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Table of Contents
successfully address these risks and difficulties and, consequently, we cannot assure you of any future growth or profitability. For more
information, see our discussion of Risks and Uncertainties beginning on page 29.
The following tables present certain consolidated financial data as a percentage of net sales and statement of operations data comparing
results for 2004, 2003, and 2002:
Statement of Operations Data
Statement of Operations Data
Year Ended December 31,
2004
2003
2002
Net sales
100.0
%
100.0
%
100.0
%
Cost of sales
53.3
49.5
42.3
Gross profit
46.7
50.5
57.7
Operating expenses:
Selling and marketing
29.9
29.9
24.8
General and administrative
5.9
7.4
4.5
Research and development
1.3
1.2
0.8
Royalties
1.1
1.6
1.7
Total operating expenses
38.2
40.1
31.8
Operating income
8.5
10.4
25.9
Other income
-
net
0.2
0.4
0.3
Income before income taxes
8.7
10.8
26.2
Income tax expense
3.0
3.9
9.5
Net income
5.7
%
6.9
%
16.7
%
Year Ended December 31,
2004-2003
2003-2002
(In Thousands)
2004
2003
2002
$ change
% change
$ change
% change
Net sales
$
523,837
$
498,836
$
584,650
$
25,001
5.0
%
$
(85,814
)
-
14.7
%
Cost of sales
279,043
247,020
247,598
32,023
13.0
%
(578
)
-
0.2
%
Gross profit
244,794
251,816
337,052
(7,022
)
-
2.8
%
(85,236
)
-
25.3
%
Operating expenses:
Selling and marketing
156,577
149,245
145,258
7,332
4.9
%
3,987
2.7
%
General and administrative
31,033
37,098
26,017
(6,065
)
-
16.3
%
11,081
42.6
%
Research and development
6,754
5,670
4,485
1,084
19.1
%
1,185
26.4
%
Royalties
5,968
7,987
10,108
(2,019
)
-
25.3
%
(2,121
)
-
21.0
%
Total operating expenses
200,332
200,000
185,868
332
0.2
%
14,132
7.6
%
Operating income
44,462
51,816
151,184
(7,354
)
-
14.2
%
(99,368
)
-
65.7
%
Other income
-
net
1,185
1,937
1,763
(752
)
-
38.8
%
174
9.9
%
Income before income taxes
45,647
53,753
152,947
(8,106
)
-
15.1
%
(99,194
)
-
64.9
%
Income tax expense
15,662
19,351
55,060
(3,689
)
-
19.1
%
(35,709
)
-
64.9
%
Net income
$
29,985
$
34,402
$
97,887
$
(4,417
)
-
12.8
%
$
(63,485
)
-
64.9
%