Corp_Buyer re operating expense increases
I don’t feel like I have a handle on IDCC’s expenses to the same extent as revenues. But let me say that I understand where you are coming from in the area of operating expenses. In 2002, I pretty much used $20m per quarter for total operating expense projections. Then in 2003, I started with $21m, then $22m, and by the last quarter of 2003, I was using $23m for operating expenses. It appears that the first quarter of 2004, the operating expenses will significantly increase again to about $24.5m, assuming another 7% quarter-over-quarter increase per guidance.
You said:
..."Incidentally, does anybody have any comments on these cost data comparisons (YE 2003 vs. 2002) showing that DEVELOPMENT spending went down (presumeably including the Tantivy key people) while G&A and Marketing went up 19% and 15% respectively? Patent Administration and Licensing costs increased 22% which probably includes the litigation costs so that does not concern me. However, why should our overhead costs INCREASE so much while DEVELOPMENT actually DECREASED?"
Research and Development expenses, mainly for our engineers, have stayed virtually flat over the last couple of years. Yes the 10 additional engineers from Tantivy should be included in this expense category in 2003. The significant increases are in General and Administrative expenses up 19% in 2003. A lot of this increase would be the D&O liability insurance, which increased about $1.5m in 2003, and would explain about 50% of the $3m increase in G&A expenses. Another significant increase of 22%, or another $3m increase, is in Patent Adm. and Licensing. Most of this increase is probably due to attorney costs for arbitrations and litigation. Also the amortization of the Tantivy acquired patents would be in this expense category also. Although Sales and Marketing expenses increased 15%, the dollar increase of about $600,000 was not that significant.
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