Audiovox 1998 Annual Report Download - page 14

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Report of the CFO
As our chairman reported in his letter to the shareholders, we have made several changes to the Company’s operat-
ing systems during 1998. We have completed an upgrade of our Management Information Systems that resolves issues
related to international business, foreign currency and addresses Y2K issues. In addition, we have made substantial
investments in information technology to improve our intranet and internet capabilities. We believe that these changes
and improvements position us for future growth.
Balance Sheet and Cash Flow
During 1998 the Company’s financial ratios improved and our cash flow position remains strong. We were able to
provide approximately $17 million from operations this year versus a usage of $37 million in 1997. We believe this result
is partially attributable to strong cash flow management and an improvement in our asset efficiencies. This cash flow
has allowed us to fund capital expenditures for our systems and equipment and has also helped reduce our interest
bearing bank debt. In addition, we have recently increased our banking facilities to include a multi-currency line that will
provide us with the funds necessary for our 1999 growth plans.
Equity Investments
Audiovox Corporation maintains equity investments in unconsolidated entities that it utilizes to augment operations
and distribution. Talk Corporation, a 31% investment, provides us with wireless products for distribution in North and
South America. Audiovox Specialized Applications LLC (50% owned) provides us the ability to market products to the
specialized van, truck, RV and agricultural industries. Our 20% ownership of Bliss-tel in Thailand provides a distribution
outlet for our product in that country.
REPORT OF THE CFO
Increased multi-currency bank lines should help
fund 1999 growth plans.
—Michael Stoehr
Senior Vice President
Chief Financial Officer
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