Audiovox 2006 Annual Report Download - page 111

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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
Proceeds from the sale of available-for-sale securities ...... $19,529,850 $5,435,000 $2,013,779
Realized (losses) on sale of marketable securities ......... — — ($ 2,056)
Interest earned ....................................... 292,623 204,707 50,668
Dividends ............................................ — — —
$ 292,623 $ 204,707 $ 48,612
Note 3. Leasehold Improvements and Equipment
The cost of leasehold improvements and equipment and the related accumulated depreciation at
November 30, 2006 and 2005 are as follows:
2006 2005
Leasehold improvements ..................... $ 798,267 $ 528,741
Machinery and equipment .................... 978,244 951,677
Tooling and molding ......................... 754,954 545,713
Transportation equipment .................... 342,155 342,155
Office furniture and fixtures .................. 359,377 311,173
Computer equipment ........................ 761,106 717,357
Booth displays .............................. 226,307 159,064
Construction in progress...................... 74,290 36,664
4,294,700 3,592,544
Less accumulated depreciation ................ 2,444,612 1,882,158
$1,850,088 $1,710,386
Note 4. Pledged Assets and Notes Payable
The terms of a loan agreement with a bank permit the Company to borrow a maximum of
$17,000,000, subject to a borrowing base determined by eligible accounts receivable and inventories as
defined by the agreement. At November 30, 2006 no amount was outstanding under this agreement.
Borrowings under the agreement bearinterest at prime minus 1.25%or LIBOR plus an applicable
margin, at the Company’s option, are collateralized by accounts receivable, inventories, and
equipment, and are due on demand. The Company also has a standby letter of credit of $1,134,485
which reduces the available borrowings on the line of credit.
Note 5. Major Vendors
For the years ended November 30, 2006, 2005, and 2004, the Company purchased approximately
56%of its products for resale from five vendors, four of which were the same in all three years.
Note 6. Transactions With Related Parties and Lease Commitments
The Company is affiliated with various entities through common ownership by Audiovox.
Transactions with Audiovox for the years ended November 30, 2006, 2005, and 2004 are
approximately as follows:
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