Audiovox 2006 Annual Report Download - page 51

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Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2007
(Dollars in thousands, except share and per-share data)
d) Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of demand deposits with banks and highly liquid money
market funds with original maturities of three months or less when purchased. Cash
equivalents amounted to $14,017 and $12,696 at February 28, 2007 and 2006, respectively.
Cash amounts held in foreign bank accounts amounted to $2,882 and $1,661 at
February 28, 2007 and 2006, respectively. Restricted cash of $1,488 at February 28, 2006
represented the amount held in escrow for the purchase of Audiovox Venezuela’s minority
interest during the year ended February 28, 2007 (Note 17).
e) Investment Securities
The Company classifies its investment securities in one of two categories: trading or
available-for-sale. Trading securities are bought and held principally for the purpose of
selling them in the near term. All other securities not included in trading are classified as
available-for-sale.
Trading and available-for-sale securities 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 comprehensive income
(loss) until realized. Realized gains and losses from the sale of available-for-sale securities
are determined on a specific identification basis. Dividend and interest income are
recognized when earned.
The cost, gross unrealized gains (losses) and aggregate fair value of investment securities as
of February 28, 2007 and 2006 are as follows:
February 28, 2007
Cost
Unrealized
Holding
Gain/(Loss)
Aggregate
Fair
Value
Short-term investments*............................ $140,872 — $140,872
CellStar Common Stock* ........................... 643 168 811
Bliss-tel Stock and Warrants* (Note 14) .............. 6,510 (2,755) 3,755
Other Investment*................................. 1,040 — 1,040
Trading Securities ................................. 7,573 — 7,573
Long-term investments ........................... $ 15,766 ($ 2,587) $ 13,179
February 28, 2006
Cost
Unrealized
Holding
Gain/(Loss)
Aggregate
Fair
Value
Short-term investments*............................ $160,799 — $160,799
CellStar Common Stock* ........................... 643 352 995
Bliss-tel Stock and Warrants* (Note 14) .............. 6,987 181 7,168
Trading Securities ................................. 6,546 — 6,546
Long-term investments ........................... $ 14,176 $533 $ 14,709
* Represents investments that are classified as available-for-sale securities.
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