Adaptec 2011 Annual Report Download - page 32

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Table of Contents
We expect our microprocessor solutions to continue to ship into the laser printer market as well as the enterprise networking market.
RESULTS OF OPERATIONS
NET REVENUES
(in millions) 2011 Change 2010 Change 2009
Net revenues $ 654.3 3% $ 635.1 28% $ 496.1
Overall net revenues for 2011 increased by $19.2 million, or 3% compared to net revenues for 2010. On a year over year basis, net revenues generated
from our product offerings in Storage, Mobile and Optical increased (decreased) by 11%, 34% and (23%), respectively.
Storage represented 60% of our net revenues in 2011 compared to 55% of our net revenues in 2010. Storage net revenues increased by 11% in 2011
compared to 2010. This increase was primarily due to higher volumes of our SAS devices shipped with the continued production ramp of our 6G SAS
products and as customers continue to migrate from 3G to 6G platforms. Also, in 2011, we had a full year of revenues from our Channel Storage business that
we purchased from Adaptec mid-year in 2010. These increases were partially offset by declines in volumes of our Fibre Channel and laser printer products in
2011, compared to 2010.
Mobile represented 15% of our net revenues in 2011 compared to 12% of our net revenues in 2010. Mobile net revenues increased by 34% in 2011
compared to 2010. This increase was mainly due to our acquisition of Wintegra in November 2010 and was partially offset by a decline in volumes of our
legacy wireless products.
Optical represented 25% of our net revenues in 2011 compared to 33% of our net revenues in 2010. Optical net revenues decreased by 23% in 2011
compared to 2010. This was reflective of end market weakness during 2011 in the areas of metro and access as Asia customers worked through existing
inventories and OEM customers built out their networks at lower rates than in the same period in 2010. We also experienced a reduction of sales volumes
from legacy SONET, ATM and microprocessor products compared to 2010. This decrease was partially offset by growth in OTN sales volumes.
Overall net revenues for 2010 increased $139.0 million, or 28% compared to net revenues for 2009, primarily due to higher sales volume, including
volume attributable to two acquisitions the Company completed during the year. The acquisitions of the Channel Storage business from Adaptec, and
Wintegra, completed in 2010 generated additional net revenues of $40.2 million compared to 2009.
Storage represented 55% of our net revenues in 2010 compared to 47% of our net revenues in 2009. Storage net revenues increased by 51% in 2010
compared to 2009. We experienced broad-based market recovery in 2010 and a corresponding positive enterprise and corporate information technology
spending environment. The increase in net revenues from our enterprise storage products was mainly driven by higher demand for our 4Gbps and 8Gbps Fibre
Channel products, and continued deployment of 3G and 6G SAS platforms. In addition, we shipped more of our 6Gbps SAS RAID-on-Chip product, which
started shipping in production volumes in the second quarter of 2009. Also, in 2010, we had additional revenues from our Channel Storage business that we
purchased from Adaptec mid-year in 2010.
Mobile represented 12% of our net revenues in 2010 compared to 10% of our net revenues in 2009. Mobile net revenues increased by 44% in 2010
compared 2009. The increase was due primarily to increased demand from our Chinese OEM customers related to the communications networking
infrastructure build out in those market segments, and from our acquisition of Wintegra in November 2010.
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