Audiovox 2005 Annual Report Download - page 10

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ACQUISITIONS
On January 4, 2005, we purchased certain assets and liabilities of Terk
Technologies Corp. ("Terk") for $15,345. The purpose of this acquisition was to
increase our market share for satellite radio products as well as accessories,
such as antennas for HDTV products.
On July 8, 2003 we acquired, for $40,406, the U.S. audio operations of
Recoton and the outstanding capital stock of Recoton German Holdings GmbH. The
primary reason for this transaction was to expand the product offerings of
Audiovox and to obtain certain long−standing trademarks such as Jensen(R) and
Acoustic Research(R).
Refer to Note 4 "Business Acquisitions" of the Notes to Consolidated
Financial Statements for additional information regarding the aforementioned
acquisitions.
DIVESTITURES (DISCONTINUED OPERATIONS)
On November 7, 2005, we completed the sale of our majority owned
subsidiary, Audiovox Malaysia ("AVM") to the current minority interest
shareholder due to increased competition from non−local OEM's and deteriorating
credit quality of local customers.
On November 1, 2004, we completed the divestiture of our Cellular business
(formerly known as "ACC", "Cellular" or "Wireless") to UTStarcom, Inc. ("UTSI").
After paying outstanding domestic obligations, taxes and other costs associated
with the divestiture, we received net proceeds of approximately $144,053. We
plan to utilize the net proceeds to pursue strategic and complementary
acquisitions or invest in our current operations. However, we may use all or a
portion of the net proceeds for other purposes and are considering all
opportunities.
These divestitures have been presented as discontinued operations, as such,
certain reclassifications have been made to prior year amounts in order to
conform to the current period presentation. Refer to Note 2 of the Notes to the
Consolidated Financial Statements for additional information regarding the
aforementioned divestitures.
STRATEGY
Our objective is to increase operating income by increasing market share,
enhancing the product portfolio, capitalizing on our current financial position
to take advantage of future growth opportunities and streamlining operations.
The key elements of our strategy are as follows:
Capitalize on niche market opportunities in the electronics industry.
We intend to use our extensive distribution and supply networks to
capitalize on niche market opportunities in the electronics industry,
such as satellite radio, collision avoidance, navigation, mobile video,
DVD's, flat panel TVs and hand held GPS.
Leverage our distribution network. We believe our distribution network
which includes, power retailers, mass merchandisers, distributors, car
dealers and OEM's will allow us to continue to expand value−added
services as the market evolves and customer needs change.
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