According to the law firm press release, the complaint alleges that, during the Class Period, VOXX issued materially false and misleading statements regarding the Company’s financial performance and future prospects and failed to disclose the following adverse facts: (i) that the Company was experiencing declining headphone sales in its Premium Audio segment; (ii) that the Company was experiencing a greater than expected sales decline in its Consumer Accessories segment; (iii) that the Company failed to timely record losses for its Hirschmann, Invision and Klipsch acquisitions, trademarks of various brands, and its Technuity business, among other things, thereby materially overstating the Company’s financial condition and misstating the Company’s financial results and financial statements; and (iv) as a result of the foregoing, Defendants lacked a reasonable basis for their positive statements about the Company’s financial performance and outlook during the Class Period.
On January 9, 2014, the Company held a conference call with analysts and investors. With regard to the Company’s outlook for fiscal 2014, Defendants lowered their sales guidance from $840 million to $825-$830 million, raised their EBITDA guidance from $62 million to $65 million, and reiterated their gross margin guidance of 28.8%. In reaction to these announcements, the price of VOXX common stock fell $2.99 per share, or 18%, to close at $14.00 per share, on heavy trading volume.
On May 14, 2014, after the markets closed, VOXX announced its financial results for the fourth quarter and year end of 2014, the period ending February 28, 2014. For the year, the Company reported net sales of $809.7 million, gross margin of 28.4%, and EBITDA of $54.5 (minus any impairment charges) – all below the Company’s stated guidance. Moreover, the Company reported an impairment charge of $57.6 million related to its Hirschmann, Invision and Klipsch acquisitions, trademarks of various brands, and its Technuity business, among other things. In reaction to these announcements, the price of VOXX common stock fell $2.56 per share, or 25%, to close at $7.51 per share, on heavy trading volume.
On July 22, 2016, the Court issued an Order granting Defendants' motion to dismiss. Plaintiffs were given leave to file an amended complaint. Plaintiffs did not file, thus this case was dismissed with prejudice on November 14.