Audiovox 2008 Annual Report Download - page 127

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Audiovox Specialized Applications, LLC And Subsidiary
(A Limited Liability Company)
Notes To Financial Statements
The Company has a royalty agreement with Audiovox whereby the Company earns a 3% royalty on the member's purchases of certain
mobile video product from a third party. The related revenue has been included in net sales on the income statement.
At November 30, 2007 and 2006, amounts included in trade receivables and accounts payable resulting from the above transactions
are as follows:
2007 2006
Trade receivables $ 143,490 $ 108,136
Accounts payable 359,376 541,559
At November 30, 2007, the Company leases warehouse, manufacturing, and office facilities from Irions Investments, LLC, an entity
related through common ownership, for approximately $41,000 per month, plus the payment of property taxes, normal maintenance,
and insurance on the property under an agreement which expires August 2016, with two five-year options to extend, at the Company's
discretion.
The Company leases certain equipment and buildings from unrelated parties under agreements that require monthly payments totaling
approximately $2,300 and expire through October 2010.
The total rental expense included in the income statements for the years ended November 30, 2007, 2006, and 2005 is approximately
$522,000, $507,000 and $576,000, respectively, of which approximately $484,000, $476,000 and $521,000, respectively was paid to
Irions Investments, LLC.
The total approximate minimum rental commitment at November 30, 2007 under the leases is due as follows:
Related Party Other Total
During the year ending November 30,
2008 $ 494,000 $ 28,000 $ 522,000
2009 494,000 19,000 513,000
2010 494,000 8,000 502,000
2011 494,000 - 494,000
2012 494,000 - 494,000
Thereafter 1,852,000 - 1,852,000
$ 4,322,000 $ 55,000 $ 4,377,000
Note 7. Employee Benefit Plans
The Company has a profit-sharing and 401(k) plan for the benefit of all eligible employees. The Company's contributions are
discretionary and are limited to amounts deductible for federal income tax purposes. Discretionary contributions were approximately
$352,000, $290,000 and $204,000, for the years ended November 30, 2007, 2006 and 2005 respectively.
The Company also maintains a discretionary employee bonus plan for the benefit of its key executive, operating officers, managers
and select salespersons. The Company has paid or accrued bonuses of approximately $1,622,000, $1,386,000 and $884,000, during
the years ended November 30, 2007, 2006 and 2005, respectively.
13
Source: AUDIOVOX CORP, 10-K, May 14, 2008