eFax 2014 Annual Report Download - page 44

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Digital Media
As our Digital Media segment was established as a result of the acquisition of Ziff Davis, Inc. on November 9, 2012, the increase from 2012 to 2013 is due to a full year
of activity in fiscal year 2013.
The following segment results are presented for fiscal year 2014, 2013 and 2012 (in thousands):
Segment net sales of $167.8 million in 2014 increased $36.7 million , or 28.0%
, from the prior comparable period primarily due to business acquisitions subsequent to
the prior comparable period.
Segment gross profit of $148.8 million in 2014 increased $34.6 million
from the prior comparable period primarily due to an increase in net sales between the periods.
Gross profit as a percentage of revenues in 2014 was consistent with the prior comparable period.
Segment operating expenses of $118.3 million in 2014 increased $10.9 million
from the prior comparable period primarily due to business acquisitions subsequent to
the prior comparable period, partially offset by reduced operating costs as the Digital Media segment leverages its scale and completes the integration process of prior acquisitions.
As a result of these factors, segment operating income of $30.5 million in 2014 increased $23.8 million , or 352.9% , from 2013.
- 43 -
2014
2013
2012
External net sales
$
167,555
99.8
%
$
130,697
99.7
%
$
9,712
100.0
%
Inter-segment net sales
259
0.2
449
0.3
—
—
Segment net sales
167,814
100.0
131,146
100.0
9,712
100.0
Cost of revenues
19,028
11.3
16,982
12.9
1,956
20.1
Gross profit
148,786
88.7
114,164
87.1
7,756
79.9
Operating expenses
118,293
70.5
107,431
81.9
4,867
50.1
Segment operating income
$
30,493
18.2
%
$
6,733
5.1
%
$
2,889
29.7
%