Audiovox 2004 Annual Report Download - page 50

Amount of Commitment
Expiration per period
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Total
Other Commercial Amounts Less than 1−3 4−5 Over
Commitments Committed 1 Year Years Years 5 years
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−− −−−−−−−−− −−−−−−−−− −−−−−−− −−−−−−− −−−−−−−
Bank obligations (3) $ 7,694 $ 7,694 −−
Commercial letters of credit (4) 959 959 −− −− −−
Standby letters of credit (4) 2,358 2,358 −− −− −−
Debt (5) 10,206 2,497 $ 5,004 $ 2,705 −−
Unconditional purchase
obligations (6) 46,041 46,041 −− −− −−
−−−−−−− −−−−−−− −−−−−−− −−−−−−− −−−−−
Total commercial
commitments $67,258 $59,549 $ 5,004 $ 2,705 −−
======= ======= ======= ======= =====
(1) Represents total payments due under a capital lease obligation which has a
current and long term principal balance of $69 and $6,001, respectively at
November 30, 2004. For more information, see Note 13 of Notes to
Consolidated Financial Statements.
(2) The Company enters into operating leases in the normal course of business.
For more information, see Note 13 of Notes to Consolidated Financial
Statements.
(3) Represents amounts outstanding under the Malaysia credit facility of $2,209
and German factoring agreement of $5,485 at November 30, 2004. As of
November 30, 2004, the available line of credit for direct borrowing,
letters of credit, bankers' acceptances and other forms of credit under the
Malaysia credit facility approximated $2,905. The obligations of the
Company under the Malaysian credit facilities are secured by the property
and building in Malaysia owned by Audiovox Communications Sdn. Bhd. and are
partially secured by the Company under two standby letters of credit of
$800 each and are payable on demand or upon expiration of the standby
letters of credit, which expire on July 7, 2005. The German credit facility
consists of accounts receivable factoring up to 16,000 Euros and a working
capital facility, secured by accounts receivable and inventory, up to 6,000
Euros. The facilities are renewable on an annual basis. For more
information, see Note 9 of Notes to Consolidated Financial Statements.
(4) Commercial letters of credit are issued by the Company during the ordinary
course of business through major domestic banks as requested by certain
suppliers. The Company also issues standby letters of credit to secure
certain bank obligations and insurance requirements.
(5) Represents amounts outstanding under a term loan agreement for Audiovox
Germany which was acquired in connection with the Recoton Acquisition. This
amount also includes amounts due under a call−put option with certain
employees of Audiovox Germany. For more information, see Notes 5 and 9 of
Notes to Consolidated Financial Statements.
(6) Unconditional purchase obligations represent inventory commitments. These
obligations are not recorded in the consolidated financial statements until
commitments are fulfilled and such obligations are subject to change based
on negotiations with manufacturers.
The Company guaranteed the debt of G.L.M. (a former equity investment)
beginning in December 1996, and this guarantee was not subsequently modified.
During the year ended November 30, 2004, the Company received a request for
payment in connection with this guarantee. As a result of the payment request,
the Company paid $291 on behalf of G.L.M. during the year ended November 30,
2004 and such guarantee is no longer in effect.
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