Audiovox 2006 Annual Report Download - page 73

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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)
20%of the Company’s stated share capital in Audiovox Germany at a call price equal to the
same proportion of the actual price paid by the Company for Audiovox Germany. The put
options cannot be exercised until the later of (i) November 30, 2008 or (ii) the full repayment
(including interest) of an inter-company loan granted to Audiovox Germany in the amount
of 5.3 million Euros. Notwithstanding the lapse of these time periods, the put options become
immediately exercisable upon (i) the sale of Audiovox Germany or (ii) the termination of
employment or death of the employee. The put price to be paid to the employee upon
exercise will be the then net asset value per share of Audiovox Germany. Accordingly, the
Company recognizes compensation expense based on 20%of the increase in Audiovox
Germany’s net assets representing the incremental change of the put price over the call
option price. Compensation (benefit) expense for these options amounted to $353, $(115),
$408 and $371 for the year ended February 28, 2007, the three months ended
February 28, 2006 and the years ended November 30, 2005 and 2004, respectively.
The following is a maturity table for debt and bank obligations outstanding at February 28,
2007:
Total Amounts
Committed 2008 2009 2010 2011
Bank Obligations ....................... $2,890 $2,890 $ — $ — $ —
Debt .................................. 6,954 1,524 3,068 1,575 787
Total .................................. $9,844 $4,414 $3,068 $1,575 $787
9) Income Taxes
The components of income (loss) from continuing operations before the provision for income
taxes are as follows:
Years
Ended
February 28,
2007
Three
Months
Ended
February 28,
2006
Year ended
November 30,
2005 2004
Domestic Operations ........................ $(1,140) $ (359) $(20,448) $(1,270)
Foreign Operations .......................... 3,298 (1,117) 2,352 2,568
$ 2,158 $(1,476) $(18,096) $ 1,298
F-33