Adaptec 2001 Annual Report Download - page 22

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22
In 2000, our R& D expenditures increased by 114% over 1999 due to a $51.5 million increase in
personnel and related costs as a result of internal hiring and acquisitions, and a $36.1 million
increase in service and material costs associated with our expanding product development
efforts. Our 2000 R&D expenses also increased by $7.4 million as a result of acquisitions that
we completed during 2000 and accounted for under the purchase method.
Our R& D expenses increased as a percentage of net revenues in 2001 due to the 54% decline in
our 2001 net revenues. The expenses decreased as a percentage of net revenues in 2000 as a
result of the 139% growth in our net revenues that year.
Marketing, General and Administrative Expenses
Our marketing, general and administrative, or MG&A, expenses decreased by 10% to $90.3
million in 2001 from $100.6 million in 2000.
The $10.3 million decrease in our MG&A expenses was largely due to a $12 million reduction in
sales commissions as a result of the decline in our revenues. MG&A expenses increased by
approximately $1.2 million in 2001 as a result of the full year impact of acquisitions made
during 2000 that were accounted for under the purchase method.
Through our two restructuring programs in 2001, w e reduced our MG&A personnel by 30%
from the end of the preceding year. However, due to growth in the latter part of 2000, this
reduction in MG&A personnel resulted in only a 3% year-over-year decrease in MG&A
personnel costs. Recruitment costs decreased in 2001 due to less hiring activity. These savings
were offset by increases in the cost of facilities due to the prior year’s expansion. Our
restructurings resulted in excess space when w e reduced our personnel in 2001. (See
“ Restructuring and other special charges” .)
Our MG&A spending in 2000 increased 92% from 1999. In 2000, we increased our personnel
and recruitment costs by $20 million and expanded our facilities and related costs by more than
$8 million due to the addition of new personnel. We also increased the size of our direct sales
force in 2000 and incurred $10.7 million more in commissions as a result of our increased
revenues. M G&A expenses also increased by approximately $1.8 million in 2000 as a result of
acquisitions made during 2000 that were accounted for under the purchase method.
MG&A expenses as a percentage of net revenues increased in 2001 and decreased in 2000
because many of our MG&A costs are relatively fixed in the short term. As a result, these
expenses will generally decline as a percentage of revenue in periods of rising revenues and
may increase as a percentage of revenue in periods of declining revenues.