Garmin 2009 Annual Report Download - page 68

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didnothaveanegativeimpactonourmarketshare.Weexpectadvertisingcoststoincreasein2010asrevenues
grow.
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Selling,GeneralandAdministrativeExpenses
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Ourselling,generalandadministrativeexpensesconsistprimarilyof:
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• salariesforsalesandmarketingpersonnel;
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• salariesandrelatedcostsforexecutivesandadministrativepersonnel;
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• marketing,andotherbrandbuildingcosts;
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• accountingandlegalcosts;
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• informationsystemsandinfrastructurecosts;
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• travelandrelatedcosts;and
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• occupancyandotheroverheadcosts.
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Duetotheeconomicpressureonourconsumer‐orientedbusiness,wedecreasedselling,generaland
administrativeexpensesin2009.Asrevenuesgrewin2005‐2008,selling,generalandadministrativeexpensesalso
increased.Weexpectselling,generalandadministrativecosts,excludingadvertising,toincreasein2010as
revenuesgrow.
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ResearchandDevelopment
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Themajorityofourresearchanddevelopmentcostsrepresentsalariesforourengineers,costsforhigh
technologycomponentsandcostsoftestequipmentusedinproductandprototypedevelopment.Approximately
85%oftheresearchanddevelopmentofourproductsisperformedinNorthAmerica.Theremainderofour
researchanddevelopmentactivitiesisperformedbyourTaiwanengineeringgroup,whichhasincreasedinsizein
recentyears.
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Wearecommittedtoincreasingthelevelofinnovativedesignanddevelopmentofnewproductsaswe
striveforexpandedabilitytoserveourexistingconsumerandaviationmarketsaswellasnewmarketsforGPS‐
enableddevices.Wecontinuetogrowourresearchanddevelopmentbudgetinabsoluteterms.
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Customers
BestBuyaccountedfor13.4%ofournetsalesintheyearendedDecember26,2009.Ourtopten
customershavecontributedbetween27%and43%ofnetsalessince2005.Wehaveexperiencedaveragesales
daysinourcustomeraccountsreceivableofbetween49and75dayssince2005.Wehaveexperiencedan
increaseinthelevelofcustomeraccountsreceivabledaysduetochangesinproductmix,longerpaymentterms,
andmacroeconomicconditions.Weexpecttoreducethelevelofcustomeraccountsreceivabledaysaswe
negotiateshorterpaymenttermswithourcustomers.
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