Our RF microwave amplifiers segment generated operating income of $7.6 million
or 7.4% of related net sales for fiscal 2012 as compared to $1.1 million or 1.2%
of related net sales for fiscal 2011. This increase in operating income, both in
dollars and as a percentage of related net sales, is primarily due to higher net
sales and a higher gross profit as a percentage of related net sales, as
Our mobile data communications segment generated operating income of $20.0
million or 17.7% of related net sales for fiscal 2012 as compared to $64.9
million or 22.5% of related net sales for fiscal 2011. The decrease in operating
income, both in dollars and as a percentage of related net sales, was primarily
due to this segment's lower net sales, partially offset by the increase in the
gross profit percentage (including a $5.6 million benefit in fiscal 2012 related
to the finalization of pricing related to certain MTS and BFT-1 orders), and
lower operating expenses, as discussed above. Operating income in this segment,
in fiscal 2012, also reflects $2.6 million of net pre-tax restructuring charges
related to our microsatellite product line.
Unallocated operating expenses were $18.0 million for fiscal 2012 as compared to
$8.1 million for fiscal 2011. Excluding the aforementioned $2.6 million of proxy
solicitation costs recorded as selling, general and administrative expenses and
the previously discussed receipt of a $12.5 million net merger termination fee
associated with the termination of the CPI acquisition agreement, unallocated
operating expenses were $15.4 million and $20.6 million for fiscal 2012 and
2011, respectively. This $5.2 million decrease is primarily attributable to a
decline in selling, general and administrative expenses associated with the
lower level of consolidated net sales, as discussed above.
Amortization of stock-based compensation expense, which is included in
unallocated operating expenses, was $3.6 million in fiscal 2012 as compared to
$5.4 million in fiscal 2011.
Interest Expense. Interest expense was $8.8 million and $8.4 million for fiscal
2012 and 2011, respectively. The increase in interest expense is primarily due
to (i) accelerated amortization of deferred financing costs related to lowering
our borrowing capacity on our secured revolving credit facility from $150.0
million to $100.0 million, (ii) higher unused credit facility fees and (iii) a
full year of accretion of interest on the contingent earn-out liability related
to our October 2010 acquisition of technology assets from Stampede.
Interest Income and Other. Interest income and other for fiscal 2012 was $1.6
as compared to $2.4 million
for fiscal 2011. The decrease of $0.8
is primarily attributable to lower cash balances as a result of
repurchases of our common stock and dividend payments.
Provision for Income Taxes. The provision for income taxes was $11.6 million and
$33.9 million for fiscal 2012 and 2011, respectively. Our effective tax rate was
26.4% for fiscal 2012 compared to 33.3% for fiscal 2011.