Audiovox 2008 Annual Report Download - page 34

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Other income decreased due to a decline in interest income as a result of a decline in our short-term investment holdings due to cash
utilized for acquisitions as well as current working capital requirements. This decrease was partially offset by realized gains on the
sale of a portion of our marketable equity securities.
Income Tax Benefit
The effective tax rate in Fiscal 2008 was a provision of 36.3% as compared to a benefit of 71.1% in the prior year. The increase in the
effective tax rate is due to lower tax exempt interest income earned on our short-term investments and increased income from
operations. The effective tax rate is greater than the Federal statutory rate due to the impact of state and local taxes and the resolution
of certain domestic and foreign tax audits.
Income (loss) from Discontinued Operations
The following is a summary of financial results included within discontinued operations :
Fiscal Fiscal
2008 2007
Net sales from discontinued operations $ - $ -
Income (loss) from discontinued operations before income taxes 3,248 (1,163)
Income tax (provision) benefit (1,529) 407
Net income (loss) from discontinued operations $ 1,719 $ (756)
The income (loss) from discontinued operations in Fiscal 2007 is primarily due to legal and related costs associated with contingencies
pertaining to our discontinued Cellular business. The increase in the income from discontinued operations in Fiscal 2008 is due to a
derivative legal settlement which resulted in pre-tax income of $3,349, net of legal fees and other administrative costs of $3,401 (see
Note 16 to the Consolidated Financial Statements). The effective tax rate from discontinued operations for Fiscal 2008 was impacted
by state and local taxes and the resolution of a domestic tax audit.
Net Income
The following table sets forth, for the periods indicated, selected statement of operations data beginning with operating income (loss)
from continuing operations to reported net income and basic and diluted net income per common share :
Fiscal Fiscal
2008 2007
Operating income (loss) $ 4,422 $ (5,077)
Other income, net 6,172 7,235
Income from continuing operations before income taxes 10,594 2,158
Income tax (expense) benefit (3,848) 1,534
Net income from continuing operations 6,746 3,692
Net income (loss) from discontinued operations, net of tax 1,719 (756)
Net income $ 8,465 $ 2,936
Net income per common share:
Basic $ 0.37 $ 0.13
Diluted $ 0.37 $ 0.13
30
Source: AUDIOVOX CORP, 10-K, May 14, 2008