Netgear 2004 Annual Report Download - page 19

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Table of Contents
Year Ended December31,
2000
2001
2002
2003
2004
(In thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term
investments
$
6,447
$
9,152
$
19,880
$
73,605
$
141,715
Working capital
36,253
16,179
13,753
130,755
181,057
Total assets
112,142
62,902
93,851
205,146
300,238
Total current liabilities
73,946
44,891
76,396
70,207
115,044
Redeemable convertible preferred stock
44,078
44,078
48,052
—
—
Total stockholders’ equity (deficit)
(6,583
)
(26,067
)
(30,597
)
134,939
185,194
Item7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion of our financial condition and results of operations together with the audited
consolidated financial statements and notes to the financial statements included elsewhere in this Form10-K. This discussion
contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts,
but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future
financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to
a number of factors, including those discussed below under “Risk Factors Affecting Future Results”.
Overview
We design, develop and market technologically advanced, branded networking products that address the specific needs of small
business and home users. We supply innovative networking products that meet the ease-of-use, quality, reliability, performance and
affordability requirements of these users. From our inception in January 1996 until May 1996, our operating activities related primarily
to research and development, developing relationships with outsourced design, manufacturing and technical support partners, testing
prototype designs, staffing a sales and marketing organization and establishing relationships with distributors and resellers. We began
product shipments during the quarter ended June30, 1996, and recorded net revenue of $4.0million in 1996. In 2004, our net revenue
was $383.1million and our net income was $23.5million.
Our products are grouped into three major product lines within the small business and home markets: Ethernet networking products,
broadband products and wireless networking products. Ethernet networking products include switches, network interface cards, or
NICs, and print servers. Broadband products include routers and gateways. Wireless networking products include wireless access
points, wireless NICs and media adapters. These products are available in multiple configurations to address the needs of our
customers in each geographic region in which our products are sold.
Our products are sold through multiple sales channels worldwide, including traditional retailers, online retailers, direct market resellers,
or DMRs, value added resellers, or VARs, and, broadband service providers. Our retail channel includes traditional retail locations
domestically and internationally, such as Best Buy, Circuit City, CompUSA, Costco, Fry’s Electronics, Office Max, Staples,
MediaMarkt (Germany, Austria), PC World (U.K.) and FNAC (France). Online retailers include Amazon.com, Newegg.com and
Buy.com. Our direct market resellers include CDW Corporation, Insight Corporation and PC Connection in domestic markets and
Misco throughout Europe. In addition, we also sell our products through broadband service providers, such as Comcast, Charter
Communications and Time-Warner Cable, in domestic markets and Strato AG (Germany), Tiscali (Germany), AOL (UK), Telewest (UK),
Tele Denmark, and Telstra (Australia). Some of these retailers and resellers purchase directly from us while most are fulfilled through
wholesale distributors around the world. A substantial portion of our net revenue to date has been derived from a limited number of
wholesale distributors, the largest of which are Ingram Micro Inc. and Tech Data Corporation. We expect that these wholesale
distributors will continue to contribute a significant percentage of our net revenue for the foreseeable future.
2005. EDGAR Online, Inc.