Adaptec 2002 Annual Report Download - page 20

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Other Costs and Expenses ($000,000)
2002 Change 2001 Change 2000
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Research and development $ 137.7 (32%) $ 201.1 12% $ 178.8
Percentage of net revenues 63% 62% 26%
Marketing, general and administrative $ 63.4 (30%) $ 90.3 (10%) $ 100.6
Percentage of net revenues 29% 28% 14%
Amortization of deferred stock compensation:
Research and development $ 2.6 (92%) $ 32.5 1% $ 32.3
Marketing, general and administrative 0.2 (98%) 8.7 118% 4.0
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
$ 2.8 (93%) $ 41.2 13% $ 36.3
Percentage of net revenues 1% 13% 5%
Impairment of property and equipment $ 1.8 − −
Percentage of net revenues 1% − −
Restructuring costs and other special charges − $ 195.2 −
Percentage of net revenues − 60% −
Impairment of goodwill and purchased intangible assets − $ 269.8 −
Percentage of net revenues − 84% −
Amortization of goodwill − $ 44.0 $ 36.4
Percentage of net revenues − 14% 5%
Costs of merger − − $ 38.0
Percentage of net revenues − − 5%
In process research and development − − $ 38.2
Percentage of net revenues − − 5%
Research and Development Expenses
Our research and development, or R&D, expenses decreased $63.4 million, or 32%,
in 2002 compared to 2001 due to the Company's restructuring and cost reduction
programs implemented in the first and fourth quarters of 2001. As a result of
these programs, we reduced our R&D personnel and related costs by $34.0 million
and other R&D expenses by $29.4 million compared to 2001.
Our R&D expenses for 2001 were $22.3 million, or 12%, higher than 2000 as the
effect of increased hiring and expansion of development programs and costs
during 2000 was only partially offset by the restructuring and cost reduction
programs implemented in 2001. We reduced our R&D personnel by 34% by the end of
2001 from the end of 2000 but because we made substantial additions to our
personnel and tools during the latter part of 2000 and because we realized less
than 3 months' savings from our fourth−quarter restructuring, our R&D personnel
and related costs for 2001 exceeded 2000 by $7.2 million and our tools and
equipment costs for 2001 exceeded 2000 by $11.8 million.
Acquisitions that we completed during 2000 and accounted for under the purchase
method increased our 2001 R&D expenses by $4.2 million compared to 2000.
19