Audiovox 2005 Annual Report Download - page 19

Download and view the complete annual report

Please find page 19 of the 2005 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 111

  • 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

Our success depends on the continued efforts of John J. Shalam, Patrick
Lavelle, and C. Michael Stoehr, each of whom has worked with Audiovox for over
two decades, as well as our other executive officers and key employees. We have
no employment contracts, with any of our executive officers or key employees.
The loss or interruption of the continued full−time service of certain of our
executive officers and key employees could have a material adverse effect on our
business.
In addition, to support our continued growth, we must effectively recruit,
develop and retain additional qualified personnel both domestically and
internationally. Our inability to attract and retain necessary qualified
personnel could have a material adverse effect on our business.
WE ARE RESPONSIBLE FOR PRODUCT WARRANTIES AND DEFECTS.
Even though we outsource manufacturing, we provide warranties for all of our
products for which we have provided an estimated liability. Therefore, we are
highly dependent on the quality of our supplier's products.
OUR CAPITAL RESOURCES MAY NOT BE SUFFICIENT TO MEET OUR FUTURE CAPITAL AND
LIQUIDITY REQUIREMENTS.
We believe that we currently have sufficient resources to fund our existing
operations for the foreseeable future. However, we may need additional capital
to operate our business if:
o market conditions change,
o our business plans or assumptions change,
o we make significant acquisitions, and
o we need to make significant increases in capital expenditures or
working capital.
OUR STOCK PRICE COULD FLUCTUATE SIGNIFICANTLY.
The market price of our common stock could fluctuate significantly in
response to various factors and events, including:
o operating results being below market expectations,
o announcements of technological innovations or new products by us or our
competitors,
o loss of a major customer or supplier,
o changes in, or our failure to meet, financial estimates by securities
analysts,
o industry developments,
o economic and other external factors,
o general downgrading of our industry sector by securities analysts, and
o inventory write−downs
In addition, the securities markets have experienced significant price and
volume fluctuations over the past several years that have often been unrelated
to the operating performance of particular companies. These market fluctuations
may also have a material adverse effect on the market price of our common stock.
JOHN J. SHALAM, OUR CHAIRMAN, OWNS A SIGNIFICANT PORTION OF OUR COMMON STOCK AND
CAN EXERCISE CONTROL OVER OUR AFFAIRS.
Mr. Shalam beneficially owns approximately 54% of the combined voting power
of both classes of common stock. This will allow him to elect our Board of
Directors and, in general, to determine the outcome of any other matter
submitted to the stockholders for approval. Mr. Shalam's voting power may have
the effect of delaying or preventing a change in control of the Company.
14