Audiovox 2008 Annual Report Download - page 39

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Operating activities used cash of $64,691 for the year ended February 29, 2008 due to: i) net income generated from
continuing operations of $6,746, ii) increased inventory, accounts receivable and prepaid balances due to increased sales activity from
our acquisitions and iii) decreased accounts payable and accrued expenses due to the timing and payment of invoices and
expenses partially offset by depreciation and amortization. Cash provided or used by operating activities is primarily generated from
net income from continuing operations, the collection of accounts receivable, inventory turnover and payment of accounts payable,
accrued expenses and income taxes. The timing of payments and collections can fluctuate and are often impacted by the timing of
sales and inventory purchases.
Investing activities provided cash of $93,465 during the year ended February 29, 2008, primarily due to the sale (net of
purchases) of short and long-term investments partially offset by the purchase of acquired businesses and capital expenditures. Cash
provided or used by investing activities is primarily generated from activity related to investments as well as acquisitions and
divestitures.
Financing activities used $5,241during the year ended February 29, 2008, primarily from the purchase of treasury stock and payment
of bank and other debt obligations partially offset by proceeds received from the exercise of stock options and warrants.
As of February 29, 2008, we have a domestic credit line to fund the temporary short-term working capital needs of the
Company. This line expires on June 30, 2008 and allows aggregate borrowings of up to $25,000 at an interest rate of Prime (or
similar designations) plus 1%. In addition, Audiovox Germany has a 16,000 Euro accounts receivable factoring arrangement and a
6,000 Euro Asset-Based Lending (“ABL”) credit facility.
Certain contractual cash obligations and other commercial commitments will impact our short and long-term liquidity. At February
29, 2008, such obligations and commitments are as follows:
Payments Due by Period
Less than 1-3 4-5 After
Contractual Cash Obligations Total 1 Year Years Years 5 Years
Capital lease obligation (1) $ 11,450 $ 521 $ 1,043 $ 1,108 $ 8,778
Operating leases (2) 23,250 4,205 6,148 4,630 8,267
Total contractual cash obligations $ 34,700 $ 4,726 $ 7,191 $ 5,738 $ 17,045
Amount of Commitment
Expiration per period
Total
Amounts Less than 1-3 4-5 After
Other Commercial Commitments Committed 1 Year Years Years 5 years
Bank obligations (3) $ 3,070 $ 3,070 $ - $ - $ -
Stand-by letters of credit (4) 2,399 2,399 - - -
Commercial letters of credit (4) 3,803 3,803 - - -
Debt (5) 1,703 935 530 238 -
Contingent earn-out payments (6) 5,893 890 3,916 1,087 -
Unconditional purchase obligations (7) 71,546 71,546 - - -
Total commercial commitments $ 88,414 $ 82,643 $ 4,446 $ 1,325 $ -
1. Represents total payments (interest and principal) due under a capital lease obligation which has a current (included in other
current liabilities) and long term principal balance of $70 and $5,607, respectively at February 29, 2008.
35
Source: AUDIOVOX CORP, 10-K, May 14, 2008