Audiovox 2008 Annual Report Download - page 33

General and administrative expenses increased $12,300 or 25.1% over the prior year due to the following:
•$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.
The above increases were partially offset by a $1,099 decrease in professional fees due to a reduction in audit fees, legal and
consulting costs and a $289 reduction in general insurance expenses offset by a $790 benefit related to a call/put option previously
granted to certain employees. The benefit recorded for the year ended February 29, 2008 was due to a reduction in the call/put liability
calculation as a result of the Oehlbach and Incaar acquisitions.
General and administrative costs from our core business were $48,448 in Fiscal 2008, an increase of $151 over the prior year.
Engineering and technical support expenses increased $2,727 or 37.6% due to $2,253 of expenses in Fiscal 2008 related to the
recently acquired Thomson Accessory, Oehlbach, Incaar, Technuity and Thomson Audio/Video operations and an increase in
domestic direct labor and related payroll benefits as a result of increased product development efforts and general wage increases.
Engineering and technical support expenses for our core business were $7,730 in Fiscal 2008, an increase of $493 over the prior year.
Other Income/(Expense)
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) %
Interest and bank charges increased due to the additional debt assumed in connection with the acquisition of Oehlbach, one
time bank charges related to the Euro Term loan agreement, which was repaid in full during September 2007, as well as increased
working capital needs of our domestic and foreign subsidiaries. Interest and bank charges represent expenses for bank obligations of
Audiovox Corporation, Audiovox Germany and Venezuela and interest payments for a capital lease.
Equity in income of equity investees increased due to increased equity income of Audiovox Specialized Applications, Inc.
(ASA) as a result of increased sales and gross margins in the Jensen Audio and Voyager product lines.
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Source: AUDIOVOX CORP, 10-K, May 14, 2008