Audiovox 2000 Annual Report Download - page 33

(12) Financing Arrangements
(A)BANK OBLIGATIONS
The Company maintains a revolving credit agreement with various finan-
cial institutions. During the year ended November 30, 1999, the credit
agreement was amended and restated in its entirety, extending the expi-
ration date to July 27, 2004. As a result, bank obligations under the credit
agreement have been classified as long-term at November 30, 2000. The
amended and restated credit agreement provides for $200,000 of avail-
able credit, including $15,000 for foreign currency borrowings. In December
1999, the credit agreement was further amended, resulting in an increase
in available credit to $250,000.
Under the credit agreement, the Company may obtain credit through
direct borrowings and letters of credit. The obligations of the Company
under the credit agreement are guaranteed by certain of the Company’s
subsidiaries and is secured by accounts receivable, inventory and the
Company’s shares of ACC. As of November 30, 2000, availability of credit
under the credit agreement is a maximum aggregate amount of $250,000,
subject to certain conditions, based upon a formula taking into account
the amount and quality of its accounts receivable and inventory. At
November 30, 2000, the amount of unused available credit is $145,433.
The credit agreement also allows for commitment up to $50,000 in for-
ward exchange contracts (Note 21(a)(1)).
Outstanding obligations under the credit agreement at November 30,
1999 and 2000 were as follows:
November 30,
1999 2000
Revolving Credit Notes $ 47,007 —
Eurodollar Notes 55,000 $15,000
$102,007 $15,000
Interest rates are as follows: revolving credit notes at .50% above the prime
rate, which was approximately 7.75%, 8.5% and 9.5% at November 30,
1998, 1999 and 2000, respectively, and Eurodollar Notes at 1.50% above the
LIBOR rate which was approximately 5.62%, 6.48% and 6.8% at November
30, 1998, 1999 and 2000, respectively. The Company pays a commitment fee
on the unused portion of the line of credit.
The credit agreement contains several covenants requiring, among other
things, minimum levels of pre-tax income and minimum levels of net
worth and working capital. Additionally, the agreement includes restric-
tions and limitations on payments of dividends, stock repurchases and
capital expenditures.
The Company also has revolving credit facilities in Malaysia (Malaysian
Credit Agreement) to finance additional working capital needs. As of
November 30, 2000, the available line of credit for direct borrowing, let-
ters of credit, bankers’ acceptances and other forms of credit approxi-
mated $6,089. The credit facilities are partially secured by one standby
letter of credit totaling $1,300 and two standby letters of credit totaling
$4,800, by the Company and payable upon demand or upon expiration of
the standby letters of credit on January 15, 2001 and August 31, 2001,
respectively. The obligations of the Company under the Malaysian Credit
Agreement are secured by the property and building owned by Audiovox
Communications Sdn. Bhd. Outstanding obligations under the Malaysian
Credit Agreement at November 30, 1999 and 2000 were approximately
$5,843 and $4,693, respectively. At November 30, 1998, interest on the
credit facility ranged from 9.5% to 12.0%. At November 30, 1999, interest
on the credit facility ranged from 7.4% to 9.6%. At November 30, 2000
interest on the credit facility ranged from 7.25% to 7.50%.
As of November 30, 1999 and 2000, Audiovox Venezuela had notes
payable of approximately 1,275,500 and 2,354,600 Venezuelan Bolivars
($2,000 and $3,411 at November 30, 1999 and 2000) outstanding to a
bank. Interest on the notes payable is 10.7%. The notes are scheduled to
be repaid within one year and, as such, are classified as short term. The
notes payable are secured by a standby letter of credit in the amount of
$3,500 by the Company and is payable upon demand or upon expiration of
the standby letter of credit on May 31, 2001.
The maximum month-end amounts outstanding under the credit agree-
ment and Malaysian Credit Agreement borrowing facilities during the
years ended November 30, 1998, 1999 and 2000 were $42,975, $110,595
and $156,854, respectively. Average borrowings during the years ended
November 30, 1998, 1999 and 2000 were $26,333, $29,835 and $52,010,
respectively, and the weighted average interest rates were 8.7%, 9.6%
and 8.9%, respectively.
During 1999, the Company entered into a wholesale financing agreement
with a financial institution to finance up to $15,000 of inventory purchases
of a particular supplier. Amounts outstanding under this agreement were
$8,150 at November 30, 1999. Borrowings under the agreement were
secured by the inventory purchased. Payments on the borrowings are due
within 30 days. Interest was payable after stipulated due dates at a rate of
prime plus 11/2%, which was 10% at November 30, 1999. The agreement
contained several covenants. During 2000, the Company canceled the
wholesale financing agreement with the financial institution.
(B)DOCUMENTARY ACCEPTANCES
The Company had various unsecured documentary acceptance lines of
credit available with suppliers to finance inventory purchases. The
Company does not have written agreements specifying the terms and
amounts available under the lines of credit. At November 30, 1999,
$1,994 of documentary acceptances were outstanding of which all was
due to TALK. There were no documentary acceptances outstanding at
November 30, 2000.
The maximum month-end documentary acceptances outstanding during
the years ended November 30, 1998, 1999 and 2000 were $4,809, $5,033
and $997, respectively. Average borrowings during the years ended
November 30, 1998, 1999 and 2000 were $3,885, $3,755 and $164,
respectively, and the weighted average interest rates, including fees,
were 6.6%, 6.1% and 6.6%, respectively.
AUDIOVOX CORPORATION AND SUBSIDIARIES
AUDIOVOX 31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)