Audiovox 2006 Annual Report Download - page 20

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• 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 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 electronics accessory product line to international markets.
On January 29, 2007, we completed the acquisition of Thomson’s Americas consumer electronics
accessory business for a total purchase price of approximately $60,485 plus a five year fee related to
the RCA brand in connection with future sales. The purpose of this acquisition was to enhance our
market share in the accessory business, which includes the rights to the RCA brand for consumer
electronics accessories as well as the Recoton, Spikemaster, Ambico and Discwasher brands for use on
any product category and the Jensen, Advent, Acoustic Research and Road Gear brands for
consumer electronics accessories.
On January 4, 2005, we purchased certain assets and liabilities of Terk Technologies Corp.
(‘‘Terk’’) for $15,274, as adjusted. The purpose of this acquisition was to increase our market share for
satellite radio products as well as accessories, such as antennas for HDTV products.
Divestitures
On November 7, 2005, we completed the sale of our majority owned subsidiary, Audiovox
Malaysia (‘‘AVM’’), to the then current minority interest shareholder due to increased competition
from non-local OEM’s and deteriorating credit quality of local customers. We sold our remaining
equity in AVM in exchange for a $550 promissory note and were released from all of our Malaysian
liabilities, including bank obligations resulting in a loss on sale of $2,079.
On November 1, 2004, we completed the divestiture of our Cellular business to UTSI. The
Cellular business was a major driver in our growth over the past twenty years. However, consolidation
within the Cellular industry, extensive price competition and the inability to successfully partner with a
manufacturer created a difficult challenge to compete within the Cellular industry. The competitive
nature of the Cellular business caused inconsistency in Cellular results, which led to the sale of
selected assets and certain liabilities of our Cellular business to UTSI for an initial purchase price of
$165,170, a working capital adjustment of $8,472 and the retention of certain account receivables of
$148,494 for total gross proceeds of $322,136. After paying outstanding domestic obligations, taxes and
other costs associated with the divestiture, we received net proceeds of approximately $144,053. As a
result of the sale of the Cellular business, we recorded a gain of $67,000 within discontinued
operations for the year ended November 30, 2004.
Currently, the remaining net proceeds from the Cellular divestiture has been invested in
short-term investments with the intention of maintaining principal while generating a moderate return
and maintaining liquidity in the account’s holdings. We have used and will continue to use the
proceeds to pursue strategic and complementary acquisitions or invest in our current business.
However, we may use all or a portion of the proceeds for other purposes and are considering all
market opportunities.
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