Audiovox 2003 Annual Report Download - page 104

Download and view the complete annual report

Please find page 104 of the 2003 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 159

  • 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
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159

AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2001, 2002 and 2003
(Dollars in thousands, except share and per share data)
shares of common stock to non−employees and recorded a charge to operations
of $297,000 (Note 16).
As a result of stock option exercises, the Company recorded a tax benefit
of $216 during fiscal 2003 which is included in paid−in capital in the
accompanying consolidated financial statements.
During fiscal 2001, 314,800 warrants were exercised and converted into
314,800 shares of common stock.
(5) Transactions With Major Suppliers
(a) ACC Dividend
In February 2001, the board of directors of ACC declared a dividend
payable to its stockholders, Audiovox Corporation, a then 95%
stockholder, and Toshiba, a then 5% stockholder for their respective
share of net income for the previous fiscal years. ACC paid Toshiba
its share of the dividend, which approximated $1,034 in the first
quarter of fiscal 2001. There were no dividends declared during fiscal
2002 and 2003.
(b) Sale/Leaseback Transaction
In April 2000, Audiovox Japan (AX Japan), a wholly−owned subsidiary,
purchased land and a building (the Property) from Shintom Co., Ltd.
(Shintom) for 770,000,000 Yen (approximately $7,300) and entered into
a leaseback agreement whereby Shintom leased the Property from AX
Japan for a one−year period. The lease was being accounted for as an
operating lease by AX Japan. Shintom is a stockholder who owns all of
the outstanding preferred stock of the Company and is a manufacturer
of products purchased by the Company through its previously−owned
equity investee, TALK Corporation (TALK). The Company currently holds
stock in Shintom and has previously invested in Shintom convertible
debentures.
The purchase of the Property by AX Japan was financed with a
500,000,000 Yen ($4,671) subordinated loan obtained from Vitec Co.,
Ltd. (Vitec), a 150,000,000 Yen loan ($1,397) from Pearl First (Pearl)
and a 140,000,000 Yen loan ($1,291) from the Company. The land and
building were included in property, plant and equipment, and the loans
were recorded as notes payable on the balance sheet as of November 30,
2001 . Changes arising from the fluctuations in the Yen exchange rate
were reflected as a component of accumulated other comprehensive loss.
Vitec is a major supplier to Shintom, and Pearl is an affiliate of
Vitec. The loans bore interest at 5% per annum, and principle is
payable in equal monthly installments over a six−month period
(Continued)
103