Creative 2005 Annual Report Download - page 10

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10
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected statement of operations data as a percentage of sales:
Years ended June 30
2005 2004 2003
Sales, net 100 % 100 % 100 %
Cost of goods sold 78 65 65
Gross profit 22 35 35
Operating expenses:
Selling, general and administrative 16 21 23
Research and development 7 8 8
Other charges 5 – –
Operating (loss) income (6) 6 4
Gross (loss) from investments, net 6 9 (1)
Interest income – – –
Interest expense – – –
Others –11
Income before income taxes and minority interest – 16 4
Provision for income taxes – 1 (1)
Minority interest in loss (income) – – –
Net income – % 17 % 3 %
The following table sets forth Creative’s net sales by product category expressed as a percentage of sales for the past three
fiscal years:
Percentage of Net Sales
for fiscal years ended June 30
2005 2004 2003
Personal Digital Entertainment 63 % 33 % 18 %
Audio 14 % 25 % 33 %
Speakers 14 % 23 % 23 %
All Other Products 9 % 19 % 26 %