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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended February 28, 2007
Commission file number 0-28839
AUDIOVOX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
13-1964841
(IRS Employer
Identification No.)
180 Marcus Blvd., Hauppauge, New York
(Address of principal executive offices)
11788
(Zip Code)
(631) 231-7750
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of Each Exchange on which Registered
Class A Common Stock $.01 par value The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (check one):
Large accelerated filer Accelerated filer Non-accelerated filer
Indicate by check mark whether the Registrant is a shell company (as defined in rule 12b-2 of the Act).
Yes No
The aggregate market value of the common stock held by non-affiliates of the Registrant was $265,196,672 (based upon closing
price on the Nasdaq Stock Market on August 31, 2006).
The number of shares outstanding of each of the registrant’s classes of common stock, as of May 9, 2007 was:
Class Outstanding
Class A common stock $.01 par value 20,643,499
Class B common stock $.01 par value 2,260,954
DOCUMENTS INCORPORATED BY REFERENCE
Part III — (Items 10, 11, 12, 13 and 14) Proxy Statement for Annual Meeting of Stockholders to be filed on or before
June 21, 2007.

Table of contents

  • Page 1
    ... AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended February 28, 2007 Commission file number 0-28839 AUDIOVOX CORPORATION (Exact name of registrant as specified in its charter...

  • Page 2
    ... ...Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stock-holder Matters ...Item 13 - Certain Relationships and Related Transactions, and Director Independence ...Item 14 - Principal Accounting Fees and Services ...PART IV Item 15 - Exhibits, Financial Statement...

  • Page 3
    ...Radio Corp., Audiovox Electronics Corporation (''AEC''), Audiovox German Holdings GmbH (''Audiovox Germany''), Audiovox Venezuela, C.A and Code Systems, Inc. (''Code''). We market our products under the Audiovox® brand name and other brand names, such as Acoustic Research®, Advent®, Ambico®, Car...

  • Page 4
    ... in the electronics industry. We intend to use our extensive distribution and supply networks to capitalize on niche product and distribution opportunities in categories like satellite radio, collision avoidance, accessories, home theater systems, navigation, mobile video, DVD's, ï¬,at panel TVs and...

  • Page 5
    ... to, satellite radio, installed and portable DVD mobile video systems, rear observation and collision avoidance systems, ï¬,at panel TVs, hand held GPS, innovative home speaker systems, navigation systems with real time traffic information and digital multi-media products. Products Our electronic...

  • Page 6
    ...at panel televisions, Home and portable stereos, HDTV Antennas, WiFi Antennas and HDMI accessories, Two-way radios, digital multi-media products such as personal video recorders and MP3 products, Home speaker systems and home theater in a box, Portable DVD players, and Flat panel TV mounting systems...

  • Page 7
    ... one customer accounted for 11% of net sales. We also provide value-added management services, which include product design and development, engineering and testing, sales training, instore display design, installation training and technical support, product repair services and warranty, nationwide...

  • Page 8
    ...have a customer service group that provides product information, answers questions and serves as a technical hotline for installation help for end-users and customers. Suppliers We work directly with our suppliers on industrial design, feature sets, development and product testing in order to ensure...

  • Page 9
    .... The Electronics Business Is Highly Competitive and Faces Significant Competition from Original Equipment Manufacturers (OEMs) and Direct Imports By Our Retail Customers. The market for electronics is highly competitive across all product lines. We compete against many established companies who...

  • Page 10
    ..., auto security, mobile video and accessories industry. We believe that OEMs have diversified and improved their product offerings and place increased sales pressure on new car dealers with whom they have close business relationships to purchase that OEM-supplied equipment and accessories. To...

  • Page 11
    ... the risk that our products will become obsolete or face selling price reductions before we can sell our inventory. We Plan to Expand the International Marketing and Distribution of Our Products, Which Will Subject Us to Additional Business Risks. As part of our business strategy, we intend to...

  • Page 12
    ... vice presidents, many of whom have 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...

  • Page 13
    ... to operate our business if market conditions change, our business plans or assumptions change, we make significant acquisitions, and we need to make significant increases in capital expenditures or working capital. Our Stock Price Could Fluctuate Significantly. The market price of our common...

  • Page 14
    ... Securities and Exchange Commission. Item 2 - Properties Our Corporate headquarters is located at 180 Marcus Blvd. in Hauppauge, New York. In addition, as of February 28, 2007, the Company leased a total of 18 operating facilities or offices located in 9 states as well as Germany, China, Malaysia...

  • Page 15
    ... suppliers or distributors, of third party patents, trade secrets, trademarks or copyrights. Any claims relating to the infringement of third-party proprietary rights, even if not meritorious, could result in costly litigation, divert management's attention and resources, or require the Company to...

  • Page 16
    ... Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Class A Common Stock of Audiovox is traded on the Nasdaq Stock Market under the symbol ''VOXX''. The following table sets forth the low and high sale price of our Class A Common Stock, based on the...

  • Page 17
    16

  • Page 18
    ... and related notes and ''Management's Discussion and Analysis of Financial Condition and Results of Operations'' of this Form 10-K. Year Ended February 28, 2007 Three Months Ended February 28, 2006 Years ended November 30, 2005 (4) 2004 2003 (2) 2002 Consolidated Statement of Operations Data Net...

  • Page 19
    ...Radio Corp., Audiovox Electronics Corporation (''AEC''), Audiovox German Holdings GmbH (''Audiovox Germany''), Audiovox Venezuela, C.A and Code Systems, Inc. (''Code''). We market our products under the Audiovox® brand name and other brand names, such as Acoustic Research®, Advent®, Ambico®, Car...

  • Page 20
    Two-way radios, digital multi-media products such as personal video recorders and MP3 products, Home speaker systems and home theater in a box, Portable DVD players, and Flat panel TV mounting systems. Acquisitions On March 5, 2007 (subsequent to year end), Audiovox German Holdings GmbH completed ...

  • Page 21
    ... of Code-Alarm branded products, acquisition of Terk Technologies, acquisition of Thomson's Americas consumer electronics accessory business, the introduction of new products and lines such as, portable DVD players, ï¬,at-panel TVs, satellite radio, GPS navigation and mobile multimedia, volatility...

  • Page 22
    ... programs: Co-operative advertising allowances are offered to customers as a reimbursement towards their costs for print or media advertising in which our product is featured on its own or in conjunction with other companies' products. The amount offered is either a fixed amount or is based...

  • Page 23
    .... We regularly review inventory quantities on-hand and record a provision, in cost of sales, for excess and obsolete inventory based primarily from selling price reductions subsequent to the balance sheet date, indications from customers based upon current negotiations and purchase orders. A signi...

  • Page 24
    ...Accounting Principles Board (''APB'') Opinion No. 25, and as a result no compensation costs had been recognized in our historical consolidated statements of operations. We have used and expect to continue to use the Black-Sholes option pricing model to compute the estimated fair value of stock-based...

  • Page 25
    ... product lines at the end of fiscal 2006. In addition, we suspended sales of Plug & Play XM satellite radio receivers for five months pending the outcome of a Federal Communication Commission (''FCC'') issue. Mobile sales were also adversely impacted by lower average selling prices in our mobile...

  • Page 26
    ... adjustment related to satellite radio inventory and an $8,775 adjustment related to the discontinuance of certain products within select product lines recorded in the prior year. Operating Expenses and Operating Loss Fiscal 2007 Fiscal 2006 $ Change % Change Operating Expenses: Selling ...General...

  • Page 27
    ...due to increased equity income of Audiovox Specialized Applications, Inc. (''ASA'') as a result of increased sales and gross margins in the Jensen Audio and Voyager product lines. Other income declined due to a one time $2,455 unrealized gain recorded during fiscal 2006 in connection with the Bliss...

  • Page 28
    ... of 2005 and an increase in sales of Jensen mobile multimedia products. Consumer Electronics sales, which represented 37.1% of net sales, showed growth as a result of increased demand for LCD ï¬,at-panel TV product lines and portable DVD Players. Sales incentive expense increased $3,395 to $16,518...

  • Page 29
    ... for Audiovox Germany offset by a $613 increase in commissions as a result of increased consumer electronics sales, changes in compensation programs related to commissionable sales for Jensen products and incremental selling expenses from the recently acquired Terk product line. General and...

  • Page 30
    ... Audiovox Specialized Applications, LLC (''ASA'') as a result of decreased sales due to increased competition for van conversion products and a decline in sales to one major customer. Other income increased due to a one-time $4,971 unrealized gain as a result of an initial public offering and stock...

  • Page 31
    ... believe the Electronics Group has an expanding market with a certain level of volatility related to both domestic and international new car sales, increased competition by manufacturers, technological advancements, price erosion and general economic conditions. As a result, all of our products are...

  • Page 32
    ... to change based on negotiations with manufacturers. We regularly review our cash funding requirements and attempt to meet those requirements through a combination of cash on hand, cash provided by operations, available borrowings under bank lines of credit and possible future public or private...

  • Page 33
    ... States dollars, price negotiations depend in part on the foreign currency of foreign manufacturers, as well as market, trade and political factors. Seasonality We typically experience seasonality in our operations. We generally sell a substantial amount of our products during September, October...

  • Page 34
    ... F-1 of this Annual Report on Form 10-K and is incorporated herein by reference. Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not Applicable Item 9a - Controls and Procedures Evaluation of Disclosure Controls and Procedures Audiovox Corporation and...

  • Page 35
    ... been audited by Grant Thornton LLP, an independent registered public accounting firm who also audited the Company's consolidated financial statements. Grant Thornton LLP's attestation report on management's assessment of the Company' s internal control over financial reporting is included below...

  • Page 36
    ... PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Audiovox Corporation We have audited management's assessment, included in the accompanying Management's Report on Internal Control over Financial Reporting, that Audiovox Corporation (a Delaware corporation) and subsidiaries (the ''Company...

  • Page 37
    ... by reference to the Company's Registration Statement on Form S-1; No. 33-10726, filed May 4, 1987). Securities Purchase Agreement made and entered into as of May 29, 2002, by and among Toshiba Corporation, Audiovox Communications Corp. and Audiovox Corporation (incorporated by reference to...

  • Page 38
    ... to Philip Christopher (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended November 30, 2002). Asset Purchase Agreement, dated as of June 11, 2004, by and among Audiovox Communications Corp., Quintex Mobile Communications Corporation, Audiovox Communications...

  • Page 39
    ... to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). Consolidated Financial Report of Audiovox Specialized Applications LLC (ASA) as of November 30, 2006 and 2005 and for the Years Ended November 30, 2006, 2005 and 2004 (filed herewith). Consent of McGladrey & Pullen, LLP (filed...

  • Page 40
    ... duly authorized. AUDIOVOX CORPORATION May 14, 2007 By: /s/ Patrick M. Lavelle Patrick M. Lavelle President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in...

  • Page 41
    AUDIOVOX CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Financial Statements: Report of Independent Registered Public Accounting Firm ...Consolidated Balance Sheets as of February 28, 2007 and 2006 ...Consolidated Statements of Operations for the year ended February 28, 2007, three ...

  • Page 42
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Audiovox Corporation We have audited the accompanying consolidated balance sheets of Audiovox Corporation (a Delaware corporation) and subsidiaries (the ''Company'') as of February 28, 2007 and 2006, and the...

  • Page 43
    Audiovox Corporation and Subsidiaries Consolidated Balance Sheets February 28, 2007 and 2006 (In thousands, except share data) 2007 2006 Assets Current assets: Cash and cash equivalents ...Restricted cash ...Short-term investments...Accounts receivable, net ...Inventory...Receivables from vendors ...

  • Page 44
    Audiovox Corporation and Subsidiaries Consolidated Balance Sheets, continued February 28, 2007 and 2006 (In thousands, except share data) 2007 2006 Liabilities and Stockholders' Equity Current liabilities: Accounts payable...Accrued expenses and other current liabilities...Accrued sales incentives...

  • Page 45
    ...data) Year Ended February 28, 2007 Three Months Ended February 28, 2006 Years ended November 30, 2005 2004 Net sales ...Cost of sales ...Gross profit ...Operating expenses: Selling...General and administrative ...Engineering and technical support...000 from sale of Cellular business in fiscal 2004) ...

  • Page 46
    ..., net ...Unrealized gain on marketable securities, net of tax effect of $881. (10,524) 401,157 - - - - - (2,308) 183 263 1,437 1,700 1,883 (2,308) Other comprehensive income ...Comprehensive income...Purchase of 168,800 shares of treasury stock ...Balances at February 28, 2006 ... (12,832) 400,732...

  • Page 47
    Audiovox Corporation and Subsidiaries Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss), continued Year Ended February 28, 2007, Three Months Ended February 28, 2006 and Years Ended November 30, 2005 and 2004 (In thousands, except share data) Accumulated Total other ...

  • Page 48
    ... equipment ...Tax benefit on stock options exercised ...Non-cash compensation adjustment ...Unrealized gain on trading security...Stock based compensation expense ...Realized loss on sale of investment...Changes in operating assets and liabilities, net of assets and liabilities acquired: Accounts...

  • Page 49
    ...February 28, 2006 Years ended November 30, 2005 2004 Purchase of long-term investment ...Net proceeds from sale of Cellular business ...Escrow payment ... on stock options exercised ...Cash used by discontinued operations ...Net cash used in financing activities ...Effect of exchange rate changes on ...

  • Page 50
    .... The Company has one reportable segment, the Electronics Group, which is organized by product category. The Electronics Group consists of five wholly-owned subsidiaries: Audiovox Electronics Corporation, American Radio Corp., Code Systems, Inc., Audiovox German Holdings GmbH and Audiovox Venezuela...

  • Page 51
    ... are recorded at fair value. Unrealized holding gains and losses on trading securities are included in earnings. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a component of accumulated other...

  • Page 52
    ... FOB shipping point or FOB destination, based upon terms established with the customer. The Company's selling price to its customers is a fixed amount that is not subject to refund or adjustment or contingent upon additional rebates. Any customer acceptance provisions, which are related to product...

  • Page 53
    ... completion of the fourth quarter and c) market information obtained from industry competitors and customers regarding pricing and product demand at the January 2006 Consumer Electronics trade show, the Company decided to discontinue certain product lines resulting in a $9,972 inventory writedown in...

  • Page 54
    ... Financial Statements, continued February 28, 2007 (Dollars in thousands, except share and per-share data) excess and obsolete inventory. Although the Company makes every effort to ensure the accuracy of its forecasts of future product demand, any significant unanticipated changes in demand, price...

  • Page 55
    ... at February 28, 2007 and 2006, respectively. Computer software includes approximately $1,240 and $353 of unamortized costs as of February 28, 2007 and 2006, respectively, related to the acquisition and installation of management information systems for internal use. k) Goodwill and Other Intangible...

  • Page 56
    ... incentives to its customers in the form of (1) co-operative advertising allowances; (2) market development funds; (3) volume incentive rebates and (4) other trade allowances. The Company accounts for sales incentives in accordance with EITF 01-9, ''Accounting for Consideration Given by a Vendor to...

  • Page 57
    ... programs: Co-operative advertising allowances are offered to customers as reimbursement towards their costs for print or media advertising in which the Company's product is featured on its own or in conjunction with other companies' products. The amount offered is either a fixed amount or is based...

  • Page 58
    ... of the product. Warranty expenses are accrued at the time of sale based on the Company's estimated cost to repair expected returns of products for warranty matters. This liability is based primarily on historical experiences of actual warranty claims as well as current information on repair costs...

  • Page 59
    ...share and per-share data) repair costs expense for the year ended February 28, 2007, the three months ended February 28, 2006 and the years ended November 30, 2005 and 2004 were $8,047, $477, $6,063 and $3,257, respectively. Changes in the Company's product warranties and product repair costs are as...

  • Page 60
    ... Year Ended Ended February 28, February 28, 2006 2007 Years ended November 30, 2005 2004 Weighted-average number of common shares outstanding (basic)...22,366,413 Effect of dilutive securities: Stock options and stock warrants ...190,859 Weighted-average number of common and potential common shares...

  • Page 61
    Audiovox Corporation and Subsidiaries Notes to Consolidated Financial Statements, continued February 28, 2007 (Dollars in thousands, except share and per-share data) t) Accounting for Stock-Based Compensation The Company has stock option plans under which employees and non-employee directors may be ...

  • Page 62
    ... primarily on historical daily price changes of the Company's stock equal to the expected life of the option. The risk free interest rate is based on the U.S. Treasury yield in effect at the time of the grant. The expected option term is the number of years the Company estimates the options will...

  • Page 63
    ...and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on February 28, 2007 was $3,782. This amount changes based on the fair market value of the company's stock. The total intrinsic...

  • Page 64
    ... were based on the required working capital needs of the Cellular business (Note 2). y) Issuances of Subsidiary Stock The Company's accounting policy on the issuances of subsidiary stock is to recognize through earnings the gain on the sale of the shares as long as the sale of the shares is not part...

  • Page 65
    ... $ 49,598 $ 404 (1,418) (1,365) 300 $(2,079) As consideration for the sale, the Company received $165,170 (''Purchase Price'') and an additional $8,472 pursuant to a net working capital adjustment (''the adjustment'') based on the working capital of ACC at the time of closing. The adjustment was...

  • Page 66
    ... a royalty free licensing agreement permitting UTSI to use the Audiovox brand name on certain products. During such period, the Company will not conduct, directly or indirectly, in the Cellular business without the prior written consent of UTSI. The Company has no separate accounting treatment for...

  • Page 67
    ... a result of the sale of the Cellular business, the Company recorded a gain of $67,000 for the year ended November 30, 2004, which was calculated as follows: Purchase Price ...Working capital adjustment ...Less: payment to former Cellular employees ...Less: professional fees incurred in conjunction...

  • Page 68
    ..., Spikemaster, Ambico and Discwasher brands for consumer electronics accessories. As consideration for Thomson's Americas consumer electronics accessory business, the Company paid the following: Purchase Price ...Working Capital Adjustment ...Acquisition related costs ...Severance costs ...Total...

  • Page 69
    ... except share and per-share data) Terk On January 4, 2005, the Company signed an asset purchase agreement to purchase certain assets of Terk Technologies Corp. (''Terk''). The purchase price was subject to a working capital adjustment based on the working capital of Terk at the time of closing, plus...

  • Page 70
    ... in Audiovox Specialized Applications, Inc. (''ASA'') which acts as a distributor to specialized markets for specialized vehicles, such as RV's and van conversions, of televisions and other automotive sound, security and accessory products. ASA's fiscal year end is November 30, 2006, however...

  • Page 71
    Audiovox Corporation and Subsidiaries Notes to Consolidated Financial Statements, continued February 28, 2007 (Dollars in thousands, except share and per-share data) Year Ended February 28, 2007 (unaudited) Three Months Ended February 28, 2006 (Unaudited) Years ended November 30, 2005 2004 Net ...

  • Page 72
    ... 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, 2007 and is renewable on an annual basis. Selected accounts receivable are purchased from the...

  • Page 73
    ... 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...

  • Page 74
    ... Corporation and Subsidiaries Notes to Consolidated Financial Statements, continued February 28, 2007 (Dollars in thousands, except share and per-share data) The (benefit) provision for income taxes is comprised of the following: Years Ended February 28, 2007 Three Months Ended February 28, 2006...

  • Page 75
    ...assets and liabilities for financial reporting and tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows: February 28, 2007 2006 Deferred tax assets: Accounts receivable ...Inventory...Property, plant and equipment ...Accruals and reserves ...Net...

  • Page 76
    ... to purchase shares of the Company's Class A common stock through payroll deductions at a minimum of 2% and a maximum of 15% of base salary compensation. Amounts withheld are used to purchase Class A common stock on the open market. The cost to the employee for the shares is equal to 85% of the fair...

  • Page 77
    Audiovox Corporation and Subsidiaries Notes to Consolidated Financial Statements, continued February 28, 2007 (Dollars in thousands, except share and per-share data) The Company's employee stock purchase plan is a non-compensatory plan, and the related expense is recorded in general and ...

  • Page 78
    ... issues standby letters of credit principally to secure certain bank obligations and insurance policies. The Company had open commercial letters of credit of $6,056 and $13,936 and standby letters of credit of $3,252 and $2,035 at February 28, 2007 and 2006, respectively. The terms of these letters...

  • Page 79
    ... 11% of net sales. A portion of the Company's customer base may be susceptible to downturns in the retail economy, particularly in the consumer electronics industry. Additionally, customers specializing in certain automotive sound, security and accessory products may be impacted by ï¬,uctuations in...

  • Page 80
    Audiovox Corporation and Subsidiaries Notes to Consolidated Financial Statements, continued February 28, 2007 (Dollars in thousands, except share and per-share data) Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the...

  • Page 81
    ...''), In re Audiovox Corporation Derivative Litigation. The Complaint challenges the payment of $16,000 to Mr. Christopher pursuant to a Personally Held Intangibles Agreement, an additional $4,000 to Mr. Christopher pursuant to an Agreement and General Release, $1,916 to Mr. Shalam pursuant to an...

  • Page 82
    ... suppliers, manufacturers and distributors of hand-held wireless telephones alleging damages relating to exposure to radio frequency radiation from hand-held wireless telephones are still pending. No assurances regarding the outcome of this matter can be given, as the Company is unable to assess...

  • Page 83
    Audiovox Corporation and Subsidiaries Notes to Consolidated Financial Statements, continued February 28, 2007 (Dollars in thousands, except share and per-share data) 18) Unaudited Quarterly Financial Data Selected unaudited, quarterly financial data of the Company.... 28, 2006 2006 Net sales...Gross...

  • Page 84
    ...German Holdings GmbH completed the acquisition of OEHLBACH Kabel GmbH, a European market leader in the accessories field, for a total purchase price of approximately $6,600, in addition to certain earn-out payments. The purpose of this acquisition was to expand our electronic accessory product line...

  • Page 85
    ... payments made or credits issued to customers. For the reserve for warranties and product repair costs, deductions represent currency effects and payments for labor and parts made to service centers and vendors for the repair of units returned under warranty. (c) Column C includes $1,255 and $1,705...

  • Page 86
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  • Page 87
    ... 21 Subsidiaries of Registrant Subsidiaries Audiovox Accessories Corp...Audiovox Communications Corp...Audiovox Electronics Corporation ...American Radio Corp...Audiovox Holding Corp...Audiovox Communications Canada Co...Audiovox Venezuela C.A...Audiovox German Holdings GmbH ...Code Systems, Inc...

  • Page 88
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  • Page 89
    ...the adoption of Financial Accounting Standards Board Statement No. 123(R), Share-Based Payments on December 1, 2005), and management's assessment of the effectiveness of internal control over financial reporting included in the Annual Report of Audiovox Corporation and subsidiaries on Form 10-K for...

  • Page 90
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  • Page 91
    ...-14(a) of the Securities Exchange Act of 1934 I, Patrick M. Lavelle, President and Chief Executive Officer of Audiovox Corporation, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Audiovox Corporation (the ''Company''); Based on my knowledge, this report does not contain any...

  • Page 92
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  • Page 93
    ... of the Securities Exchange Act of 1934 I, C. Michael Stoehr, Senior Vice President and Chief Financial Officer of Audiovox Corporation, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Audiovox Corporation (the ''Company''); Based on my knowledge, this report does not contain...

  • Page 94
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  • Page 95
    ... Act of 2002 In connection with the Annual Report of Audiovox Corporation (the ''Company'') on Form 10-K for the period ended February 28, 2007 (the ''Report'') as filed with the Securities and Exchange Commission on the date hereof, I, Patick M. Lavelle, President and Chief Executive Officer of...

  • Page 96
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  • Page 97
    ... In connection with the Annual Report of Audiovox Corporation (the ''Company'') on Form 10-K for the period ended February 28, 2007 (the ''Report'') as filed with the Securities and Exchange Commission on the date hereof, I, C. Michael Stoehr, Senior Vice President and Chief Financial Officer of...

  • Page 98
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  • Page 99
    Exhibit 99.1 Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Consolidated Financial Report 11.30.2006 McGladrey & Pullen Certified Public Accountants McGladrey & Pullen, LLP is a member firm of RSM International -an affiliation of separate and independent legal...

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    CONTENTS Report of Independent Registered Public Accounting Firm On The Financial Statements ...Consolidated Financial Statements ...Consolidated balance sheets ...Consolidated statements of income ...Consolidated statements of members' equity...Consolidated statements of cash ï¬,ows ...Notes to fi...

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    ...-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Members Audiovox Specialized Applications, LLC and Subsidiary Elkhart, Indiana We have audited the consolidated balance sheets of Audiovox Specialized Applications, LLC and Subsidiary as of November 30, 2006 and 2005, and the related...

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Consolidated Balance Sheets November 30, 2006 and 2005 2006 2005 Assets Current Assets Cash and cash equivalents ...Available-for-sale securities ...Trade receivables ...Inventories...Prepaid expenses ...Total ...

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Consolidated Statements of Income Years Ended November 30, 2006, 2005 and 2004 2006 2005 2004 Net sales ...Cost of goods sold ...Gross Profit ...Selling, general...337 $ 7,303,965 See Notes to Financial Statements. 3

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Consolidated Statements of Members Equity Years Ended November 30, 2006, 2005 and 2004 2006 2005 2004 Balance, beginning...Net income ...Member distributions ...Balance, ending ... $24,145,549 5,795,107 (6,603,808) ...

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Consolidated Statements of Cash Flows Years Ended November 30, 2006, 2005 and 2004 2006 2005 2004 Cash Flows From Operating Activities Net income...Adjustments to reconcile net income to net cash provided by ...

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    ...proprietary line of products include: Flexvision LCD Entertainment Systems, including DVD and video cassette players; Voyager Rear Observation and Bus Monitor/PA Systems and radios; Nextgen Modular Chassis Systems; Aquatronics Marine Radios, Speakers, and Housings; Jensen Marine Radios, Speakers and...

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Notes to Financial Statements Sales incentives: The Company offers sales incentives to its customers primarily in the form of co-operative advertising allowances and rebates. The Company accounts for sales ...

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    ... on-hand and records a provision for excess and obsolete inventory based primarily from selling prices, indications from customers based upon current price negotiations and purchase orders. The Company's industry is characterized by rapid technological change and frequent new product introductions...

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Notes to Financial Statements manufacturer or its dealers to repair or replace defective products during such warranty periods at no cost to the consumer. The Company estimates the costs that may be incurred under ...

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Notes to Financial Statements comparing the carrying value of the long-lived assets with the estimated future net undiscounted cash ï¬,ows expected to result from the use of the assets, including cash ï¬,ows from ...

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Notes to Financial Statements A summary of proceeds from the sale of available-for-sale securities and investment earnings for the years ended November 30, 2006, 2005, and 2004 is as follows: 2006 2005 2004 ...

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    ... with Audiovox whereby the Company earns a 3% royalty on the member's purchases of certain mobile video product from a third party. The related revenue has been included in net sales on the income statement. At November 30, 2006 and 2005, amounts included in trade receivables and accounts payable...

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    Audiovox Specialized Applications, LLC and Subsidiary (A Limited Liability Company) Notes to Financial Statements tax purposes. Discretionary contributions were approximately $290,000, $204,000, and $270,000, for the years ended November 30, 2006, 2005, and 2004, respectively. The Company also ...

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    ... Registered Public Accounting Firm We have issued our report, dated March 7, 2007, on the consolidated financial statements of Audiovox Specialized Applications, LLC for the year ended November 30, 2006 which is included in the Annual Report of Audiovox Corporation and subsidiaries on Form 10...

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    ... Office Audiovox Corporation 180 Marcus Blvd. Hauppauge, NY 11788 (631) 231-7750 Stock Exchange Listing Nasdaq® Ticker Symbol: ''VOXX'' Transfer Agent and Registrar Continental Stock Transfer and Trust Company 17 Battery Place, 8th Floor New York, NY 10004 (212) 509-4000 Financial Public Relations...

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