Years Ended June 30,
(1) Revenue for
2013 and fiscal 2012, respectively.
Cost of Revenues and Gross Profit Cost of revenues decreased
$17.0 million, or 8%, from $202.5 millionin fiscal 2012 to $185.5 millionin fiscal 2013. The decreases in cost of revenues in fiscal 2013 was primarily due to decreased revenues and to a lesser extent, changes in product mix. Gross profit as a percentage of revenue decreased to 42% in fiscal 2013 compared to 43% in fiscal 2012. The decrease in gross profit percentage in the fiscal 2013 reflects increases in variable operating costs and changes in product mix. Operating Expenses Research and Development Research and development expenses increased $4.3 million, or 25%, from $16.7 millionin fiscal 2012 to $21.0 millionin fiscal 2013. As a percentage of revenues, research and development expenses increased from 5% in fiscal 2012 to 6% in fiscal 2013. The increase in research and development expenses in absolute dollars was largely due to increases in headcount and facilities related costs as we broadened our research and development activities to new product areas. As a percentage of revenues, research and development expenses increased in both periods primarily due to our overall decrease in revenues. Over time, we expect our research and development costs to increase in absolute dollars as we continue making significant investments in developing new products and developing new versions of our existing products. Sales, General and Administrative Sales, general and administrative expenses increased $12.8 million, or 142%, from $9.0 millionin fiscal 2012 to $21.8 millionin fiscal 2013. As a percentage of revenues, sales, general and administrative expenses increased from 3% in fiscal 2012 to 7% in fiscal 2013. Sales, general and administrative expenses increased in absolute dollars and as a percentage of revenue due largely to increased legal expenses of $4.3 million, primarily associated with our anti-counterfeiting litigation, increased professional fees of $2.0 million, primarily related to the ancillary support of certain management functions, increases in headcount and related salaries of $1.0 million. Additionally, in fiscal 2012 we recorded a gain of $1.5 millionfrom a trademark coexistence agreement within sales, general and administrative expenses. Over time, we expect our sales, general and administrative expenses to increase in absolute dollars due to growth in headcount to support our business and operations and the need to build and protect our intellectual property rights worldwide. Interest Expense and Other, Net Interest expense and other, net was $851,000for fiscal 2013, representing a decrease of $418,000from $1.3 millionfor fiscal 2012. The decrease in fiscal 2013 as compared to fiscal 2012 was primarily due to the additional interest coupon on our