Audiovox 1997 Annual Report Download

Download and view the complete annual report

Please find the complete 1997 Audiovox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 33

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33

a u d i o v o x
T E C H N O L O G Y D R I V E N
1 9 9 7 A n n u a l R e p o r t

Table of contents

  • Page 1
    T E C H N O L O G Y D R I V E N audiovox 1997 Annual Report

  • Page 2
    ... Audiovox® and Prestige® brands, and the Car Dealer Expediter, with the Pursuit® and SPS brands. The Consumer Electronics group targets the mass merchandiser with Audiovox branded vehicle security, home and portable stereo systems and Rampage® brand auto sound products. The AE Division supports...

  • Page 3
    ...02 - 142,828 24,639 2,091 1,575 808 767 0.08 - 191,400 30,286 25,536 (23,727)(i) 4,138 (j) (27,865) (2.83) - NOTE: The Company does not compute fully diluted earnings per share when the addition of potentially dilutive securities would result in anti-dilution. (a) Includes a pre-tax charge of $12...

  • Page 4
    ... sales programs and tight operating controls in all of the Company's product groups, cellular, auto sound and vehicle security, contributed to this result. Our communications subsidiary, Audiovox Communications Corp., sold a record three million cellular telephones in 1997, bringing the total number...

  • Page 5
    ... in millions) Unit Sales QUESTION: (in millions) Can you comment on the growth of Audiovox Communications Corp.? ANSWER: Since we entered the market in 1984, Audiovox has been an industry leader in cellular with our products consistently ranking among the top brands. Our customer base reads like...

  • Page 6
    ... is the growth potential for Audiovox Communications? How has the new CDMA phone been received? ANSWER: ANSWER: Very well. This first CDMA phone is being manufactured for us by Toshiba, which has been a manufacturing partner for us since we started in the cellular industry. The carriers who have...

  • Page 7
    ..., auto sound, vehicle security and mobile video, are marketed through the Automotive Electronics Division. The Division's Mobile Electronics Group focuses on the mobile electronics specialist, with the Audiovox and Prestige brands, and the Car Dealer Expediter, with the Pursuit and Custom SPS Brands...

  • Page 8
    ...ANSWER: At the Consumer Electronics show in January, we showed two new vehicle tracking products that are satellite based, two-way GPS which we expect to ship in 1998. They will be central station monitored for fast response. Featuring our patent pending 'Log and Locate' technology, the new Pursuit...

  • Page 9
    ... conversion, sale of CellStar shares and earnings results give us the balance sheet strength to position the Company to support future strategic growth initiatives in both of our marketing groups. Both our Communications and Automotive groups will require capital as they develop the new technologies...

  • Page 10
    ... phone billings generated by the base of customers activated by the Company on a particular cellular carrier's system. The Automotive group consists of Audiovox Automotive Electronics (AAE) and, through February 28, 1997, Heavy Duty Sound, which are divisions of the Company, Audiovox Communications...

  • Page 11
    ...the transfer of the Heavy Duty Sound division to a new joint venture. Excluding sound sales from the Heavy Duty Sound division for fiscal 1997 and 1996, sound sales decreased 0.6%. Automotive security and accessories increased 11.7% compared to last year, primarily due to increased sales in Prestige...

  • Page 12
    ...last year. Without the transfer of the Heavy Duty Sound business, pre-tax income increased $2,796 compared to 1996. The Company believes that the Automotive group has an expanding market with a certain level of volatility related to both domestic and international new car sales. Also, certain of its...

  • Page 13
    ... of products sold to mass merchandise chains and auto sound sales to new car dealers. This decrease was partially offset by increases in sales of sound products to private label customers. Net sales of automotive security and accessory products increased approximately $20,418, or 27.9%, for fiscal...

  • Page 14
    .... During 1997, the Company received amendments and waivers to allow the Company to make stock repurchases and enter into the equity collar. Subsequent to year end, the Company received a waiver which allowed for the delay in issuance of its financial statements. The Company granted to an investor in...

  • Page 15
    ...October, for both wholesale and retail operations. Year 2000 Date Conversion Management believes that a significant portion of its computer systems are year 2000 compliant and is in the process of assessing the balance of its systems. The Company intends to communicate with its customers, suppliers...

  • Page 16
    ... data) 1997 Assets 1996 Current assets: Cash and cash equivalents Accounts receivable, net Inventory, net Receivable from vendor Prepaid expenses and other current assets Deferred income taxes Equity collar Total current assets Investment securities Equity investments Property, plant and equipment...

  • Page 17
    AUDIOVOX CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (Loss) Years Ended November 30, 1997, 1996 and 1995 (In thousands, except per share data) 1997 $ 639,082 532,320 106,762 Net sales Cost of sales (including an inventory write-down to market in 1995 of $9,300) Gross profit ...

  • Page 18
    ... compensation relating to grant of options and nonperformance restricted stock Compensation expense Options and non-performance restricted stock forfeitures due to employee terminations Issuance of warrants Implementation of change in accounting for debt and equity securities, net of tax effect of...

  • Page 19
    ... interest Gain on sale of equity investment Provision for (recovery of ) deferred income taxes Provision for unearned compensation Expense relating to issuance of warrants (Gain) loss on disposal of property, plant and equipment, net Changes in: Accounts receivable Note receivable from equity...

  • Page 20
    ... include stereo cassette radios, compact disc players and changers, amplifiers and speakers; key based remote control security systems; cruise controls and door and trunk locks. These products are marketed through mass merchandise chain stores, specialty automotive accessory installers, distributors...

  • Page 21
    ... costs of communicating advertising when the service is received. During the years ended November 30, 1997, 1996, and 1995, the Company had no direct response advertising. (n) Warranty Expenses Warranty expenses are accrued at the time of sale based on the Company'sestimated cost to repair expected...

  • Page 22
    ... for Stock Issued to Employees", and related interpretations. As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. On December 1, 1996, the Company adopted SFAS No. 123, "Accounting for Stock-Based...

  • Page 23
    ... As of November 30, 1997 and 1996, the Company recorded an unrealized holding gain relating to available-for-sale marketable equity securities, net of deferred income...30, 1997, 1996, and 1995, respectively. Although there are a limited number of manufacturers of its products, management believes that...

  • Page 24
    ...) which monitors car security commands through a satellite based system in Malaysia. As of November 30, 1997, the Company had a 20% ownership interest in Bliss-Tel which distributes cellular telephones and accessories in Thailand. Additionally, the Company had 50% non-controlling ownership interests...

  • Page 25
    ... and minimum levels of net worth and working capital. Additionally, the agreement includes restrictions and limitations on payments of dividends, stock repurchases, and capital expenditures. During 1997, the Company received amendments and waivers to allow the Company to make stock repurchases (Note...

  • Page 26
    ... Common Stock, par value $.01 per share at an initial conversion price of $17.70 per share, subject to adjustment under certain circumstances. The Indenture Agreement contains various covenants. The bonds are subject to redemption by the Company in whole, or in part, at any time after March 15, 1997...

  • Page 27
    ... Ringgits (approximately $675) to acquire a building. The loan was secured by the property acquired and bore interest at 1.5% above the Malaysian base lending rate which was 9.2% on November 30, 1996. The loan was payable in 120 monthly equal installments commencing October 1995, however, was...

  • Page 28
    ... included in retained earnings amounted to $1,564 and $3,728 at November 30, 1997 and 1996, respectively. (13) Common Stock and Compensation Plans (a) The Company has stock option plans under which employees and non-employee directors may be granted incentive stock options (ISO's) and non-qualified...

  • Page 29
    ... compensation expense was recorded for the year ended November 30, 1997. Information regarding the Company's stock option plans is summarized below: Number of Shares Weighted Average Exercise Price The Company applies APB Opinion No. 25 in accounting for its stock option grants and, accordingly, no...

  • Page 30
    ... law to be made for eligible employees in Canada were not material. (14) Export Sales During the third quarter of fiscal 1993, pursuant to a consulting agreement effective April 1993, the Company granted warrants to purchase 100,000 shares of Class A Common Stock, which have been reserved, at $7.50...

  • Page 31
    ...'s customer base may be susceptible to downturns in the retail economy, particularly in the consumer electronics industry. Additionally, customers specializing in certain automotive sound, security and accessory products may be impacted by fluctuations in automotive sales. A relatively small number...

  • Page 32
    ... years in the three-year period ended November 30, 1997. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with...

  • Page 33
    ... Edelman Public Relations Worldwide 1500 Broadway New York, New York 10036-4015 (212) 704-8239 Analyst Coverage Senior Vice President, Chief Financial Officer Patrick Lavelle Senior Vice President, Automotive Electronics Ann Boutcher Vice President, Marketing Richard Maddia Audiovox Corporation...