Audiovox Corporation (ticker: VOXX) which designs and markets electronic products, including cell phones, reported Q3 2005 earnings results earlier this week. Take a look at the following exchange during management's earnings results conference call:
Riley McCormack - Tracer Capital - Analyst
I look at your stock trading at maybe .5 to .6 times tangible book. And at this not even to current working capital. And obviously the market doesn't really agree with the strategy for you to make acquisitions. So why would you continue to make acquisitions and why would you not just return capital to shareholders?
Michael Stoehr - Audiovox Corporation - SVP and CFO
I think one of the problems we have that is impacting the stock….that because we reported a loss it has an impact on the stock. The stock when we return to profitability will come back to book value. The question then becomes is the acquisition we make a better return as opposed to buying our stock back. Right now we're kind of in a weird situation when we report a loss which automatically pushes your stock down. It comes almost to the cash value what we're carrying now as a share value.
The question that we need to look at is that once the Company rights itself and we put these grants that Pat has described into place, then when you look at an acquisition from a level playing field, then that is the question that you look at.
(Quotes are from the CCBN StreetEvents transcript.)