Audiovox 2006 Annual Report Download - page 54

Download and view the complete annual report

Please find page 54 of the 2006 Audiovox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

Audiovox Corporation and Subsidiaries
Notes to Consolidated 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 or technological developments could have a significant impact on the value
of the Company’s inventory and reported operating results.
i) Debt Issuance Costs
Costs incurred in connection with the previous restructuring of bank obligations were
capitalized. These charges were amortized over the lives of the respective agreements
resulting in amortization expense of $1,024 for the year ended November 30, 2004. These
capitalized costs were fully amortized at November 30, 2004.
j) Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Property
under a capital lease is stated at the present value of minimum lease payments. Major
improvements are capitalized and minor replacements, maintenance and repairs are
charged to expense as incurred. Upon retirement or disposal of assets, the cost and related
accumulated depreciation are removed from the consolidated balance sheets.
A summary of property, plant and equipment, net, is as follows:
February 28,
2007 2006
Land .................................................... $ 338 $ 338
Buildings ................................................ 5,806 5,806
Property under capital lease................................ 6,981 7,142
Furniture, fixtures and displays ............................. 2,457 2,392
Machinery and equipment ................................. 5,912 5,505
Construction-in-progress................................... 48 —
Computer hardware and software........................... 15,146 13,152
Automobiles ............................................. 977 845
Leasehold improvements .................................. 5,136 4,989
42,801 40,169
Less accumulated depreciation and amortization.............. 24,782 21,370
$18,019 $18,799
Depreciation is calculated on the straight-line method over the estimated useful lives of the
assets as follows:
Buildings................................. 20-30 years
Furniture, fixtures and displays ............. 5-10 years
Machinery and equipment.................. 5-10 years
Computer hardware and software ........... 3-5years
Automobiles ............................. 3years
Leasehold improvements are amortized over the shorter of the lease term or estimated
useful life of the asset. Assets acquired under capital lease are amortized over the term of
the lease. Capitalized computer software costs obtained for internal use are amortized on a
straight-line basis.
Depreciation and amortization of property, plant and equipment amounted to $3,599, $893,
$3,399 and $2,638 for the year ended February 28, 2007, the three months ended
F-14