Audiovox 2006 Annual Report Download - page 56

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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)
Other Intangible Assets
February 28, 2007
Gross
Carrying
Value Accumulated
Amortization
Total Net
Book
Value
Patents subject to amortization ...................... $ 625 $193 $ 432
Trademarks/Tradenames not subject to amortization
(see below) ..................................... 56,835 — 56,835
Contract subject to amortization (5 years) ............ 1,104 497 607
Total............................................. $58,564 $690 $57,874
February 28, 2006
Gross
Carrying
Value Accumulated
Amortization
Total Net
Book
Value
Patents subject to amortization ...................... $ 150 $ 18 $ 132
Trademarks/Tradenames not subject to amortization . . . 10,042 — 10,042
Contract subject to amortization (5 years) ............ 1,104 276 828
Total............................................. $11,296 $294 $11,002
During the year ended February 28, 2007, the Company purchased $475 of patents subject
to amortization with estimated useful lives ranging from twenty-four to forty-five months.
In addition, the Company acquired in January 2007 $46,793 of intangible assets in
connection with an acquisition, which has been preliminarily allocated to trademarks not
subject to amortization (Note 4).
Amortization expense for intangible assets amounted to $395, $58 and $236 for the year
ended February 28, 2007, three months ended February 28, 2006 and year ended
November 30, 2005, respectively. The estimated aggregate amortization expense for all
amortizable intangibles for each of the succeeding years ending February 28, 2012 is as
follows:
Fiscal Year Amount
2008 ....................................... $410
2009 ....................................... 343
2010 ....................................... 214
2011 ....................................... 15
2012 ....................................... 15
$997
l) Sales Incentives
The Company offers sales incentives to its customers in the form of (1) co-operative
advertising allowances; (2) market development funds; (3) volume incentive rebates and
(4) other trade allowances. The Company accounts for sales incentives in accordance with
EITF 01-9, ‘‘Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of Vendor’s Products)’’ (EITF 01-9). Except for other trade allowances, all sales
incentives require the customer to purchase the Company’s products during a specified
period of time. All sales incentives require customers to claim the sales incentive within a
F-16