The acquisition of Gefen Distribution contributed approximately $6.1 million to the increase in net sales during 2013. Excluding
the impact of Gefen Distribution, sales of audio/video distribution products decreased approximately $24.4 million during 2013.
The impact of Gefen Distribution contributed approximately $4.9 million to COGS during 2013. As noted in the table above, COGS
as a percentage of net sales decreased in 2013 as compared to 2012. This decrease was primarily as a result of a decrease in overhead
costs as a percentage of net sales, partially offset by an increase in material costs as a percentage of net sales. The increase in
material costs as a percentage of net sales is primarily attributable to a change in product mix. The decrease in overhead costs as
a percentage of net sales is primarily as a result of the items that follow. COGS for 2013 also includes (1) restructuring and
transformation costs of approximately $2.5 million and (2) a charge of approximately $1.5 million related to the discontinuation of
certain products within the segment. COGS for 2012 includes a charge of approximately $3.7 million relating to the decision to
discontinue development of a certain new product and approximately $2.4 million in severance and other charges relating to exit
and disposal activities.
The impact of Gefen Distribution contributed approximately $2.7 million to SG&A during 2013. The increase in SG&A as a
percentage of net sales for 2013 is primarily the result of a decrease in net sales without a proportionate increase in SG&A due to
the fixed nature of certain expenses. SG&A for 2013 also includes (1) a decrease in product development costs of approximately
$1.0 million, (2) an increase of approximately $1.5 million in severance and other charges related to exit and disposal activities
and, (3) acquisition related costs of approximately $0.2 million.