Centigram's recent SEC 10-Q form:
sec.yahoo.com
One thing I was a little disappointed in was that it appears that R&D and SG&A expenses are going to remain at current levels, or even expand. Here are a few excerpts:
Research and development expenses increased 17% in the first six months of fiscal 1997 as compared to the first six months of fiscal 1996 and represented 21% and 20% of net revenues for each respective period. This increase in R&D expense resulted from higher employee costs including salaries and benefits resulting from increased headcount, increased costs of outside consultants and services, and increased facilities expenses. The Company believes that ongoing development of new products and features is required to maintain and enhance its competitive position. The Company expects to continue to invest in R&D and therefore these expenses are expected to be maintained at the current levels or to increase moderately, notwithstanding the level of sales realized in future quarters. Accordingly, while the Company expects to control expenses where possible in forthcoming quarters, its R&D expenses may continue to increase.
Selling, general and administrative (SG&A) and other expenses increased 48% in the second quarter of fiscal 1997 as compared to the corresponding quarter of 1996 and were 46% above the first quarter of fiscal 1997. These increases in expenses resulted primarily from charges taken in the second quarter of approximately $3.6 million which represented $2.4 million in restructuring charges and $1.2 million in expenses associated with the proposed acquisition of Voice-Tel Enterprises and Voice-Tel Network ("Voice-Tel") which was terminated in the second quarter of fiscal 1997. In addition, SG&A expenses increased approximately $1.4 million in the second quarter of fiscal 1997 over the same quarter of fiscal 1996 and were 12% over those incurred in the first fiscal quarter of 1997. These increases consisted primarily of increased compensation, travel, and outside services in sales and marketing. SG&A and other expenses represented 62%, 43%, and 38% of net revenue in the second quarter of 1997, the second quarter of 1996, and the first quarter of fiscal 1997, respectively.
Selling, general and administrative (SG&A) and other expenses for the first six months of fiscal 1997 were up 28% over the prior year six month period and represented 49% and 42% of net revenues for the respective periods. This increase in expenses reflects the same reasons as noted in the previous paragraph,namely, the impact of the other operating expense charges taken in the second quarter and the increases in the sales and marketing expenses. The Company believes continued investments in sales and customer support, particularly in export markets, are essential to maintaining its competitive position. The Company expects to continue to invest in SG&A. Therefore, SG&A expenses are expected to be maintained at the current levels or to increase moderately, after deducting the unusual second quarter other operating expense charges. |
