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36
RESULTS OF OPERATIONS
The following table sets forth certain items from our consolidated statements of operations as a percentage of net revenues from
continuing operations for the periods indicated:
Year Ended December 31,
2014 2013 2012
Net revenues:
Product revenues 71.4 % 70.2 % 75.3 %
Services revenues 28.6 % 29.8 % 24.7 %
Total net revenues 100.0 % 100.0 % 100.0 %
Cost of revenues 38.6 % 39.7 % 39.2 %
Gross margin 61.4 % 60.3 % 60.8 %
Operating expenses:
Research and development 17.0 % 16.9 % 15.6 %
Marketing and selling 25.1 % 23.8 % 24.1 %
General and administrative 15.3 % 13.8 % 8.2 %
Amortization of intangible assets 0.3 % 0.5 % 0.7 %
Restructuring costs, net — % 1.0 % 3.9 %
Total operating expenses 57.7 % 55.9 % 52.5 %
Operating income 3.7 % 4.4 % 8.3 %
Interest and other income (expense), net (0.5)% (0.1)% (0.3)%
Income from continuing operations before income taxes 3.2 % 4.3 % 8.0 %
Provision for income taxes 0.4 % 0.5 % 0.6 %
Income from continuing operations, net of tax 2.8 % 3.8 % 7.4 %
Income from discontinued operations — % — % 7.2 %
Net income 2.8 % 3.8 % 14.6 %
Net Revenues
Our net revenues are derived mainly from sales of video and audio hardware and software products and solutions for digital
media content creation, distribution and monetization, and related professional services and maintenance contracts.
Net Revenues from Continuing Operations for the Years Ended December 31, 2014 and 2013
(dollars in thousands)
2014 Change 2013
Net Revenues $ % Net Revenues
Video products and solutions $ 233,464 $ (9,709) (4.0)% $ 243,173
Audio products and solutions 145,163 (7,195) (4.7)% 152,358
Total products and solutions 378,627 (16,904) (4.3)% 395,531
Services 151,624 (16,257) (9.7)% 167,881
Total net revenues $ 530,251 $ (33,161) (5.9)% $ 563,412