Audiovox 2003 Annual Report Download - page 109

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2001, 2002 and 2003
(Dollars in thousands, except share and per share data)
The following unaudited pro−forma financial information for the year ended
November 30, 2003 represents the combined results of the Company's
operations and the Recoton acquisition as if the Recoton acquisition had
occurred at the beginning of the year of acquisition. 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 periods.
Years Ended
November 30,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−
2002 2003
−−−−−−−−−−−− −−−−−−−−−−−−
Revenue $ 1,305,212 $ 1,364,291
Net loss (14,985) (3,961)
Net loss per share−basic
and diluted $ (0.69) $ (0.18)
On August 29, 2003, the Company entered into a call/put option agreement
with certain employees of Audiovox Europe, whereby these employees can
acquire up to a maximum of 20% of the Company's stated share capital in
Audiovox Europe at a call price equal to the same proportion of the actual
price paid by the Company for Audiovox Europe. The put options cannot be
exercised until the later of (i) November 30, 2008 or (ii) the full
repayment (including interest) of an inter−company loan granted to Audiovox
Europe in the amount of 5.3 million Euros. Notwithstanding the lapse of
these time periods, the put options become immediately exercisable upon (i)
the sale of Audiovox Europe or (ii) the termination of employment or death
of the employee. The put price to be paid to the employee upon exercise
will be the then net asset value per share of Audiovox Europe. Accordingly,
the Company recognizes compensation expense based on 20% of the increase in
Audiovox Europe's net assets representing the incremental change of the put
price over the call option price. Compensation expense for these options
amounted to $388 for the year ended November 30, 2003.
(7) Receivables from Vendors
The Company has recorded receivables from vendors in the amount of $14,174
and $7,830 as of November 30, 2002 and 2003, respectively. Receivables from
vendors represent prepayments on product shipments, defective product
reimbursements and amounts due from Toshiba. At November 30, 2002, the
Company recorded receivables from Toshiba aggregating approximately $12,219
for price protection and software upgrades. Subsequent to November 30,
2002, the receivables from Toshiba were paid in full. At November 30, 2003,
the Company recorded receivables from Toshiba aggregating approximately
$709, primarily for software upgrades. In addition, one wireless vendor
represented $2,211 of the November 30, 2003 vendor receivable balance.
(Continued)
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