Audiovox 2010 Annual Report Download - page 86

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Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2010
(Dollars in thousands, except share and per share data)
3) Discontinued Operations
The Company had net income (loss) from discontinued operations of $1,719 for the year ended February 29, 2008, which is
primarily due to legal settlements and related legal and administrative costs associated with contingencies pertaining to the
Company’s discontinued Cellular (see Note 15) and Malaysia businesses.
Included in income from discontinued operations are tax provisions of $1,529 for the year ended February 29, 2008.
4) Receivables from Vendors
The Company has recorded receivables from vendors in the amount of $11,170 and $12,195 as of February 28, 2010 and
February 28, 2009, respectively. Receivables from vendors represent prepayments on product shipments and product
reimbursements.
5) Equity Investment
The Company has a 50% non-controlling ownership interest in Audiovox Specialized Applications, Inc. (“ASA”) which acts
as a distributor to markets for specialized vehicles, such as RV’s, van conversions and marine vehicles, of televisions and
other automotive sound, security and accessory products. ASC 810 requires the Company to evaluate non-consolidated
entities periodically and as circumstances change to determine if an implied controlling interest exists. During Fiscal 2010,
the Company evaluated this equity investment and concluded that this is still a variable interest and correctly accounted
for. ASA’s fiscal year end is November 30, 2009, however, the proportionate results of ASA as of and until February 28,
2010 have been recorded in the consolidated financial statements.
The following presents unaudited summary financial information for ASA. Such summary financial information has been
provided herein based upon the individual significance of this unconsolidated equity investment to the consolidated financial
information of the Company.
February 28, February 28,
2010 2009
(unaudited)
Current assets $ 21,793 $ 25,268
Non-current assets 5,316 4,745
Current liabilities 4,565 3,778
Members' equity 22,544 26,235
The equity balance carried on the Company’s balance sheet amounts to $11,272 and $13,118 for the years ended February
28, 2010 and February 28, 2009, respectively.
Year Year Year
Ended Ended Ended
February 28, February 28, February 29,
2010 2009 2008
(unaudited)
Net sales $ 51,341 $ 51,169 $ 71,726
Gross profit 12,705 12,691 20,869
Operating income 3,032 1,338 6,158
Net income 3,314 1,951 7,178
The Company's share of income from ASA for the years ended February 28, 2010, February 28, 2009 and February 29, 2008
was $1,657, $975 and $3,590, respectively. In addition, the Company received cash distributions from ASA totaling $3,504,
$1,080 and $1,720 during the years ended February 28, 2010, February 28, 2009 and February 29, 2008, respectively.
57
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠