Audiovox 2005 Annual Report Download - page 86

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(8) Financing Arrangements
The Company has the following financing arrangements:
NOVEMBER 30,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
2004 2005
−−−−−−−−−−−−− −−−−−−−−−−−−
Bank Obligations
Domestic bank obligations (a) $ − $ −
Venezuela bank obligations (b) − 1,070
Euro factoring obligations (c) 5,485 3,687
−−−− −−−−− −−−− −−−−−
Total bank obligations $5,485 $4,757
====== ======
Debt
Euro term loan agreement (d) $9,377 $6,561
Other (e) 829 1,153
−−−−−−− −−− −−− −−−−−
Total debt $10,206 $7,714
======= ======
(a) Domestic Bank Obligations
At November 30, 2005, the Company has an unsecured credit line
to fund the temporary short−term working capital needs of the
domestic operations. This line expires on February 28, 2006
and allows aggregate borrowings of up to $25,000 at an
interest rate of Prime (or similar designations) plus 1%. As
of November 30, 2004 and November 30, 2005, no direct amounts
are outstanding under this agreement. At November 30, 2005,
the Company had $11,617 in commercial and standby letters of
credit outstanding, which reduces the amounts available under
the unsecured credit line.
(b) Venezuela Bank Obligations
In October 2005, Audiovox Venezuela, the Company's majority
owned subsidiary, entered into a credit facility borrowing
arrangement which allows for principal borrowings up to $1,000
plus accrued interest and foreign currency valuation. The
facility requires minimum monthly interest payments at an
annual interest rate of 13% until the expiration of the
facility on August 20, 2006. Audiovox Corporation has secured
this facility with a $1,000 standby letter of credit.
(c) Euro Asset−Based Lending Obligation
The Company has a 16,000 Euro accounts receivable factoring
arrangement and a 6,000 Euro Asset Based Lending ("ABL")
(finished goods inventory and non factored accounts
receivable) credit facility for the Company's subsidiary,
Audiovox Germany, which expires on October 25, 2006 and is
renewable on an annual basis. Selected accounts receivable are
purchased from the Company on a non−recourse basis at 85% of
face value and payment of the remaining 15% upon receipt from
the customer of the balance of the receivable purchased. In
respect of the ABL credit facility, selected finished goods
are advanced at a 60% rate and non factored accounts
receivables are advanced at a 50% rate. The rate of interest
is the three months Euribor plus 2.5%, and the Company pays
0.4% of its gross sales as a fee for the accounts receivable
factoring arrangement. As of November 30, 2005,
F−32