UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
                                   (Mark One)
           |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the quarterly period ended November 30, 2007

                                       or

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                         Commission file number: 0-28839

                              Audiovox Corporation
             (Exact name of registrant as specified in its charter)


        Delaware                                                 13-1964841
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

180 Marcus Blvd., Hauppauge, New York                            11788
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:   (631) 231-7750

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                            Yes  X     No
                                ---       ---

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer as defined in Rule 12b-2 of the
Exchange Act. (Check one):

Large accelerated filer     Accelerated filer  X   Non-accelerated filer
                        ---                   ---                        ---



Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                           Yes     No  X
                               ---    ---

Number of shares of each class of the issuer's  common stock  outstanding  as of
the latest practicable date.




         Class                                       As of January 9, 2008
         --------------------                        ---------------------

         Class A Common Stock                        20,593,660 Shares

         Class B Common Stock                         2,260,954 Shares



                                       1


                              Audiovox Corporation


                                      INDEX




                                                                            Page
                                                                            ----
PART I -- FINANCIAL INFORMATION

   ITEM 1. FINANCIAL STATEMENTS (unaudited)

           Consolidated Balance Sheets at November 30, 2007 and
             February 28, 2007............................................   3

           Consolidated Statements of Operations for the
             Three and Nine Months Ended November 30, 2007 and 2006.......   5

           Consolidated Statements of Cash Flows for the
             Nine Months Ended November 30, 2007 and 2006.................   6

           Notes to Consolidated Financial Statements.....................   8

   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS.........................  26

   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
              MARKET RISK.................................................  40

   ITEM 4. CONTROLS AND PROCEDURES........................................  40


PART II -- OTHER INFORMATION

   ITEM 1.   LEGAL PROCEEDINGS............................................  41

   ITEM 1A. RISK FACTORS..................................................  41

   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
                  PROCEEDS................................................  41

   ITEM 6. EXHIBITS.......................................................  42

   SIGNATURES.............................................................  43



                                       2


PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                      Audiovox Corporation and Subsidiaries
                           Consolidated Balance Sheets
                        (In thousands, except share data)





                                                                                     November 30,               February 28,
                                                                                         2007                      2007
                                                                                    ---------------            -------------
                                                                                      (unaudited)
Assets

Current assets:

                                                                                                           
 Cash and cash equivalents ..................................................           $ 20,669                 $ 15,473
 Short-term investments .....................................................              8,277                  140,872
 Accounts receivable, net ...................................................            157,664                   86,003
 Inventory ..................................................................            147,830                  104,972
 Receivables from vendors ...................................................             26,701                   13,935
 Prepaid expenses and other current assets ..................................             12,652                   11,427
 Income tax receivable ......................................................                581                    3,518
 Deferred income taxes ......................................................              2,705                    2,492
                                                                                        --------                 --------
  Total current assets ......................................................            377,079                  378,692

Investment securities .......................................................             14,353                   13,179
Equity investments ..........................................................             13,064                   11,353
Property, plant and equipment, net ..........................................             21,181                   18,019
Goodwill ....................................................................             40,009                   17,514
Intangible assets ...........................................................             58,101                   57,874
Deferred income taxes .......................................................              2,503                    1,858
Other assets ................................................................                649                      631
                                                                                        --------                 --------
  Total assets ..............................................................           $526,939                 $499,120
                                                                                        ========                 ========



          See accompanying notes to consolidated financial statements.


                                       3


                      Audiovox Corporation and Subsidiaries
                     Consolidated Balance Sheets, continued
                        (In thousands, except share data)




                                                                                          November 30,         February 28,
                                                                                             2007                 2007
                                                                                       ----------------       --------------
                                                                                         (unaudited)
Liabilities and Stockholders' Equity

Current liabilities:
                                                                                                        
 Accounts payable ...............................................................       $     39,664          $     34,344
 Accrued expenses and other current liabilities .................................             25,319                26,564
 Accrued sales incentives .......................................................             14,937                 7,410
 Bank obligations ...............................................................              3,929                 2,890
 Current portion of long-term debt ..............................................                 79                 1,524
                                                                                        ------------          ------------
  Total current liabilities .....................................................             83,928                72,732

Long-term debt ..................................................................              2,236                 5,430
Other tax liabilities ...........................................................              4,450                 3,347
Capital lease obligation ........................................................              5,625                 5,676
Deferred compensation ...........................................................              8,618                 7,573
                                                                                        ------------          ------------
  Total liabilities .............................................................            104,857                94,758

Commitments and contingencies

Stockholders' equity:
 Series preferred stock, $.01 par value; 1,500,000 shares authorized, no
   shares issued or outstanding .................................................               --                    --
 Common stock:
  Class A, $.01 par value; 60,000,000 shares authorized, 22,414,212 and
    22,005,346 shares issued, 20,593,660 and 20,312,299 shares
    outstanding at November 30, 2007 and February 28, 2007, respectively ........                224                   220
  Class B convertible, $.01 par value; 10,000,000 shares authorized,
    2,260,954 shares issued and outstanding .....................................                 22                    22
 Paid-in capital ................................................................            275,830               271,056
 Retained earnings ..............................................................            161,873               151,363
 Accumulated other comprehensive income (loss) ..................................              2,537                (1,320)
 Treasury stock, at cost, 1,820,552 and 1,693,047 shares of Class A
   common stock at November 30, 2007 and February 28, 2007,
   respectively .................................................................            (18,404)              (16,979)
                                                                                        ------------          ------------
Total stockholders' equity ......................................................            422,082               404,362
                                                                                        ------------          ------------
Total liabilities and stockholders' equity ......................................       $    526,939          $    499,120
                                                                                        ============          ============


          See accompanying notes to consolidated financial statements.


                                       4


                      Audiovox Corporation and Subsidiaries
                      Consolidated Statements of Operations
         For the Three and Nine Months Ended November 30, 2007 and 2006
                 (In thousands, except share and per share data)
                                   (unaudited)




                                                                            Three Months Ended              Nine Months Ended
                                                                               November 30,                     November 30,
                                                                       ----------------------------    -----------------------------
                                                                           2007           2006            2007             2006
                                                                       ------------    ------------    -----------     -------------

                                                                                                           
Net sales ..........................................................   $    183,563    $    151,833    $    460,085    $    360,556
Cost of sales ......................................................        148,572         126,462         373,431         299,332
                                                                       ------------    ------------    ------------    ------------
Gross profit .......................................................         34,991          25,371          86,654          61,224
                                                                       ------------    ------------    ------------    ------------

Operating expenses:
 Selling ...........................................................          9,828           8,114          26,534          21,626
 General and administrative ........................................         16,948          13,649          45,153          36,682
 Engineering and technical support .................................          2,600           1,888           7,010           5,418
                                                                       ------------    ------------    ------------    ------------
  Total operating expenses .........................................         29,376          23,651          78,697          63,726
                                                                       ------------    ------------    ------------    ------------

Operating income (loss) ............................................          5,615           1,720           7,957          (2,502)
                                                                       ------------    ------------    ------------    ------------

Other income (expense):
 Interest and bank charges .........................................           (723)           (429)         (2,087)         (1,491)
 Equity in income of equity investees ..............................          1,011             659           2,927           2,423
 Other, net ........................................................            816           1,118           3,444           4,827
                                                                       ------------    ------------    ------------    ------------
  Total other income, net ..........................................          1,104           1,348           4,284           5,759
                                                                       ------------    ------------    ------------    ------------

Income from continuing operations before income taxes ..............          6,719           3,068          12,241           3,257
Income tax (expense) benefit .......................................         (2,039)            780          (3,709)            740
                                                                       ------------    ------------    ------------    ------------
Net  income from continuing operations .............................          4,680           3,848           8,532           3,997

Net income (loss) from discontinued operations, net of tax .........           --                 6           2,111            (576)
                                                                       ------------    ------------    ------------    ------------

Net  income ........................................................   $      4,680    $      3,854    $     10,643    $      3,421
                                                                       ============    ============    ============    ============

Net income (loss) per common share (basic):
 From continuing operations ........................................   $       0.20    $       0.17    $       0.38    $       0.18
 From discontinued operations ......................................           --              --              0.09           (0.03)
                                                                       ------------    ------------    ------------    ------------
Net  income  per common share (basic) ..............................   $       0.20    $       0.17    $       0.47    $       0.15
                                                                       ============    ============    ============    ============

Net income (loss) per common share (diluted):
 From continuing operations ........................................   $       0.20    $       0.17    $       0.38    $       0.18
 From discontinued operations ......................................           --              --              0.09           (0.03)
                                                                       ------------    ------------    ------------    ------------
Net income per common share (diluted) ..............................   $       0.20    $       0.17    $       0.47    $       0.15
                                                                       ============    ============    ============    ============

Weighted-average common shares outstanding (basic) .................     22,852,781      22,234,399      22,853,108      22,345,183
                                                                       ============    ============    ============    ============
Weighted-average common shares outstanding (diluted) ...............     22,857,355      22,445,164      22,880,263      22,540,476
                                                                       ============    ============    ============    ============


          See accompanying notes to consolidated financial statements.


                                       5


                      Audiovox Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows
              For the Nine Months Ended November 30, 2007 and 2006
                                 (In thousands)
                                   (unaudited)




                                                                                                              2007           2006
                                                                                                          -----------    -----------
Cash flows from operating activities:
                                                                                                                    
 Net income ..........................................................................................     $  10,643      $   3,421
 Net (income) loss from discontinued operations ......................................................        (2,111)           576
                                                                                                           ---------      ---------
 Net income from continuing operations ...............................................................         8,532          3,997
 Adjustments to reconcile net income to net cash used in continuing operating  activities:
  Depreciation and amortization ......................................................................         3,782          2,863
  Bad debt expense (recovery) ........................................................................           166            (51)
  Equity in income of equity investees ...............................................................        (2,927)        (2,423)
  Non-cash compensation adjustment ...................................................................          (212)           231
  Non-cash stock based compensation and warrant expense ..............................................           609            432
  Loss on disposal of property, plant and equipment ..................................................            14             33
  Tax benefit on stock options exercised .............................................................        (1,020)           (22)
 Changes in operating assets and liabilities (net of assets and liabilities acquired):
  Accounts receivable ................................................................................       (62,762)       (44,996)
  Inventory ..........................................................................................       (33,995)         8,562
  Receivables from vendors ...........................................................................       (12,696)           274
  Prepaid expenses and other .........................................................................         2,602         (2,502)
  Investment securities-trading ......................................................................        (1,042)          (757)
  Accounts payable, accrued expenses, accrued sales incentives and other current liabilities .........         2,947         12,412
  Income taxes payable ...............................................................................         3,132            518
                                                                                                           ---------      ---------
  Net cash used in operating activities ..............................................................       (92,870)       (21,429)
                                                                                                           ---------      ---------

Cash flows from investing activities:
 Purchases of property, plant and equipment ..........................................................        (5,772)        (1,917)
 Proceeds from sale of property, plant and equipment .................................................            43             24
 Proceeds from distribution from an equity investee ..................................................         1,215          2,589
 Proceeds from a liquidating distribution from an available-for-sale security ........................           645           --
 Purchase of short-term investments ..................................................................       (13,775)       (66,905)
 Proceeds from sale of short-term investments ........................................................       146,255         91,900
 Purchase of patents .................................................................................          --             (475)
 Purchase of long term investment ....................................................................          --           (1,000)
 Purchase of acquired businesses, less cash acquired .................................................       (28,387)          --
                                                                                                           ---------      ---------
  Net cash provided by investing activities ..........................................................       100,224         24,216
                                                                                                           ---------      ---------


                                       6



                      Audiovox Corporation and Subsidiaries
                Consolidated Statements of Cash Flows, continued
              For the Nine Months Ended November 30, 2007 and 2006
                                 (In thousands)
                                   (unaudited)





                                                                                             2007             2006
                                                                                         -------------    ------------
Cash flows from financing activities:
                                                                                                        
 Repayments on bank obligations ....................................................           (860)          (1,425)
 Principal payments on capital lease obligation ....................................            (50)             (64)
 Proceeds from exercise of stock options and warrants ..............................          3,148            1,444
 Principal payments on debt ........................................................         (4,240)          (1,089)
 Repurchase of Class A common stock ................................................         (1,425)          (4,155)
 Repurchase of preferred stock .....................................................           --                 (5)
 Tax benefit on stock options exercised ............................................          1,020               22
                                                                                           --------         --------
  Net cash used in financing activities ............................................         (2,407)          (5,272)
                                                                                           --------         --------
Effect of exchange rate changes on cash ............................................            249               83
                                                                                           --------         --------
Net increase (decrease) in cash and cash equivalents ...............................          5,196           (2,402)
Cash and cash equivalents at beginning of period ...................................         15,473           16,280
                                                                                           --------         --------
Cash and cash equivalents at end of period .........................................       $ 20,669         $ 13,878
                                                                                           ========         ========


          See accompanying notes to consolidated financial statements.


                                       7


                      Audiovox Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

(1)  Basis of Presentation
     ---------------------

     The accompanying  unaudited interim  consolidated  financial  statements of
     Audiovox  Corporation and  subsidiaries  ("Audiovox" or the "Company") have
     been prepared  pursuant to the rules and  regulations of the Securities and
     Exchange Commission and in accordance with accounting  principles generally
     accepted  in the  United  States of America  and  include  all  adjustments
     (consisting  of normal  recurring  adjustments),  which,  in the opinion of
     management,  are  necessary to present  fairly the  consolidated  financial
     position,  results of operations and cash flows for all periods  presented.
     The results of operations are not necessarily  indicative of the results to
     be  expected  for  the  full  fiscal  year.  These  consolidated  financial
     statements  do not include all  disclosures  associated  with  consolidated
     financial  statements  prepared in accordance  with  accounting  principles
     generally  accepted  in the United  States of America.  Accordingly,  these
     statements  should  be read  in  conjunction  with  the  Company's  audited
     consolidated  financial  statements  and  notes  thereto  contained  in the
     Company's  Form 10-K for the fiscal year ended  February 28, 2007.  Certain
     reclassifications  have been made to prior year amounts on the accompanying
     balance  sheet in order to conform to the current  year  presentation  (see
     Note 10).

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates and  assumptions  that affect the amounts of
     assets,  liabilities,  revenues  and expenses  reported in those  financial
     statements as well as the disclosure of contingent  assets and  liabilities
     at the date of the consolidated  financial statements.  These judgments can
     be subjective and complex,  and  consequently,  actual results could differ
     from those  estimates and  assumptions.  Significant  estimates made by the
     Company include the allowance for doubtful accounts,  inventory  valuation,
     fair  value  of  stock  based  compensation,  income  taxes,  valuation  of
     long-lived  assets,  accrued  sales  incentives  and warranty  reserves.  A
     summary of the Company's  significant  accounting policies is identified in
     Note 1 of the Consolidated  Financial Statements in the Company's Form 10-K
     for the fiscal year ended February 28, 2007.  There have been no changes to
     the Company's  significant  accounting  policies subsequent to February 28,
     2007, except for the accounting for uncertain tax positions (see Note 10).

     The Company has one reportable  segment,  the Electronics  Group,  which is
     organized by product  category.  The  Electronics  Group  consists of seven
     wholly-owned  subsidiaries:  American  Radio  Corp.,  Audiovox  Electronics
     Corporation,  Audiovox Consumer  Electronics,  Inc.,  Audiovox  Accessories
     Corporation,  Audiovox German Holdings GmbH, Audiovox  Venezuela,  C.A. and
     Code Systems,  Inc. The Company  markets its products under the Audiovox(R)
     and other brand names. Unless specifically indicated otherwise, all amounts
     and percentages  presented in the notes below are exclusive of discontinued
     operations.

(2)  Accounting for Stock-Based Compensation
     ---------------------------------------

     The Company has various  stock  based  compensation  plans,  which are more
     fully  described in Note 1 of the  Company's  Form 10-K for the fiscal year
     ended February 28, 2007.


                                       8


                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)



     Stock-Based Compensation Expense
     --------------------------------

     The Company recognized stock-based compensation (before deferred income tax
     benefits) for awards granted under the Company's  Stock Option Plans in the
     following line items in the Consolidated Statement of Operations:








                                                                           Three Months ended              Nine Months ended
                                                                               November 30,                   November 30,
                                                                          ----------------------        ----------------------
                                                                             2007        2006             2007          2006
                                                                           ---------   ---------        ---------     --------

                                                                                                            
Cost of sales ..................................................             $  5         $ 21             $ 10         $ 21
Selling expenses ...............................................               64          156              128          156
General and administrative expenses ............................              202          207              404          245
Engineering and technical support ..............................                5           10               10           10
                                                                             ----         ----             ----         ----
Stock-based compensation expense before income tax benefit......             $276         $394             $552         $432
                                                                             ====         ====             ====         ====


     The Company  granted  257,500 stock options during August 2007,  which vest
     one-third on August 31, 2007, one-third on November 30, 2007, and one-third
     on February 28, 2008,  expire three years from date of vesting  (August 31,
     2010,  November 30, 2010,  and  February 28, 2011,  respectively),  have an
     exercise price equal to $1.00 above the lowest sales price of the Company's
     stock on the day prior to the date of grant  ($10.90),  have a  contractual
     term between 2 years and 3.7 years and a grant date fair value of $3.26 per
     share  determined  based upon a Black-Sholes  valuation model (refer to the
     table below for  assumptions  used to determine fair value).  In connection
     with this  option  grant,  there  were also  15,000  options  granted to an
     outside director that expire on September 9, 2009, which have a contractual
     life of 2.1 years and a grant date fair value of $2.57 per share.

     In addition,  the Company issued 17,500  warrants to purchase the Company's
     common stock at an exercise price of $10.90 per share as consideration  for
     past legal services  rendered.  The warrants are  exercisable  immediately,
     expire  three years from date of issuance and have a fair value on issuance
     date of $3.26 per warrant  determined  based upon a Black-Sholes  valuation
     model  (refer to the table below for  assumptions  used to  determine  fair
     value).  Accordingly,  the Company recorded additional legal expense in the
     amount of approximately $57 during the nine months ended November 30, 2007,
     representing  the fair value of the  warrants  issued.  These  warrants are
     included in the outstanding  options and warrant table below and considered
     exercisable at November 30, 2007.

     The fair value of stock options and warrants on the date of grant,  and the
     assumptions  used to  estimate  the fair  value of the  stock  options  and
     warrants using the  Black-Sholes  option valuation model granted during the
     period was as follows:

                                                     Nine Months Ended
                                                     November 30, 2007
                                                  -----------------------

Dividend yield                                                        0%
Weighted-average expected volatility                               47.0%
Risk-free interest rate                        .                   4.57%
Expected life of options (in years)                          2.00 - 3.00
Fair value of options/warrants granted             $3.26 (3 year option)
                                                   $2.57 (2 year option)

     The Company  granted 105,000 stock options during the three and nine months
     ended  November 30, 2006,  which vested  immediately,  had exercise  prices


                                       9


                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

     equal to the fair  market  value  of the  stock on the date of grant  and a
     contractual  term of two years.  The per share fair value of stock  options
     granted  during the three and nine months ended November 30, 2006 was $4.15
     and $3.75. These fair values were determined using the Black-Sholes  option
     valuation model with the following assumptions:




                                                Three Months Ended       Nine Months Ended
                                                November 30, 2006        November 30, 2006
                                                -----------------        -----------------

                                                                             
Dividend yield ................................            0%                      0%
Weighted-average expected volatility ..........         49.9%                   48.8%
Risk-free interest rate .......................         4.67%                   4.97%
Expected life of options (in years) ...........         2.00                    2.00
Fair value of options granted .................       $ 4.15                 $  3.75


     The expected  dividend yield is based on historical and projected  dividend
     yields.  The Company  estimates  expected  volatility  based  primarily  on
     historical daily price changes of the Company's stock equal to the expected
     life of the  option.  The  risk  free  interest  rate is  based on the U.S.
     Treasury yield in effect at the time of the grant. The expected option term
     is  the  number  of  years  the  Company  estimates  the  options  will  be
     outstanding prior to exercise based on employment termination behavior.

     Information   regarding  the  Company's   stock  options  and  warrants  is
     summarized below:




                                                                                          Weighted            Weighted Average
                                                                                           Average                Remaining
                                                                   Number of Shares     Exercise Price         Contractual Term
                                                                   ----------------     --------------        -----------------

                                                                              
Outstanding at February 28, 2007 .............................         1,784,652          $  12.97
  Granted ....................................................           275,000             10.90
  Exercised ..................................................          (408,866)             7.70
  Forfeited/expired ..........................................           (83,750)            13.68
                                                                      ----------          --------
Outstanding at November 30, 2007 .............................         1,567,036             13.96                 1.86
                                                                      ==========          ========                 ====
Exercisable at November 30, 2007 .............................         1,481,203          $  14.13                 1.78
                                                                      ==========          ========                 ====


     At November 30, 2007, the Company had  unrecognized  compensation  costs of
     approximately  $276 related to non-vested  options  granted during the nine
     months ended November 30, 2007. The unrecognized compensation costs related
     to these  options will be  completely  recognized by the fiscal year ending
     February 29, 2008. At February 28, 2007 and November 30, 2006,  the Company
     had no  unrecognized  compensation  cost as all stock  options  were  fully
     vested.


                                       10

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

(3)  Discontinued Operations
     -----------------------

     The net income (loss) from  discontinued  operations for the three and nine
     months  ended  November  30,  2007  and  2006  is  primarily  due to  legal
     settlements  and related legal and  administrative  costs  associated  with
     contingencies  pertaining to the Company's  discontinued  Cellular business
     (see Note 15).

     The following is a summary of the results of discontinued operations:




                                                                             Three Months Ended            Nine Months Ended
                                                                                November 30,                  November 30,
                                                                           -----------------------       -----------------------
                                                                             2007          2006             2007         2006
                                                                           --------      ---------       ----------    ---------
                                                                                                             
Net sales from discontinued operations ..............................         $--         $  --            $  --         $  --
                                                                              ===         =======          =======       ======

Income (loss) from discontinued operations before
 income taxes .......................................................         $--         $  (148)         $ 3,248       $ (886)
Income tax (expense) benefit ........................................          --             154           (1,137)         310
                                                                              ---         -------          -------       ------
Net income (loss) from discontinued operations ......................         $--         $     6          $ 2,111       $ (576)
                                                                              ===         =======          =======       ======


(4)  Net Income Per Common Share
     ---------------------------

     Basic net income per common share is based upon the weighted-average common
     shares outstanding  during the period.  Diluted net income per common share
     reflects the potential dilution that would occur if common stock equivalent
     securities  or other  contracts  to issue  common  stock were  exercised or
     converted into common stock.

     There are no  reconciling  items which  impact the  numerator  of basic and
     diluted  net  income  per  common  share.  A  reconciliation   between  the
     denominator of basic and diluted net income per common share is as follows:




                                                                                   Three Months Ended          Nine Months Ended
                                                                                      November 30,                November 30,
                                                                                ------------------------    ------------------------
                                                                                  2007          2006           2007          2006
                                                                                ----------    ----------    ----------    ----------
                                                                                                              
Weighted-average common shares outstanding .................................    22,852,781    22,234,399    22,853,108    22,345,183
Effect of dilutive securities:
 Stock options and warrants ................................................         4,574       210,765        27,155       195,293
                                                                                ----------    ----------    ----------    ----------
Weighted-average common shares and potential common shares outstanding .....    22,857,355    22,445,164    22,880,263    22,540,476
                                                                                ==========    ==========    ==========    ==========


     Stock options  totaling  1,617,026 and 1,013,000 for the three months ended
     November 30, 2007 and 2006,  respectively,  and 1,354,482 and 1,209,635 for
     the nine months ended  November 30, 2007 and 2006,  respectively,  were not
     included  in the net income  per  diluted  share  calculation  because  the
     exercise  price of these options was greater than the average  market price
     of the Company's common stock during these periods.

                                       11

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

(5)  Accumulated Other Comprehensive Income (Loss)
     ---------------------------------------------

     Accumulated  other  comprehensive  income  (loss) of $2,537 and $(1,320) at
     November 30, 2007 and February  28,  2007,  respectively,  includes the net
     accumulated  unrealized  gain  (loss) on the  Company's  available-for-sale
     investment  securities  of $(1,082)  and  $(1,561) at November 30, 2007 and
     February 28, 2007, respectively,  and foreign currency translation gains of
     $3,619 and $241 at November 30, 2007 and February 28, 2007, respectively.

     The Company's total comprehensive income (loss) was as follows:




                                                                                 Three Months Ended          Nine Months Ended
                                                                                     November 30,               November 30,
                                                                                -----------------------    -----------------------
                                                                                  2007          2006         2007          2006
                                                                                ---------     ---------    ---------     ---------

                                                                                                              
Net income ...............................................................       $ 4,680       $ 3,854      $10,643       $ 3,421

Other comprehensive income (loss) :
 Foreign currency translation adjustments ................................         2,021           200        3,378         1,080
 Unrealized holding gain (loss) on available-for-sale
   investment securities arising during the period, net of tax ...........           471          (264)         479        (2,659)
                                                                                 -------       -------      -------       -------
Other comprehensive  income (loss), net of tax ...........................         2,492           (64)       3,857        (1,579)
                                                                                 -------       -------      -------       -------

Total comprehensive income ...............................................       $ 7,172       $ 3,790      $14,500       $ 1,842
                                                                                 =======       =======      =======       =======


     The changes in the net unrealized holding gain (loss) on available-for-sale
     investment securities arising during the periods presented above are net of
     tax  expense  (benefits)  of $301 and  $(162)  for the three  months  ended
     November 30, 2007 and 2006, respectively and $306 and $(1,630) for the nine
     months ended November 30, 2007 and 2006, respectively.

(6)  Supplemental Cash Flow Information/Changes in Stockholders' Equity
     ------------------------------------------------------------------

     The  following is  supplemental  information  relating to the  consolidated
     statements of cash flows:

                                                           Nine Months Ended
                                                             November 30,
                                                       -------------------------
                                                         2007            2006
                                                       ---------       ---------
Cash paid during the period:
 Interest (excluding bank charges) ...............      $ 1,904         $  929
 Income taxes (net of refunds) ...................      $ 1,308         $   53


                                       12

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

     Non-Cash Transactions
     ---------------------

     During the nine  months  ended  November  30,  2007 and 2006,  the  Company
     recorded  a  non-cash  compensation  (benefit)  charge of $(212)  and $231,
     respectively,  related to the rights  under a  call/put  option  previously
     granted to certain  employees.  The net  benefit  recorded  during the nine
     months ended  November 30, 2007,  was primarily due to a $998  reduction in
     the call/put liability  calculation as a result of the Oehlbach acquisition
     (see Note 7). In  addition,  the  Company  recorded a non-cash  stock based
     compensation  and  warrant  expense of $609 and $432 during the nine months
     ended  November  30, 2007 and 2006,  respectively,  related to the grant of
     options and warrants to employees,  directors and certain  outside  service
     providers (see Note 2).

     During the nine  months  ended  November  2007,  the  Company  recorded  an
     incremental   non-cash   amortization   expense  of  $244  related  to  the
     amortization  of  an  intangible  asset  in  connection  with  the  Thomson
     accessories acquisition (see Note 7).

     Changes in Stockholders' Equity
     -------------------------------

     During the nine months ended November 30, 2007,  408,866 stock options were
     exercised  yielding  proceeds of $3,148 to the Company.  In  addition,  the
     Company  recorded a $1,020  increase  to paid in capital as a result of the
     tax benefit  realized upon exercise of stock options during the nine months
     ended November 30, 2007.

     During the nine months  ended  November  30,  2007,  the Company  purchased
     128,100  shares of its Class A Common Stock for $1,425 in  connection  with
     its share repurchase program.

     As a result of the implementation of FASB Interpretation No. 48, Accounting
     for  Uncertainty  in Income  Taxes ("FIN 48"),  an  adjustment  of $133 was
     recorded to decrease the beginning balance of retained earnings at March 1,
     2007 in  connection  with a  cumulative  effect of a change  in  accounting
     principle (see Note 10).

(7)  Business Acquisitions
     ---------------------

     Thomson Accessories
     -------------------

     On January 29, 2007, the Company acquired certain assets and liabilities of
     Thomson's  Americas  consumer  electronics  accessory  business  as well as
     rights to the RCA, Recoton,  Spikemaster,  Ambico and Discwasher brands for
     consumer electronics  accessories for $60,427,  including a working capital
     payment of $7,617.

     As part of the acquisition price, the Company agreed to pay Thomson a 0.75%
     fee  related  to future  net sales of the RCA brand for five years from the
     date of  acquisition.  This fee  amounted to $562 for the nine months ended
     November  30, 2007,  and has been  preliminarily  allocated  to  intangible
     assets (see Note 8).

     The results of  operations  of this  acquisition  have been included in the
     consolidated financial statements from the date of acquisition. The purpose
     of this  acquisition  was to  enhance  the  Company's  market  share in the
     accessory business,  which includes rights to the RCA brand and other brand
     names. The following summarizes the preliminary  allocation of the purchase
     price to the fair value of the assets acquired and  liabilities  assumed at
     the date of acquisition:

                                       13

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

Assets acquired:
  Inventory ....................................................         $31,664
  Prepaid expenses and other current assets ....................           2,312
  Tradename and other intangible assets ........................          46,735
                                                                         -------
   Total assets acquired .......................................         $80,711
                                                                         -------

Liabilities assumed:
  Accounts payable .............................................         $17,489
  Accrued expenses and other liabilities .......................           2,795
                                                                         -------
   Total liabilities assumed ...................................         $20,284
                                                                         -------
                                                                         -------
Cash paid ......................................................         $60,427
                                                                         =======

     The  allocation of the purchase  price to assets  acquired and  liabilities
     assumed is preliminary (see Note 8).

     Oehlbach
     --------

     On March 1,  2007,  Audiovox  German  Holdings  GmbH  completed  the  stock
     acquisition of Oehlbach Kabel GmbH  ("Oehlbach"),  a European market leader
     in the accessories  field. As consideration for Oehlbach,  the Company paid
     the following:

     Purchase price (net of cash acquired) .......................    $  6,411
     Acquisition related costs ...................................         146
                                                                      --------
     Total purchase price ........................................    $  6,557
                                                                      ========

     In  addition,  a  contingent  payment  may be due by the Company if certain
     earnings  targets are  generated  by  Oehlbach  for a period of three years
     after the acquisition date (March 1, 2010). The earnings target calculation
     requires that if the accumulated  Oehlbach  operating income,  including or
     excluding  certain items exceeds 3,290 Euros over the cumulative three year
     period,  the  Company is liable to pay the excess of the  operating  income
     amount (as defined in the purchase  agreement)  over 3,290 Euros but not to
     exceed 1,000 Euros. As of November 30, 2007, no amount has been accrued for
     the contingency payment as the earnings target was not met.

     The results of  operations  of this  acquisition  have been included in the
     consolidated financial statements from the date of acquisition. The purpose
     of this acquisition was to expand the Company's  accessory product lines to
     European Markets.

     The following  summarizes the preliminary  allocation of the purchase price
     to the fair value of the assets  acquired  and  liabilities  assumed at the
     date of acquisition:



Assets acquired:
  Accounts receivable, net .....................................         $ 2,215
  Inventory ....................................................           1,939
  Prepaid expenses and other current assets ....................              60
  Property, plant and equipment ................................             337
  Goodwill .....................................................           6,688
                                                                         -------
   Total assets acquired .......................................         $11,239
                                                                         -------

                                       14

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

Liabilities assumed:
  Accounts payable .............................................         $   601
  Accrued expenses and other liabilities .......................           2,383
  Income taxes payable .........................................             891
  Long-term debt ...............................................             807
                                                                         -------
   Total liabilities assumed ...................................         $ 4,682
                                                                         -------
Cash paid ......................................................         $ 6,557
                                                                         =======

     The  allocation of the purchase  price to assets  acquired and  liabilities
     assumed is preliminary (see Note 8).

     Incaar
     ------

     On August 14, 2007, Audiovox German Holdings GmbH completed the acquisition
     of certain  assets and the business of Incaar  Limited  ("Incaar"),  an OEM
     business  in Europe.  As  consideration  for Incaar,  the Company  paid the
     following:

     Purchase price ............................................       $  350
     Acquisition related costs .................................           52
                                                                       ------
     Total purchase price ......................................       $  402
                                                                       ======

     In  addition,  a  contingent  payment  may be due by the Company if certain
     earnings  targets are  generated  by Incaar for a period of two years after
     the acquisition  date (August 14, 2009).  The earnings  target  calculation
     requires  that if the  accumulated  Incaar  pre-tax  income,  including  or
     excluding  certain items,  exceeds 1,055 Euros over the cumulative two year
     period,  the  Company is liable to pay an  additional  earn-out  payment of
     $400,  as defined in the purchase  agreement.  As of November 30, 2007,  no
     amount has been accrued for the contingency  payment as the earnings target
     was not met.

     The results of  operations  of this  acquisition  have been included in the
     consolidated financial statements from the date of acquisition. The purpose
     of  this  acquisition  is to  add  the  experience,  concepts  and  product
     development of an OEM business in Europe.

     The following  summarizes the preliminary  allocation of the purchase price
     to the fair value of the assets acquired at the date of acquisition:



     Assets acquired:
          Patent .......................................  $  402
                                                          ------
     Cash paid .........................................  $  402
                                                          ======

     The allocation of the purchase price to the assets  acquired is preliminary
     (see Note 8).

                                       15

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

     Technuity
     ---------

     On  November  1,  2007,  Audiovox  Accessories  Corporation  completed  the
     acquisition   of  all  of  the   outstanding   stock  of  Technuity,   Inc.
     ("Technuity"),  an  emerging  leader  in the  battery  and  power  products
     industry  and the  exclusive  licensee of the  Energizer(R)  brand in North
     America  for  rechargeable  batteries  and  battery  packs for  camcorders,
     cordless  phones,  digital  cameras,  DVD players  and other  power  supply
     devices. As consideration for Technuity, the Company paid the following:

     Purchase price (net of cash acquired) ....................    $  20,373
     Acquisition related costs ................................        1,085
                                                                   ---------
     Total purchase price .....................................    $  21,458
                                                                   =========

     In  addition,  a  minimum  working  capital  payment,  as  defined  in  the
     agreement,  and a maximum  contingent  payment  of $1,000 may be due by the
     Company if certain  sales and gross margin  targets are met for a period of
     twelve  months  after the  acquisition  date.  The  sales and gross  margin
     targets  require  that net sales  exceeds  $26.5  million and gross  margin
     exceeds $7.65 million, as defined in the purchase agreement. As of November
     30,  2007,  no amount has been accrued for the  contingency  payment as the
     sales and gross margin targets have not been met.

     The results of  operations  of this  acquisition  have been included in the
     consolidated financial statements from the date of acquisition. The purpose
     of this acquisition was to further  strengthen our accessory  product lines
     and core offerings,  to be the exclusive licensee of the Energizer(R) brand
     in North America for rechargeable batteries and power supply systems and to
     increase the Company's market share in the consumer  electronics  accessory
     business.

     The following  summarizes the preliminary  allocation of the purchase price
     to the fair value of the assets  acquired  and  liabilities  assumed at the
     date of acquisition:

Assets acquired:
     Accounts receivable, net ..................................         $ 4,071
     Inventory .................................................           5,008
     Prepaid expenses and other current assets .................             652
     Property, plant and equipment, net ........................             108
     Goodwill ..................................................          15,807
                                                                         -------
      Total assets acquired ....................................         $25,646
                                                                         -------

   Liabilities assumed:
     Accounts payable ..........................................         $ 3,689
     Accrued expenses and other liabilities ....................             467
     Other liabilities .........................................              32
                                                                         -------
      Total liabilities assumed ................................         $ 4,188
                                                                         -------
   Cash paid ...................................................         $21,458
                                                                         =======

     The allocation of the purchase price to the assets acquired and liabilities
     assumed is preliminary (see Note 8).

                                       16

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

     The following unaudited  pro-forma financial  information for the three and
     nine months  ended  November  30,  2007 and 2006  represents  the  combined
     results of the Company's operations as if the Technuity,  Incaar,  Oehlbach
     and Thomson acquisitions occurred on March 1, 2006. The unaudited pro-forma
     financial   information  does  not  necessarily   reflect  the  results  of
     operations  that would have  occurred had the Company  constituted a single
     entity during such period.




                                                                   Three Months Ended               Nine Months Ended
                                                                      November 30,                     November 30,
                                                               --------------------------      ---------------------------
                                                                  2007            2006            2007             2006
                                                               ----------      ----------      -----------      ----------

                                                                                                     
Net sales ..........................................            $188,252        $208,705         $477,501        $528,492
Net income .........................................               5,032           4,984           11,733           5,825
Net income per share-diluted .......................            $   0.22        $   0.22         $   0.51        $   0.26


(8)  Goodwill and Intangible Assets
     ------------------------------

     The change in goodwill is as follows:

     Balance at February 28, 2007 ...........................      $17,514
     Purchase of  Oehlbach ..................................        6,688
     Purchase of Technuity ..................................       15,807
                                                                   -------
     Balance at November 30, 2007 ...........................      $40,009
                                                                   =======

         At November 30, 2007, intangible assets consisted of the following:




                                                                                Gross
                                                                               Carrying         Accumulated          Total Net
                                                                                Value           Amortization        Book Value
                                                                               --------         ------------        ----------

                                                                                                             
Trademarks/Tradenames not subject to amortization .....................         $50,650            $  --              $50,650
Intangible assets subject to amortization .............................           6,500                244              6,256
Contract subject to amortization (5 years) ............................           1,104                662                442
Patents subject to amortization .......................................           1,097                344                753
                                                                                -------            -------            -------
  Total ...............................................................         $59,351            $ 1,250            $58,101
                                                                                =======            =======            =======


                                       17

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

     At February 28, 2007, intangible assets consisted of the following:




                                                                                Gross
                                                                               Carrying       Accumulated       Total Net
                                                                                 Value        Amortization     Book Value
                                                                               ---------      ------------     ----------

                                                                                                        
Trademarks/Tradenames  not subject to amortization .....................        $56,835         $  --            $56,835
Contract subject to amortization (5 years) .............................          1,104             497              607
Patents subject to amortization ........................................            625             193              432
                                                                                -------         -------          -------
  Total ................................................................        $58,564         $   690          $57,874
                                                                                =======         =======          =======


     During the nine months  ended  November  30,  2007,  the Company made total
     payments of $562 primarily  relating to a contingent  payment in connection
     with the  acquired  RCA  accessory  brand,  which  has  been  preliminarily
     allocated to trademarks not subject to amortization (see Note 7).

     The Company  recorded  amortization  expense of $351 and $103 for the three
     months ended November 30, 2007 and 2006, respectively and $565 and $225 for
     the nine  months  ended  November  30,  2007 and  2006,  respectively.  The
     estimated  aggregate  amortization  expense for the  cumulative  five years
     ending November 30, 2012 amounts to $2,507.

(9)  Equity Investments
     ------------------

     As of  November  30,  2007 and  February  28,  2007,  the Company had a 50%
     non-controlling  ownership interest in Audiovox  Specialized  Applications,
     Inc.  ("ASA")  which  acts  as  a  distributor  of  televisions  and  other
     automotive sound, security and accessory products for specialized vehicles,
     such as RV's and van conversions.

     The following presents summary financial  information for ASA. Such summary
     financial  information  has been provided  herein based upon the individual
     significance  of ASA  to  the  consolidated  financial  information  of the
     Company.

                                                November 30,      February 28,
                                                  2007               2007
                                                ------------      ------------

Current assets .............................       $26,894           $23,409
Non-current assets .........................         4,773             4,716
Current liabilities ........................         5,538             5,420
Members' equity ............................        26,129            22,705


                                       18

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

                                               Nine Months Ended November 30,
                                               ------------------------------
                                                  2007               2006
                                               ----------         -----------

Net sales ................................       $55,194            $45,072
Gross profit .............................        16,099             13,480
Operating income .........................         5,010              4,058
Net income ...............................         5,853              4,846

     The Company's  share of income from ASA for the nine months ended  November
     30, 2007 and 2006,  was $2,927 and $2,423  respectively.  In addition,  the
     Company received  distributions  from ASA totaling $1,215 and $2,589 during
     the nine months ended November 30, 2007 and 2006,  respectively,  which was
     recorded  as  a  reduction  to  equity   investments  in  the  accompanying
     consolidated balance sheets.

(10) Income Taxes
     ------------

     Quarterly Tax Provision
     -----------------------

     Interim period tax provisions are generally based upon an estimated  annual
     effective tax rate per taxable  entity,  including  evaluations of possible
     current and future events and  transactions,  and are subject to subsequent
     refinement  or  revision.  When the Company is unable to estimate a part of
     its annual income or loss,  or the related tax expense or benefit,  the tax
     expense or  benefit  applicable  to that item is  reported  in the  interim
     period in which  the  income  or loss  occurs.  A  valuation  allowance  is
     provided when it is more likely than not that some portion,  or all, of the
     deferred tax assets will not be realized.

     The effective tax rate from  continuing  operations  for the three and nine
     months  ended  November  30,  2007 was a provision  of 30.3%  compared to a
     benefit of 25.4% and 22.7% for the three and nine months ended November 30,
     2006,  respectively.  The  increase  in the  effective  tax  rate is due to
     increased  income  from  operations  and lower tax exempt  interest  income
     earned on our short-term investments.  Accordingly, the Company's effective
     tax rate is less than the  statutory  rate due to the  impact of tax exempt
     interest income.

     FIN 48
     ------

     In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
     Interpretation  No. 48,  "Accounting  for  Uncertainty in Income Taxes - an
     interpretation  of FASB  Statement  No. 109,  Accounting  for Income Taxes"
     ("FIN 48").  FIN 48  addresses  the  determination  of whether tax benefits
     claimed or expected to be claimed on a tax return should be recorded in the
     financial  statements.  Under FIN 48, the  Company  may  recognize  the tax
     benefit from an uncertain  tax position  only if it is more likely than not
     that the tax  position  will be  sustained  on  examination  by the  taxing
     authorities based on the technical merits of the position. The tax benefits
     recognized  in the  financial  statements  from  such  position  should  be
     measured based on the largest benefit that has a greater than fifty percent
     likelihood of being realized upon ultimate settlement. FIN 48 also provides
     guidance  on   derecognition,   classification,   interest  and  penalties,
     accounting in interim periods and disclosure requirements.

     The  Company  adopted  the  provisions  of FIN 48 on March 1,  2007,  which
     resulted in a $133 adjustment to decrease  retained  earnings in connection

                                       19

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

     with a cumulative effect of a change in accounting principle. The amount of
     gross unrecognized tax benefits at November 30, 2007 was $4,450 (related to
     gross  unrecognized  tax  benefits for tax  positions  taken during a prior
     period),  all of which would impact the  Company's  effective  tax rate, if
     recognized.  The Company  increased  its gross  unrecognized  tax  benefits
     related to unrecognized tax benefits for tax positions taken during a prior
     period by $139 and $417 during the three and nine months ended November 30,
     2007. The Company recognizes accrued interest and penalties associated with
     unrecognized  tax  benefits  as part of the  income  tax  provision.  As of
     November 30, 2007,  the Company had $812 of accrued  interest and penalties
     in  connection  with  unrecognized  tax  benefits  of which $91 and $275 of
     interest and  penalties  were  recognized  during the three and nine months
     ended November 30, 2007.

     It is possible that the amount of unrecognized tax benefits could change in
     the next 12 months, however, the Company does not expect the change to have
     a significant impact on its results of operations or financial position.

     The Internal  Revenue  Service  ("IRS") is conducting an examination of the
     Company's U.S.  federal income tax returns for the fiscal years 2004,  2005
     and 2006 as part of the IRS's  Compliance  Assurance  Process  program.  In
     addition,  the Company files in numerous  states and foreign  jurisdictions
     with varying statutes of limitations.

(11) Accrued Sales Incentives
     ------------------------

     A summary of the  activity  with  respect to sales  incentives  is provided
     below:




                                                            Three Months Ended            Nine Months Ended
                                                              November 30,                  November 30,
                                                        -------------------------     -------------------------
                                                           2007          2006            2007           2006
                                                        ----------    -----------     -----------   -----------

                                                                                         
Opening balance ..................................      $ 11,403       $  7,405       $  7,410       $  8,512
Accruals .........................................         7,385 *        5,614         22,467 **      11,797
Payments and credits .............................        (2,980)        (2,559)       (12,531)        (8,585)
Reversals for unearned sales incentive ...........          (277)          (451)          (682)        (1,152)
Reversals for unclaimed sales incentives .........          (594)           (77)        (1,727)          (640)
                                                        --------       --------       --------       --------
Ending balance ...................................      $ 14,937       $  9,932       $ 14,937       $  9,932
                                                        ========       ========       ========       ========


     *    Includes  $646  of  sales  incentives   acquired  from  the  Technuity
          acquisition (see Note 7).

     **   Includes $325 and $646 of accrued sales  incentives  acquired from the
          Oehlbach and Technuity acquisitions (see Note 7).

(12) Product Warranties and Product Repair Costs
     -------------------------------------------

     The  following  table  provides a summary of the  activity  with respect to
     product warranties and product repair costs:

                                       20

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)




                                                                         Three Months Ended                Nine Months Ended
                                                                            November 30,                      November 30,
                                                                    -----------------------------     -----------------------------
                                                                      2007               2006           2007               2006
                                                                    ----------        -----------     ----------        -----------

                                                                                                             
Opening balance ............................................         $ 10,073          $  8,576        $  9,586          $  9,947
Liabilities accrued for warranties issued
  during the period ........................................            3,009             2,864           8,178             6,019
Warranty claims paid during the period .....................           (2,886)           (2,283)         (7,568)           (6,809)
                                                                     --------          --------        --------          --------
Ending balance .............................................         $ 10,196          $  9,157        $ 10,196          $  9,157
                                                                     ========          ========        ========          ========


(13) Financing Arrangements
     ----------------------

     The Company has the following financing arrangements:



                                                           November 30,      February 28,
                                                              2007              2007
                                                           ------------      ------------
Bank Obligations
----------------

                                                                           
Domestic bank obligation (a) .........................       $ --                $ --
Venezuela bank obligations (b) .......................         --                  --
Euro Asset-Based lending obligation (c) ..............        3,929               2,890
                                                             ------              ------
Total bank obligations ...............................       $3,929              $2,890
                                                             ======              ======


Debt
----

                                                                           
Euro term loan agreement (d) .........................       $ --                $5,461
Oehlbach (e) .........................................          874                --
Other (f) ............................................        1,441               1,493
                                                             ------              ------
Total debt ...........................................       $2,315              $6,954
                                                             ======              ======


     (a)  Domestic Bank Obligations
          -------------------------

          At November 30, 2007, the Company has an unsecured credit line to fund
          the  temporary  short-term  working  capital  needs  of  the  domestic
          operations.  This line  expires on March 31,  2008,  is renewable on a
          periodic basis and allows aggregate  borrowings of up to $25,000 at an
          interest  rate of Prime  (or  similar  designations)  plus  1%.  As of
          November  30,  2007 and  February  28,  2007,  no direct  amounts  are
          outstanding  under this  agreement.  At November 30, 2007, the Company
          had $2,277 in commercial  and standby  letters of credit  outstanding,
          which reduces the amount available under the unsecured credit line.

     (b)  Venezuela Bank Obligations
          --------------------------

          In October 2005,  Audiovox  Venezuela  entered into a credit  facility
          borrowing  arrangement  which allows for  principal  borrowings  up to

                                       21

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

          $1,000 plus accrued  interest.  The facility  requires minimum monthly
          interest  payments  at an  annual  interest  rate  of  13%  until  the
          expiration of the facility on February 14, 2008. Audiovox  Corporation
          has secured this facility with a $1,200 standby  letter of credit.  At
          November 30, 2007 and February 28, 2007,  no amounts were  outstanding
          under this agreement.

     (c)  Euro Asset-Based Lending Obligation
          -----------------------------------

          The  Company  has  a  16,000  Euro   accounts   receivable   factoring
          arrangement and a 6,000 Euro  Asset-Based  Lending  ("ABL")  (finished
          goods inventory and non factored accounts  receivable) credit facility
          for the Company's  subsidiary,  Audiovox German  Holdings GmbH,  which
          expires on  October  25,  2008 and is  renewable  on an annual  basis.
          Selected  accounts  receivable  are  purchased  from the  Company on a
          non-recourse  basis at 85% of face value and payment of the  remaining
          15% upon receipt  from the  customer of the balance of the  receivable
          purchased.  In respect of the ABL credit facility,  selected  finished
          goods are advanced at a 60% rate and non factored accounts receivables
          are  advanced  at a 50% rate.  The rate of interest is the three month
          Euribor  plus 2.5%,  and the Company pays 0.4% of its gross sales as a
          fee for the accounts receivable factoring arrangement.  As of November
          30,  2007,  the  amount of  accounts  receivable  and  finished  goods
          available for factoring  exceeded the amounts  outstanding  under this
          obligation.

     (d)  Euro Term Loan Agreement
          ------------------------

          On September 2, 2003, Audiovox Germany borrowed 12 million Euros under
          a new term loan  agreement.  This agreement was for a 5-year term loan
          with a financial institution consisting of two tranches.  Tranche A is
          for 9 million  Euros and Tranche B is for 3 million  Euros.  Tranche B
          had been fully  repaid in prior  years.  During  September  2007,  the
          Company repaid in full the amount outstanding under the Tranche A term
          loan  using  the  Company's  available  cash  on  hand  at  the  time.
          Accordingly,  the Company has been  released  from its 3 million  Euro
          guarantee  under this loan as well as the pledge of stock,  brands and
          trademarks of Audiovox Germany.

     (e)  Oehlbach
          --------

          In connection with the Oehlbach  acquisition (see Note 7), the Company
          acquired  short and long term debt payable to various  third  parties.
          The interest  rate on the debt ranges from 4.2% to 6.1% and is payable
          from May 2008 to March 2011.

     (f)  Other Debt
          ----------

          This amount  represents a call/put option owed to certain employees of
          Audiovox Germany.

(14) Other Income
     ------------

     Other income is comprised of the following:

                                       22

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)




                                                        Three Months Ended                Nine Months Ended
                                                           November 30,                      November 30,
                                                    ---------------------------      -----------------------------
                                                       2007            2006               2007           2006
                                                    -----------     -----------      ------------     ------------

                                                                                            
Interest income ............................          $   822         $ 1,397           $ 3,379         $ 4,681
Rental income ..............................              138             138               414             414
Miscellaneous ..............................             (144)           (417)             (349)           (268)
                                                      -------         -------           -------         -------
Total-Other, net ...........................          $   816         $ 1,118           $ 3,444         $ 4,827
                                                      =======         =======           =======         =======


(15) Contingencies and Derivative Settlement
     ---------------------------------------

     Contingencies
     -------------

     The  Company is  currently,  and has in the past  been,  a party to various
     routine legal proceedings  incident to the ordinary course of business.  If
     management  determines,  based on the underlying  facts and  circumstances,
     that it is probable a loss will result from a  litigation  contingency  and
     the amount of the loss can be reasonably  estimated,  the estimated loss is
     accrued for. The Company  believes there has been no material change to the
     matters disclosed in Note 17 of the Company's Form 10-K for the fiscal year
     ended February 28, 2007, however,  due to the uncertainty of these matters,
     the Company disclosed the following:

     Certain   consolidated  class  actions   transferred  to  a  Multi-District
     Litigation  Panel of the United  States  District  Court of the District of
     Maryland  against  the  Company  and  other  suppliers,  manufacturers  and
     distributors of hand-held wireless  telephones alleging damages relating to
     exposure to radio frequency  radiation from hand-held  wireless  telephones
     are still pending.  No assurances  regarding the outcome of this matter can
     be given,  as the Company is unable to assess the degree of  probability of
     an unfavorable outcome or estimated loss or liability, if any. Accordingly,
     no estimated loss has been recorded for the aforementioned case.

     The  products  the Company  sells are  continually  changing as a result of
     improved  technology.  As a result,  although the Company and its suppliers
     attempt to avoid infringing known  proprietary  rights,  the Company may be
     subject to legal  proceedings  and claims for alleged  infringement  by its
     suppliers  or  distributors,   of  third  party  patents,   trade  secrets,
     trademarks  or  copyrights.  Any claims  relating  to the  infringement  of
     third-party  proprietary rights,  even if not meritorious,  could result in
     costly litigation,  divert management's attention and resources, or require
     the Company to either  enter into royalty or license  agreements  which are
     not advantageous to the Company or pay material amounts of damages.

     Under the asset purchase  agreement for the sale of the Company's  Cellular
     business to UTSI,  the Company  agreed to indemnify  UTSI for any breach or
     violation by Audiovox  Communications  Corporation and its representations,
     warranties and covenants  contained in the asset purchase agreement and for
     other matters, subject to certain limitations.  Significant indemnification
     claims by UTSI  could  have a  material  adverse  effect  on the  Company's
     financial  condition and results of operation.  The Company is not aware of
     any such claim(s) for indemnification.

     Derivative Settlement
     ---------------------

     In November 2004, several purported double derivative, derivative and class
     actions were filed in the Court of Chancery of the State of  Delaware,  New
     Castle County challenging  approximately  $27,000 made in payments from the
     proceeds of the sale of the Company's cellular business. These actions were
     subsequently   consolidated  into  a  single   derivative   complaint  (the
     "Complaint"), In re Audiovox Corporation Derivative Litigation.

                                       23

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

     This  matter was  settled in May 2007 and  received  final  Chancery  court
     approval in June 2007. As a result of the settlement,  the Company received
     $6,750 in gross  proceeds.  The  gross  proceeds  were  offset by $2,378 in
     plaintiff legal fees and $1,023 in accrued legal and  administrative  costs
     for defending all remaining  ACC legal claims.  The items  discussed  above
     resulted in a pre-tax benefit of $3,349 recorded in discontinued operations
     for the nine months ended November 30, 2007.

(16) Recent Accounting Pronouncements
     --------------------------------

     In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements"
     ("SFAS No. 157"). SFAS No. 157 defines fair value,  establishes  guidelines
     for  measuring  fair value and  expands  disclosures  regarding  fair value
     measurement. SFAS No. 157 does not require any new fair value measurements,
     but rather eliminates inconsistencies in guidance found in other accounting
     pronouncements.  SFAS No. 157 is effective for fiscal years beginning after
     November 15,  2008,  as it was amended by FASB Staff  Position  No.  157-b,
     Effective Date of FASB Statement No. 157. The transition  adjustment of the
     difference  between  the  carrying  amounts  and the fair  values  of those
     financial   instruments   should  be  recognized  as  a  cumulative  effect
     adjustment  to  retained  earnings  as of  the  beginning  of the  year  of
     adoption.  The Company is currently  evaluating the impact of SFAS No. 157,
     but does not expect the adoption of this  pronouncement  to have a material
     impact on the Company's financial position or results of operations.

     In February  2007,  the FASB  released SFAS No. 159, "The Fair Value Option
     for Financial Assets and Financial Liabilities" ("SFAS No. 159") to provide
     companies  with  an  option  to  report  selected   financial   assets  and
     liabilities at fair value.  The objective of SFAS No. 159 is to reduce both
     the complexity in accounting for financial  instruments  and the volatility
     in earnings caused by measuring related assets and liabilities differently.
     SFAS No. 159 is effective  for fiscal years  beginning  after  November 15,
     2007 with early adoption permitted. The Company is currently evaluating the
     impact  of  SFAS  No.  159,  but  does  not  expect  the  adoption  of this
     pronouncement to have a material impact on the Company's financial position
     or results of operations.

     On December 4, 2007,  the Financial  Accounting  Standards  Board  ("FASB")
     issued Statement No. 141(R), Business Combinations ("Statement No. 141(R)")
     and Statement No. 160, Accounting and Reporting of Noncontrolling Interests
     in  Consolidated   Financial  Statements,   an  amendment  of  ARB  No.  51
     ("Statement No. 160").  These new standards will  significantly  change the
     financial accounting and reporting of business combination transactions and
     noncontrolling   (or   minority)   interests  in   consolidated   financial
     statements.  Issuance of these  standards is also  noteworthy  in that they
     represent  the  culmination  of the first major  collaborative  convergence
     project between the International  Accounting Standards Board and the FASB.
     Statement No. 141(R) is required to be adopted  concurrently with Statement
     No. 160 and is effective for business  combination  transactions  for which
     the  acquisition  date is on or after the  beginning  of the  first  annual
     reporting period beginning on or after December 15, 2008. Early adoption is
     prohibited.  Application  of Statement  No. 141(R) and Statement No. 160 is
     required  to be adopted  prospectively,  except for certain  provisions  of
     Statement  No.  160,  which are  required  to be  adopted  retrospectively.
     Business  combination   transactions   accounted  for  before  adoption  of
     Statement No. 141(R) should be accounted for in accordance  with  Statement
     No. 141 and that  accounting  previously  completed under Statement No. 141
     should not be modified as of or after the date of adoption of Statement No.
     141(R).  The Company is currently  evaluating  the impact of Statement  No.
     141(R) and  Statement  No. 160,  but does not expect the  adoption of these
     pronouncements  to  have  a  material  impact  on the  Company's  financial
     position or results of operations.

                                       24

                      Audiovox Corporation and Subsidiaries
              Notes to Consolidated Financial Statements, continued
                                November 30, 2007
             (Dollars in thousands, except share and per share data)
                                   (unaudited)

(17) Subsequent Events
     -----------------

     On December 31, 2007,  the Company  completed  the  acquisition  of certain
     assets and liabilities of Thomson's U.S.,  Canada,  Mexico,  China and Hong
     Kong consumer  electronics  audio/video business for a total purchase price
     of approximately $19,700, plus a net asset payment and a fee related to the
     RCA(R) brand in  connection  with future sales for a stated period of time.
     The purpose of this  acquisition  was to control the RCA  trademark for the
     audio  video  field of use and to  expand  our core  product  offerings  in
     certain  developing  markets.  Contemporaneous  with this transaction,  the
     Company  entered into a license  agreement with  Multimedia  Device Ltd., a
     Chinese  manufacturer to market certain product categories  acquired in the
     acquisition  for an  upfront  fee  of  $10,000,  the  purchase  of  certain
     inventory and future royalty payments.



                                       25



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------  -------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS
         -----------------------------------

Forward-Looking Statements

     Certain  information in this Quarterly Report on Form 10-Q would constitute
forward-looking  statements,  including but not limited to, information relating
to the future performance and financial condition of the Company,  the plans and
objectives of the Company's management and the Company's  assumptions  regarding
such  performance  and plans  that are  forward-looking  in nature  and  involve
certain risks and  uncertainties.  Actual results could differ  materially  from
such forward-looking information.

     We begin  Management's  Discussion and Analysis of Financial  Condition and
Results  of  Operations  ("MD&A")  with an  overview  of the  business.  This is
followed by a discussion of the Critical  Accounting Policies and Estimates that
we  believe  are  important  to  understanding  the  assumptions  and  judgments
incorporated in our reported financial results.  In the next section, we discuss
our results of operations  for the three and nine months ended November 30, 2007
compared to the three and nine months ended  November 30, 2006.  We then provide
an  analysis of changes in our  balance  sheets and cash flows,  and discuss our
financial   commitments  in  the  sections   entitled   "Liquidity  and  Capital
Resources."   We  conclude  this  MD&A  with  a  discussion  of  "Related  Party
Transactions" and "Recent Accounting Pronouncements".

     Unless  specifically  indicated  otherwise,  all  amounts  and  percentages
presented in our MD&A below are exclusive of discontinued  operations and are in
thousands, except for per share amounts.

Business Overview

     Audiovox  Corporation  ("Audiovox",  "We",  "Our",  "Us" or "Company") is a
leading  international  distributor  and value  added  service  provider  in the
accessory,  mobile and consumer electronics industries.  We conduct our business
through  seven  wholly-owned   subsidiaries:   American  Radio  Corp.,  Audiovox
Electronics Corporation ("AEC"),  Audiovox Consumer Electronics,  Inc., Audiovox
Accessories Corp. ("AAC"),  Audiovox German Holdings GmbH ("Audiovox  Germany"),
Audiovox Venezuela,  C.A and Code Systems, Inc. ("Code"). We market our products
under  the  Audiovox(R)  brand  name and other  brand  names,  such as  Acoustic
Research(R),  Advent(R),  Ambico(R),  Car  Link(R),  Chapman(R),  Code-Alarm(R),
Discwasher(R),  Energizer(R),  Heco(R),  Jensen(R),  Mac  Audio(R),  Magnate(R),
Movies 2 Go(R), Oehlbach(R),  Phase Linear(R),  Prestige(R),  Pursuit(R), RCA(R)
(effective  January 1, 2008),  RCA  Accessories(R),  Recoton(R),  Road  Gear(R),
Spikemaster(R)  and Terk(R),  as well as private labels through a large domestic
and international  distribution  network.  We also function as an OEM ("Original
Equipment  Manufacturer")  supplier to several  customers and presently have one
reportable  segment  (the  "Electronics  Group"),  which is organized by product
category.   We  previously   announced  our  intention  to  acquire  synergistic
businesses with gross profit margins higher than our core business.

     We  have  recently   acquired  and  continue  to  integrate  the  following
acquisitions, discussed below, into our existing business structure:

     In December 2007, the Company  completed the  acquisition of certain assets
and liabilities of Thomson's U.S., Canada,  Mexico, China and Hong Kong consumer
electronics  audio/video  business for a total purchase  price of  approximately
$19,700,  plus a net asset  payment  and a fee  related to the  RCA(R)  brand in
connection  with future sales for a stated  period of time.  The purpose of this
acquisition  was to control the RCA  trademark  for the audio video field of use
and to  expand  our  core  product  offerings  in  certain  developing  markets.
Contemporaneous  with  this  transaction,  the  Company  entered  into a license
agreement with Multimedia Device Ltd., a Chinese  manufacturer to market certain
product  categories  acquired in the  acquisition for an upfront fee of $10,000,
the purchase of certain inventory and future royalty payments.

                                       26


     In  November  2007,   Audiovox   Accessories   Corporation   completed  the
acquisition  of all of the  outstanding  stock of  Technuity,  Inc., an emerging
leader in the battery and power products industry and the exclusive  licensee of
the Energizer(R)  brand in North America for rechargeable  batteries and battery
packs for camcorders,  cordless phones,  digital cameras,  DVD players and other
power supply  devices,  for a total  purchase  price of $21,458,  plus a minimum
working capital payment,  as defined in the agreement,  and a maximum contingent
earn out payment of $1,000,  if certain sales and gross margin  targets are met.
The purpose of this acquisition was to further  strengthen our accessory product
lines and core offerings, to be the exclusive licensee of the Energizer(R) brand
in North  America for  rechargeable  batteries  and power supply  systems and to
increase  the  Company's  market  share in the  consumer  electronics  accessory
business.

     In August 2007,  Audiovox German Holdings GmbH completed the acquisition of
certain assets of Incaar Limited,  a U.K. business that specializes in rear seat
electronics  systems,  for a total  purchase  price of $402,  in  addition  to a
maximum  contingent  earn out payment of $400, if certain  earnings  targets are
met. The purpose of this  acquisition  was to add the  experience,  concepts and
product  development of an Original Equipment  Manufacturer  ("OEM") business to
our European operations.

     In  March  2007,   Audiovox   German  Holdings  GmbH  completed  the  stock
acquisition of Oehlbach,  a European market leader in the accessories  business,
for a total  purchase  price of $6,557,  in  addition to a  contingent  earn out
payment,  not to exceed 1 million euros.  The purpose of this acquisition was to
add electronics accessory product lines to our European business.

     In January  2007,  we  completed  the  acquisition  of  certain  assets and
liabilities of Thomson's Americas consumer electronics  accessory business for a
total  purchase  price of  approximately  $60,427,  including a working  capital
payment of $7,617,  plus a five year fee related to the RCA brand in  connection
with  future  sales.  The purpose of this  acquisition  was to expand our market
presence in the accessory business.  The acquisition  included the rights to the
RCA  Accessories  brand  for  consumer  electronics  accessories  as well as the
Recoton,  Spikemaster,  Ambico  and  Discwasher  brands  for use on any  product
category  and the Jensen,  Advent,  Acoustic  Research  and Road Gear brands for
consumer electronics accessories.

     We  continue  to  monitor  economic  and  industry  conditions  in order to
evaluate  potential  synergistic  business  acquisitions  that would allow us to
leverage  overhead,  penetrate  new  markets  or expand  our core  business  and
distribution channels.

     Effective March 1, 2007, the Company  reported  "Accessories" as a separate
product  group due to the Thomson and Oehlbach  acquisitions  and now during the
fiscal 2008 third quarter, the Technuity acquisition. In addition, the Company's
former mobile and consumer  product  categories are now combined and recorded in
the "Electronics"  product group. As such, certain  reclassifications  have been
made to prior year amounts as the Company  currently  reports sales data for the
following two product categories:

     Electronics products include:

     o    mobile  multi-media  video  products,   including  in-dash,  overhead,
          headrest and portable mobile video systems,
     o    autosound  products  including  radios,  speakers,  amplifiers  and CD
          changers,
     o    satellite  radios  including  plug and play models and direct  connect
          models,
     o    automotive security and remote start systems,
     o    automotive power accessories,
     o    car to car portable navigation systems,
     o    rear observation and collision avoidance systems,
     o    Liquid Crystal Display ("LCD") and Plasma flat panel televisions,
     o    home and portable stereos,
     o    two-way radios,
     o    digital multi-media  products such as personal video recorders and MP3
          products,
     o    home speaker systems and home theater in a box, and
     o    portable DVD players.

                                       27


     Accessories products include:

     o    High-Definition Television ("HDTV") Antennas,
     o    Wireless Fidelity ("WiFi") Antennas,
     o    High-Definition Multimedia Interface ("HDMI") accessories,
     o    home electronic accessories such as cabling,
     o    other connectivity products,
     o    power cords,
     o    performance enhancing electronics,
     o    TV universal remotes,
     o    flat panel TV mounting systems,
     o    iPod specialized products,
     o    wireless headphones,
     o    battery backups (UPS),
     o    camcorder, digital camera, notebook, cordless phone and portable video
          (DVD) batteries and accessories,
     o    portable audio batteries, and
     o    power supply systems.

     We believe our product  groups have  expanding  market  opportunities  with
certain levels of volatility related to both domestic and international markets,
new  car  sales,   increased  competition  by  manufacturers,   private  labels,
technological advancements, discretionary consumer spending and general economic
conditions.  Also, all of our products are subject to price  fluctuations  which
could affect the carrying value of inventories and gross margins in the future.

Reportable Segments

     We  have  determined  that  we  operate  in  one  reportable  segment,  the
Electronics  Group,  based  on  review  of  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 131,  "Disclosures  about  Segments of an Enterprise and
Related  Information".  The characteristics of our operations that are relied on
in making and  reviewing  business  decisions  include the  similarities  in our
products,  the commonality of our customers across multiple brands,  our unified
marketing  strategy,  and the nature of the  financial  information  used by our
Executive  Officers.  Management  reviews the  financial  results of the Company
based on the performance of the Electronics Group.

Critical Accounting Policies and Estimates

     As disclosed in our Form 10-K for the fiscal year ended  February 28, 2007,
the discussion and analysis of our financial condition and results of operations
are based upon our consolidated  financial statements,  which have been prepared
in conformity with accounting principles generally accepted in the United States
of America.  The  preparation of these financial  statements  require us to make
estimates  and  assumptions   that  affect  the  reported   amounts  of  assets,
liabilities, revenues and expenses reported in those financial statements. These
judgments can be subjective and complex, and consequently,  actual results could
differ from those estimates. Our most critical accounting policies and estimates
relate to revenue recognition; sales incentives; accounts receivable; inventory,
goodwill and other intangible assets;  warranties,  stock-based compensation and
income  taxes.  Since  February  28,  2007,  there  have been no  changes in our
critical accounting policies or changes to the assumptions and estimates related
to them, except for the accounting for uncertain tax positions, which is further
discussed  in footnote 10.  Income  Taxes,  included in this Form 10-Q,  for the
three and nine months ended November 30, 2007.

                                       28


Results of Operations

     As you  read  this  discussion  and  analysis,  refer  to the  accompanying
consolidated  statements  of  operations,  which  present  the  results  of  our
operations  for the three and nine months ended  November 30, 2007 and 2006.  We
analyze and explain the  differences  between periods based on the specific line
items of the consolidated statements of operations.

Three months ended November 30, 2007 compared to the three months ended
-----------------------------------------------------------------------
November 30, 2006
-----------------

Continuing Operations
---------------------

     The  following  tables  set  forth,  for  the  periods  indicated,  certain
statement of  operations  data for the three months ended  November 30, 2007 and
2006.

Net Sales




                                               Three Months Ended November 30,
                                               -------------------------------              $               %
                                                   2007                2006              Change          Change
                                               -------------       -----------        ---------       -----------

                                                                                               
Electronics ...........................           $138,959           $148,273           $ (9,314)          (6.3)%
Accessories ...........................             44,604              3,560             41,044          1,153
                                                  --------           --------           --------          -----
  Total net sales .....................           $183,563           $151,833           $ 31,730           20.9 %
                                                  ========           ========           ========          =====


     Electronics   sales,   which  include  mobile  and  consumer   electronics,
represented 75.7% of our net sales for the three months ended November 30, 2007,
decreased by 6.3% or $9,314 primarily due to a decrease in consumer  electronics
sales as a result of lower than  anticipated  holiday sales and shortages of LCD
panels. This industry-wide shortage adversely impacted fiscal 2008 third quarter
sales of LCD TV's,  portable DVD's and digital picture frames.  Electronic sales
also declined in certain  mobile video  categories due to a decline in OEM sales
as a result of a decline in new car sales.

     The above  decreases were  partially  offset by an increase in mobile audio
sales as a result of improved sales in the Jensen(R) mobile, Phase Linear(R) and
satellite  radio  product  lines and  increases in the  electronic  sales of the
Company's international operations in Germany and Venezuela.

     Accessories  sales,  which represented 24.3% of our net sales for the three
months ended November 30, 2007,  increased  1,153% or $41,044 due to incremental
sales  generated  from the recently  acquired  Thomson,  Oehlbach and  Technuity
operations.  The Company  expects  accessory  sales to  continue to  represent a
higher  percentage  of total net sales and margin as  compared to the prior year
due to these acquisitions.

     Sales  incentive  expense  increased  $1,815 to $6,901 for the three months
ended  November 30, 2007,  as a result of an increase in  accessories  net sales
which offer more sales incentive  programs,  which is partially offset by a $343
increase in sales  incentive  reversals  during the period.  The increase in the
reversals is primarily due to an increase of unclaimed sales incentives upon the
expiration of the claim period.  We believe the reversal of earned but unclaimed
sales  incentives  upon the  expiration  of the claim  period is a  disciplined,
rational,   consistent  and  systematic  method  of  reversing  unclaimed  sales
incentives.  These sales  incentive  programs  are expected to continue and will
either increase or decrease based upon competition and customer demands.


                                       29


Gross Profit

                                                     2007               2006
                                                  ------------      ------------

Gross profit .............................         $  34,991         $  25,371
Gross margin percentage ..................             19.1%             16.7%

     Gross  margins  increased  by 240 basis  points from 16.7% to 19.1%.  Gross
margins were favorably  impacted by higher  margins  generated from the recently
acquired  accessory  companies as well as improved  overall  margins in our core
business.  Gross  margins were  adversely  impacted by increased  warehouse  and
assembly  costs as a result of  incremental  costs  necessary to facilitate  the
newly acquired companies as well as increased warranty and repair costs, freight
and shipping costs and inventory provisions as a result of increased accessories
sales.

Operating Expenses and Operating Income




                                                            Three Months Ended November 30,
                                                            -------------------------------          $               %
                                                               2007                2006            Change          Change
                                                            ------------       ------------      ----------      ----------

Operating Expenses:
                                                                                                        
 Selling ..............................................        $ 9,828            $ 8,114          $ 1,714          21.1%
 General and administrative ...........................         16,948             13,649            3,299          24.2
 Engineering and technical support ....................          2,600              1,888              712          37.7
                                                               -------            -------          -------          ----
  Operating expenses ..................................        $29,376            $23,651          $ 5,725          24.2%
                                                              -------             -------          -------          ----

 Operating income .....................................        $ 5,615            $ 1,720          $ 3,895         226.5%


     Operating expenses increased $5,725 for the three months ended November 30,
2007,  as compared to the prior year.  As a percentage  of net sales,  operating
expenses  increased to 16% for the three months  ended  November 30, 2007,  from
15.6%  in the  prior  year due to  incremental  costs to  operate  the  acquired
companies.  The increase in total  operating  expenses is due to the incremental
costs related to the recently acquired Thomson,  Oehlbach,  Incaar and Technuity
operations,  which contributed total operating  expenses of $6,263 for the three
months ended  November 30, 2007.  Operating  expenses for our core  business was
$23,113  for  the  three  months   ended   November  30,  2007,  a  decrease  of
approximately $538 over prior year.

     The following table sets forth, for the periods indicated,  total operating
expenses from our core business and the incremental  operating  expenses related
to the recently acquired Thomson, Oehlbach, Incaar and Technuity businesses.




                                                            Three Months Ended November 30,
                                                            -------------------------------           $                   %
                                                                2007              2006              Change               Change
                                                            -----------       -------------       ----------      --------------

                                                                                                             
Core operating expenses .............................          $23,113            $23,651           $  (538)             (2.3)%
Operating expenses from acquired
   businesses .......................................            6,263               --               6,263             100.0
                                                               -------            -------           -------             -----
Total operating expenses ............................          $29,376            $23,651           $ 5,725              24.2 %
                                                               =======            =======           =======             =====


     Selling expenses  increased $1,714 due to $2,781 of selling expenses during
the three months ended November 30, 2007 for the recently acquired operations of
Thomson,  Oehlbach,  Incaar and  Technuity,  as well as  increases  in  salesmen
salaries due to a change in  compensation  programs and increases in the cost of
travel and  share-based  compensation  expense.  These  increases were partially
offset by a decrease in  advertising  expenses  due to a decline in the budgeted
amounts for general and print media advertising in fiscal 2008. Selling expenses
for our core business was $7,047 for the three months ended November 30, 2007, a
decrease of $1,067 over the prior year.

                                       30


         General and administrative expenses increased $3,299 due to:

     o    $2,883 of expenses during the three months ended November 30, 2007 for
          the recently  acquired  operations  of Thomson,  Oehlbach,  Incaar and
          Technuity,
     o    $1,085 increase in executive bonuses and profit sharing as a result of
          the  Company  meeting  certain   earnings   targets  and  fiscal  wage
          increases,
     o    $156 increase in depreciation  and  amortization due to an increase in
          capital  expenditures as a result of  acquisitions  and investments in
          new systems,
     o    $276 increase in a non-cash  stock-based  compensation  expense due to
          the vesting of options to employees during the period,
     o    $426 increase in the cost of travel and communication  expenses and an
          increase in the cost of the  Company's  medical plan as a result of an
          increase in the usage of the plan.

     The  above  increases  were  partially   offset  by  a  $1,578  decline  in
professional fees due to reduced audit fees, legal and consulting costs.

     General and  Administrative  expenses for our core business was $14,065 for
the three months ended November 30, 2007, decreased by $416 over the prior year.

     Engineering and technical  support  expenses  increased $712 due to $599 of
expenses  during the three  months  ended  November  30,  2007 for the  recently
acquired operations of Thomson,  Oehlbach, Incaar and Technuity, and an increase
in domestic direct labor and related payroll benefits as a result of fiscal wage
increases.  Engineering and technical  support expense for our core business was
$2,001 for the three  months ended  November 30, 2007,  an increase of $113 over
the prior year.

Other Income (Expense)




                                                                  Three Months Ended November 30,
                                                                  -------------------------------           $               %
                                                                     2007                2006            Change          Change
                                                                  -----------        -------------     -----------     ----------

                                                                                                               
Interest and bank charges ...............................           $  (723)           $  (429)         $  (294)           68.5 %
Equity in income of equity investees ....................             1,011                659              352            53.4
Other, net ..............................................               816              1,118             (302)          (27.0)
                                                                    -------            -------          -------           -----
Total other income, net .................................           $ 1,104            $ 1,348          $  (244)          (18.1)%
                                                                    =======            =======          =======           =====


     Interest  and bank  charges  increased  as a result  of the  assumption  of
additional  debt in  connection  with the  acquisition  of  Oehlbach  as well as
increased  working  capital  needs of our  domestic  and  foreign  subsidiaries.
Interest and bank charges  represent  expenses for bank  obligations of Audiovox
Corporation, Audiovox Germany and Venezuela and interest for a capital lease.

     Income from equity investments  increased due to increased income earned by
Audiovox  Specialized  Applications  ("ASA") as a result of increased  sales and
gross margins in Jensen(R) audio and other product lines.

     Other income decreased due to a decline in interest income as a result of a
decline in short-term  investment holdings due to cash utilized for acquisitions
as well as current working capital needs.

Income Tax Provision (Benefit)

     The effective  tax rate for the three months ended  November 30, 2007 was a
provision  of 30.3%  compared  to a benefit  of 25.4% in the prior  period.  The
increase in the  effective tax rate is due to lower tax exempt  interest  income
earned on our short-term  investments  and an increase in our operating  income.
Accordingly,  our effective tax rate is less than the statutory  rate due to the
impact of our tax exempt interest income.

                                       31


Income (Loss) from Discontinued Operations

     The  following  is  a  summary  of  financial   results   included   within
discontinued operations:




                                                                                            Three Months Ended
                                                                                               November 30,
                                                                                     --------------------------------
                                                                                          2007             2006
                                                                                     --------------     -------------
                                                                                                      
Net sales from discontinued operations .........................................           $--              $--
                                                                                           =====            =====

Loss from discontinued operations before income taxes ..........................            --               (148)
Recovery of income taxes .......................................................            --                154
                                                                                           -----            -----
Net income from discontinued operations ........................................           $--              $   6
                                                                                           =====            =====


     Net income from discontinued operations for the three months ended November
30, 2006 is primarily due to legal and related costs offset by associated income
tax benefits pertaining to our discontinued Cellular business.

Net Income

     The  following  table  sets  forth,  for the  periods  indicated,  selected
statement of operations  data beginning with  operating  income from  continuing
operations  to  reported  net income and basic and diluted net income per common
share.




                                                                                       Three Months Ended November 30,
                                                                                    ------------------------------------
                                                                                         2007                2006
                                                                                    ---------------     --------------

                                                                                                      
Operating income .............................................................            $ 5,615           $ 1,720
Other income, net ............................................................              1,104             1,348
                                                                                          -------           -------
Income from continuing operations before income taxes ........................              6,719             3,068
Income tax (expense) benefit .................................................             (2,039)              780
                                                                                          -------           -------
Net income  from continuing operations .......................................              4,680             3,848
Net income from discontinuing operations, net of tax .........................               --                   6
                                                                                          -------           -------
Net income ...................................................................            $ 4,680           $ 3,854
                                                                                          =======           =======

Net income  per common share:
   Basic .....................................................................            $  0.20           $  0.17
                                                                                          =======           =======
   Diluted ...................................................................            $  0.20           $  0.17
                                                                                          =======           =======


     Net income was  favorably  impacted by sales  incentive  reversals  of $871
($531  after  taxes) and $528 ($343  after  taxes)  for the three  months  ended
November 30, 2007 and 2006, respectively.


Nine months ended November 30, 2007 as compared to the nine months ended
------------------------------------------------------------------------
November 30, 2006
-----------------

Continuing Operations
---------------------

     The  following  tables  set  forth,  for  the  periods  indicated,  certain
statement of  operations  data for the nine months  ended  November 30, 2007 and
2006.


                                       32


Net Sales




                                                  Nine Months Ended November 30,
                                                  ------------------------------            $               %
                                                     2007              2006               Change          Change
                                                  -----------      -------------       ------------     ---------

                                                                                                
Electronics ............................           $ 341,205        $ 349,793            $  (8,588)         (2.5)%
Accessories ............................             118,880           10,763              108,117       1,004.5 %
                                                   ---------        ---------            ---------       --------
  Total net sales ......................           $ 460,085        $ 360,556            $  99,529          27.6 %
                                                   =========        =========            =========       =========


     Electronics   sales,   which  include  mobile  and  consumer   electronics,
represented  74.2% of our net sales for the nine months ended November 30, 2007,
decreased by 2.5% or $8,588 primarily due to a decrease in consumer  electronics
sales as a result of lower than  anticipated  holiday sales and an industry-wide
shortage of LCD panels that adversely affected sales of LCD TV's, portable DVD's
and digital  picture  frames.  Electronic  sales also declined in certain mobile
video  categories due to increased OEM programs that include the video system as
"standard" on more vehicles and a decline in new car sales.

     The above  decreases were  partially  offset by an increase in mobile audio
sales as a result of improved  sales in the Jensen(R)  mobile,  Phase Linear and
satellite  radio  product  lines and  increases in the  electronic  sales of the
Company's international operations in Germany and Venezuela.

     Accessories  sales,  which  represented 25.8% of our net sales for the nine
months  ended  November  30,  2007,   increased  1,004.5%  or  $108,117  due  to
incremental  sales generated from the recently  acquired  Thomson,  Oehlbach and
Technuity  operations.  The  Company  expects  accessories  sales to continue to
represent a higher  percentage  of total net sales and margin as compared to the
prior year due to these acquisitions.

     Sales incentive  expense  increased  $10,440 to $20,445 for the nine months
ended November 30, 2007 as a result of a general increase in sales, specifically
an increase in accessories net sales which offer more sales incentive  programs,
which is partially offset by a $617 increase in reversals during the period. The
increase in  reversals  is  primarily  due to a $1,087  increase in reversals of
unclaimed sales  incentives upon the expiration of the claim period.  We believe
the reversal of earned but unclaimed sales incentives upon the expiration of the
claim period is a disciplined,  rational,  consistent  and systematic  method of
reversing  unclaimed  sales  incentives.  These  sales  incentive  programs  are
expected to continue and will either increase or decrease based upon competition
and customer demands.

Gross Profit

                                                     2007              2006
                                                  -----------      ------------

Gross profit .............................         $  86,654        $  61,224
Gross margin percentage ..................             18.8%            17.0%

     Gross  margins  increased  by 180 basis  points from 17.0% to 18.8% for the
nine months  ended  November  30, 2007 as  compared to the prior  period.  Gross
margins were favorably  impacted by higher  margins  generated from the recently
acquired  companies as well as improved  overall margins in our core business as
well as improved  buying programs and inventory  management.  Gross margins were
adversely  impacted by increased  warehouse  and  assembly  costs as a result of
incremental   transition  costs  necessary  to  facilitate  the  newly  acquired
companies as well as increased  warranty and repair costs,  freight and shipping
costs and inventory  provisions as a result of increased  accessories  sales. In
addition,  reversals of sales incentive expense favorably impacted gross margins
by 0.5% during the nine months ended November 30, 2007 and 2006, respectively.


                                       33


Operating Expenses and Operating Income (Loss)




                                                            Nine Months Ended November 30,
                                                          --------------------------------         $               %
                                                              2007               2006            Change         Change
                                                          --------------     -------------     ----------     ----------

Operating Expenses:
                                                                                                     
 Selling ...............................................     $ 26,534          $ 21,626          $  4,908        22.7%
 General and administrative ............................       45,153            36,682             8,471        23.1
 Engineering and technical support .....................        7,010             5,418             1,592        29.4
                                                             --------           --------         --------        ----
  Operating expenses ...................................     $ 78,697          $ 63,726          $ 14,971        23.5%
                                                             --------           --------         --------        ----

 Operating income (loss) ...............................     $  7,957          $ (2,502)         $ 10,459       418.0%


     Operating expenses increased $14,971 for the nine months ended November 30,
2007,  as compared to 2006.  As a percentage  of net sales,  operating  expenses
decreased  to 17.1% for the nine months ended  November 30, 2007,  from 17.7% in
2006 due to higher sales and better controls over our fixed costs.  The increase
in total  operating  expenses  is due to the  incremental  costs  related to the
recently  acquired Thomson,  Oehlbach,  Incaar and Technuity  operations,  which
contributed  total  operating  expenses  of $16,789  for the nine  months  ended
November 30, 2007.  Operating expenses for our core business was $61,908 for the
nine months ended November 30, 2007, a decrease of $1,818 over prior year.

     The following table sets forth, for the periods indicated,  total operating
expenses from our core business and the incremental  operating  expenses related
to the recently acquired Thomson, Oehlbach, Incaar and Technuity businesses.




                                                                  Nine Months Ended November 30,
                                                                  ------------------------------         $              %
                                                                     2007             2006            Change          Change
                                                                  ------------    --------------     ----------      ----------

                                                                                                            
Core operating expenses ....................................        $ 61,908        $ 63,726          $ (1,818)         (2.9)%
Operating expenses from acquired businesses ................          16,789            --              16,789         100.0
                                                                    --------        --------          --------         -----
Total operating expenses ...................................        $ 78,697        $ 63,726          $ 14,971          23.5 %
                                                                    ========        ========          ========         =====


     Selling  expenses  increased  $4,908  primarily  due to $7,166  of  selling
expenses  during  the nine  months  ended  November  30,  2007 for the  recently
acquired operations of Thomson,  Oehlbach,  Incaar and Technuity, an increase in
the cost of  travel  and an  increase  in  commission  expense  as a  result  of
increases in commissionable  sales and salesmen  salaries.  These increases were
partially  offset by a decline in  advertising  expenses due to a decline in the
budgeted amounts for general and print media advertising in fiscal 2008. Selling
expenses for our core  business  was $19,368 for the nine months ended  November
30, 2007, a decrease of $2,258 over prior year.

     General and administrative expenses increased $8,471 due to the following:

     o    $8,189 of expenses  during the nine months ended November 30, 2007 for
          the recently  acquired  operations  of Thomson,  Oehlbach,  Incaar and
          Technuity,
     o    $1,548 increase to executive bonuses and profit sharing as a result of
          the  Company  meeting  certain   earnings   targets  and  fiscal  wage
          increases,
     o    $394 increase in depreciation  and  amortization due to an increase in
          capital  expenditures as a result of  acquisitions  and investments in
          new systems,
     o    $178  increase  in a non-cash  stock-based  compensation  and  warrant
          expense due to the vesting of options to employees,
     o    $447 increase in the cost of the  Company's  medical plan, as a result
          of an increase  in the usage of the plan,  and an increase in the cost
          of travel due to acquisition activity, and
     o    $442 increase in communication expenses.

     The  above  increases  were  partially  offset  by  a  $1,701  decrease  in
professional  fees due to a reduction in audit fees,  legal costs and consulting
costs.

                                       34


     General and administrative  expenses from our core business was $36,964 for
the nine months  ended  November  30,  2007,  an increase of $282 over the prior
year.

     Engineering and technical  support expenses  increased $1,592 due to $1,435
of expenses  during the nine months  ended  November  30, 2007 for the  recently
acquired operations of Thomson,  Oehlbach,  Incaar and Technuity and an increase
in  domestic  direct  labor and  related  payroll  benefits  as a result of wage
increases.  Engineering and technical support expenses for our core business was
$5,575 for the nine months ended November 30, 2007, an increase of $157 over the
prior years.

Other Income (Expense)




                                                                Nine Months Ended November 30,
                                                               -------------------------------        $              %
                                                                  2007              2006            Change         Change
                                                               ------------     --------------    -----------    ---------

                                                                                                        
Interest and bank charges ...............................         $(2,087)         $(1,491)         $  (596)        40.0 %
Equity in income of equity investees ....................           2,927            2,423              504         20.8
Other, net ..............................................           3,444            4,827           (1,383)       (28.7)
                                                                  -------          -------          -------        ----
Total other income, net .................................         $ 4,284          $ 5,759          $(1,475)       (25.6)%
                                                                  =======          =======          =======        ====


     Interest  and bank  charges  increased  as a result  of the  assumption  of
additional  debt in  connection  with the  acquisition  of  Oehlbach  as well as
increased  working  capital  needs of our  domestic  and  foreign  subsidiaries.
Interest and bank charges  represent  expenses for bank  obligations of Audiovox
Corporation, Audiovox Germany and Venezuela and interest for a capital lease.

     Equity in income of equity  investees  increased  due to  increased  equity
income  of  Audiovox  Specialized  Applications,  Inc.  ("ASA")  as a result  of
increased sales and gross margins in the Jensen Audio and Voyager product lines.

     Other income decreased due to a decline in interest income as a result of a
decline in short-term  investment holdings due to cash utilized for acquisitions
as well as current working capital needs.

Income Tax Provision

     The effective tax rate for the nine months ended  November 30, 2007,  was a
provision  of 30.3%  compared  to a benefit  of 22.7% in the prior  period.  The
increase in the  effective tax rate is due to lower tax exempt  interest  income
earned on our  short-term  investments  and  increased  income from  operations.
Accordingly,  our effective tax rate is less than the statutory  rate due to the
impact of our tax exempt interest income.

Income (loss) from Discontinued Operations

     The  following  is  a  summary  of  financial   results   included   within
discontinued operations:


                                       35




                                                                                         Nine Months Ended
                                                                                            November 30,
                                                                                   ---------------------------------
                                                                                        2007              2006
                                                                                   -------------     ---------------
                                                                                                   
Net sales from discontinued operations ..........................................      $  --             $  --
                                                                                       =======           =======

Income (loss) from discontinued operations before income taxes ..................        3,248              (886)
Income tax (expense) benefit ....................................................       (1,137)              310
                                                                                       -------           -------
Net income (loss) from discontinued operations ..................................      $ 2,111           $  (576)
                                                                                       =======           =======


     The income (loss) from  discontinued  operations  for the nine months ended
November 30, 2006 is primarily  due to legal and related costs  associated  with
contingencies  pertaining to our discontinued Cellular business. The increase in
income from discontinued  operations for the nine months ended November 30, 2007
is due to a derivative  legal  settlement  which  resulted in pre-tax  income of
$3,348, net of legal fees and other  administrative costs of $3,401 (see Note 15
of Notes to the Consolidated Financial Statements).

Net Income

     The  following  table  sets  forth,  for the  periods  indicated,  selected
statement  of  operations  data  beginning  with  operating  income  (loss) from
continuing  operations  to reported  net income and basic and diluted net income
per common share:




                                                                                              Nine months ended November 30,
                                                                                           ----------------------------------
                                                                                               2007                   2006
                                                                                           -------------        -------------

                                                                                                             
Operating income (loss) .........................................................            $  7,957              $ (2,502)
Other income, net ...............................................................               4,284                 5,759
                                                                                             --------              --------
Income from continuing operations before income taxes ...........................              12,241                 3,257
Income tax (expense) benefit ....................................................              (3,709)                  740
                                                                                             --------              --------
Net income  from continuing operations ..........................................               8,532                 3,997
Net income (loss) from discontinuing operations, net of tax .....................               2,111                  (576)
                                                                                             --------              --------
Net income ......................................................................            $ 10,643              $  3,421
                                                                                             ========              ========

Net income  per common share:
   Basic ........................................................................            $   0.47              $   0.15
                                                                                             ========              ========
   Diluted ......................................................................            $   0.47              $   0.15
                                                                                             ========              ========


     Net income was favorably  impacted by sales  incentive  reversals of $2,409
($1,469  after taxes) and $1,792  ($1,165 after taxes) for the nine months ended
November 30, 2007 and 2006,  respectively,  and pre-tax income of $3,248 ($2,111
after  taxes)  recorded in  discontinued  operations  for the nine months  ended
November 30, 2007.

Liquidity and Capital Resources
-------------------------------

Cash Flows, Commitments and Obligations
---------------------------------------

     As of November 30, 2007, we had working capital of $293,151, which includes
cash and  short-term  investments  of $28,946  compared with working  capital of
$305,960 at February 28, 2007, which included cash and short-term investments of
$156,345.  The  decrease  in  short-term  investments  is  primarily  due to the
acquisitions  of  Oehlbach,  Incaar  and  Technuity,  the  purchase  of  capital
expenditures  as well as additional  working  capital  needs to support  current
operations.  We plan to utilize our current cash and  short-term  investments as
well as collections from accounts  receivable to fund the current  operations of
the business.  However,  we may utilize all or a portion of our current  capital
resources to pursue other business opportunities, including acquisitions.

                                       36


     Operating  activities  used  cash of  $92,870  for the  nine  months  ended
November  30,  2007  compared  to cash used of $21,429 in 2006.  Net income from
continuing  operations  for the nine months  ended  November 30, 2007 was $8,532
compared to $3,997 in the prior  year.  The  increase in cash used by  operating
activities  as  compared to the prior year was  primarily  due to an increase in
accounts receivable (including vendor receivables) and inventory balances.

     The  following  significant  fluctuations  in the  balance  sheet  accounts
impacted cash flows from operations:

     o    Cash  flows  from  operating  activities  for the  nine  months  ended
          November 30, 2007 were impacted by an increase in accounts  receivable
          and receivables from vendors  primarily due to increased sales and the
          timing of collections.  Accounts receivable turnover  approximated 5.0
          times during the nine months ended  November 30, 2007  compared to 4.2
          times in the prior year.

     o    Cash flows from  operations  were impacted by an increase in inventory
          due to increased  purchases  for future sales  projections  during the
          holiday  selling season.  Inventory  turnover  approximated  3.9 times
          during the nine months ended  November 30, 2007  compared to 4.1 times
          in the prior year.

     o    In addition,  cash flows from operating activities for the nine months
          ended  November  30,  2007 were  favorably  impacted by an increase in
          accounts  payable and accrued  expenses due to the timing of payments.
          The timing of payments made can  fluctuate  and are often  impacted by
          the timing of inventory  purchases,  operating expenses and the amount
          of inventory on hand.

     Investing activities provided cash of $100,224 during the nine months ended
November 30, 2007,  primarily  due to the sales (net of purchases) of short-term
investments partially offset by the Technuity,  Oehlbach and Incaar acquisitions
and purchases of property,  plant and equipment.  Investing  activities provided
cash of $24,216 during the nine months ended November 30, 2006, primarily due to
purchase (net of sales) of short-term investments.

     Financing  activities  used cash of $2,407  during  the nine  months  ended
November 30, 2007,  primarily  from the purchase of treasury stock and principal
payments on debt partially offset by the proceeds  received from the exercise of
stock options.  Financing activities for the nine months ended November 30, 2006
used cash of $5,272,  primarily  from the purchase of treasury stock and payment
of bank  obligations  and debt  partially  offset by proceeds  received from the
exercise of stock options and warrants.

     As of  November  30,  2007,  we have a  domestic  credit  line to fund  the
temporary short-term working capital needs of the Company.  This line expires on
March 31, 2008 and allows  aggregate  borrowings of up to $25,000 at an interest
rate of Prime (or similar  designations) plus 1%. In addition,  Audiovox Germany
has a 16,000 Euro accounts  receivable  factoring  arrangement  and a 6,000 Euro
Asset-Based  Lending ("ABL") credit facility and Audiovox Venezuela has a $1,000
credit facility borrowing arrangement with an interest rate of 13%.

     Certain contractual cash obligations and other commercial  commitments will
impact our short and long-term liquidity. At November 30, 2007, such obligations
and commitments are as follows:



                                                             Payments Due by Period
                                                             -----------------------------------------------------------------------
                                                                            Less than         1-3          4-5            After
Contractual Cash Obligations                                  Total          1 Year          Years        Years          5 Years
--------------------------------------------------------     -------        ---------       --------     --------       ----------

                                                                                                        
Capital lease obligation (1) .......................         $11,580         $   521         $ 1,043      $ 1,095         $ 8,920
Operating leases (2) ...............................          18,816           2,976           4,298        3,361           8,182
                                                             -------         -------         -------      -------         -------
Total contractual cash obligations .................         $30,396         $ 3,497         $ 5,341      $ 4,456         $17,102



                                       37




                                                              Amount of Commitment Expiration per period
                                                              ----------------------------------------------------------------------
                                                                Total
                                                               Amounts      Less than       1-3            4-5            After
Other Commercial Commitments                                  Committed      1 Year         Years         Years          5 years
--------------------------------------------------------      ---------     ---------      --------      ---------      ----------

                                                                                                        
Bank obligations (3) ....................................     $ 3,929        $ 3,929        $  --          $  --          $  --
Stand-by letters of credit (4) ..........................       2,244          2,244           --             --             --
Commercial letters of credit (4) ........................          33             33           --             --             --
Debt (5) ................................................       2,315             79          1,695            541           --
Unconditional purchase obligations (6) ..................      78,877         78,877           --             --             --
                                                              -------        -------        -------        -------        -------
Total commercial commitments ............................     $87,398        $85,162        $ 1,695        $   541        $     0
                                                              =======        =======        =======        =======        =======


1.   Represents total payments  (interest and principal) due under capital lease
     obligations,  which has a current  (included in other current  liabilities)
     and long term principal balance of $74 and $5,625, respectively at November
     30, 2007.

2.   We enter into operating leases in the normal course of business.

3.   Represents  amounts   outstanding  under  the  Audiovox  Germany  factoring
     agreement at November 30, 2007.

4.   Commercial  letters  of credit are issued  during  the  ordinary  course of
     business through major domestic banks as requested by certain suppliers. We
     also issue standby letters of credit to secure certain bank obligations and
     insurance requirements.

5.   Represents amounts outstanding under a loan agreement for Audiovox Germany.
     This amount also includes  amounts due under a call-put option with certain
     employees of Audiovox Germany.  During September 2007, the Company paid the
     outstanding balance of the Germany term loan (approximately $4,868) in full
     with current cash balances.

6.   Open  purchase   obligations   represent   inventory   commitments.   These
     obligations are not recorded in the consolidated financial statements until
     these  commitments are fulfilled and such obligations are subject to change
     based on negotiations with manufacturers.

     We regularly review our cash funding requirements and attempt to meet those
requirements through a combination of cash on hand, cash provided by operations,
available  borrowings  under bank lines of credit and possible  future public or
private  debt  and/or  equity   offerings.   At  times,  we  evaluate   possible
acquisitions of, or investments in,  businesses that are  complementary to ours,
which  transactions may require the use of cash. We believe that our cash, other
liquid  assets,  operating  cash flows,  credit  arrangements,  access to equity
capital markets,  taken together,  provides  adequate  resources to fund ongoing
operating expenditures. In the event that they do not, we may require additional
funds in the future to support our  working  capital  requirements  or for other
purposes and may seek to raise such additional  funds through the sale of public
or private  equity  and/or debt  financings  as well as from other  sources.  No
assurance can be given that additional financing will be available in the future
or that if available,  such financing will be obtainable on terms favorable when
required.

Off-Balance Sheet Arrangements
------------------------------

     We do  not  maintain  any  off-balance  sheet  arrangements,  transactions,
obligations or other  relationships with  unconsolidated  entities that would be
expected  to have a  material  current  or  future  effect  upon  our  financial
condition or results of operations.

                                       38


Related Party Transactions
--------------------------

     During 1998,  we entered into a 30-year  capital  lease for a building with
our  principal  stockholder  and  chairman,  which was the  headquarters  of the
discontinued  Cellular operation.  Payments on the capital lease were based upon
the construction costs of the building and the then-current  interest rates. The
current  effective  interest  rate on the  capital  lease  obligation  is 8%. On
November 1, 2004,  we entered  into an  agreement  to sublease  the  building to
UTStarcom  for  monthly  payments of $46 until  November 1, 2009.  We also lease
another  facility from our principal  stockholder  which expires on November 30,
2016.  Total lease  payments  required  under all related  party  leases for the
five-year period ending November 30, 2012 are $6,139.

Recent Accounting Pronouncements
--------------------------------

     In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements"
("SFAS No.  157").  SFAS 157 defines  fair  value,  establishes  guidelines  for
measuring fair value and expands  disclosures  regarding fair value measurement.
SFAS No.  157 does not  require  any new fair  value  measurements,  but  rather
eliminates inconsistencies in guidance found in other accounting pronouncements.
SFAS No. 157 is effective for fiscal years beginning after November 15, 2008, as
it was  amended  by  FASB  Staff  Position  No.  157-b,  Effective  Date of FASB
Statement  No. 157. The  transition  adjustment  of the  difference  between the
carrying  amounts and the fair values of those financial  instruments  should be
recognized  as a cumulative  effect  adjustment  to retained  earnings as of the
beginning  of the year of  adoption.  The Company is  currently  evaluating  the
impact of SFAS No. 157, but does not expect the  adoption of this  pronouncement
to have a material  impact on the  Company's  financial  position  or results of
operations.

     In February  2007,  the FASB  released SFAS No. 159, "The Fair Value Option
for  Financial  Assets and  Financial  Liabilities"  ("SFAS No. 159") to provide
companies with an option to report selected  financial assets and liabilities at
fair value.  The  objective of SFAS No. 159is to reduce both the  complexity  in
accounting for financial  instruments  and the volatility in earnings  caused by
measuring related assets and liabilities  differently.  SFAS No. 159is effective
for  fiscal  years  beginning  after  November  15,  2007  with  early  adoption
permitted.  The Company is currently  evaluating the impact of SFAS No. 159, but
does not expect the adoption of this  pronouncement to have a material impact on
the Company's financial position or results of operations.

     On December 4, 2007,  the Financial  Accounting  Standards  Board  ("FASB")
issued Statement No. 141(R), Business Combinations  ("Statement No. 141(R)") and
Statement  No. 160,  Accounting  and  Reporting of  Noncontrolling  Interests in
Consolidated  Financial  Statements,  an amendment of ARB No. 51 ("Statement No.
160").  These new standards will significantly  change the financial  accounting
and  reporting  of business  combination  transactions  and  noncontrolling  (or
minority)  interests in  consolidated  financial  statements.  Issuance of these
standards is also noteworthy in that they represent the culmination of the first
major  collaborative  convergence  project between the International  Accounting
Standards  Board and the FASB.  Statement  No.  141(R) is required to be adopted
concurrently  with  Statement No. 160 and is effective for business  combination
transactions  for which the acquisition date is on or after the beginning of the
first annual  reporting  period  beginning on or after December 15, 2008.  Early
adoption is  prohibited.  Application  of Statement No. 141(R) and Statement No.
160 is required to be adopted  prospectively,  except for certain  provisions of
Statement No. 160,  which are required to be adopted  retrospectively.  Business
combination  transactions  accounted for before adoption of Statement No. 141(R)
should be accounted for in accordance with Statement No. 141 and that accounting
previously  completed  under  Statement  No. 141 should not be modified as of or
after the date of adoption of  Statement  No.  141(R).  The Company is currently
evaluating  the impact of Statement  No.  141(R) and Statement No. 160, but does
not expect the adoption of these pronouncements to have a material impact on the
Company's financial position or results of operations.

                                       39


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------  ----------------------------------------------------------

     There  has  been  no  significant  change  in  our  market  risk  sensitive
instruments since February 28, 2007.

ITEM 4.  CONTROLS AND PROCEDURES
-------  -----------------------

     Under  the  supervision  and  with  the  participation  of our  management,
including  our Chief  Executive  Officer and Chief  Financial  Officer,  we have
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls and procedures  pursuant to Exchange Act Rules  13a-15(e) and 15d-15(e)
as of the end of the period  covered by this report.  Based on that  evaluation,
the Chief Executive  Officer and Chief Financial Officer have concluded that, as
of the end of the period covered by this report,  these disclosure  controls and
procedures are effective at a "reasonable assurance" level.

     There were no  material  changes in our  internal  control  over  financial
reporting  (as  such  term is  defined  in  Exchange  Act  Rules  13a-15(f)  and
15d-15(f))  during the three  month  period  ended  November  30, 2007 that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.

                                       40


PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS
-------   -----------------

     See Note 15 of the Notes to the Consolidated  Financial  Statements in Part
I, Item 1 of this Form  10-Q and Note 17 of the Form  10-K for the  fiscal  year
ended February 28, 2007 for information regarding legal proceedings.

ITEM 1A.  RISK FACTORS
--------  ------------

     There  have  been no  material  changes  from the risk  factors  previously
disclosed  in the  Company's  Form 10-K for the fiscal year ended  February  28,
2007.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
-------   -----------------------------------------------------------

Treasury Stock/Share Repurchase Program
---------------------------------------

     In  September  2000,  we were  authorized  by the  Board  of  Directors  to
repurchase  up to  1,563,000  shares of Class A Common  Stock in the open market
under a share  repurchase  program (the  "Program").  In July 2006, the Board of
Directors  authorized  an additional  repurchase up to 2,000,000  Class A common
stock in the open market in  connection  with the  program.  As of November  30,
2007,  the  cumulative  total of  acquired  shares  pursuant  to the program was
1,821,147  reducing  the  remaining   authorized  share  repurchase  balance  to
1,741,853.  During the nine months ended November 30, 2007, we purchased 128,100
shares for $1,431,000 as outlined in the following table:




                                                                                       Total Number           Maximum
                                                                                        of Shares            Number of
                                                                                       Purchased as         Shares that
                                                     Total                              Part of              May Yet Be
                                                   Number of           Average          Publicly             Purchased
                                                     Shares          Price Paid         Announced            Under the
Period                                             Purchased          Per Share          Program            Program (1)
--------------------------------------------      -----------        ----------        -----------         -------------

                                                                                                 
As of February 28, 2007 ....................          --              $   10.03         1,693,047            1,869,953
July 2007 purchases ........................        98,200            $   11.44         1,791,247            1,771,753
August 2007 purchases ......................        29,900            $   10.29         1,821,147            1,741,853
September 2007 purchases ...................          --                --                   --                   --
October 2007 purchases .....................          --                --                   --                   --
November 2007 purchases ....................          --                --                   --                   --
                                                  ---------
Total purchases ............................       128,100


(1)  Prior to the purchases made during the nine months ended November 30, 2007,
     we had 1,693,047  shares of treasury stock  purchased as part of a publicly
     announced  program.  As of November 30, 2007,  we had  1,821,147  shares of
     treasury stock with an average paid price per share of $10.11.



                                       41



ITEM 6.  EXHIBITS
-------  --------






  Exhibit Number               Description
  --------------               -----------

                            
                               Certification  of Chief Executive  Officer Pursuant to Rule 13a-14(a) and rule
       31.1                    15d-14(a) of the Securities Exchange Act of 1934 (filed herewith)


                               Certification  of Chief Financial  Officer Pursuant to Rule 13a-14(a) and rule
       31.2                    15d-14(a) of the Securities Exchange Act of 1934 (filed herewith).


                               Certification of Chief Executive  Officer Pursuant to 18 U.S.C.  Section 1350,
                               as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002 (filed
       32.1                    herewith).


                               Certification of Chief Financial  Officer Pursuant to 18 U.S.C.  Section 1350,
                               as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002 (filed
       32.2                    herewith).






                                       42



SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                         AUDIOVOX CORPORATION




                                         By: /s/Patrick M. Lavelle
                                             -----------------------
                                                Patrick M. Lavelle
                                                President and Chief
                                                  Executive Officer

Dated: January 9, 2008

                                         By: /s/Charles M. Stoehr
                                             ----------------------------
                                                Charles M. Stoehr
                                                Senior Vice President and
                                                  Chief Financial Officer




                                       43