Audiovox 2003 Annual Report Download - page 114

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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)
(12) Financing Arrangements
(a) Bank Obligations
The Company's principal source of liquidity is its revolving credit
agreement which expires July 27, 2004. The Company is currently
negotiating with the bank to extend this agreement for an additional
three years, of which no assurance can be given. At November 30, 2003,
the credit agreement provided for $150,000 of available credit,
including $10,000 for foreign currency borrowings. An amendment to the
credit agreement reduced its credit availability from $200,000 to
$150,000 during the third quarter of fiscal 2003 as a result of the
Company's working capital position and current anticipated borrowing
requirements. The foreign currency borrowing sublimit was
simultaneously reduced from $15,000 to $10,000.
Under the credit agreement, the Company may obtain credit through
direct borrowings and letters of credit. The obligations of the
Company under the credit agreement are guaranteed by certain of the
Company's subsidiaries and are secured by accounts receivable,
inventory and the Company's shares of ACC common stock. At November
30, 2003, the amount of unused available credit is $109,184. The
credit agreement also allows for commitments up to $50,000 in forward
exchange contracts.
Outstanding domestic obligations under the credit agreement at
November 30, 2002 and 2003 were as follows:
November 30,
−−−−−−−−−−−−−−−−−
2002 2003
−−−−−−− −−−−−−−
Revolving Credit Notes $16,883 $11,709
Eurodollar Notes 20,000 20,000
−−−−−−− −−−−−−−
$36,883 $31,709
======= =======
Interest rates are as follows: revolving credit notes at 0.25% above
the Prime Rate at November 30, 2001, 0.50% above the Prime Rate at
November 30, 2002 and 0.75% above the Prime Rate at November 30,
2003, which was 5.5%, 4.8% and 4.75% at November 30, 2001, 2002 and
2003, respectively. Eurodollar Notes at 1.75% above Libor at November
30, 2001, 2.50% above Libor at November 30, 2002 and 2.75% above Libor
at November 30, 2003 which was 3.4%, 3.9% and 3.9% at November 30,
2001, 2002 and 2003, respectively. The Company pays a commitment fee
on the unused portion of the credit line.
(Continued)
113