Audiovox 2009 Annual Report Download - page 7

In November 2007, AAC completed the acquisition of all of the outstanding stock of Technuity, Inc., an emerging leader in the
battery and power products industry and the exclusive licensee of the Energizer® brand in North America for rechargeable batteries
and battery packs for camcorders, cordless phones, digital cameras, DVD players and other power supply devices, for a total cash
purchase price of $20,373 (net of cash acquired), plus a working capital credit of $317, transaction costs of $1,131 and a maximum
contingent earn out payment of $1,000, if certain sales and gross margin targets are met. The purpose of this acquisition was to further
strengthen our accessory product lines and core offerings, to be the exclusive licensee of the Energizer® brand in North America for
rechargeable batteries and power supply systems, and to increase the Company’s market share in the consumer electronics accessory
business.
In August 2007, Audiovox Germany completed the acquisition of certain assets of Incaar Limited, a U.K. business that specializes
in rear seat electronics systems, for a total purchase price of $350, plus transaction costs of $51 and a maximum contingent earn out
payment of $400, if certain earnings targets are met. The purpose of this acquisition was to add the experience, concepts and product
development of an Original Equipment Manufacturer (“OEM”) business to our European operations.
In March 2007, Audiovox Germany completed the stock acquisition of Oehlbach, a European market leader in the accessories
business, for a total cash purchase price of $6,611, plus transaction costs of $200 and a contingent earn out payment, not to exceed 1
million euros. The purpose of this acquisition was to add electronics accessory product lines to our European business.
In January 2007, we completed the acquisition of certain assets and liabilities of Thomson’s Americas consumer electronics
accessory business for a total cash purchase price of approximately $50,000, plus a working capital payment of $7,617, plus a five
year fee estimated to be $4,685 related to the RCA brand in connection with future sales and approximately $2,414 of transaction
costs. The purpose of this acquisition was to expand our market presence in the accessory business. The acquisition included the
rights to the RCA Accessories brand for consumer electronics accessories as well as the Recoton, Spikemaster, Ambico and
Discwasher brands for use on any product category and the Jensen, Advent, Acoustic Research and Road Gear brands for consumer
electronics accessories.
We continue to monitor economic and industry conditions in order to evaluate potential synergistic business acquisitions that would
allow us to leverage overhead, penetrate new markets and expand our core business and distribution channels.
Refer to Note 3 “Business Acquisitions” of the Notes to Consolidated Financial Statements for additional information regarding the
aforementioned acquisitions.
Divestitures (Discontinued Operations)
On November 7, 2005, we completed the sale of our majority owned subsidiary, Audiovox Malaysia (“AVM”) to the then current
minority interest shareholder due to increased competition from non-local OEM’s and deteriorating credit quality of local customers.
On November 1, 2004, we completed the divestiture of our Cellular business (formerly known as "ACC", "Cellular" or "Wireless")
to UTStarcom, Inc. ("UTSI"). After paying outstanding domestic obligations, taxes and other costs associated with the divestiture,
we received net proceeds of approximately $144,053. We have utilized the net proceeds to invest in strategic and complementary
acquisitions and invest in our current operations.
These divestitures have been presented as discontinued operations. Refer to Note 2 “Discontinued Operations” of the Notes to
Consolidated Financial Statements for additional information regarding the aforementioned divestitures.
Strategy
Our objective is to grow our business by acquiring new brands, embracing new technologies, expanding product development and
applying this to a continued stream of new products that should increase gross margins and improve operating income. In addition,
we plan to continue to acquire synergistic companies that would allow us to leverage our overhead, penetrate new markets and expand
existing product categories through our business channels.
The key elements of our strategy are as follows:
Capitalize on the Audiovox® family of brands. We believe the "Audiovox®" family of brands, which includes Acoustic
Research®, Advent®, Ambico®, Car Link®, Chapman®, Code-Alarm®, Discwasher®, Energizer®, Heco®, Incaar®,
Jensen®, Mac Audio®, Magnat®, Movies2Go®, Oehlbach®, Phase Linear®, Prestige®, Pursuit®, RCA®, RCA
Accessories®, Recoton®, Road Gear®, Spikemaster® and Terk®, is one of our greatest strengths and offers us significant
opportunity for increased market penetration. To further benefit from the Audiovox® family of brands, we continue to invest
and introduce new products using our brand names.
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Source: AUDIOVOX CORP, 10-K, May 14, 2009 Powered by Morningstar® Document Research℠