Audiovox 1997 Annual Report Download - page 27

During 1995, Audiovox Malaysia entered into a Secured Term
Loan for 1,700 Malaysian 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 fully
repaid in November 1996.
Maturities on long-term debt for the next five fiscal years are as
follows:
1998 –
1999 –
2000 –
2001 $2,269
2002 –
(11) Income Taxes
The components of income (loss) before the provision for (recovery
of) income taxes are as follows:
November 30,
1997 1996 1995
Domestic Operations $42,613 $(21,899) $(12,424)
Foreign Operations 829 1,264 (2,262)
$43,442 $(20,635) $(14,686)
Total income tax expense (recovery) was allocated as follows:
November 30,
1997 1996
Income (loss) from continuing operations $22,420 $ 5,834
Stockholders’ equity
Unrealized holding gain (loss) on
investment securities recognized
for financial reporting purposes 1,174 (13,143)
Unrealized holding gain on equity
collar recognized for financial
reporting purposes 473 –
Total income tax expense
(recovery) $24,067 $(7,309)
The provision for (recovery of) income taxes attributable to
income from continuing operations is comprised of:
Federal Foreign State Total
1995:
Current $ 1,455 $ 570 $ 330 $ 2,355
Deferred (4,189) – (969) (5,158)
$(2,734) $ 570 $ (639) $(2,803)
1996:
Current $ 3,711 $ 802 $ 853 $ 5,366
Deferred 330 – 138 468
$ 4,041 $ 802 $ 991 $ 5,834
1 997:
Current $23,316 $1,159 $1,068 $25,543
Deferred (2,845) – (278) (3,123)
$20,471 $1,159 $ 790 $22,420
A reconciliation of the provision for (recovery of) income taxes
attributable to income (loss) from continuing operations computed
at the Federal statutory rate to the reported provision for income
taxes attributable to income (loss) from continuing operations is as
follows:
November 30,
1997 1996 1995
Tax provision
(recovery) at
Federal statutory
rates $15,205 35.0% $(7,222) (35.0)% $(5,140) (35.0)%
Expense relating
to exchange
of subordinated
debentures 4,578 10.5 11,421 55.3 – –
Undistributed
earnings from
equity investments 123 0.3 128 0.6 1,330 9.1
State income taxes, net
of Federal benefit 1,637 3.8 275 1.3 (415) (2.8)
(Decrease) increase in
beginning-of-the-year
balance of the valuation
allowance for deferred
tax assets (180) (0.4) 1,270 6.2 644 4.3
Foreign tax rate differential 323 0.7 30 0.1 (34) (0.2)
Expense relating to the
issuance of warrants – – – – 1,022 6.9
Other, net 734 1.7 (68) (0.2) (210) (1.4)
$22,420 51.6% $ 5,834 28.3% $(2,803) (19.1)%
The significant components of deferred income tax expense
(recovery) for the years ended November 30, 1997 and 1996 are as fol-
lows:
November 30,
1997 1996
Deferred tax recovery
(exclusive of the effect of other
components listed below) $(2,938) $ (802)
(Decrease) increase in
beginning-of-the-year balance
of the valuation allowance for
deferred tax assets (180) 1,270
$(3,118) $ 468
AUDIOVOX CORPORATION AND SUBSIDIARIES
N o t e s t o C o n s o l i d a t e d F i n a n c i a l S t a t e m e n t s
(continued)
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