Audiovox 2006 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 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)
At February 28, 2007, the Company was obligated under non-cancelable capital and operating
leases for equipment and warehouse facilities for minimum annual rental payments as follows:
Capital
Lease Operating
Leases
2008 .......................................................... $ 521 $ 3,533
2009 .......................................................... 522 2,688
2010 .......................................................... 521 2,266
2011 .......................................................... 521 1,834
2012 .......................................................... 535 1,703
Thereafter ..................................................... 9,351 9,250
Total minimum lease payments ................................. 11,971 $21,274
Less: minimum sublease income .................................. 1,472
Net......................................................... 10,499
Less: amount representing interest ................................ 4,758
Present value of net minimum lease payments...................... 5,741
Less: current installments included in accrued expenses and other
current liabilities.............................................. 65
Long-term obligation............................................ $ 5,676
Rental expense for the above-mentioned operating lease agreements and other leases on a
month-to-month basis approximated $2,319, $536, $2,097 and $2,475 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 Company leases certain facilities and equipment from its principal stockholder and several
officers. At February 28, 2007, minimum annual rental payments on these related party leases, in
addition to the capital lease payments, which are included in the above table, are as follows:
2008 ......................................................................... $ 654
2009 ......................................................................... 673
2010 ......................................................................... 693
2011 ......................................................................... 714
2012 ......................................................................... 735
Thereafter ................................................................... 3,805
Total ........................................................................ $7,274
13) Financial Instruments
a) Off-Balance Sheet Risk
Commercial letters of credit are issued by the Company during the ordinary course of
business through major domestic banks as requested by certain suppliers. The Company also
issues standby letters of credit principally to secure certain bank obligations and insurance
policies. The Company had open commercial letters of credit of $6,056 and $13,936 and
standby letters of credit of $3,252 and $2,035 at February 28, 2007 and 2006, respectively. The
terms of these letters of credit are all less than one year. No material loss is anticipated due
to nonperformance by the counter parties to these agreements. The fair value of these open
F-38