Back to GetFilings.com

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

OR

Commission file number 0-26924

AMX Corporation

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (469) 624-8000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 par value (Title of Class)

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 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 an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ¨  No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

The aggregate market value of the voting stock (which consists solely of shares of Common Stock) held by non-affiliates of the registrant as of September 30, 2002, computed by reference to the closing sales price of the registrant’s Common Stock on the Nasdaq National Market on such date, was approximately $25,076,000.

The number of shares of the registrant’s Common Stock outstanding as of June 16, 2003 was 11,402,858.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for the 2003 Annual Meeting of Shareholders are incorporated by reference into Part III hereof.

PART I

ITEM 1.    BUSINESS.

Overview

AMX Corporation (“AMX”, or the “Company”), incorporated in Texas in March 1982, is a leading designer, developer, marketer and distributor of sophisticated systems that control a variety of otherwise incompatible electronic devices and integrated systems. AMX simplifies the automation and integration of audio/video, environmental and communications technologies through the combination of a powerful processing platform and intuitive user interfaces. Due to its expansive architecture and flexibility, the Company’s systems provide control solutions for many different vertical markets, such as Broadcasting, Education, Entertainment, Government, Healthcare, Hotels, Houses of Worship, Network Operations Centers, Presentation Facilities, Retail, and Residential Applications, including Home Theater, Home Automation, and Private Transportation. The Company’s systems are designed to leverage evolving technologies. AMX systems currently provide centralized control for thousands of different electronic devices, including but not limited to video components, audio components, teleconferencing devices, lighting equipment, educational media, environmental control systems, and security systems. The Company’s control systems incorporate Internet standards and protocols, enabling end users to communicate with their control systems, as well as send and receive commands, content or information from a remote location using any Internet connection, including wireless (WiFi).

Applications in the commercial market for the Company’s integrated control systems include: control of presentation equipment and audience environment in corporate board rooms, business training centers, and distance learning classrooms; automation controls for presentation audio, video and digital signage in hotels, meeting and convention facilities; security camera control, video distribution, and public address systems for stadiums and theme parks; multimedia and teleconferencing support for government and educational facilities; and decision support centers for industrial applications. In the residential market, the Company’s products enable individuals to create an integrated home automation system that can control audio, video and home theater systems, lighting, motorized drapes, heating and air conditioning units, closed circuit cameras, security systems, and other home electronic equipment.

The Company’s system sales are made through dealers and distributors who are supported by Company sales and support offices in various geographic areas. In addition, the Company utilizes independent manufacturers’ representatives in areas not served by Company offices. In the United States, the Company principally relies on approximately 700 specialized third-party dealers of electronic and audio-visual equipment to sell, install, support, and service its products. In addition to maintaining an office in the United Kingdom, the Company relies on an international network of 18 exclusive distributors in 69 countries and over 1,200 dealers to serve its worldwide markets. Dealers and distributors use AMX design software to tailor the Company’s control system for the unique requirements of each installation. The Company also sells various customized products, primarily user interface devices, to OEMs and other large customers.

The Company believes that the market for its products continues to grow and diversify due to the increasing functionality, greater affordability, and widespread use of a diverse array of electronic devices, particularly sophisticated audio, video, and presentation equipment. Many of these devices have separate control mechanisms that are incompatible due to the absence of any one widely accepted control standard. This creates a need for an integrated control system such as those offered by the Company.

The Company’s strategy is to take advantage of the growth in the market for its products by bringing the power and flexibility of integrated control technology to a wide variety of settings. Elements of the Company’s strategy include:

2

Market and Industry Overview

In the last two decades, there has been a tremendous increase in the number of electronic and other programmable devices incorporated throughout commercial and residential applications, particularly in telecommunications and audio/visual equipment. This growth has been fueled by increased affordability and performance of the equipment. The sheer volume and wide variety of such devices, and the lack of a standardized operating control protocol, has created a demand for integrated control systems in commercial and residential applications worldwide. AMX control systems enable centralized control in almost any environment, making the operation of complex equipment straightforward and convenient. The Company’s integrated control systems are used in a wide variety of vertical markets that include: Broadcasting, Education, Entertainment, Government, Healthcare, Home Theater, Hotels, Houses of Worship, Private Transportation, Network Operations Centers, Presentation Facilities, Retail, and Whole Home Automation. In the commercial marketplace, there is a tremendous need for integrated control systems in meeting areas, conference rooms, training facilities and building-wide applications. Boardrooms, technology enriched classrooms and similar applications throughout the world are designed to exploit networking technologies with an emphasis on consistent design, functionality and serviceability. Information technology professionals require convenient and reliable systems to monitor, secure and maintain integrated equipment. Corporate end users desire a system that provides advanced control, but is easy to use and understand. In the residential market, the amount of integrated control systems in use continues to grow rapidly. Homeowners increasingly want a single control system in the home, taking the concept of the connected home well beyond the traditional personal computer application. As a result, new home builders are frequently including infrastructure required to support fully integrated control systems. AMX control systems provide the tools to meet the needs of both commercial and residential users in a seamless, interactive and easy to use format.

In addition to active marketing and educational efforts presented by manufacturers in the commercial and residential marketplaces, the entire industry is supported by several trade associations, most notably ICIA (International Communications Industries Association), CEDIA (Custom Electronic Design and Installation Association), NAB (National Association of Broadcasters), NSCA (National Systems Contractor Association), CEA (Consumer Electronics Association), CABA (Continental Automated Building Association), and AIA (American Institute of Architects). These key associations coordinate trade shows, provide regular training programs, and actively develop their respective markets within the industry. AMX is an active member and supporter of these organizations and their initiatives in these markets.

The Company’s products are currently used most commonly in the following markets and applications:

Commercial

Broadcasting.    From local television stations to major news networks, AMX control systems enable broadcast organizations to manage, organize and share data across connected servers, and provide quick access for video playbacks and editing. The Company’s systems can be found in 20^th Century Fox Post Production Studios, ESC Entertainment, Revolution Studios, CNN News Networks, and the Public Broadcast Television Station in Syracuse, New York.

3

Education.    From grade school to collegiate settings, the Company provides integrated control for lecture halls, auditoriums and classrooms. AMX products facilitate the teaching process by allowing instructors to manage presentations, record and stream lectures over the Internet, activate in-classroom microphones and cameras, and perform other presentation related tasks. The Company’s systems can be found around the world in such schools as the University of Notre Dame, Georgetown University, Columbia University, The Pennsylvania State University, Wake Forest, Saint Joseph’s University, the University of North Carolina, Lehigh University, the University of Texas at Dallas, Louisiana Technical University, the Harvard School of Public Health, the Singapore American School, the DuPage Technology Research, Education, and Commercialization Center in Chicago, the Dallas Independent School District, the Houston Independent School District, the Allen Independent School District located in the Dallas metropolitan area, the Edina School District of Minnesota located in the Minneapolis metropolitan area, and New York City Public Schools.

Entertainment.    From local sports bars to large museums, the Company’s products offer interactive control in a variety of different ways, including: managing restaurant reservations and monitoring restaurant occupancy, managing content on multiple televisions in sports bars, managing special effects equipment, and changing the ways fountains dance outside hotels. The Company’s systems are used in various entertainment venues across the United States, including Disney World, EPCOT Center, Sea World, Virginia Air and Space Museum, JFK Museum, Universal Studios, Busch Gardens, and the Rock and Roll Hall of Fame. The Company’s systems are also currently being used in stadiums and other sports facilities across the United States, including Pepsi Center, BankOne Ballpark, Camden Yards, The Ballpark in Arlington, the Georgia Dome, Cleveland Browns Stadium, the United Center in Chicago, and MCI Center.

Government.    From the courtroom to the war room, AMX products help government agencies work effectively and efficiently, including such functionality as: displaying videotaped depositions and other evidence on courtroom monitors, controlling voting and request-to-speak systems, controlling multiple presentation monitors locally or around the globe, and providing centralized control for monitoring and security systems. The Company’s systems are being used by federal, state, and local government entities such as the White House, The Pentagon, Camp David, State of Maryland Intelligent Highway Vehicle Control System, the Dallas Police Academy, the California Senate, the Louisiana House of Representatives, the Library of Congress in Washington, D.C., and war rooms at the U.S. Army War College.

Healthcare.    From rural clinics to major hospital groups, the Company’s products help improve access to healthcare technology. For example, the Company’s products are used by medical facilities to broadcast surgical procedures to doctors worldwide using live videoconference feeds, share a diagnosis with knowledgeable colleagues around the world in real-time, or to give people with physical challenges the ability to operate equipment with a touch of a button. The Company’s systems can be found in the Center for Disease Control and Prevention, Medtronic World Headquarters, The Cleveland Clinic, the University of Florida Brain Institute in Gainesville, and the Lehigh Valley Hospital in Allentown, Pennsylvania. The Company’s systems can also be found in the “Rooms of Magic” built for children’s hospitals by the Elf Foundation.

Hotels.    From upscale bed-and-breakfasts to large luxury hotels, AMX products are used to provide guests with convenient room service capabilities, to provide small or large-scale environmental control, or to control hotel conferencing and banquet hall facilities. The Company’s systems can be found in the Renaissance Hollywood Hotel in Hollywood, the Trump Tower in Miami, the Clift Hotel in San Francisco, and at Doubletree Hotels. Other significant installations in this market include the Bellagio Hotel & Casino, Caesar’s Palace and The Mansion at MGM Grand in Las Vegas.

Houses of Worship.    From small to large congregations, AMX products can be used to monitor and adjust the audio, video, and lighting, and to provide overall comfort to the congregation. Additionally, the Company’s products can be used to help tape and edit the service for those unable to attend and stream the presentation over the Internet. The Company’s systems can be found in the Fellowship Church in Grapevine, Texas, The National

4

Presbyterian Church in Washington, D.C., First United Methodist Church in Plano, Texas, St. Mary’s Cathedral in Sydney, Australia, and Crossroads Christian Church in Evansville, Indiana.

Network Operations Centers.    From law enforcement agencies to global communication operators, AMX products facilitate the remote command and control of various networks by providing the means to operate integrated surveillance systems, troubleshoot systems and equipment, and to control lighting systems, video monitors, and audio equipment. The Company’s systems are currently being used in decision support centers in industrial settings such as the Center for Disease Control and Prevention, the Network Emergency Response Assistance Center of Bell South Services, Inc., the Decision Command Center of Burlington Northern Railroad, the Network Operations Center of EDS, and the Monroe County Office of Emergency Preparedness.

Presentation Facilities.    From small office conference rooms to world commercial centers, AMX products are used to manage presentations, operate lighting systems, activate videos and music, and coordinate global videoconferences. An increasing portion of the board, conference, meeting, and training rooms constructed or remodeled are being designed to include integrated control systems. AMX control systems are used in the facilities of many of the Fortune 500 companies. The Company’s systems can be found at AT&T, Best Buy Co. Inc., Coca Cola, EDS, Exxon Mobil, Intel, J.P. Morgan Chase, Lucent Technologies, Microsoft, Motorola, Nokia, Proctor & Gamble, Reebok International, and The Vanguard Group.

Retail.    From local retail stores to global retail chains, AMX provides the ability to manage and route unique audio and video content to each in-store department on a real-time basis and play customized advertisements based upon current specials or consumer demographics. Key installations in the retail market include Christie’s Auction House in New York City, Apple Computer, Inc., Iggy’s Sports Grill Franchises, and Dickson Cyber Express & Cafe in Hong Kong.

Residential

The residential market remains a very fragmented marketplace with numerous providers and a wide range of products and services. AMX control systems can be found in Home Theater, Home Automation, and Private Transportation applications. The Company’s products enable individuals to create an integrated home automation system that can control such items as home theater systems, lighting, motorized drapes, heating and air conditioning units, closed circuit cameras, security systems, and various other home electronic equipment systems. The Company has developed standardized control products designed to increase its penetration of the residential market. The Company believes that the opportunities in the residential market will continue to expand as fully integrated automation systems become more widely accepted as an essential component of the connected home.

Home Theater.    AMX products allow for integrated control of home theater applications. Among many other applications, AMX systems can be used to close the drapes, dim the lighting, start the movie and adjust the sound.

Home Automation.    AMX products allow homeowners to use one or more intuitive touch panels to centrally control a variety of otherwise incompatible devices, such as lighting, HVAC systems, sprinklers, security systems and alarms, intercoms, pool and spa equipment, fans, and audio/video equipment.

Private Transportation.    AMX products are used in yachts, private jets, limousines and other forms of transportation to automate environmental settings such as audio, video, lighting, and climate controls.

Business Strategy

The Company’s strategy is to take advantage of the growth in the markets for its main products by bringing the power and flexibility of integrated control technology to a wide variety of settings. Elements of the Company’s strategy include:

Development of new software to simplify system programming. The Company believes that enhanced software investment can increase system sales by simplifying programming requirements for its dealers. For

5

example, the Company continues to introduce new software tools and improve existing software tools that enable dealers to more easily program the Company’s systems by employing graphical user interfaces. The Company believes that these enhancements can provide its dealers with simplified customization techniques that will reduce programming time and thus enhance sales of the Company’s products.

Emphasis on customer support and service.    The Company believes that the support, service and training it provides to its customers are key competitive advantages. The Company provides technical support, on-site repair and support as needed, and on-line software support to its dealers and end users. The Company’s customer support and service originates from its headquarters in Richardson, Texas. However, in order to provide quality and timely customer support, the Company has also established domestic offices in Philadelphia, Pennsylvania; Costa Mesa, California; and Tampa, Florida; and international offices in York, United Kingdom; and Brussels, Belgium.

International distribution expansion.    The Company believes that the international market presents a significant opportunity for the Company, and continues to expand its distribution presence overseas to take advantage of this opportunity. In addition to its two international offices, the Company currently markets its products outside the United States through a network of 18 international distributors with exclusive rights to sell AMX products.

Flexible systems to accommodate emerging technologies.    The Company believes that an important competitive advantage is the flexible, modular design of its systems, which are expandable and which can accommodate a wide variety of control formats. This design maximizes the ability of the Company’s products to accommodate new technologies in electronic devices as they are developed. NetLinx, the Company’s latest product platform, represents a significant enhancement increasing both speed and functionality. NetLinx is compatible with the Company’s existing Axcess and Landmark systems and expands their functionality by allowing them to utilize Internet Control System Protocol. The Company believes that a single platform system such as NetLinx that can accommodate the constant changes in system design and technology is essential relative to the demands of the industry.

Development of alliances with key electronic industry companies.    In an effort to develop and maintain proactive, strategic business relationships with key manufacturers of electronic equipment, AMX has developed the Inconcert^™ program. This continuously growing alliance of companies provides a consistent, proven programming standard for seamless, fully integrated, one-touch control automation. This alliance allows AMX and other manufacturers to work in harmony. The Company’s systems simplify the automation and integration of audio/video, environmental and communications technologies through intuitive user interfaces, and are engineered to communicate with any electronic equipment. The Inconcert^™ program is a platform for other manufacturers to provide the protocols for their latest equipment, to ensure seamless interoperability of their products within the AMX control system. Inconcert^™ gives designers, programmers, installers and end users the reassurance that AMX control will work with the latest product offerings from other manufacturers. From the initial specification through completion, AMX technology and Inconcert^™ alliance equipment communicate together to bring convenience, productivity and security to any commercial or residential environment.

Commitment to dealer training.    The Company has its primary training facility at its headquarters in Richardson, Texas, where dealers and distributors are provided training to program, install, and service the Company’s systems. The Company also provides training at its other regional and international locations to accommodate the geographic distribution of its dealers; thereby reducing the dealers’ cost of travel. The Company believes that its commitment to dealer training has resulted in a growing, increasingly well-trained group of dealers who are serving a range of discrete vertical markets. The Company operates the AMX Certified Expert program, or “ACE” program. The ACE program allows individuals to attain AMX certifications in system design, installation, and programming. Once all three certifications have been achieved, the individual becomes a Certified Expert or an “ACE”. In addition, the Company reviews the capabilities and performance of all its dealers on a semi-annual basis. Dealer training is a critical process because the Company’s dealers, rather than

6

the Company, have direct relationships with the end users, and a well trained and monitored dealer network will provide a quality installation that will result in a greater level of customer satisfaction. The success of the dealer network allows the Company to minimize the need to service end users.

Development of vertical markets.    The Company believes that complementing the current technology platform with value added products, services and partnerships, can further leverage the successes that the Company has experienced in multiple vertical markets. These enhancements improve the Company’s competitive position and provide useful information to the Company for product development efforts.

Product Components

The Company’s current systems and products are offered in a variety of configurations designed to meet the changing needs of individual end users. A typical AMX integrated system consists of a touch panel or other type of user interface such as a keypad, a central controller, communication and integration software, and a series of controlled devices, such as audio visual systems, computers, lights, HVAC, security systems, and window treatments. Prices for a complete system vary substantially depending upon the configuration of the system. The components of a typical AMX system are further described as follows:

User Interfaces are the user’s “window” to the system. AMX user interfaces come in a variety of shapes and sizes to match any system requirement, including small hand-held wireless remotes, wall mounted keypads, and color touch panels that can interactively guide the user through an application.

Central Controllers are components that perform the direct “handshake” to the various components of a user’s system, such as audio-visual systems, computers, lights, security systems, and window treatments. The controllers tie together a variety of often dissimilar parts into a unified control network.

Communications and Integration Software runs inside the system, acting as the central “brain” between the user and the system components, providing the handshake logic and customized functionality for an installation.

Controlled Devices represent a vast array of otherwise non-compatible electronic and mechanical appliances that the user wishes to operate from a centralized location. The Company’s systems can be programmed to operate a vast array of such devices, primarily in three basic segments: communications devices, such as telephones, intercomm systems, and computers; environmental devices, such as lights, thermostats, security systems, and window treatments; and audio-visual devices, such as televisions, VCRs, DVDs, cameras and satellite systems.

Customer Support and Service

The Company believes that the support and service it provides to its customers are key competitive advantages and, as part of its strategy, will continue to focus on the development of such support and service. Examples of the services the Company provides to domestic and international customers are:

7

The Company’s goal is to continue to reduce the costs associated with customer support and service, improving the quality of such support and service and making it easier for customers to do business with AMX.

Sales, Distribution, and Marketing

The Company markets and sells its products worldwide through distribution channels that include a direct sales team, manufacturer’s representatives in the U. S., dealers and distributors internationally, as well as OEM and custom product arrangements. The Company relies on third parties to sell, install, support, and service its integrated remote control systems, a strategy that it believes is best suited for broad domestic and international market coverage.

Domestic Markets

The Company has established relationships with approximately 700 of the leading system integrators in the United States. The Company believes that utilizing the sales force of dealers that are already selling systems integration services to potential purchasers of electronic equipment is the most effective way to reach a broad range of customers. The Company believes that the inclusion of an AMX system in the package of electronic equipment sold to end-users enhances the profitability of the dealer’s systems sales. The Company’s agreements with its dealers involve non-exclusive arrangements that may be canceled by either party at will and contain no minimum purchase requirements on the part of the dealers. Domestic sales represented approximately $55.4 million, $62.6 million, and $65.7 million, or 67%, 71%, and 70% of the Company’s total sales during the fiscal years ended March 31, 2003, 2002, and 2001, respectively.

International Markets

Outside the United States, independent distributors with exclusive distribution rights market the Company’s custom products in 69 countries. The Company’s agreements with its distributors grant exclusive distribution rights as to a specific geographic area. Sales outside of the United States, consisting of products sold primarily in Europe, Canada, Mexico, Asia, and Australia, represented approximately $27.2 million, $25.0 million, and $28.3 million, or 33%, 29%, and 30% of the Company’s total sales during the fiscal years ended March 31, 2003, 2002, and 2001, respectively. See Note 10 in the audited financial statements for additional information.

Technology

AMX product offerings comprise a unique combination of hardware and proprietary software, while incorporating the Company’s extensive experience of working with thousands of control codes used in a wide range of electronic components. The Company believes that its products deliver the most comprehensive functionality in the marketplace while promoting exceptional ease-of-use.

The Company’s products include a wide variety of user interface devices designed to facilitate simple and intuitive operation of controlled devices. These user interface devices include tabletop touch panels, wireless touch panels, and wall mounted keypads in a variety of different designs that utilize bright screens, colorful icons and smart menus for effortless and versatile navigation.

The Company offers three categories of control hardware used to control a wide range of electronic components: Axcess Systems used in the commercial and residential marketplaces; Landmark Systems used in the residential marketplace; and NetLinx Systems around which existing and future hardware will be unified. NetLinx represents a significant enhancement increasing both speed and functionality. NetLinx is compatible with the Company’s Axcess and Landmark systems and expands their functionality by allowing them to utilize Internet Control System Protocol, which is the protocol that unifies the three systems, and is capable of running over any network topology including TCP/IP. In February 2003, the Company introduced the NetLinx Integrated Controller Series or “NI Series” control systems. The NI Series represents a significant step in the Company’s migration to a single control system platform. The Company believes that a single platform system such as NetLinx that can accommodate changes in system design and technology is essential relative to the demands of the industry.

8

The Company provides design software, which can be used by dealers of the Company’s products to layout system architecture, provide control logic for the system, and create application designs for user interfaces. The Company is continually developing and improving these software tools to enable dealers to easily program the Company’s systems by employing graphical user interfaces. The Company believes that these enhancements can provide its dealers with simplified customization techniques that will reduce programming time and thus enhance sales of the Company’s products.

In order to extend the life of the Company’s installed hardware systems and to increase the utility and desirability of current and future generations of products, the Company developed Internet server products, including WebLinx. WebLinx is a network server application and Hyper Text Transport Protocol Common Gateway Interface application that provides remote hardware administration and custom web browser programming interfaces to the Company’s new and previously installed hardware systems. WebLinx permits a user to securely access the installed AMX system remotely through the Internet and control the connected devices as if the user were operating such devices locally.

Research and Development

The timely development and introduction of new products and services is essential to maintaining the Company’s competitive position. Accordingly, the Company is continually involved in the development, enhancement and expansion of hardware and operating software capabilities. The Company has expanded its research and development efforts in its core product offerings in order to significantly enhance existing product lines and develop new products. Current areas of focus in the Company’s research and development efforts include:

Research and development expenses were approximately $9,210,000, $6,854,000, and $9,720,000 in the fiscal years ended March 31, 2003, 2002 and 2001, which represented 11.1%, 7.8%, and 10.3% of net sales in those periods, respectively. The Company discontinued research and development related to the consumer broadband strategy in March 2001. Excluding research and development expenditures for the consumer broadband strategy, research and development expense for the year ended March 31, 2001 was $8,413,000.

Manufacturing

The Company’s primary manufacturing strategy is to contract with a small number of ISO Certified manufacturers, located both domestically and in the Pacific Rim, in order to take advantage of the manufacturing expertise and efficiencies these vendors offer. This outsourcing extends from prototyping to volume manufacturing, and includes activities such as material procurement, final assembly, test, and quality control. The Company procures over 90% of its products through this outsourcing strategy. In fiscal 2003, the Company entered into an agreement with a large electronic component distributor to act as the Company’s supply-chain partner. Under this arrangement, the distributor will provide the procurement and logistical support for all electronic components utilized by the manufacturers of the Company’s products. This manufacturing strategy will allow the Company to:

9

The principal components of AMX products are printed circuit boards, electronic components (including microprocessors), displays and metal or plastic housings. Substantially all of the Company’s products are purchased as finished products from turnkey vendors. The Company generally does not have long-term agreements with its suppliers.

Backlog

The Company generally ships standard products promptly following receipt of an order. The Company’s backlog of orders for standard products has generally been less than 45 days at any given time. While OEM and other large customers typically place orders for products several months prior to the scheduled shipment date, these orders are subject to rescheduling and cancellation. As a result, the Company does not consider its backlog to be a meaningful indicator of future sales.

Competition

The Company’s principal direct competitor in custom residential control systems and custom commercial control systems is Crestron. Crestron is a privately owned manufacturer of control systems for commercial and residential applications. The residential market is currently extremely diverse in its product functionality, and as a result there are a variety of manufacturers that supply products to the residential market. The commercial market also has several companies that compete in particular sectors of the Company’s business, but with the exception of Crestron, no other company competes in all of them. The Company assumes that there are other companies with substantial financial, technical, manufacturing, and marketing resources currently engaged in the development and marketing of products similar to those produced by the Company and that such companies may enter one or more of the Company’s markets at any time.

Intellectual Property

The Company currently relies on a combination of patent, copyright and trademark laws, trade secrets, confidentiality provisions and other contractual provisions to protect its intellectual property rights. Despite efforts to protect these intellectual property rights, unauthorized parties may misappropriate or infringe on the Company’s patents, trade secrets, copyrights, trademarks, service marks and similar intellectual property rights. The Company currently has 3 registered United States Patents and 15 pending United States patent applications. Internationally, the Company has 3 registered patents and 16 pending international patent applications. Even if the Company obtains such patents, the fact that the patent rights are valuable, create a competitive barrier, or will be free from infringement is not guaranteed. The Company faces additional risk when conducting business in countries that have poorly developed or inadequately enforced intellectual property laws. In any event, competitors may independently develop similar or superior technologies or duplicate the technologies the Company has developed, which could substantially limit the value of its intellectual property.

Government Regulation

The Company’s domestic business operations are subject to certain federal, state, and local laws and regulations relating to radio frequency electromagnetic emissions generated by its products. Certain of its products must comply with Federal Communications Commission regulations before the products may be marketed in the United States. There can be no assurance that the Company’s products will comply with such

10

regulations or that Federal Communications Commission regulations will remain constant with respect to the Company’s current or future products. Failure to comply with Federal Communications Commission regulations for products under development or a change in existing regulations by the Federal Communications Commission that would make products non-compliant could have a material adverse effect on the Company’s results of operations. Because the requirements imposed by such laws and regulations are frequently changed, the Company is unable to predict its ability to comply with, or the ultimate cost of compliance with, such requirements.

European Community regulations relating to electromagnetic emissions and immunity testing became effective January 1, 1996. Failure to receive EC approval on new products may limit or eliminate the Company’s ability to sell new products in EC member countries and would have an adverse effect on the results of operations.

Employees

As of March 31, 2003, the Company employed 358 people of which 23 are located outside the United States, primarily in the United Kingdom. None of the Company’s employees are represented by a labor union or subject to a collective bargaining agreement. The Company believes that its employee relations are good.

ITEM 2.    PROPERTIES.

The Company occupies buildings that contain approximately 161,000 square feet of floor space. All of this space is leased under agreements that expire at various dates. The Company’s headquarters in Richardson, Texas are leased through August 2010. The principal facilities are located as follows:

All facilities are suitable for the Company’s business. Each facility is fully utilized, with the exception of the headquarters location in Richardson, which contains approximately 14,000 square feet of additional floorspace which is available for future expansion. All furniture and equipment owned and leased by the Company is well maintained and suitable for its operations.

The Company considers its current facilities adequate and believes that suitable additional space will be available, as needed, to accommodate further physical expansion of its corporate operations.

ITEM 3.    LEGAL PROCEEDINGS.

Litigation

The Company is party to ordinary litigation incidental to its business, none of which is expected to have a material adverse effect on the results of operations, financial position or liquidity of the Company.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

11

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER

                   MATTERS.

Stock Prices

In November 1995, the Company’s common stock, par value $0.01 per share (the “Common Stock”), was admitted for trading on the Nasdaq National Market under the symbol “AMXX.” In September 1999, the symbol was changed to “PNJA” in connection with the Company’s name change from AMX Corporation to Panja Inc. Effective June 11, 2001, the Company recommenced doing business as AMX Corporation. Following approval by the Company’s shareholders at its annual meeting on August 22, 2001, the Company officially changed its corporate name back to AMX Corporation, and its Nasdaq ticker symbol changed from “PNJA” to “AMXC”.

The following table sets forth, for the periods indicated, the high and low closing sale prices for the Common Stock for the fiscal years ended March 31, 2002 and 2003.

As of May 30, 2003, there were approximately 242 holders of record of our Common Stock.

Dividend Policy

The Company has never paid dividends on its Common Stock and does not anticipate paying dividends on its Common Stock in the foreseeable future in order to retain all available earnings generated by operations for the development and growth of the business. In addition, under the terms of the debt agreements, the Company may not pay dividends without the prior consent of the lending bank. Any future determination as to the payment of dividends will be at the discretion of the Board of Directors and will depend upon the Company’s operating results, financial condition, capital requirements, general business conditions, and such other factors that the Board of Directors deems relevant.

Recent Sales of Unregistered Securities

None

12

ITEM 6.    SELECTED CONSOLIDATED FINANCIAL DATA.

(in thousands, except per share amounts)