Audiovox 2004 Annual Report Download - page 87

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2002, 2003 and 2004
(Dollars in thousands, except share and per share data)
The following unaudited pro−forma financial information for the years ended
November 30, 2002 and 2003 represents the combined results of the Company's
operations and the Recoton acquisition as if the Recoton acquisition had
occurred at the beginning of the year of acquisition. The unaudited
pro−forma financial information does not necessarily reflect the results of
operations that would have occurred had the Company constituted a single
entity during such periods.
Years Ended
November 30,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
2002 2003
−−−−−−−−−− −−−−−−−−−−
(unaudited)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Revenue $ 577,554 $ 558,081
Net loss (14,985) (3,961)
Net loss per share−basic and diluted $ (0.69) $ (0.18)
On August 29, 2003, the Company entered into a call/put option agreement
with certain employees of Audiovox Germany, whereby these employees can
acquire up to a maximum of 20% of the Company's stated share capital in
Audiovox Germany at a call price equal to the same proportion of the actual
price paid by the Company for Audiovox Germany. The put options cannot be
exercised until the later of (i) November 30, 2008 or (ii) the full
repayment (including interest) of an inter−company loan granted to Audiovox
Germany in the amount of 5.3 million Euros. Notwithstanding the lapse of
these time periods, the put options become immediately exercisable upon (i)
the sale of Audiovox Germany or (ii) the termination of employment or death
of the employee. The put price to be paid to the employee upon exercise
will be the then net asset value per share of Audiovox Germany.
Accordingly, the Company recognizes compensation expense based on 20% of
the increase in Audiovox Germany's net assets representing the incremental
change of the put price over the call option price. Compensation expense
for these options amounted to $388 and $371 for the years ended November
30, 2003 and 2004, respectively.
(6) Receivables from Vendors
The Company has recorded receivables from vendors in the amount of $4,463
and $7,028 as of November 30, 2003 and 2004, respectively. Receivables from
vendors represent prepayments on product shipments and defective product
reimbursements.
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