Audiovox 1999 Annual Report Download - page 28

AUDIOVOX
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The Shintom debentures mature on September 30, 2002.
A related deferred tax liability of $2,546 and $6,053 was recorded at
November 30, 1998 and 1999, respectively, as a reduction to the unreal-
ized holding gain included in accumulated other comprehensive income.
During 1997, the Company sold 1,835,000 shares of CellStar Common
Stock yielding net proceeds of approximately $45,937 and a gain, net of
taxes, of approximately $23,232.
During 1998, the Company purchased 400,000 Japanese yen (approxi-
mately $3,132) of Shintom debentures and exercised its option to convert
the Shintom debentures into shares of Shintom common stock. These
shares are included in the Company’s available-for-sale marketable secu-
rities at November 30, 1998. During the fourth quarter of 1999, the
Company recorded an other-than-temporary decline in market value of its
Shintom common stock in the amount of $1,953 and a related deferred
tax benefit of $761. The write-down has been recorded as a component of
other expense in the consolidated statement of income.
During 1998, the Company purchased an additional 1,400,000
Japanese yen (approximately $9,586) of Shintom debentures and exer-
cised its option to convert 737,212 Japanese yen of Shintom debentures
into shares of Shintom common stock. The Company sold the Shintom
common stock yielding net proceeds of $5,830 and a gain of $787.
During 1999, the Company purchased an additional 3,100,000
Japanese yen (approximately $27,467) of Shintom debentures and exer-
cised its option to convert 2,882,788 Japanese yen of Shintom debentures
into shares of Shintom common stock. The Company sold the Shintom
common stock yielding net proceeds of $27,916 and a gain of $3,501.
(9) Property, Plant and Equipment
A summary of property, plant and equipment, net, is as follows:
November 30,
1998 1999
Land .................................................................................. $ 363 $ 363
Buildings........................................................................... 1,605 1,605
Property under capital lease ............................................ 7,141 7,141
Furniture, fixtures and displays........................................ 3,184 1,878
Machinery and equipment ............................................... 5,023 5,363
Computer hardware and software................................... 9,767 9,655
Automobiles...................................................................... 633 580
Leasehold improvements.................................................. 3,943 2,968
31,659 29,553
Less accumulated depreciation and amortization ........... (13,831) (9,924)
$ 17,828 $19,629
The amortization of the property under capital lease is included in
depreciation and amortization expense.
Computer software includes approximately $3,149 and $2,927 of
unamortized costs as of November 30, 1998 and 1999, respectively,
related to the acquisition and installation of management information
systems for internal use.
Depreciation and amortization of plant and equipment amounted to
$1,503, $2,089 and $2,875 for the years ended November 30, 1997, 1998
and 1999, respectively. Included in accumulated depreciation and amorti-
zation is amortization of computer software costs of $19, $350 and $1,051
for the years ended November 30, 1997, 1998 and 1999, respectively.
Included in accumulated depreciation and amortization is amortization of
property under capital lease of $160 and $240 for the year ended
November 30, 1998 and 1999, respectively.
Notes to Consolidated
FINANCIAL STATEMENTS (continued) Audiovox Corporation and Subsidiaries
(8) Investment Securities
As of November 30, 1999, the Company’s investment securities consist primarily of 1,730,000 shares of CellStar Common Stock, 1,904,000 shares of
Shintom common stock and 1,125,024 Japanese yen of Shintom debentures, which were classified as available-for-sale marketable securities. As of
November 30, 1998, the Company’s investment securities consist primarily of 1,730,000 shares of CellStar Common Stock, 1,904,000 shares of Shintom
common stock and 662,788 Japanese yen of Shintom debentures, which were classified as available-for-sale marketable securities. The cost, gross unre-
alized gains and losses and aggregate fair value of the investment securities available-for-sale as of November 30, 1999 were as follows:
1998 1999
Gross Gross Gross
Unrealized Unrealized Aggregate Unrealized Aggregate
Holding Holding Fair Holding Fair
Cost Gain Loss Value Cost Gain Value
CellStar Common Stock............................................................................. $ 2,715 $8,422 — $11,137 $ 2,715 $13,936 $16,651
Shintom Common Stock............................................................................. 3,132 — $1,723 1,409 1,179 — 1,179
Shintom Debentures.................................................................................. 4,543 — — 4,543 10,526 2,045 12,571
$10,390 $8,422 $1,723 $17,089 $14,420 $15,981 $30,401