Audiovox 2000 Annual Report Download - page 32

(9) Property, Plant and Equipment
A summary of property, plant and equipment, net, is as follows:
November 30,
1999 2000
Land $ 363 $ 4,959
Buildings 1,605 4,564
Property under capital lease 7,141 7,141
Furniture, fixtures and displays 1,878 1,909
Machinery and equipment 5,363 5,866
Computer hardware and software 9,655 12,023
Automobiles 580 588
Leasehold improvements 2,968 3,793
29,553 40,843
Less accumulated depreciation and amortization (9,924) $(12,847)
$19,629 $ 27,996
The amortization of the property under capital lease is included in depre-
ciation and amortization expense.
Computer software includes approximately $2,927 and $3,133 of unamor-
tized costs as of November 30, 1999 and 2000, respectively, related to the
acquisition and installation of management information systems for inter-
nal use.
Depreciation and amortization of plant and equipment amounted to
$2,089, $2,875 and $3,426 for the years ended November 30, 1998, 1999
and 2000, respectively. Included in accumulated depreciation and amorti-
zation is amortization of computer software costs of $350, $1,051 and
$702 for the years ended November 30, 1998, 1999 and 2000, respec-
tively. Included in accumulated depreciation and amortization is amortiza-
tion of property under capital lease of $160, $240 and $240 for the years
ended November 30, 1998, 1999 and 2000, respectively.
The Company acts as a lessor in an operating lease for land and a build-
ing with a cost of $7,450 and accumulated depreciation of $63 (Note 20).
(10) Equity Investments
As of November 30, 2000, the Company’s 72% owned subsidiary,
Audiovox Communications Sdn. Bhd., had a 29% ownership interest in
Avx Posse (Malaysia) Sdn. Bhd. (Posse) which monitors car security com-
mands through a satellite based system in Malaysia. As of November 30,
2000, the Company had a 20% ownership interest in Bliss-tel which dis-
tributes cellular telephones and accessories in Thailand. Additionally, the
Company had 50% non-controlling ownership interests in three other
entities: Protector Corporation (Protector) which acts as a distributor of
chemical protection treatments; ASA which acts as a distributor to spe-
cialized markets for RV’s and van conversions, of televisions and other
automotive sound, security and accessory products; and G.L.M. Wireless
Communications, Inc. (G.L.M.) which is in the cellular telephone, pager
and communications business in the New York metropolitan area.
During 2000, the Company entered into an agreement to cease the opera-
tions of its 50% owned investment in Audiovox Pacific Pty., Limited,
which was a former distributor of cellular telephones and automotive
sound and security products in Australia and New Zealand. At November 30,
1999, prepaid and other current assets included a receivable of $459 due
from Audiovox Pacific Pty. Ltd. which was fully repaid in 2000. Also during
fiscal 2000, the Company entered into an agreement to transfer to the
other equity partner its 50% ownership equity in Quintex West, which is
in the cellular telephone and related communication products business,
as well as the automotive after-market products business. No considera-
tion was given or no gain or loss was recorded in connection with either
of the above transactions as both equity investments had been previously
written down.
The Company previously held a 30.8% investment in TALK which was dis-
posed of during fiscal 2000 as discussed in Notes 5(d) and 14).
The Company’s net sales to the equity investments amounted to $4,528,
$4,605 and $3,233 for the years ended November 30, 1998, 1999 and
2000, respectively. The Company’s purchases from the equity investments
amounted to $91,095, $146,803 and $119,444 for the years ended
November 30, 1998, 1999 and 2000, respectively. The Company recorded
$1,752, $1,735 and $1,432 of outside representative commission
expenses for activations and residuals generated by G.L.M. on the
Company’s behalf during fiscal year 1998, 1999 and 2000, respectively.
Included in accounts receivable at November 30, 1999 and 2000 are trade
receivables due from its equity investments aggregating $1,057 and $861,
respectively. Receivable from vendor includes $3,741 and $3,823 due from
TALK as of November 30, 1999 and 2000, respectively, which represents
prepayments on product shipments and interest payable in monthly
installments. At November 30, 1999 and 2000, included in accounts
payable and other accrued expenses were obligations to equity invest-
ments aggregating $1,015 and $30, respectively. Documentary accept-
ance obligations of $1,994 were outstanding to TALK at November 30,
1999 (Note 12(b)). There were no documentary acceptance obligations
outstanding to TALK at November 30, 2000.
For the years ended November 30, 1998, 1999 and 2000, interest income
earned on equity investment notes and other receivables approximated
$480, $482 and $602, respectively. Interest expense on documentary
acceptances payable to TALK approximated $256, $228 and $11 in 1998,
1999 and 2000, respectively.
(11) Unearned Revenue
As of November 30, 2000, included in accrued expenses and other current
liabilities on the accompanying consolidated balance sheet, is $27,150
which represents prepayments for future product shipments. The
Company will recognize the revenue as product shipments are made.
30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)