Audiovox 2010 Annual Report Download - page 77

Download and view the complete annual report

Please find page 77 of the 2010 Audiovox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 131

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131

Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2010
(Dollars in thousands, except share and per share data)
The expected dividend yield is based on historical and projected dividend yields. The Company estimates expected
volatility based primarily on historical price changes of the Company’s stock equal to the expected life of the option.
During Fiscal 2010, the Company changed from daily stock prices to monthly stock prices as the Company’s stock
experiences low-volume trading. We believe that daily fluctuations are distortive to the volatility and as such will
continue to use monthly inputs in the future. The risk free interest rate is based on the U.S. Treasury yield in effect at the
time of the grant. The expected option term is the number of years the Company estimates the options will be
outstanding prior to exercise based on employment termination behavior.
The Company recognized stock-based compensation expense (before deferred income tax benefits) for awards granted
under the Company’s stock option plans in the following line items in the consolidated statement of operations for the
years ended February 28, 2010 and February 28, 2009:
Year Ended Year Ended Year Ended
February 28, February 28, February 29,
2010 2009 2008
Cost of sales $ 17 $ 7 $ 16
Selling expense 165 63 192
General and administrative expenses 951 234 662
Engineering and technical support 5 5 16
Stock-based compensation expense before income tax benefits $ 1,138 $ 309 $ 886
Net income from continuing operations and net income was impacted by $1,138 (after tax), $309 (after tax) and $506
(after tax) in stock based compensation expense or $0.05, $0.01 and $0.02 per diluted share for the years ended February
28, 2010, February 28, 2009 and February 29, 2008, respectively. No tax benefit was recorded in fiscal 2010 due to the
Company’s loss position.
Information regarding the Company's stock options and warrants are summarized below:
Weighted-
Average
Number Exercise
of Shares Price
Outstanding and exercisable at February 28, 2007 1,784,652 $ 12.97
Granted 275,000 10.90
Exercised (408,866) 7.70
Forfeited/expired (83,750) 13.68
Outstanding and exercisable at February 29, 2008 1,567,036 13.96
Granted 214,750 4.83
Exercised (10,000) 4.63
Forfeited/expired (314,952) 13.29
Outstanding and exercisable at February 28, 2009 1,456,834 12.82
Granted 898,750 6.40
Exercised (17,500) 7.38
Forfeited/expired (1,022,500) 14.91
Outstanding and exercisable at February 28, 2010 1,315,584 $ 6.91
At February 28, 2010 the Company had unrecognized compensation costs of approximately $1,182 related to non-vested
options. The unrecognized compensation costs related to these options will be completely recognized by November 30,
2010. At February 28, 2009 and February 29, 2008, the Company had no unrecognized compensation costs as all stock
options were fully vested.
50
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠