GeoTeam Taking a Loss on Closed Long Position
Sold our long position in VOXX ($7.24) – On 7/30/2014 we disclosed our long position and released our bullish article on VOXX. Since then, new product release delays and weak Q2 2015 operating results have pushed shares lower. The launch of its widely anticipated and hyped 360Fy action camera is now delayed until March 2015 . Management stated on the Q2 conference call that there are software/hardware interface issues with 360Fly and extensive testing is required to resolve all issues and be absolutely sure before launching the product. Note the product was originally supposed to be launched last June and then October so the software problems are apparently serious and there can be no assurance they will be resolved by March. VOXX’s other new product, Myris is schedule for a limited retail launch in November but there was no guidance regarding the product’s use as an enterprise solution which is considered to be the greater opportunity. The delayed new product launches negatively impacted fiscal 2015 revenue guidance by $20 million. No estimates for the impact of 360Fly and Myris on fiscal 2016 revenues was given as management surprisingly said the budgeting for those products has not yet been done. Fiscal 2015 guidance was reduced to $800 million revenue and $40 million EBITDA down from $825-$830 million and $54-$55 million, respectively. We presume the delay in the launch of 360Fly could impacts ability to capture market share as some other entities are in the various stages of launching 360 cameras. We will continue to monitor the development process of 360Fly.