iRobot 2005 Annual Report Download - page 2

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Dear Shareholder,
At iRobot, we believe there is a better way to accomplish
many of the dull, dirty and dangerous tasks that face us
today. In 2005, our innovative products delivered on that
belief. We saw our robots gain signifi cant popularity in
both the military and consumer markets. iRobot’s revenue
increased 49 percent this past year, from $95 million in
fi s cal 2004 to nearly $142 million in 2005. We achieved
profi tability in our business for the second consecutive
year, as our pre-tax income grew to $2.8 million in fi scal
2005, compared to $0.4 million in 2004. This was the
result of strong revenue growth in our operating units:
our Consumer Robots division saw 32 percent growth
and our Government and Industrial Robots division
doubled its revenue for the second consecutive year.
We also realized signifi cant gross profi t improvements,
a key fi nancial goal for 2005, and this resulted in fully
diluted earnings per share of 11 cents per share for fi scal
2005 as compared to 1 cent per share for 2004. Finally,
in early November we became a public company, and
for the fi rst time a robot sounded the opening bell on
the NASDAQ exchange.
In 2006, iRobot’s focus is on sustainable revenue
growth. The market opportunity for the emerging robot
industry is signifi cant, and we are just beginning to tap
its potential. iRobot is well positioned to lead in this
emerging market. For this reason, our target fi nancial
model is fi ve years into the future, and focuses on
increasing pre-tax earnings to the mid-to-high teens
(as a percentage of sales) by the end of that period. We
are committed to investing in our future and broadening
iRobot’s product and technology portfolio over time,
rather than maximizing our earnings today.
Innovation Opportunity Leadership
Revenue Growth
150
120
90
60
30
0
$ in Millions
2000 2001 2002 2003 2004 2005