Classmates.com 2010 Annual Report Download - page 61

Table of Contents
Year Ended December 31, 2010 compared to Year Ended December 31, 2009
The following table presents our consolidated operating results as a percentage of consolidated revenues for the years ended December 31,
2010 and 2009.
Consolidated Results
Revenues. Consolidated revenues decreased by $69.6 million, or 7%, to $920.6 million for the year ended December 31, 2010, compared
to $990.1 million for the year ended December 31, 2009. The decrease was due to a $44.1 million decrease in revenues from our
Communications segment and a $34.4 million decrease in revenues from our Content & Media segment, partially offset by an $8.7 million
increase in revenues from our FTD segment. Consolidated revenues related to our FTD, Content & Media and Communications segments
constituted 60.1%, 21.8% and 18.1%, respectively, of our total segment revenues for the year ended December 31, 2010, compared to 55.0%,
23.8% and 21.3%, respectively, for the year ended December 31, 2009.
Cost of Revenues. Consolidated cost of revenues increased by $12.3 million, or 3%, to $429.7 million for the year ended December 31,
2010, compared to $417.4 million for the year ended December 31, 2009. Consolidated cost of revenues as a percentage of consolidated
revenues increased to 46.7% for the year ended December 31, 2010, compared to 42.2% for the prior-year period. The increase of $12.3 million
was due to a $20.4 million increase in cost of revenues associated with our FTD segment, a $0.8 million increase in depreciation expense and a
$0.5 million increase in cost of revenues associated with our Content & Media segment. These increases were partially offset by a $9.1 million
decrease in cost of revenues associated with our Communications segment. Cost of revenues related to our FTD, Content & Media and
Communications segments constituted 82.1%, 8.5% and 9.4%, respectively, of our total segment cost of revenues for the year ended
December 31, 2010, compared to 79.5%, 8.6% and 12.0%, respectively, for the year ended December 31, 2009.
Sales and Marketing Expenses. Consolidated sales and marketing expenses decreased by $26.9 million, or 13%, to $175.9 million for the
year ended December 31, 2010, compared to $202.8 million for the year ended December 31, 2009. Consolidated sales and marketing expenses
as a
58
Year Ended
December 31,
2010
2009
Revenues
100.0
%
100.0
%
Operating expenses:
Cost of revenues
46.7
42.2
Sales and marketing
19.1
20.5
Technology and development
6.0
6.5
General and administrative
12.2
12.3
Amortization of intangible assets
3.5
3.5
Restructuring charges
0.3
0.4
Total operating expenses
87.8
85.3
Operating income
12.2
14.7
Interest income
0.2
0.2
Interest expense
(2.7
)
(3.4
)
Other income, net
—
0.4
Income before income taxes
9.8
11.9
Provision for income taxes
3.9
4.9
Net income
5.8
%
7.1
%