Audiovox 2006 Annual Report Download - page 7

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• specialty and internet retailers,
• independent 12 volt retailers,
• distributors,
• new car dealers,
• vehicle equipment manufacturers (OEM), and
• the U.S. military
We sell our products under OEM arrangements with domestic and/or international subsidiaries of
automobile manufacturers such as Ford Motor Company, Daimler Chrysler, General Motors
Corporation, Toyota, Kia, Mazda, Jaguar and Subaru. These projects require a close partnership with
the customer as we develop products to meet specific requirements. OEM projects accounted for
approximately 11%,13%,10%and 14%of net sales for the year ended February 28, 2007, the three
months ended February 28, 2006 and the years ended November 30, 2005 and 2004, respectively.
Our five largest customers represented 18%,16%,24%, and 27%of net sales during the year
ended February 28, 2007, the three months ended February 28, 2006 and the years ended
November 30, 2005 and 2004, respectively. During the year ended February 28, 2007, the three months
ended February 28, 2006 and the year ended November 30, 2005, no single customer accounted for
more than 10%of net sales. During the year ended November 30, 2004, one customer accounted for
11%of net sales.
We also provide value-added management services, which include:
• product design and development,
• engineering and testing,
• sales training,
• instore display design,
• installation training and technical support,
• product repair services and warranty,
• nationwide installation network, and
• warehousing.
We have flexible shipping policies designed to meet customer needs. In the absence of specific
customer instructions, we ship products within 24 to 48 hours from the receipt of an order from public
warehouses and leased facilities throughout the United States, Venezuela and Germany.
Product Development, Warranty and Customer Service
Our product development cycle includes:
• identifying consumer trends and potential demand,
• responding to those trends through product design and feature integration, which includes
software design, electrical engineering, industrial design and pre-production testing. In the
case of OEM customers, the product development cycle may also include product validation
to customer quality standards, and
• evaluating and testing new products in our own facilities to ensure compliance with our
design specifications and standards.
We work closely with customers and suppliers throughout the product design, testing and
development process in an effort to meet the expectations of consumer demand for
technologically-advanced and high quality products. Our Hauppauge, New York facility is ISO
14001:2004, ISO/TS 1649:2002 certified, which requires the monitoring of quality standards in all facets
of business.
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