Audiovox 2006 Annual Report Download - page 32

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Certain contractual cash obligations and other commercial commitments will impact our short and
long-term liquidity. At February 28, 2007, such obligations and commitments are as follows:
Payments Due by Period
Contractual Cash Obligations Total Less than
1 Year 1-3 Years 4-5 Years After 5
Years
Capital lease obligation (1) .............. $11,971 $ 521 $1,043 $1,056 $ 9,351
Operating leases (2)..................... 21,274 3,533 4,954 3,537 9,250
Total contractual cash obligations ......... $33,245 $4,054 $5,997 $4,593 $18,601
Amount of Commitment Expiration per period
Other Commercial Commitments
Total
Amounts
Committed Less than
1 Year 1-3 Years 4-5 Years After
5 years
Bank obligations (3) ............... $ 2,890 $ 2,890 — — —
Stand-by letters of credit (4) ........ 3,252 3,252 — — —
Commercial letters of credit (4)...... 6,056 6,056 — — —
Debt (5) .......................... 6,954 1,524 4,643 787 —
Unconditional purchase obligations
(6)............................. 73,484 73,484 — — —
Total commercial commitments ...... $92,636 $87,206 $4,643 $787 —
(1) Represents total payments (interest and principal) due under a capital lease obligation which has
a current (included in other current liabilities) and long term principal balance of $65 and $5,676,
respectively at February 28, 2007.
(2) We enter into operating leases in the normal course of business.
(3) Represents amounts outstanding under the Audiovox Germany factoring agreement at
February 28, 2007.
(4) Commercial letters of credit are issued during the ordinary course of business through major
domestic banks as requested by certain suppliers. We also issue standby letters of credit to secure
certain bank obligations and insurance requirements.
(5) Represents amounts outstanding under a loan agreement for Audiovox Germany. This amount
also includes amounts due under a call-put option with certain employees of Audiovox Germany.
(6) Open purchase obligations represent inventory commitments. These obligations are not recorded
in the consolidated financial statements until commitments are fulfilled and such obligations are
subject 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 debt and/or equity offerings. At times, we evaluate
possible acquisitions of, or investments in, businesses that are complementary to ours, which
transactions may require the use of cash. We believe that our cash, other liquid assets, operating cash
flows, credit arrangements, access to equity capital markets, taken together, provides adequate
resources to fund ongoing operating expenditures. In the event that they do not, we may require
additional funds in the future to support our working capital requirements or for other purposes and
may seek to raise such additional funds through the sale of public or private equity and/or debt
financings as well as from other sources. No assurance can be given that additional financing will be
available in the future or that if available, such financing will be obtainable on terms favorable when
required.
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