Audiovox 2009 Annual Report Download - page 36

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Income Tax Provision
The effective tax rate in Fiscal 2009 was a provision of 27.0% on a pre-tax loss from continuing operations of $(55,954) as
compared to a provision of 36.3% on a pre-tax income of $10,595 from continuing operations in the prior year. The increase in the
effective tax rate is due to impairment of non-deductible goodwill and the provision of a valuation allowance against the deferred tax
assets as the Company does not believe that it will realize its deferred tax assets on a more-likely-than-not basis.
Income (loss) from Discontinued Operations
The following is a summary of financial results included within discontinued operations :
Fiscal Fiscal
2009 2008
Net sales from discontinued operations $ - $ -
Income (loss) from discontinued operations before income taxes 3,248
Income tax (provision) benefit - (1,529)
Net income (loss) from discontinued operations - 1,719
Loss on sale of discontinued operations, net of tax - -
Loss from discontinued operations, net of tax $ - $ 1,719
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 15 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
2009 2008
Operating (loss) income $ (53,443) $ 4,422
Other income, net (2,511) 6,172
(Loss) income from continuing operations before income taxes (55,954) 10,594
Income tax benefit (expense) (15,075) (3,848)
Net (loss) income from continuing operations (71,029) 6,746
Net income (loss) from discontinued operations, net of tax - 1,719
Net (loss) income $ (71,029) $ 8,465
Net (loss) income per common share:
Basic $ (3.11) $ 0.37
Diluted $ (3.11) $ 0.37
Net (loss) income was favorably impacted by sales incentive reversals of $4,083 ($0 after taxes) and $4,108 ($2,506 after taxes) in
Fiscal 2009 and 2008, respectively, and pre-tax income of $3,248 ($1,719 after taxes) recorded in discontinued operations in Fiscal
2008. During fiscal 2009, the Company was impacted by several non-standard charges related to the economy, market conditions,
customers and other events. The following is a pro forma presentation of our net income detailing the above mentioned charges.
Proforma information presented is considered a non-GAAP financial measure. The Company believes that this presentation of
proforma results provides useful information by excluding specific items the Company believes are not indicative of core operating
results.
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Source: AUDIOVOX CORP, 10-K, May 14, 2009 Powered by Morningstar® Document Research℠