Netgear 2011 Annual Report Download - page 51

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Table of Contents
2011 Sales and Marketing Expense Compared to 2010 Sales and Marketing Expense
Sales and marketing expenses increased $23.0 million, or 17.5%, to $154.6 million for the year ended December 31, 2011, from $131.6
million for the year ended December 31, 2010. Of this increase, $13.8 million was related to an increase in payroll and other employee expenses
primarily attributable to increased overall sales and marketing headcount. Sales and marketing headcount increased by 54 employees to 357
employees at December 31, 2011 compared to 303 employees at December 31, 2010. Further, $7.2 million of the increase was due to marketing
costs resulting from increased marketing campaigns, and call center and freight costs, resulting from greater sales volumes.
2010 Sales and Marketing Expense Compared to 2009 Sales and Marketing Expense
Sales and marketing expenses increased $25.4 million, or 23.9%, to $131.6 million for the year ended December 31, 2010, from $106.2
million for the year ended December 31, 2009. Of this increase, $15.1 million was related to an increase in payroll and other employee expenses
primarily attributable to increased overall sales and marketing headcount, increased variable compensation and an increase in travel expenses.
Sales and marketing headcount increased by 35 employees to 303 employees at December 31, 2010, compared to 268 employees at December
31, 2009. Additionally, marketing expenses and other outside service costs increased by $6.8 million due to increased marketing campaigns.
General and Administrative Expense
General and administrative expenses consist of salaries and related expenses for executive, finance and accounting, human resources,
professional fees, allowance for doubtful accounts and other corporate expenses.
2011 General and Administrative Expense Compared to 2010 General and Administrative Expense
General and administrative expenses increased $3.2 million, or 8.8%, to $39.4 million for the year ended December 31, 2011, from $36.2
million for the year ended December 31, 2010. The increase was primarily due to an increase in payroll and other employee expenses primarily
attributable to increased headcount. General and administrative headcount increased by 16 employees to 114 employees at December 31, 2011
compared to 98 employees at December 31, 2010.
2010 General and Administrative Expense Compared to 2009 General and Administrative Expense
General and administrative expenses increased $3.5 million, or 10.7%, to $36.2 million for the year ended December 31, 2010, from $32.7
million for the year ended December 31, 2009. Of this amount, $6.1 million was related to an increase in payroll and other employee expenses
primarily attributable to increased variable compensation. We note there was minimal variable compensation expense in the year ended
December 31, 2009. Partially offsetting this increase was a $2.4 million decrease in fees for outside legal and other professional services
primarily attributable to decreased legal patent defense costs.
Restructuring and Other Charges
Restructuring and other charges increased $2.2 million, to an expense of $2.1 million during the year ended December 31, 2011, from a
benefit of $88,000 for year ended December 31, 2010. Of the $2.2 million increase, we incurred $1.6 million in restructuring costs for employee
severance related to the reorganization into three
47
Year Ended December 31,
2011
Percentage
Change
2010
Percentage
Change
2009
(In thousands, except percentage data)
General and administrative expense
$
39,423
8.8
%
$
36,220
10.7
%
$
32,727
Percentage of net revenue
3.3
%
4.0
%
4.8
%