Audiovox 2008 Annual Report Download - page 66

Download and view the complete annual report

Please find page 66 of the 2008 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 130

  • 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
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 29, 2008
(Dollars in thousands, except share and per share data)
Other Intangible Assets
February 29, 2008
Gross Total Net
Carrying Accumulated Book
Value Amortization Value
Trademarks/Tradenames not subject to amortization $ 86,368 $ - $ 86,368
Customer relationships subject to amortization (5-15 years) 14,685 741 13,944
Patents subject to amortization (5-10 years) 695 385 310
Contract subject to amortization (5 years) 1,104 718 386
Total $ 102,852 $ 1,844 $ 101,008
February 28, 2007
Gross Total Net
Carrying Accumulated Book
Value Amortization Value
Trademarks/Tradenames not subject to amortization $ 56,835 $ - $ 56,835
Patents subject to amortization 625 193 432
Contract subject to amortization (5 years) 1,104 497 607
Total $ 58,564 $ 690 $ 57,874
During the year ended February 29, 2008, the Company purchased $70 of patents subject to amortization with an
estimated useful life of eighty-nine months. In addition, the Company acquired in November and December 2007,
$27,435 of intangible assets in connection with two acquisitions, which has been preliminarily allocated to trademarks
not subject to amortization and customer relationships subject to amortization (see Note 3). The weighted-average
amortization period for customer relationships as of February 29, 2008 is approximately 11.5 years.
Amortization expense for intangible assets amounted to $1,141, $395, $58 and $236 for the years ended February 29,
2008, February 28, 2007, the three months ended February 28, 2006 and the year ended November 30, 2005,
respectively. The estimated aggregate amortization expense for all amortizable intangibles for each of the succeeding
years ending February 28, 2013 is as follows:
Fiscal Year Amount
2009 $ 1,606
2010 1,477
2011 1,278
2012 1,278
2013 1,239
$ 6,878
k) Sales Incentives
The Company offers sales incentives to its customers in the form of (1) co-operative advertising allowances; (2) market
development funds; (3) volume incentive rebates and (4) other trade allowances. The Company accounts for sales
incentives in accordance with Emerging Issues Task Force 01-9, "Accounting for Consideration Given by a Vendor to a
Customer (Including a Reseller of Vendor's Products )" (“EITF 01-9”). Except for other trade allowances, all sales
incentives require the customer to purchase the Company's products during a specified period of time. All sales
incentives require customers to claim the sales incentive within a certain time period (referred to as the "claim period")
and claims are settled either by the customer claiming a deduction against an outstanding account receivable or by the
customer requesting a cash payout. All costs associated with sales incentives are classified as a reduction of net sales.
The following is a summary of the various sales incentive programs:
Co-operative advertising allowances are offered to customers as reimbursement towards their costs for print or media
advertising in which the Company’s product is featured on its own or in conjunction with other companies'
products. The amount offered is either a fixed amount or is based upon a fixed percentage of sales revenue or a fixed
amount per unit sold to the customer during a specified time period.
Source: AUDIOVOX CORP, 10-K, May 14, 2008