Audiovox 2010 Annual Report Download - page 98

Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2010
(Dollars in thousands, except share and per share data)
The basis of attributing net sales from external customers to individual countries is based on where the sale originates from.
Long-Lived Assets
As of As of
February 28, February 28,
2010 2009
North America $ 135,600 $ 116,219
Latin America 1,427 1,417
Asia 299 417
Germany 19,322 13,019
Total long-lived assets $ 156,648 $ 131,072
Net sales by product categories for the years ended February 28, 2009, February 29, 2008 and February 28, 2007 were as
follows:
Year Year Year
Ended Ended Ended
February 28, February 28, February 29,
2010 2009 2008
Electronics $ 375,021 $ 449,433 $ 437,018
Accessories 175,674 153,666 154,337
Total net sales $ 550,695 $ 603,099 $ 591,355
14) Contingencies
The Company is currently, and has in the past been, a party to various routine legal proceedings incident to the ordinary
course of business. If management determines, based on the underlying facts and circumstances, that it is probable a loss will
result from a litigation contingency and the amount of the loss can be reasonably estimated, the estimated loss is accrued
for. The Company believes its outstanding litigation matters disclosed below will not have a material adverse effect on the
Company's financial statements, individually or in the aggregate; however, due to the uncertain outcome of these matters, the
Company disclosed these specific matters below:
Certain consolidated class actions transferred to a Multi-District Litigation Panel of the United States District Court of the
District of Maryland against the Company and other suppliers, manufacturers and distributors of hand-held wireless
telephones alleging damages relating to exposure to radio frequency radiation from hand-held wireless telephones are still
pending. No assurances regarding the outcome of this matter can be given, as the Company is unable to assess the degree of
probability of an unfavorable outcome or estimated loss or liability, if any. Accordingly, no estimated loss has been recorded
for the aforementioned case.
During the fourth quarter of Fiscal 2009, the Company became aware that certain personal consumer credit card information
had been accessed by an intrusion by an unauthorized source. The Company has notified the various state and federal
authorities in which the consumers reside and is offering a plan of credit monitoring and protection for the affected
individuals. The Company is partially covered by insurance but anticipates amounts will be necessary to cover the cost of this
issue. The Company has recorded certain costs associated with this issue as of February 28, 2009, based on information
available at the time .
The products the Company sells are continually changing as a result of improved technology. As a result, although the
Company and its suppliers attempt to avoid infringing known proprietary rights, the Company may be subject to legal
proceedings and claims for alleged infringement by its suppliers or distributors, of third party patents, trade secrets,
trademarks or copyrights. Any claims relating to the infringement of third-party proprietary rights, even if not meritorious,
could result in costly litigation, divert management’s attention and resources, or require the Company to either enter into
royalty or license agreements which are not advantageous to the Company or pay material amounts of damages.
Derivative Settlement
In November 2004, several purported double derivative, derivative and class actions were filed in the Court of Chancery of
the State of Delaware, New Castle County challenging approximately $27,000 made in payments from the proceeds of the
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠