good. And our entry into the imagery market with our 360Fly action camera and 360 micro cell phone accessory as well as the new iris authentication products in the biometrics market, both ventures from our newly restructured VOXX Electronics subsidiary should help us expand our distribution and sales more so as we move into next fiscal year. Of course, there will always be some things, which have the potential to pullback sales, which is expected for our business. This year, they will likely include a continued decline of fulfillment sales and some exiting of lower margin products, but not to the extent that we have seen over the past few years. Also digital TV tuner sales for select OEM customers will be lower as those customers transitioned from the current DVDT tuner to the next-gen DVDT 2 digital tuner. In automotive, we expect sales to be flat with this year. Once again, these numbers take into account the anticipated declines in fulfillment sales, little or no business from Venezuela, and the digital tuner transition. The latter piece is really just about timing as we anticipate the following year comparisons will be favorable. Offsetting this will be growth in our antenna business and continued traction in both rear seat entertainment and security. We have a strong global OEM customer base, solid contracts that will carry us for multiple years, and access to technology that I believe separates us from the competition and positions us for growth. In premium audio, we are anticipating a slight decline in fiscal ‘15 roughly 1% to 3%, but while top line sales might be effective, profitability in this category should increase. During this past fiscal year, we embarked on several programs designed to strengthen the Klipsch brand and its commitment to quality. We elected to exit certain retail channels and limit distribution to maintain the integrity of the Klipsch brand as well as its gross margins, so that our retail partners know we thoroughly support their commitment to our brand. At the same time, we have increased our very visible marketing programs such as Kings of Leon tour, sponsorship of the Sarah Fisher Hartman Racing team and the Indianapolis Grand Prix to name a few. We believe that this year we will see the first tangible evidence of the impact these increased sponsorships and promotions will have on the brand. In our consumer accessory segment, we expect to see double-digit increases of between 12% and 13%. There will be continued growth in our new line of charging products, Bluetooth wireless speakers and also from our line of 808 audio products. In addition, Schwaiger and Oehlbach are expected to post increases as the economy in Europe improves. The growth in this category will also be driven by new products VOXX Electronics will be introducing in action cameras and biometrics, both slated for summer and fall introductions. Due to the timing of these launches, we expect only a small impact on this fiscal year. However, over the next two to three years, these categories should be big drivers that represent significant growth and diversification for our company. Additionally, and a part of my future optimism spans from several projects we are working on now that are in various levels of development and the reason for the increases in our R&D spend. We continue to expand our activities in the field of asset tracking. And later this year, we will launch a robust solar power module with a minim 10-year life without the need for a further power supply. We plan to sell this product into the container and trailer tracking markets leveraging our existing network provider partnership with AT&T. As I mentioned earlier, car connection is growing on every level. We are in discussion with a major international carrier to bring that technology to Europe and here in the United States. We are beginning the rollout of car connection into new retail outlets and car connection fleet to new fleet management companies. We have submitted our bid with the Mexican government to potentially be a major supplier of product as that country moves from analog to digital. You may recall the significant bump in sales we experience domestically a few years back when that transition occurred in the U.S. and more recently in Germany. As we move into fiscal ‘15, I want to remain cautious when guiding as we have seen strong sell-in at retail for the past three years owing to see sell-through suffer for various reasons. Unfortunately, the fragile economy forces us to plan much of the same in our fiscal ‘15 numbers. Of course, should the economy continue to improve and we experienced positive year-over-year changes at retail during the next holiday season, we can do far better than the 3% growth we are guiding to. In fiscal ‘15, we see top line sales in the $825 million to $830 million range. Again, with some potential upside that I will revisit when we get to the second half of the year. Gross margins are projected to come in a little above 29% for fiscal ‘15. We were at 28.4% this year and the higher number is based on product mix we are projecting and newer products coming to market. Operating expenses, which were held in check in prior years increased in fiscal ‘14 as we implemented a modest 3% cost of living salary increase, increased spending to support promotional activities of our premium audio and select consumer accessory brands and increase our engineering and R&D teams by 10% to over 300 engineers to support OEM and various other projects. We will continue this in fiscal ‘15. We are investing in our infrastructure and in our R&D teams to stay ahead of the technology curve. And while this will lead to an uptick in overhead, it will also lead to stronger top line performance in future years. Overall, operating expenses could increase about 4% to 5%. I expect EBITDA to be comparable with fiscal ‘14 approximately $54 million to $55 million. Cash flow continues to increase and we should do better next year based on lower capital expenditures. We are paying down debt quicker than we had budgeted and we exited the year with total bank debt of $88 million, well under the sub $100 million we had anticipated at the beginning of last fiscal year and the total company debt of a little over $109 million, which represents again a $65 million improvement. I’d like to address one other topic before my closing remarks. We have recently announced a 3 million strategic investment that equates to an approximate 10% holding in EyeSee360. This investment builds on our exclusive distribution agreement for 360 degree action in camera and it’s related accessories and demonstrates our commitment to them and to the category. We believe the technology that EyeSee360 has developed far surpasses what’s in the market today providing a full 360-degree, 240-degree view in HD quality with the largest field of view of any camera in the market. It will allow consumers to capture real life experiences like never before. And as I said before, our growth strategies, is not only to develop products, but also to invest in new and exciting technologies and categories. This is one such investment that we believe will not only grow sales, but also allow us to sharing the positive financial growth of the category. We continue to look at new technologies and companies and we will stay on this path to identify the next generation growth drivers for our industry and our business. To that point, we remain active in the M&A arena. And we will be prudent and cautious in any new acquisition. That said, we do believe that over the coming quarter there is potential for additional M&A activity. Any deals should they materialize are expected to be accretive in year one. In summary, we are confident with our current position and potential. Our story has not changed. The fourth quarter was not specific to VOXX or rather the industry as a whole. And our relationships and placement with our OEM partners and our retail customers remain at an all time high. From a bottom line perspective, the next two to three years should shape to be our best yet. And with that I will now turn the call over to Mike and he will go through the numbers and then we will open it up for questions. Michael? Charles Michael Stoehr - Chief Financial Officer: Thanks Pat. Good morning everyone. I am going to focus my remarks on the fiscal year comparisons and provide color on the fourth quarter before moving on to the balance sheet. While sales were lower than anticipated, I will reiterate Pat’s comments that the weather conditions in the U.S. this past winter and the impact it had on retail sales during the fourth quarter is really the primary reason for our top line miss. On the other hand, we continue to generate good cash flow and exited the year with better debt reductions than we planned. We are executing on our strategy and feel good about our prospects over the next few years, especially with some of the newer product lines and product categories. Now for our financials, all comparisons are for the fiscal year ended February 28, 2014 and February 28, 2013. We reported sales of $809.7 million versus $835.6 million, down 3.1%. Automotive segment sales were $412.5 million, down 1%. Both our domestic and international OEM business continues to grow. Domestic OEM sales were up 2.3% and our international business was up 9.7%. Discounting Venezuela, international OEM sales were up 15.4%. Our fulfillment business primarily satellite radio had the biggest impact on our year-over-year comparisons as fulfillment sales were down almost $17 million. When taking into account Venezuela and fulfillment sales, our other automotive business was up 5.8%. During the fourth quarter automotive sales declined both on the OEM level and in the aftermarket, as we had to contend with the retail environment and one of our largest OEM customers sold fewer vehicles which impacted results. Premium auto sales were $189.2 million, down 2%. Our domestic business was down 3.7%. So we did see growth from new products such as sound bars, Bluetooth and wireless speakers new cinema products. International sales were up 1% with the first half of the year soft followed by a much stronger second half. For the fourth quarter sales were impacted again due to a soft retail environment and lower headphone sales. We also moved out of older products to make way for our new higher margin product introductions this year. And consumer accessory sales were $206.3 million, a decline of $18.4 million or 8.2%. This is primarily a result of a $15 million of exited products. The retail environment in the fourth quarter and lower international sales part of which was due to the fact that we did not anniversary set-top box sales from the prior year. As Pat noted in his remarks we are just about done exiting categories that have had a large impact on our year-over-year results. Turning to gross margins, our gross margins were 28.4% versus 28.3% for the comparable quarters, a 10 basis point increase. We began the year with a target of 28.8% and we are tracking to that number for most of the year. During the fourth quarter margins were a bit lower than anticipated overseas. We moved some products out to make way for our newer offerings domestically. And we experienced modest declines in the automotive aftermarket. For the fiscal year comparisons automotive gross margins increased 130 basis points due to strength overseas and the product mix shift towards more remote start products. Lower Venezuela sales held margins in check and if the political situation changes for the better, this would have a positive impact for us. Both our premium audio and consumer accessory segment saw gross margins declines of 170 basis points and 100 basis points respectively. Lower international sales, the discounting of certain product sales margins in check and this was offset by better margins in our growth categories, namely, sound bars, Bluetooth and wireless speakers and fewer sales of lower margin products that we exited throughout the year. We are anticipating margins in excess of 29% in fiscal ‘15. Before moving to expenses, income, and EBITDA, I want to address the impairment charges. During the fiscal 2014 fourth quarter, we conducted our annual assessment of goodwill and intangible assets. As a result of this analysis, an impairment charge of $32.2 million was recorded for goodwill. Also, we reported an impairment charge related to our trade names for various brands of $22.8 million. Lastly, we abandoned our Technuity business and restructured the marketing and use of the domain name resulting in impairment of $2.6 million. These impairments totaled $57.6 million. I will provide an overview of our financials now, both with and without the impairment charges. Property expenses for fiscal ‘14 were $267.6 million versus $195.1 million. Excluding the impairment charges, operating expenses were $210 million, up $14.9 million. This $14.9 million increase is principally due to the restructuring charge of $1.3 million for the ERP upgrade and a $12.1 million increase at Hirschmann. Within this, one, our selling expenses increased by $3.7 million, mostly due to higher salary and compensation expenses principally at Hirschmann, where we added personnel to support both new and existing programs and due to higher advertising and marketing expenses at Klipsch and in support of dual consumer accessory product lines. Two, general and administrative expenses increased by $4.2 million principally due to increased salaries and payroll benefits as we added personnel at Hirschmann. And three, the biggest component of the year-over-year increase was in our engineering and tech support line, which increased by $7.2 million. This was related to several new projects at Hirschmann an increase in our R&D spend and higher labor cost with new personnel. These were for the new projects prior to customer reimbursement for non-engineering costs, which will be reimbursed at a later date. And four, these expenses were partially offset by reduced occupancy cost at the RCA Klipsch level, lower costs in temporary personnel, lower professional fees, lower provisions for bad debts, and customer reimbursements for OEM related expense. Operating expenses for the fourth quarter excluding the impairment charges were up $5.1 million and Hirschmann’s expenses increased $6.8 million. Selling expenses and R&D were up $5 million as a result what I just covered. We added a number of new engineers and are engaged in a number of automotive projects. We also had an increase in our advertising and marketing expenses, which are offset by lower G&A expenses due to lower executive salary costs. For fiscal ‘14, we reported an operating loss of $37.4 million with the impairment charges. Excluding these non-cash impairment charges, we reported operating income of $20.2 million versus $41.7 million in fiscal ‘13. The variances due to lower sales volume from prior year and higher operating expenses and recognition of certain reimbursement for certain expenses, which was carried in other income. We had planned for the expense side, but the sales shortfall in our fourth quarter was the big driver. I will add consistent with my remarks last quarter that we expect to save approximately $4 million next fiscal year as a result of our ERP implementation and facility consolidation as these projects are now complete. We had approximately $900,000 decline in our interest and bank charges for the bank obligation as we continue to pay down our debt. Equity in the income of equity investees related to our joint venture ASA was $6.1 million versus $4.9 million in the prior year as ASA continues to do better and expand its business. Other net was virtually a $14.7 million swing as fiscal ‘14 included funds received from our customer of roughly $4.4 million as well as funds of approximately $5.6 million received in the class action settlement. The results were approximately $900,000 related to recovery of funds from Circuit City that had been previously written off. Other net also includes a net loss of foreign currency of $1.1 million partially offset by a $200,000 gain in the devaluation of the Venezuelan B. These charges were also further offset by an accrual of $1.2 million for the estimated and actual patent settlements with third parties for fiscal ’14. As for last fiscal year other net includes net charges in connection with the patent suit of $2.7 million and losses on foreign exchange contracts of $2.7 million incurred in conjunction with the Hirschmann acquisition. These charges are partially offset by income related to a favorable legal settlement at Klipsch of $1 million and rental income of approximately $1.1 million. For the quarter, our interest expense decreased $300,000 due to lower debt levels, equity income of equity investees increased by approximately $150,000 and other net saw a 6.1 swing from last year principally as a result of the patent settlement which occurred last year in the fourth quarter. For the quarter, we reported an operating loss of $59.6 million. Excluding the operating charges we reported an operating loss of $2 million compared to an operating income of $12 million in the comparable fiscal ’13 period. Net income, with the impairment charges, we reported a net loss of $26.6 million or a loss per common diluted share of $1.10. This compares to net income of $22.5 million or income per common diluted share of $0.95 in fiscal ’13. Excluding the impairment charges and related tax effects, we reported net income of $21.7 million and net income per common diluted share or $0.90. Net loss for this fiscal year was favorably impacted by the impairment charges related to goodwill, amortizing and non-amortizing intangible assets and long lived assets as well as the restructuring charges, sales decline contribute to the European market and the economic and political conditions in Venezuela. This was offset by better performance of our equity investment ASA, lower acquisition and professional fees payments received related to contract shortfall and favorable class action settlements which I had covered previously. For the fourth quarter we reported a net loss of $49 million. Excluding the impairment charge and related tax effect the net loss was $700,000 or a loss of $0.03 per diluted share. This compares with net income of $10.3 million and net income per diluted share of $0.43. Moving on to EBITDA, with the impairment charges we reported an EBITDA loss of $3.1 million. Without the impairment charges EBITDA was $54.5 million. This compares to EBITDA of $60.4 million in fiscal ’13 and once again there was a lot of activity for the comparable periods. We reported adjusted EBITDA of $46.5 million as compared to $67.5 million in fiscal’13. Let me walk you through these adjustments. For fiscal ’14 we adjusted $4.4 million cash received for the contract shortfall payment, $4.4 million cash received for net settlements, $940,000 for Circuit City recovery and approximately $200,000 in relocating our Asia warehouse. This was offset by $1.3 million of restructuring charges related to Klipsch and the ERP upgrade, $641,000 in stock based compensation and $57.6 million for the non-cash impairment charges with total fiscal ’14 adjustments of $49.6 million. For fiscal ‘13, we adjusted $2.7 million related to the loss on foreign exchange contracts due to the Hirschmann acquisition and $1.6 million in acquisition related costs, $1.7 million for net settlements, approximately $800,000 in charges related to the change in our Klipsch warehouse in Asia, $435,000 in stock based compensation. This equates to a total adjustment in fiscal ‘13 of $7.1 million. The effective tax rate for fiscal 2014 was an income tax benefit of 0.2% on the pretax loss of operations of $26.7 million. The effective tax excluding the impairment charges and related tax effect, the effective tax rate in fiscal 2014 was an income tax provision of 29.8% on pre-tax income from operations of $30.9 million as compared to a provision of 36.9% on pre-tax income of $35.7 million from continuing operations in the prior year. Now, to our balance sheet. Our cash position as of February 28, 2014 was $10.6 million versus $19.8 million as of February 28, 2013. Our total debt as of February 28, 2014, which is inclusive of mortgages, capital leases and bank debt stood at $115.3 million compared to $180.8 million as of February 28, 2013. When comparing these periods, the breakdown is as follows: bank debt worldwide was $91.7 million versus $156.4 million; capital lease obligations were $6.1 million versus $5.8 million; worldwide mortgages were $17.5 million versus $18.6 million; reduced our total debt in one year by $65.8 million. Our worldwide bank debt includes $88.7 million of borrowings under the revolver versus $155.1 million last year. As of today, our bank debt is now $67.2 million with availability of $137.8 million. Our balance sheet continues to improve. Additionally, CapEx for fiscal ‘14 was $15.3 million and for fiscal ‘15, we anticipate CapEx will be between $12 million and $13 million. However, please note we are currently reviewing our office and plant infrastructure with a goal to reduce our fixed facility costs in the future. If we pursue changes in the upcoming fiscal year, it could of course impact our CapEx and cash flow, but again will result in lower expenses on a go-forward basis. Subject to the above, we anticipate cash flow north of $40 million in fiscal ‘15. Pat covered our outlook for the year. So, at this time, I will turn the call back to Pat and we will open up the call for questions. Pat? Pat Lavelle - Chief Executive Officer: Okay, Michael. Thank you. At this time, you guys can fire away.

(Operator Instructions) Our first question comes from the line of Sean McGowan from Needham & Company. Sean McGowan - Needham & Company: Hi, good morning guys. I have a couple of questions. We will see if we can get through them. In terms of the current business, I mean, we are almost finished the first quarter. Can you give us some sense of how the retail climate is going? That’s general, but then more specifically to comment on your expectations for the timing of revenue in the various segments and expenses as well, because you have made some comments before about some of these new products have been backend loaded and some of the investments needed to support the unveiling in front end loaded. So, a little color on what we should expect in terms of timing and how current business is? Thank you.

Okay. As far as current business, obviously look at the month of March, we had more of the same in March as we had in January and February with some bad weather that curtailed the retail business. However, we are seeing a strengthening in the market. Car sales are starting to pickup. So, activity is picking up. The month is not over. We do have some shipments that could be held up due to a flood that was in China. And if we missed the sale this month, obviously it’s going to fall into the second quarter. But really no big surprises as we look at our first quarter numbers. When we look at the growth where we see the growth coming from this year, we are essentially looking at as I indicated during my speech that we were expecting to see flat business within the automotive space. We are expecting to see flat to a little down in the premium audio. The growth is going to be coming from the new introduction of product that is slated for September introduction this year. And those both – both of those projects are on time and we anticipate that they will launch and give us the additional sales that will drive growth for the year. The expenditure of R&D is a little further up. Since we acquired Hirschmann and Invision, half of our business is now manufactured by us and that business requires a tremendous amount of R&D, because it is our own technology that we are making. Some of that new technology is very exciting for us and can mean future business of significant amount, but the product has to be worked on, it has to be developed. We do have some contracts that we are working on. Others, we hope to close, but that’s where the R&D expenditure, you are going to see that this year. You are going to see it’s from next year and you will see some of those sales start to happen next year. Sean McGowan - Needham & Company: Okay. And in terms of the gross margin improvement that you are looking for what product segments or product areas would you expect to be driving that or do you expect to see it across all of them?

I expect to see it primarily within the premium audio space. We have made strong effort of the past six months to limit distribution, to maintain profitability within that space for us and our customer. And that’s where we will see the improvement. Sean McGowan - Needham & Company: Okay. I didn’t hear you talked out about the product at digital antenna with the Roku connection is, what’s your outlook for that product?

That product has been delayed although that product is still slated for the end of this year. Sean McGowan - Needham & Company: Okay. And then lastly a very general question, your guidance for 2014 even at the high end or rather for 2015, fiscal 2015, is the high end of the guidance is lower than what you have put up in 2013. So I am struggling to reconcile that with the problem here in the fourth quarter just being sort of a one-time weather related thing? It seems like it must be something bigger than that.

One of the problems that we have is when we are looking at these numbers. Over the last few years, we were impacted, but various things that impacted the fourth quarter, whether it be the talks in Washington the year before as I told everybody out of the market at Christmas or whether it was the weather that pulled everybody out this Christmas, what we are looking at we are baking into Christmas like we have had over the last three years. And that’s a weak Christmas. And until we see something strengthen to where we can feel more positive about retail sell-through, not our load-in going into Christmas, but retail sell-through, we are going to be very cautious in how we guide. Sean McGowan - Needham & Company: Okay, thank you.

You’re welcome.

Thank you. Our next question comes from the line of Rob Stone from Cowen & Company. Rob Stone - Cowen & Company: Hi, guys. I wanted to follow-up a little bit on the expense subject as well with respect to linearity. I think in past conversations, maybe you had talked about need to do some spending ahead of the launch of the new camera product or is there somewhere along the way a lump of expenses relative to quarters within your guidance for the full year amount? That’s my first question. Thanks.

As far as the expenses from the launch, you are going to see that happen in the first half of the year and then we will see some sales in the second half of the year. So what we are anticipating, our expenses in marketing expenses in product development that we will have no revenue against that will then start to change as the product starts to deliver. Rob Stone - Cowen & Company: Okay. And in Mike’s comments, he reminded us about the planned savings from the ERP systems, $3 million or $4 million. And Pat, I think you said operating expenses overall will be up 3% or 4%. So net-net, you will actually have an increased investment bigger than the 3% or 4% counting the ERP system, I wanted to make sure I understood that’s the magnitude?

Yes, you are absolutely right. The 4% to 5% increase is net of the savings that we have had last year. And again, this is being driven primarily by two areas. And that is the additional marketing spend that we have for some of our premium audio products, our consumer accessory products and the biggest expense coming from the increase in engineers that we brought on late in the year of last year to work on various different projects so that we can ensure. Number one, that we meet launch dates of contracts we have already won, but also worked on some of the newer technologies that we believe were going to be very, very exciting for this company in the years ahead. Rob Stone - Cowen & Company: So given the lead time on that type of OE projects with the new engineers and investment you are making there, what time period do you think you can see a reversal of these trends where you would have some operating leverage and revenues growing faster than expenses, is that two years out, three years out?

Some of the projects will start at the end of our fiscal ‘15, is that okay? The bulk of the projects will start to fall into fiscal ‘16 where we deliver the new tuners for Daimler-Benz that we are working on, as you know we have won $160 million contract there. Those programs will be in the latter part of next year. We started production for those products. But then they take us out until 2021/2022 that’s the nature of the OEM business. Rob Stone - Cowen & Company: Okay, great. My final question is on the equity investment in the EyeSee360 business, can you provide any color on the rest of the ownership, is that a business that you would be then sharing the potential with others down the road or possibly bring the whole thing in-house?

Well, there is another larger investment in there, (indiscernible) partners and there is VOXX certainly in there. Our thinking behind that is just that as we work hard to build the sales we think we are going to generate a lot of value through our efforts in 360 the company. And we wanted to make sure that we were in a position, number one to benefit by that and also as things progress we may want to take a bigger portion of the company. Rob Stone - Cowen & Company: Great. Thank you.

You’re welcome. Thanks Rob.

Thank you. Our next question comes from the line of Scott Tilghman from B. Riley. Scott Tilghman - B. Riley: Thanks. Good morning.

Hi Scott. Scott Tilghman - B. Riley: I wanted to touch actually on three items, the first, as if you look over the next 12 months you have a number of launches and contracts in play that have been discussed. I was wondering if maybe you could categorize the group that you would identify as the top tier the ones that you are most excited about that you think have the most growth potential not just for this year but also into next year?

Well, that’s a two part question Scott, I mean what we see this year as I indicated the new products that we are launching later in the year. And that’s our (micro) product or micro fly product and those are the two products – two categories that we see growth in. As I indicated we are going to have some change over with tuners, with some of our OE customers. We will see a dip this year as jump into the new technology. We have already won the contracts with the new technology, but there is a timing difference. So based on what we are doing and based on the fact that we are focusing on the profitability and by focusing on profitability within our premium audio it will cost us some sales, so that’s why we are talking about lower sales to flat sales there. And real growth for this year is going to be coming in our accessory business where these two categories are placed. As we look into next year and the future years then you will see our automotive business are with the contracts that we have already won you will start to see our business grow as we deliver the Daimler program as we deliver the new 4G antennas, as we deliver some more of the tracking smartphone antennas. And then on top of all of this, there are a number of new programs that we are working on that – and I have to be careful here. But they can be hundreds of millions of dollars of new business that we are working on where we are developing the new technology, where we are not just making this, because we want to make it. We are making it, because we either have a relationship. We have been asked to develop a product. It doesn’t necessarily mean we have currently won an award of new business, but we are confident we will. And that’s where the bulk of the R&D is right now, where the technology we are working on can be very, very exciting for this company. And that’s a big change for this company over the way we were of the last 10 years, where we were primarily specing product and having it made in the third-party manufacturing facility. Here we are making our own technology, new technology that will be unique to the industry. And that is where we expect to see some significant new business in the years ahead. Scott Tilghman - B. Riley: That actually ties in nicely to my second question. I was going to ask about the R&D strategy given that over the last two years, the approach has been to build a portfolio of capabilities. It sounds like you are seeing opportunity to build within the verticals that you have already. I guess the question is are there others out there that are in some of these new and exciting areas, where you do see some tuck-in opportunities. I know you touched on the M&A topic briefly or are they really categories where the technology is evolving so quickly, it needs to be addressed upfront and you don’t really see the opportunity to buy the capabilities and therefore have to add the engineers?

One of the things that we see is opportunities is the ability to strengthen each one of the existing categories. In some cases, the strengthening would be by bringing in technology that we don’t possess and bringing in an acquisition that brings us new technology and engineers with that discipline. When we bring in and develop new product, it’s a big barrier to entry for competition. And there once again, we can be unique and we can generate with margin in that business. In the other areas where we are look at where opportunities exist maybe different brands outside, this is outside of technology with different brands and different distributions that would strengthen our other existing segments. So, we look at all of them and we will weigh them on their merits. Scott Tilghman - B. Riley: That’s helpful. Last thing, I just wanted to revisit guidance for a minute. I think we have been this quite a bit, but going back to the January comments, low single-digit growth on the 825, 830 that was originally expected for fiscal ‘14. It sounds like the holiday uncertainty for this year is a lot of what’s bringing the top line outlook down. My question is really on the expense side, have there been any changes in your expense outlook for this year relative to what you were thinking a few years ago or is most of the pullback in the EBITDA guidance relative to what we could have expected really a function of the lower sales levels and therefore some de-leveraging?

As far as I am concerned and I had indicated in the opening, the miss on our top line was solely driven by the weakness at retail caused by the weather. And as far as our expense, Mike talked about the $4 million in savings that we will enjoy this year, now that the ERP system is up and some of the restructuring is over, some of the severance is done, those are real savings. We will continue to look at each one of our operations. We are continuing to look at consolidation of facilities, so that we can bring down our fixed overhead, but for the most part, it was driven by the top line miss. Scott Tilghman - B. Riley: Let me ask it a little bit differently, I am looking at fiscal ‘15 rather than a fourth quarter, the R&D spending plan, is that any different today than what you were looking at four, five months ago?

It’s up. As we have won some additional new business this past year in order to meet the launch dates for that business, we had to bring in some additional engineering. And that’s why you saw the 10% increase in our engineering was primarily within our overall growth. Scott Tilghman - B. Riley: Great, thank you.

You’re welcome.

Thank you. (Operator Instructions) Our next question comes from the line of (indiscernible) Capital.

Hi. Am I live?

Yes, yes.

Yes. Hi. Well, thanks for the opportunity to ask a question and appreciate your time hosting the call today. I have a quick question for you guys, so EBITDA reported for this year, I mean if you exclude the impairment charges as I understand its $54.5 million, is that right?

Correct

So and I wanted to refer back to the comments on your third quarter call on January, so at that time the EBITDA guidance was upgraded from $62 million to $65 million, right. So basically that was let’s say a little bit of a gap between the $65 million and $65 million that was actually reported, so I mean the $10 million gap. So I understand that you mentioned the weather as being the key factor to sales but I want to think a little bit about what I don’t really understand and would appreciate some sort of a help on understanding or color is that the nine months – in the same call the nine months EBITDA that was reported I remember is $50.3 million. So the way I look at it right now is that spending on January 9, we have half the fourth quarter past. So and then we knew that nine months EBITDA was $50.3 million and we thought that the implied thought was that the fourth quarter we are going to generate $15 million of EBITDA to give the guidance of $65 million, right. And in actual fact from January 9 until February 28, we had only like 6 weeks or 7 weeks we only generated $5 million of EBITDA which is the reported $54.5 million. So instead of the implied EBITDA of $15 million which was implied by the guidance on January 9, we only achieved $5 million EBITDA which is quite a huge miss. So I was wondering what happened in the six weeks between January 9 and February 28 that was different between what was modeled or what was guided and what was actually achieved in fiscal ’14? Thank you.

Okay. I might call, yes I did raise our guidance from $62 million to $65 million primarily due to some income that we had received from one of our OEM customers. However, when we have met on January 9, we had pretty much our top line revenue for December, we knew where that came in. We knew that there was a shortfall. And I cautioned everybody and lowered our guidance at that particular point. We do not have financials on January 29, we are at the CES show. But as we moved through the balance of the year – of the quarter which was the rest of January and February two things happened. One is we knew we had a shortfall in top line revenue in December but until the financials were complete we did not understand some of the impact to our margins because when you look at our projections, year-over-year our margins was also impacted. We had – we missed approximately $30 million of top line revenue that we were projecting we missed that in the fourth quarter. And when you look at our margins where we were, where we projected you will see that is the sole reason for our miss when we go from $55 million to $65 million.

Thank you. Thank you very much for the color. I think I really appreciate it. I think it makes a lot of sense, but I just want to confirm that it was just that top line miss driven the gap in the EBITDA is not just to be sure that’s no – we didn’t lose the contract…?

No, in fact we did not lose one position at retail. We did not lose any business, it as I said was driven by the top line miss driven by the softness at retail. And then we had to respond and that’s why there was some margin miss because we had to start moving products to clear product for our upcoming launches which are happening now.

Yes, I mean that’s fine I mean I totally I appreciate I have been a long-term investor, so we totally understand the long-term nature of the investment and we don’t invest for the quarter. So I just want to be sure that there was no new competitor coming in collecting pricing are losing business or whatever it is, but it was just the weather that was – that drove the weak retail and the top-line miss. Is that a correct understanding?

That is correct.

Okay, great. If I have time, can I ask the second question about the 360 Eye investment?

Yes.

Yes, sure. So, I just want to understand a little bit more about again I appreciate the 360 Eye investment I am as optimistic as you are on the growth potential of this product. So, I just want to understand a little more about how if this product is successful, it can help VOXX the company, because you mentioned that we have a 10% position. So, in the 360 Eye company and in the public releases up to this point, we have been described as an explosive distribution partnership. So, I just want to understand a little more color around how the partnership will work? I mean would we buy things from 360 Eye the company at some kind of wholesale and then make the spread on the retail spread or how exactly would VOXX benefit from this arrangement?

Okay. Obviously, I can’t divulge the terms of our agreement, but basically we are an exclusive – we have an exclusive arrangement with them. We are not a distributor of theirs. We do not buy product from them. We have the product made according to their specification and according to their licenses. They own a lot of IP in the space. And they have selected us as their distribution partner, but we will have the product manufactured. We will bring the product and we will sell the product. Their program works off of the IP and the value that their IP generates and the better we do, the more valuable their IP becomes not only in the action camera space, but in every application, where you can see the use of a 360 high resolution camera. So, that’s where we see there is good potential for 360 to continue to grow even beyond the space that we are involved in.

Yes, absolutely. I mean, as I said, I am really optimistic about the growth potential. I just want to maybe I will rephrase the question. I understand a little bit about the financial impact and how that would positively benefit us? Do we make money only as a result of our appreciation in the equity, the 10% equity that we invested with them? So, that’s certainly one way we can make money, but as we sell the product on a per piece basis, do we get also cash as we sell or how do we think – how should we think about the financial impact of the success of this product on VOXX?

Okay. The success of this product will be on us selling it where we make a normal margin. It’s our product, we bring it in, we sell it, we make a margin on it and that’s going to be how Audiovox or VOXX International makes money on it.

Do we only keep, I mean, when I say we, VOXX International, VOXX International only keeps 10% of the profit?

You’ve got to look at it two ways. One is an investment in the 360 company and the other is we have developed products using the 360 technology that we can sell to the market and we will make money doing that.

I see, okay. I think that makes a lot of sense. I understand it now. I understand it much better now. Thank you very much for your time.

You are welcome.

Thank you. And our next question comes from the line of Rob Ammann from RK Capital. Rob Ammann - RK Capital: Yes, thank you. I appreciate all the detail on the fiscal ‘15 guidance on expenses and all the different line items. The EBITDA guidance is it fair to say that the EBITDA guidance and adjusted EBITDA would effectively be the same, you are not contemplating any kind of as many puts and takes in the numbers for fiscal year ‘15?

Well, what we are looking at is we don’t expect to see as many puts and takes. What happens during the course of the year sometimes you can’t really predict that, but looking at our budgets on a go forward basis, the improvements where we didn’t – we are not going to have the puts and takes like we had this year, we are improving sales by approximately $25 million. We are improving margins a little bit, so that’s where we are going to generate the profitability.

This is Mike speaking. We just look for normal EBITDA flow. Rob Ammann - RK Capital: Okay, great. So, I mean, it seems like any of the puts and takes would flow into EBITDA, but not affect adjusted EBITDA. So, I guess what I am trying to understand as you stand right now without knowing if there is going to be any puts or takes is it fair to say your adjusted EBITDA guidance is $54 million to $55 million?

EBITDA and adjusted EBITDA.

Right now, we are starting out with the $55 million. Rob Ammann - RK Capital: Okay, okay. So, it’s the same for both.

Correct. Rob Ammann - RK Capital: Okay, great, great. And then the operating expense increases, you certainly – you have seen a meaningful increase in engineering and technology development, but you have also had some revenues associated with that, that are a contra expense that I think $6.9 million this most recent fiscal year. Do you expect a similar sort of contra expense in fiscal year ‘15 or does that potentially grow given the nature of all the development programs that you are working on?

Right now, we are looking based on what we are budgeting, those are the numbers that we are looking at, but this is a fluid situation. The technology we are working on is very interesting to a number of different accounts. And we expect that during the year we may win additional awards. If we win those additional awards, we will need to bring on some additional engineering so that we can meet those launch dates. Rob Ammann - RK Capital: Okay. So – but did your total operating expenses contemplate any kind of reimbursed engineering expenses or is that just kind of a base case if you get some, you are going to see an increase in R&D and you are going to get paid for that? I think that’s it for me.

There is NRE in many of our programs and yes, in fact we win new awards, most likely they will be NRE that comes with it. Rob Ammann - RK Capital: Okay. And your existing programs, would they support reimbursement similar to the levels that we saw this year of $6.9 million or should we be thinking a number more like year before, that’s closer to $3.5 million?

Probably, I would say that you would probably see something along the lines of what we have had. It’s a combination of the two. As we get ready to launch, obviously, the NRE will change, but we are on programs with a number of different OEMs where hitting milestones of product development will generate an NRE payment for us. And depending on the schedule, I would say that we are going to be somewhere in between where we were between the last two years. Rob Ammann - RK Capital: Okay, great. Thank you.

You’re welcome.

Thank you. Our next question is a follow-up from the line of Kivi Chen from Manresa Capital. Kivi Chen – Manresa Capital: Yes, hi. Thanks for taking the follow-up question. Just very quick, so I am also really looking forward to the 360 Eye introduction, I think you mentioned in the call just now that you expect the introduction of this new product to be in September, am I understanding correctly?

Yes. Kivi Chen – Manresa Capital: Yes, so given I look back to the January call and at that time I think the indications was that this product including the imaging and the biometric products, we might expect to see sales in the April, May or June timeframe. So there has been a little bit of a delay. I would understand two things, one is what caused those delays, and two, how sure are we that this time around we will see things getting -- starting in September? Thank you.

Well, in my call in January, we talked about a June delivery. And that June delivery we were talking about the micro cell phone accessory, which we decided that, that accessory should be launched with the 360 fly all at the same time. And that’s one of the reasons why we are pushing it up. Kivi Chen – Manresa Capital: But no hiccup, I mean, I guess I want to understand, just going to get confirmation that there is no hiccup with the development or the production or anything in the supply chain or whatever it is, but everything is just going on smoothly or is there anything that we should be concerned about with these new product introductions?

Nothing ever goes smoothly, but you shouldn’t have anything to concern about. Kivi Chen – Manresa Capital: I see, okay. Thank you very much for the time.

You’re welcome.

Thank you. That concludes our question-and-answer session. I would like to turn the conference back to management for any closing comments. Pat Lavelle - Chief Executive Officer: Well, I want to thank you all for listening in on this morning. As we grow our sales more in any of these big opportunities drop our way, we are going to see a nice impact to our EBITDA and cash flow. So right now, there is a lot of talk about our expenditure as far as R&D and everything, but believe me, I do think it’s well worth the spend and we will see the benefit in the years ahead. Thank you for joining us and have a great afternoon.

Thank you. Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may now disconnect. Everyone, have a good day.