Harman Kardon 2010 Annual Report Download - page 54

Below is a summary of our SG&A by business segment:
Year Ended June 30,
($ in thousands) 2010
Percentage
of Net
Sales 2009
Percentage
of Net
Sales 2008
Percentage
of Net
Sales
Automotive ........................ $473,721 19.2% $530,283 26.5% $599,131 20.5%
Consumer ......................... 104,088 27.9% 110,348 31.0% 127,895 24.8%
Professional ........................ 127,379 24.4% 138,848 28.2% 155,981 24.9%
Other ............................. 69,001 * 51,940 * 62,439 *
Total ............................. $774,189 23.0% $831,419 29.1% $945,446 23.2%
* Percent not meaningful.
Automotive—Automotive SG&A decreased $56.6 million to $473.7 million in fiscal year 2010 compared to
the prior fiscal year. As a percentage of net sales, SG&A decreased 7.3 percentage points to 19.2 percent in fiscal
year 2010 compared to the prior fiscal year, primarily due to savings from STEP Change initiatives, lower
restructuring expenses and R&D, partially offset by the impact of a settlement of a claim associated with an
automotive supply arrangement and unfavorable foreign currency translation of $19.0 million. R&D decreased
$3.2 million to $265.9 million, or 10.8 percent of net sales, in fiscal year 2010 compared to $269.1 million, or
13.4 percent of net sales, in the prior fiscal year, primarily due to lower gross spending as a result of STEP
Change initiatives, partially offset by higher amortization expense and unfavorable foreign currency translation
of $3.2 million.
Automotive SG&A decreased $68.8 million to $530.3 million in fiscal year 2009 compared to the prior
fiscal year. As a percentage of net sales, SG&A increased 6.0 percentage points to 26.5 percent in fiscal year
2009 compared to the prior fiscal year, primarily due to the decline in sales. Foreign currency translation
favorably impacted SG&A by $34.5 million. R&D decreased $50.8 million to $269.1 million or 13.4 percent of
net sales, compared to $319.9 million or 10.9 percent of net sales in the prior fiscal year. Approximately $20.8
million of the decrease in R&D was due to foreign currency translation. Other factors contributing to the
decrease in SG&A included $15.4 million of a net gain from the sale of certain of our speech recognition assets
and lower advertising and promotion expenses, partially offset by an increase of $30.0 million in restructuring
expenses. The $15.4 million gain was comprised of $20.2 million of gross proceeds, partially offset by a
write-off of a related intangible asset of $4.8 million.
Consumer—Consumer SG&A decreased $6.3 million to $104.1 million in fiscal year 2010 compared to the
prior fiscal year. As a percentage of net sales, SG&A decreased 3.1 percentage points to 27.9 percent in fiscal
year 2010 compared to the prior fiscal year, primarily due to lower compensation and benefit expenses resulting
from STEP Change initiatives. R&D decreased $1.9 million to $16.8 million or 4.5 percent of net sales,
compared to $18.7 million or 5.2 percent of net sales in the prior fiscal year and unfavorable currency translation
of $1.7 million.
Consumer SG&A decreased $17.5 million to $110.3 million in fiscal year 2009 compared to the prior fiscal
year. As a percentage of net sales, SG&A increased 6.2 percentage points to 31.0 percent in fiscal year 2009
compared to the prior fiscal year, primarily due to the decrease in sales. R&D decreased $10.4 million to $18.7
million or 5.2 percent of net sales, compared to $29.1 million or 5.6 percent of net sales in the prior fiscal year.
Other factors contributing to the decrease in SG&A were lower compensation and benefit expenses from
restructuring actions. These decreases were partially offset by an increase in restructuring expenses of $7.4
million and unfavorable currency translation of $4.1 million.
Professional—Professional SG&A decreased $11.5 million to $127.4 million in fiscal year 2010 compared
to the prior fiscal year. As a percentage of net sales, SG&A decreased 3.8 percentage points to 24.4 percent in
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