Support.com 2007 Annual Report Download - page 45

2006. Included in sales and marketing expense for the year ended December 31, 2007 and 2006 were $1.9 million and $899,000 of stock-based compensation
expense. There were no comparable expenses in 2005, because we adopted the provisions of SFAS 123R effective January 1, 2006.
General and administrative. General and administrative expense consists primarily of compensation costs and related overhead costs for administrative
personnel and professional fees for legal, accounting and other professional services. General and administrative expense was $9.3 million in 2007, $10.2 million
in 2006, and $8.6 million in 2005. General and administrative expense decreased in 2007 from 2006 due to a decrease in personnel. Included in general and
administrative expense for the year ended December 31, 2007 and 2006 were $1.7 million and $1.6 million of stock-based compensation expense. There were no
comparable expenses in 2005, because we adopted the provisions of SFAS 123R effective January 1, 2006.
Restructuring charges. For the years ended December 31, 2007, 2006 and 2005, we recorded restructuring charges of $1.2 million, $817,000 and
$645,000, respectively. Such charges related to reductions in our work force and related facilities costs. Restructuring charges are reflected in the applicable cost
of revenue or operating expense line items in the Consolidated Statement of Operations, the detail of which is presented in Note 5 to the Consolidated Financial
Statements.
Interest income and other, net
($ in thousands)
2007
% Change
2006 to 2007 2006
% Change
2005 to 2006 2005
Interest income and other, net $ 6,526 2% $ 6,383 76% $ 3,619
Interest income and other, net. Interest income and other, net was $6.5 million in 2007, $6.4 million in 2006, and $3.6 million in 2005. The year-over-year
increases in interest income and other, net were primarily due to higher interest rates earned on our invested cash and marketable securities.
Provision for income taxes
($ in thousands)
2007 2006 2005
Income (loss) before income taxes $ (20,698) $ (7,748) $ 4,827
Provision for income taxes (671) (487) (402)
Net Income (loss) $ (21,369) $ (8,235) $ 4,425
Provision for income taxes. The provisions for income taxes are comprised of estimates of current taxes due in foreign jurisdictions and payments of
foreign withholding taxes. The 2007, 2006 and 2005 tax provisions varied from the expected tax provision at the U.S. federal statutory rate primarily due to
benefits from stock option deductions for which stock-based compensation was not previously benefited and the net reversal of timing differences, offset by
nondeductible expenses. The increase in the provision for income taxes in 2007 is due to increased foreign income in certain jurisdictions resulting in a larger tax
provision in these locations as well as additional reserves in foreign jurisdictions.
Liquidity and Capital Resources
Total cash, cash equivalents and marketable securities decreased $7.0 million to $112.9 million at December 31, 2007 from $119.9 million at December 31,
2006.
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Source: SUPPORTSOFT INC, 10-K, March 13, 2008