Plantronics 2011 Annual Report Download - page 42

In fiscal 2010, compared to fiscal 2009, consolidated research, development, and engineering expenses decreased in absolute
dollars and as a percentage of net revenues as a result of cost reduction efforts. The decrease in absolute dollars was due primarily
to the following:
• lower compensation costs of $2.7 million as a result of reductions in our workforce; and
• a decrease of $1.7 million of lower research and development project expenses as a result of efficiency improvements,
including the benefit of lower project material and equipment expenses from outsourcing our Bluetooth headset
manufacturing.
We anticipate that our consolidated research, development and engineering expenses in fiscal 2012 will increase slightly in
comparison to fiscal 2011 as we continue to develop solutions for the UC market opportunity and to refresh and extend our product
offerings for contact centers, traditional offices and mobile applications.
Selling, General and Administrative
Selling, general and administrative expense consists primarily of compensation costs, marketing costs, professional service fees,
travel expenses, litigation costs, bad debt expense, and allocations of overhead expenses, including facilities, human resources
and IT costs.
(in thousands)
Selling, general and
administrative
% of total consolidated
net revenues
Fiscal Year Ended
March 31,
2011
$163,389
23.9%
March 31,
2010
$143,784
23.4%
Increase
(Decrease)
$ 19,605
0.5
13.6%
ppt.
Fiscal Year Ended
March 31,
2010
$143,784
23.4%
March 31,
2009
$155,678
23.1%
Increase
(Decrease)
$(11,894)
0.3
(7.6)%
ppt.
In fiscal 2011, compared to fiscal 2010, consolidated selling, general and administrative expenses increased due primarily to the
following:
• higher compensation expenses of $8.9 million as a result of higher performance-based compensation on higher revenues
and profits, increased headcount, and annual merit increases;
• an increase in marketing and sales promotions of $3.0 million in support of increased revenue opportunities;
• an increase in travel-related expenses of $2.6 million mostly in support of increased revenue opportunities;
• an increase in legal costs of $2.5 million mostly due to additional litigation that was settled favorably in fiscal 2011 and
is discussed below in "Gain from Litigation Settlement"; and
• an increase in external sales representative fees and commissions of $1.5 million associated with higher revenues.
These increases were offset in part by a decrease of $1.1 million in depreciation expenses due to assets being fully depreciated
during fiscal 2010 and a majority of the current capital projects were not completed as of the end of fiscal 2011.
In fiscal 2010, compared to fiscal 2009, consolidated selling, general and administrative expenses decreased due primarily to the
following:
• a decrease in marketing and sales promotions of $6.2 million due to lower advertising, public relations, trade show, and
market research expenses as a result of cost reduction and containment efforts;
• a decrease in professional service fees of $4.4 million mostly due to lower external sales representative fees as a result
of lower revenues, consulting costs, and recruiting costs;
• a decrease of $1.8 million for provisions on doubtful accounts receivable due to higher expenses in fiscal 2009 as we
experienced unexpected customer bankruptcies as a result of the global recession; and
• a decrease of $1.8 million in travel and entertainment related expenses as a result of our cost reduction initiatives.
These decreases were offset in part by an increase of $1.4 million in legal fees mostly as a result of litigation activity related to
cases where Plantronics is the plaintiff.
We anticipate that our consolidated selling, general and administrative expenses will increase slightly in fiscal 2012 in comparison
to fiscal 2011 as we continue to invest in support of the growing UC market.
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