Audiovox 2005 Annual Report Download - page 81

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The following is a summary of results included within
discontinued operations:
FOR THE YEARS ENDED NOVEMBER 30,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
2003 2004 2005
−−−−−−−−−−−−−−− −−−−−−−−−−−−−− −−−−−−−−−−−−−−−−
Net sales from discontinued operations $813,003 $1,162,863 $ 3,404
======== ========== ========
Income (loss) from operations of discontinued
operations before income taxes $ 5,323 $ 10,837 $ (1,187)
2,111 701 (362)
−−−−−−−−−− −−−−−−−−−−− −−−−−−−−−−−
Provision (benefit) for income taxes 3,212 10,136 (825)
Gain (loss) on sale of business, net of tax − 67,000 (2,079)
−−−−−−−−−−− −−−−−−−−−−−− − −−−−−−−
Income (loss) from discontinued operations, net
of tax $ 3,212 $ 77,136 $ (2,904)
======= ======== =========
Included in income from discontinued operations are tax
provisions of $2,111, $37,012 and $662 for the years ended
November 30, 2003, 2004 and 2005, respectively. The net change
in the total valuation allowance for the years ended November
30, 2003, 2004 and 2005 was a decrease of $614, $12,148 and $144
respectively. Such change positively impacted the provision for
income taxes during the years indicated.
(3) Issuance of Subsidiary Shares and Transactions with Toshiba
Toshiba had been a minority interest shareholder in the Company's
discontinued Cellular operation since 1999. As previously discussed in
Note 2, the Company completed its sale of Cellular to UTStarcom
("UTSI") on November 1, 2004. In connection with the sale of Cellular,
the Company repurchased the minority interest in Toshiba and was
released from all prior agreements on November 1, 2004 as a result of
the sale of the Cellular business to UTSI.
Minority interest expense relating to Toshiba's minority share
ownership in ACC for the years ended November 30, 2003 and 2004 was
$1,066 and $2,398, respectively and such expense has been included in
discontinued operations in the accompanying statements of operations.
(4) Business Acquisitions
Code Systems, Inc.
On March 15, 2002, Code Systems, Inc. (Code), a wholly−owned subsidiary
of the Company, purchased certain assets of Code, an automotive
security product company. The purchase price consisted of approximately
$7,100, paid in cash at the closing, and a debenture (CSI Debenture)
whose value was linked to the future earnings of Code. No value was
assigned to the CSI Debenture as the performance requirements were not
satisfied.
During the year ended November 30, 2004, an adjustment to the purchase
price was made due to the collection of monies held in escrow at the
time of closing, resulting in a $513 decrease to goodwill. As a result
of the acquisition, goodwill, as adjusted, of $2,047 was recorded.
F−27