Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
13-1964841
(IRS
Employer Identification No.)
|
||
180
Marcus Blvd., Hauppauge, New York
(Address
of principal executive offices)
|
11788
(Zip
Code)
|
||
(631) 231-7750
(Registrant's
telephone number, including area code)
|
|||
Securities
registered pursuant to Section 12(b) of the Act:
|
|||
Title
of each class:
|
Name
of Each Exchange on which Registered
|
||
Class A
Common Stock $.01 par value
|
The
Nasdaq Stock Market LLC
|
Class
|
Outstanding
|
Class A
common stock $.01 par value
|
20,593,660
|
Class B
common stock $.01 par value
|
2,260,954
|
Table
of Contents
|
||
PART
I
|
||
Item
1
|
Business
|
4
|
Item
1A
|
Risk
Factors
|
11
|
Item
1B
|
Unresolved
Staff Comments
|
16
|
Item
2
|
Properties
|
16
|
Item
3
|
Legal
Proceedings
|
16
|
Item
4
|
Submission
of Matters to a Vote of Security Holders
|
17
|
PART
II
|
||
Item
5
|
Market
for the Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
17
|
Item
6
|
Selected
Consolidated Financial Data
|
19
|
Item
7
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
19
|
Item
7A
|
Quantitative
and Qualitative Disclosures About Market Risk
|
37
|
Item
8
|
Consolidated
Financial Statements and Supplementary Data
|
38
|
Item
9
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
38
|
Item
9A
|
Controls
and Procedures
|
38
|
Item
9B
|
Other
Information
|
41
|
PART
III
|
||
Item
10
|
Directors,
Executive Officers and Corporate Governance
|
41
|
Item
11
|
Executive
Compensation
|
41
|
Item
12
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
41
|
Item
13
|
Certain
Relationships and Related Transactions, and Director
Independence
|
41
|
Item
14
|
Principal
Accounting Fees and Services
|
41
|
PART
IV
|
||
Item
15
|
Exhibits,
Financial Statement Schedules
|
41
|
SIGNATURES
|
43
|
|
·
|
mobile
multi-media video products, including in-dash, overhead, headrest and
portable mobile video systems,
|
|
·
|
autosound
products including radios, speakers, amplifiers and CD
changers,
|
|
·
|
satellite
radios including plug and play models and direct connect
models,
|
|
·
|
automotive
security and remote start systems,
|
|
·
|
automotive
power accessories,
|
|
·
|
car
to car portable navigation systems,
|
|
·
|
rear
observation and collision avoidance
systems,
|
|
·
|
Liquid
Crystal Display (“LCD”) flat panel
televisions,
|
|
·
|
home
and portable stereos,
|
|
·
|
two-way
radios,
|
|
·
|
digital
multi-media products such as personal video recorders and MP3
products,
|
|
·
|
camcorders,
|
|
·
|
clock-radios,
|
|
·
|
digital
voice recorders,
|
|
·
|
home
speaker systems,
|
|
·
|
portable
DVD players, and
|
|
·
|
digital
picture frames.
|
|
·
|
High-Definition
Television (“HDTV”) Antennas,
|
|
·
|
Wireless
Fidelity (“WiFi”) Antennas,
|
|
·
|
High-Definition
Multimedia Interface (“HDMI”)
accessories,
|
|
·
|
home
electronic accessories such as
cabling,
|
|
·
|
other
connectivity products,
|
|
·
|
power
cords,
|
|
·
|
performance
enhancing electronics,
|
|
·
|
TV
universal remotes,
|
|
·
|
flat
panel TV mounting systems,
|
|
·
|
iPod
specialized products,
|
|
·
|
wireless
headphones,
|
|
·
|
rechargeable
battery backups (UPS) for camcorders, cordless phones and portable video
(DVD) batteries and accessories,
and
|
|
·
|
power
supply systems.
|
Three
|
||||||||||||||||
Year
|
Year
|
Months
|
Year
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
February
29,
|
February
28,
|
February
28,
|
November
30,
|
|||||||||||||
2008
|
2007
|
2006
|
2005
|
|||||||||||||
Electronics
|
$ | 437,018 | $ | 432,943 | $ | 99,566 | $ | 530,408 | ||||||||
Accessories
|
154,337 | 23,747 | 3,484 | 9,308 | ||||||||||||
Total
net sales
|
$ | 591,355 | $ | 456,690 | $ | 103,050 | $ | 539,716 |
|
·
|
power
retailers,
|
|
·
|
mass
merchants,
|
|
·
|
regional
chain stores,
|
|
·
|
specialty
and internet retailers,
|
|
·
|
independent
12 volt retailers,
|
|
·
|
distributors,
|
|
·
|
new
car dealers,
|
|
·
|
vehicle
equipment manufacturers (OEM), and
|
|
·
|
the
U.S. military
|
|
·
|
product
design and development,
|
|
·
|
engineering
and testing,
|
|
·
|
sales
training and customer packaging,
|
|
·
|
instore
display design,
|
|
·
|
installation
training and technical support,
|
|
·
|
product
repair services and warranty,
|
|
·
|
nationwide
installation network, and
|
|
·
|
warehousing.
|
|
·
|
identifying
consumer trends and potential
demand,
|
|
·
|
responding
to those trends through product design and feature integration, which
includes software design, electrical engineering, industrial design and
pre-production testing. In the case of OEM customers, the product
development cycle may also include product validation to customer quality
standards, and
|
|
·
|
evaluating
and testing new products in our own facilities to ensure compliance with
our design specifications and
standards.
|
|
·
|
the
overall performance of the economy and discretionary consumer
spending,
|
|
·
|
competition
within key markets,
|
|
·
|
customer
acceptance of newly developed products and services,
and
|
|
·
|
the
demand for other products and
services.
|
|
·
|
our
supplier relationships will continue as presently in
effect,
|
|
·
|
our
suppliers will not become
competitors,
|
|
·
|
our
suppliers will be able to obtain the components necessary to produce
high-quality, technologically-advanced products for
us,
|
|
·
|
we
will be able to obtain adequate alternatives to our supply sources should
they be interrupted,
|
|
·
|
if
obtained, alternatively sourced products of satisfactory quality would be
delivered on a timely basis, competitively priced, comparably featured or
acceptable to our customers, and
|
|
·
|
our
suppliers have sufficient financial resources to fulfill their
obligations.
|
|
·
|
export
and import restrictions, tax consequences and other trade
barriers,
|
|
·
|
currency
fluctuations,
|
|
·
|
greater
difficulty in accounts receivable
collections,
|
|
·
|
economic
and political instability,
|
|
·
|
foreign
exchange controls that prohibit payment in U.S. dollars,
and
|
|
·
|
increased
complexity and costs of managing and staffing international
operations.
|
|
·
|
difficulties
in the integration and assimilation of the operations, technologies,
products and personnel of an acquired
business;
|
|
·
|
diversion
of management’s attention from other business
concerns;
|
|
·
|
increased
expenses associated with the acquisition;
and
|
|
·
|
potential
loss of key employees or customers of any acquired
business.
|
|
·
|
market
conditions change,
|
|
·
|
our
business plans or assumptions
change,
|
|
·
|
we
make significant acquisitions, and
|
|
·
|
we
need to make significant increases in capital expenditures or working
capital.
|
|
·
|
operating
results being below market
expectations,
|
|
·
|
announcements
of technological innovations or new products by us or our
competitors,
|
|
·
|
loss
of a major customer or supplier,
|
|
·
|
changes
in, or our failure to meet, financial estimates by securities
analysts,
|
|
·
|
industry
developments,
|
|
·
|
economic
and other external factors,
|
|
·
|
general
downgrading of our industry sector by securities
analysts,
|
|
·
|
inventory
write-downs, and
|
|
·
|
ability
to integrate acquisitions.
|
|
·
|
changes
in U.S. federal, state and local
law,
|
|
·
|
our
ability to implement operating cost structures that align with revenue
growth,
|
|
·
|
trade
sanctions against or for foreign
countries,
|
|
·
|
successful
integration of business acquisitions and new brands in our distribution
network,
|
|
·
|
compliance
with the Sarbanes-Oxley Act, and
|
|
·
|
compliance
with complex financial accounting and tax
standards.
|
Year
ended February 29, 2008
|
High
|
Low
|
||||||
First
Quarter
|
$ | 15.29 | $ | 12.67 | ||||
Second
Quarter
|
13.48 | 9.63 | ||||||
Third
Quarter
|
13.04 | 10.02 | ||||||
Fourth
Quarter
|
13.47 | 9.00 | ||||||
Year
ended February 28, 2007
|
High
|
Low
|
||||||
First
Quarter
|
$ | 12.98 | $ | 11.20 | ||||
Second
Quarter
|
14.81 | 11.78 | ||||||
Third
Quarter
|
15.19 | 12.63 | ||||||
Fourth
Quarter
|
15.99 | 12.82 |
Three
|
||||||||||||||||||||||||
Year
|
Year
|
Months
|
||||||||||||||||||||||
Ended
|
Ended
|
Ended
|
||||||||||||||||||||||
February
29,
|
February
28,
|
February
28,
|
Years
ended November 30,
|
|||||||||||||||||||||
2008 (5)
|
2007
|
2006
|
2005 (4)
|
2004
|
2003 (2)
|
|||||||||||||||||||
Consolidated
Statement of Operations Data
|
||||||||||||||||||||||||
Net
sales (1)
|
$ | 591,355 | $ | 456,690 | $ | 103,050 | $ | 539,716 | $ | 563,653 | $ | 510,899 | ||||||||||||
Operating
income (loss) (1)
|
4,422 | (5,077 | ) | (3,159 | ) | (27,690 | ) | (1,356 | ) | 14,008 | ||||||||||||||
Net
income (loss) from continuing operations (1)
|
6,746 | 3,692 | 367 | (6,687 | ) | 64 | 8,027 | |||||||||||||||||
Net
income (loss) from discontinued operations (3)
|
1,719 | (756 | ) | (184 | ) | (2,904 | ) | 77,136 | 3,212 | |||||||||||||||
Net
income (loss)
|
$ | 8,465 | $ | 2,936 | $ | 183 | $ | (9,591 | ) | $ | 77,200 | $ | 11,239 | |||||||||||
Net
income (loss) per common share from continuing operations:
|
||||||||||||||||||||||||
Basic
|
$ | 0.29 | $ | 0.16 | $ | 0.02 | $ | (0.30 | ) | $ | 0.00 | $ | 0.36 | |||||||||||
Diluted
|
$ | 0.29 | $ | 0.16 | $ | 0.02 | $ | (0.30 | ) | $ | 0.00 | $ | 0.36 | |||||||||||
Net
income (loss) per common share:
|
||||||||||||||||||||||||
Basic
|
$ | 0.37 | $ | 0.13 | $ | 0.01 | $ | (0.43 | ) | $ | 3.52 | $ | 0.51 | |||||||||||
Diluted
|
$ | 0.37 | $ | 0.13 | $ | 0.01 | $ | (0.43 | ) | $ | 3.45 | $ | 0.51 | |||||||||||
As
of February 29,
|
As
of February 28,
|
As
of November 30,
|
||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||||||||||
Consolidated
Balance Sheet Data
|
(as
adjusted)
|
|||||||||||||||||||||||
Total
assets
|
$ | 533,036 | $ | 499,120 | $ | 466,012 | $ | 485,864 | $ | 543,338 | $ | 583,360 | ||||||||||||
Working
capital
|
275,787 | 305,960 | 340,564 | 340,488 | 362,018 | 304,354 | ||||||||||||||||||
Long-term
obligations
|
27,260 | 22,026 | 18,385 | 18,425 | 18,598 | 29,639 | ||||||||||||||||||
Stockholders'
equity
|
423,513 | 404,362 | 400,732 | 401,157 | 404,187 | 325,728 |
|
·
|
mobile
multi-media video products, including in-dash, overhead, headrest and
portable mobile video systems,
|
|
·
|
autosound
products including radios, speakers, amplifiers and CD
changers,
|
|
·
|
satellite
radios including plug and play models and direct connect
models,
|
|
·
|
automotive
security and remote start systems,
|
|
·
|
automotive
power accessories,
|
|
·
|
car
to car portable navigation systems,
|
|
·
|
rear
observation and collision avoidance
systems,
|
|
·
|
Liquid
Crystal Display (“LCD”) flat panel
televisions,
|
|
·
|
home
and portable stereos,
|
|
·
|
two-way
radios,
|
|
·
|
digital
multi-media products such as personal video recorders and MP3
products,
|
|
·
|
camcorders,
|
|
·
|
clock-radios,
|
|
·
|
digital
voice recorders,
|
|
·
|
home
speaker systems,
|
|
·
|
portable
DVD players, and
|
|
·
|
digital
picture frames.
|
|
·
|
High-Definition
Television (“HDTV”) Antennas,
|
|
·
|
Wireless
Fidelity (“WiFi”) Antennas,
|
|
·
|
High-Definition
Multimedia Interface (“HDMI”)
accessories,
|
|
·
|
home
electronic accessories such as
cabling,
|
|
·
|
other
connectivity products,
|
|
·
|
power
cords,
|
|
·
|
performance
enhancing electronics,
|
|
·
|
TV
universal remotes,
|
|
·
|
flat
panel TV mounting systems,
|
|
·
|
iPod
specialized products,
|
|
·
|
wireless
headphones,
|
|
·
|
rechargeable
battery backups (UPS) for camcorders, cordless phones and portable video
(DVD) batteries and accessories,
and
|
|
·
|
power
supply systems.
|
|
·
|
acquisition
of Thomson’s Americas consumer electronics accessory
business,
|
|
·
|
acquisition
of Oehlbach’s accessory business,
|
|
·
|
acquisition
of Incaar’s OEM business,
|
|
·
|
acquisition
of Technuity’s accessory business,
|
|
·
|
acquisition
of Thomson’s audio/video business,
|
|
·
|
acquisition
of Terk Technologies,
|
|
·
|
acquisition
of Recoton and growth in Jensen
sales,
|
|
·
|
acquisition
of Code-Alarm branded products,
|
|
·
|
the
introduction of new products and lines such as portable DVD players,
flat-panel TVs, satellite radio, GPS navigation and mobile multi-media
devices,
|
|
·
|
volatility
in core mobile, consumer and accessories sales due to increased
competition and lower selling
prices.
|
|
·
|
Capitalize
and increase the Audiovox® family of
brands,
|
|
·
|
Capitalize
on niche product and distribution opportunities in the electronics
industry,
|
|
·
|
Leverage
our distribution network,
|
|
·
|
Grow
our international presence,
|
|
·
|
Pursue
strategic and complementary
acquisitions,
|
|
·
|
Continue
to outsource manufacturing to increase operating leverage,
and
|
|
·
|
Monitor
operating expenses.
|
Fiscal
|
Fiscal
|
$ | % | |||||||||||||
2008
|
2007
|
Change
|
Change
|
|||||||||||||
Electronics
|
$ | 437,018 | $ | 432,943 | $ | 4,075 | 0.9 | % | ||||||||
Accessories
|
154,337 | 23,747 | 130,590 | 549.9 | ||||||||||||
Total
net sales
|
$ | 591,355 | $ | 456,690 | $ | 134,665 | 29.5 | % |
Fiscal
|
Fiscal
|
|||||||
2008
|
2007
|
|||||||
Gross
profit
|
$ | 111,328 | $ | 79,319 | ||||
Gross
margin percentage
|
18.8
|
% | 17.4 | % |
Fiscal
|
Fiscal
|
$ | % | |||||||||||||
2008
|
2007
|
Change
|
Change
|
|||||||||||||
Operating
Expenses:
|
||||||||||||||||
Selling
|
$ | 35,703 | $ | 28,220 | $ | 7,483 | 26.5 | % | ||||||||
General
and administrative
|
61,220 | 48,920 | 12,300 | 25.1 | ||||||||||||
Engineering
and technical support
|
9,983 | 7,256 | 2,727 | 37.6 | ||||||||||||
Total
Operating Expenses
|
$ | 106,906 | $ | 84,396 | $ | 22,510 | 26.7 | % | ||||||||
Operating
income (loss)
|
$ | 4,422 | $ | (5,077 | ) | $ | 9,499 | 187.1 | % |
Fiscal
|
Fiscal
|
$ | % | |||||||||||||
2008
|
2007
|
Change
|
Change
|
|||||||||||||
Core
operating expenses
|
$ | 81,809 | $ | 83,216 | $ | (1,407 | ) | (1.7 | ) % | |||||||
Operating
expenses from acquired businesses
|
25,097 | 1,180 | 23,917 | 2,026.9 | ||||||||||||
Total
operating expenses
|
$ | 106,906 | $ | 84,396 | $ | 22,510 | 26.7 | % |
|
·
|
$12,149
of expenses in Fiscal 2008 for the recently acquired operations of Thomson
Accessory, Oehlbach, Incaar, Technuity and Thomson Audio/Video
operations,
|
|
·
|
$1,392
increase in salaries and related payroll taxes and benefits due to an
increase in executive bonuses and profit sharing as a result of the
company meeting certain earnings targets and general fiscal wage
increases,
|
|
·
|
$454
increase in a non-cash stock based compensation and warrant expense due to
the vesting of options to employees and outside
consultants,
|
|
·
|
$559
increase in depreciation and amortization due to an increase in capital
expenditures and amortizable intangibles as a result of acquisitions and
investments in new systems,
|
|
·
|
$501
increase in communication expenses,
|
|
·
|
$344
increase in software maintenance fees,
and
|
|
·
|
$602
increase in legal settlements from claims by a
licensor.
|
Fiscal
|
Fiscal
|
$ | % | |||||||||||||
2008
|
2007
|
Change
|
Change
|
|||||||||||||
Interest
and bank charges
|
$ | (2,127 | ) | $ | (1,955 | ) | $ | (172 | ) | 8.8 | % | |||||
Equity
in income of equity investees
|
3,590 | 2,937 | 653 | 22.2 | ||||||||||||
Other,
net
|
4,709 | 6,253 | (1,544 | ) | (24.7 | ) | ||||||||||
Total
other income
|
$ | 6,172 | $ | 7,235 | $ | (1,063 | ) | (14.7 | ) % |
Fiscal
|
Fiscal
|
|||||||
2008
|
2007
|
|||||||
Net
sales from discontinued operations
|
$ | - | $ | - | ||||
Income
(loss) from discontinued operations before income taxes
|
3,248 | (1,163 | ) | |||||
Income
tax (provision) benefit
|
(1,529 | ) | 407 | |||||
Net
income (loss) from discontinued operations
|
$ | 1,719 | $ | (756 | ) |
Fiscal
|
Fiscal
|
|||||||
2008
|
2007
|
|||||||
Operating
income (loss)
|
$ | 4,422 | $ | (5,077 | ) | |||
Other
income, net
|
6,172 | 7,235 | ||||||
Income
from continuing operations before income taxes
|
10,594 | 2,158 | ||||||
Income
tax (expense) benefit
|
(3,848 | ) | 1,534 | |||||
Net
income from continuing operations
|
6,746 | 3,692 | ||||||
Net
income (loss) from discontinued operations, net of tax
|
1,719 | (756 | ) | |||||
Net
income
|
$ | 8,465 | $ | 2,936 | ||||
Net
income per common share:
|
||||||||
Basic
|
$ | 0.37 | $ | 0.13 | ||||
Diluted
|
$ | 0.37 | $ | 0.13 |
Fiscal
|
Fiscal
|
$ | % | |||||||||||||
2007
|
2006
|
Change
|
Change
|
|||||||||||||
Electronics
|
$ | 432,943 | $ | 512,022 | $ | (79,079 | ) | (15.4 | ) % | |||||||
Accessories
|
23,747 | 14,764 | 8,983 | 60.8 | ||||||||||||
Total
net sales
|
$ | 456,690 | $ | 526,786 | $ | (70,096 | ) | (13.3 | ) % |
Fiscal
|
Fiscal
|
|||||||
2007
|
2006
|
|||||||
Gross
profit
|
$ | 79,319 | $ | 60,418 | ||||
Gross
margin percentage
|
17.4 | % | 11.5 | % |
Fiscal
|
Fiscal
|
$ | % | |||||||||||||
2007
|
2006
|
Change
|
Change
|
|||||||||||||
Operating
Expenses:
|
||||||||||||||||
Selling
|
$ | 28,220 | $ | 30,632 | $ | (2,412 | ) | (7.9 | ) % | |||||||
General
and administrative
|
48,920 | 48,643 | 277 | 0.6 | ||||||||||||
Engineering
and technical support
|
7,256 | 6,191 | 1,065 | 17.2 | ||||||||||||
Total
Operating Expenses
|
$ | 84,396 | $ | 85,466 | $ | (1,070 | ) | (1.3 | ) % | |||||||
Operating
Loss
|
$ | (5,077 | ) | $ | (25,048 | ) | $ | 19,971 | (79.7 | ) % |
Fiscal
|
Fiscal
|
$ | % | |||||||||||||
2007
|
2006
|
Change
|
Change
|
|||||||||||||
Core
operating expenses
|
$ | 83,216 | $ | 85,466 | $ | (2,250 | ) | (2.6 | ) % | |||||||
Operating
expenses from acquired businesses
|
1,180 | - | 1,180 | 100 | ||||||||||||
Total
operating expenses
|
$ | 84,396 | $ | 85,466 | $ | (1,070 | ) | (1.3 | ) % |
|
·
|
$719
increase in occupancy costs as a result of transition services costs
necessary to support the newly acquired Thomson
operations.
|
|
·
|
$1,517
increase in employee benefits due to increased health care costs under the
Company’s medical and dental plan as well as increased employer
contributions to the 401(k) plan.
|
|
·
|
$476
decrease in professional fees due to reduced audit, legal and consulting
costs, partially offset by $1,588 in legal settlements from claims by
licensors during fiscal 2007,
|
|
·
|
$817
decrease in bad debt expense due to a decline in the accounts receivable
balance and improved collectibility efforts. The Company does
not consider this to be a trend in the overall accounts receivable,
|
|
·
|
increased
MIS billings of $489 for services performed in connection with a
transition service
agreement.
|
Fiscal
|
Fiscal
|
$ | % | |||||||||||||
2007
|
2006
|
Change
|
Change
|
|||||||||||||
Interest
and bank charges
|
$ | (1,955 | ) | $ | (2,405 | ) | $ | 450 | (18.7 | ) % | ||||||
Equity
in income of equity investees
|
2,937 | 2,463 | 474 | 19.2 | ||||||||||||
Other,
net
|
6,253 | 6,894 | (641 | ) | (9.3 | ) | ||||||||||
Total
other income
|
$ | 7,235 | $ | 6,952 | $ | 283 | 4.1 | % |
Fiscal
|
Fiscal
|
|||||||
2007
|
2006
|
|||||||
Net
sales from discontinued operations
|
$ | - | $ | 2,690 | ||||
Loss
from discontinued operations before income taxes
|
(1,163 | ) | (774 | ) | ||||
Income
tax benefit
|
407 | 418 | ||||||
(756 | ) | (356 | ) | |||||
Loss
on sale of discontinued operations, net of tax
|
- | (2,079 | ) | |||||
Loss
from discontinued operations
|
$ | (756 | ) | $ | (2,435 | ) |
Fiscal
|
Fiscal
|
|||||||
2007
|
2006
|
|||||||
Operating
loss
|
$ | (5,077 | ) | $ | (25,048 | ) | ||
Other
income, net
|
7,235 | 6,952 | ||||||
Income
(loss) from continuing operations before income taxes
|
2,158 | (18,096 | ) | |||||
Income
tax benefit
|
1,534 | 12,328 | ||||||
Net
income (loss) from continuing operations
|
3,692 | (5,768 | ) | |||||
Net
loss from discontinued operations, net of tax
|
(756 | ) | (2,435 | ) | ||||
Net
income (loss)
|
$ | 2,936 | $ | (8,203 | ) | |||
Net
income (loss) per common share:
|
||||||||
Basic
|
$ | 0.13 | $ | (0.36 | ) | |||
Diluted
|
$ | 0.13 | $ | (0.36 | ) |
Three
|
||||||||||||||||
Year
|
Year
|
Months
|
Year
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
February
29,
|
February
28,
|
February
28,
|
November
30,
|
|||||||||||||
2008
|
2007
|
2006
|
2005
|
|||||||||||||
Cash
provided by (used in):
|
||||||||||||||||
Operating
activities
|
$ | (64,691 | ) | $ | 43,420 | $ | 55,298 | $ | (42,085 | ) | ||||||
Investing
activities
|
93,465 | (40,897 | ) | (51,018 | ) | 13,629 | ||||||||||
Financing
activities
|
(5,241 | ) | (3,449 | ) | (2,188 | ) | (555 | ) | ||||||||
Effect
of exchange rate changes on cash
|
335 | 119 | 24 | (234 | ) | |||||||||||
Net
increase (decrease) in cash and cash equivalents
|
$ | 23,868 | $ | (807 | ) | $ | 2,116 | $ | (29,245 | ) |
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)
|
$ | 11,450 | $ | 521 | $ | 1,043 | $ | 1,108 | $ | 8,778 | ||||||||||
Operating
leases (2)
|
23,250 | 4,205 | 6,148 | 4,630 | 8,267 | |||||||||||||||
Total
contractual cash obligations
|
$ | 34,700 | $ | 4,726 | $ | 7,191 | $ | 5,738 | $ | 17,045 | ||||||||||
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)
|
$ | 3,070 | $ | 3,070 | $ | - | $ | - | $ | - | ||||||||||
Stand-by
letters of credit (4)
|
2,399 | 2,399 | - | - | - | |||||||||||||||
Commercial
letters of credit (4)
|
3,803 | 3,803 | - | - | - | |||||||||||||||
Debt
(5)
|
1,703 | 935 | 530 | 238 | - | |||||||||||||||
Contingent
earn-out payments (6)
|
5,893 | 890 | 3,916 | 1,087 | - | |||||||||||||||
Unconditional
purchase obligations (7)
|
71,546 | 71,546 | - | - | - | |||||||||||||||
Total
commercial commitments
|
$ | 88,414 | $ | 82,643 | $ | 4,446 | $ | 1,325 | $ | - |
1.
|
Represents
total payments (interest and principal) due under a capital lease
obligation which has a current (included
in other current liabilities) and long term principal balance of $70 and
$5,607, respectively at February 29,
2008.
|
2.
|
We
enter into operating leases in the normal course of
business.
|
3.
|
Represents
amounts outstanding under the Audiovox Germany factoring agreement at
February 29, 2008.
|
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 term loan agreements in connection with the
Oehlbach acquisition. This amount also includes amounts due
under a call-put option with certain employees of Audiovox
Germany.
|
6.
|
Represents
contingent payments in connection with the Thomson Accessory, Oehlbach and
Incaar acquisitions (see Note 3 of the Consolidated Financial
Statements).
|
7.
|
Open
purchase obligations represent inventory commitments. These
obligations are not recorded in the consolidated financial statements
until commitments are fulfilled and such obligations are subject to change
based on negotiations with
manufacturers.
|
|
·
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;
|
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company
are being made only in accordance with authorizations of management and
directors of the Company; and
|
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that
could have a material effect on the financial
statements.
|
(1
and 2)
|
Financial
Statements and Financial Statement Schedules. See Index to
Consolidated Financial Statements attached
hereto.
|
|
(3)
|
Exhibits. The
following is a list of
exhibits:
|
Exhibit
|
||
Number
|
Description
|
|
3.1
|
Amended
and Restated Certificate of Incorporation of the Company as filed with the
Delaware Secretary of State on April 17, 2000 (incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended November
30, 2000).
|
|
3.2
|
By-laws
of the Company (incorporated by reference to the Company's Registration
Statement on Form S-1; No. 33-10726, filed May 4,
1987).
|
|
3.2a
|
Amendment
to the Bylaws of the Company (incorporated by reference to the Company's
Form 8-K filed via EDGAR on July 3, 2007).
|
|
10.1
|
Purchase
Agreement made and entered into as of December 20, 2006 by and between
Thomson and Audiovox Corporation (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended February 28,
2007).
|
|
10.2
|
Audiovox
Corporation 2006 Stock Compensation Plan (incorporated by reference to the
Company's Form S-8 filed via EDGAR on October 13, 2006)
|
|
10.3
|
Employment
Agreement made effective as of the 1st day of March, 2007 by and between
the Company and Patrick M. Lavelle (incorporated by reference to the
Company's Form 8-K filed via EDGAR on June 15, 2007)
|
|
10.4
|
Form
of Transition Services Agreement (incorporated by reference to the
Company's Form 8-K filed via EDGAR August 10, 2004).
|
|
10.5
|
Form
of Trademark License Agreement (incorporated by reference to the Company's
Form 8-K filed via EDGAR August 10, 2004).
|
|
21
|
Subsidiaries
of the Registrant (filed herewith).
|
|
23
|
Consent
of Grant Thornton LLP (filed herewith).
|
|
31.1
|
Certification
of Principal Executive Officer Pursuant to Rule 13a-14(a) and rule
15d-14(a) of the Securities Exchange Act of 1934 (filed
herewith).
|
|
31.2
|
Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a) and rule
15d-14(a) of the Securities Exchange Act of 1934 (filed
herewith).
|
|
32.1
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
herewith).
|
|
32.2
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
99.1
|