iRobot 2010 Annual Report Download - page 74

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information contained in this section has been derived from our consolidated financial statements and
should be read together with our consolidated financial statements and related notes included elsewhere in this
Annual Report on Form 10-K. This Annual Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange
Act of 1934, as amended, or the Exchange Act, and are subject to the “safe harbor” created by those sections. In
particular, statements contained in this Annual Report on Form 10-K that are not historical facts, including, but not
limited to statements concerning new product sales, product development and offerings, Roomba, Scooba, Looj and
Verro products, PackBot tactical military robots, the Small Unmanned Ground Vehicle, Seaglider, Negotiator, our
home robot and government and industrial robots divisions, our competition, our strategy, our market position,
market acceptance of our products, seasonal factors, revenue recognition, our profits, growth of our revenues,
composition of our revenues, our cost of revenues, operating expenses, selling and marketing expenses, general and
administrative expenses, research and development expenses, and compensation costs, our projected income tax
rate, our credit facility and equipment facility, our valuations of investments, valuation and composition of our
stock-based awards, and liquidity, constitute forward-looking statements and are made under these safe harbor
provisions. Some of the forward-looking statements can be identified by the use of forward-looking terms such as
“believes,” “expects,” “may,” “will,” “should,” “could,” “seek,” “intends,” “plans,” “estimates,” “anticipates,” or
other comparable terms. Forward-looking statements involve inherent risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking statements. We urge you to consider the risks
and uncertainties discussed in greater detail under the heading “Risk Factors” in evaluating our forward-looking
statements. We have no plans to update our forward-looking statements to reflect events or circumstances after the
date of this report. We caution readers not to place undue reliance upon any such forward-looking statements, which
speak only as of the date made.
Overview
iRobot designs and builds robots that make a difference. For over 20 years, we have developed proprietary
technology incorporating advanced concepts in navigation, mobility, manipulation and artificial intelligence to
build industry-leading robots. Our Roomba floor vacuuming robot and Scooba floor washing robot perform time-
consuming domestic chores in the home, while our Looj gutter cleaning robot and Verro pool cleaning robot
perform tasks outside the home. Our PackBot and Small Unmanned Ground Vehicle (SUGV) tactical ground
military robots perform battlefield reconnaissance and bomb disposal. Our Negotiator ground robot performs multi-
purpose tasks for local police and first responders. Our 1KA Seaglider unmanned underwater robot performs long
endurance oceanic missions. We sell our robots to consumers through a variety of distribution channels, including
chain stores and other national retailers, and through our on-line store, and to the U.S. military and other
government agencies worldwide. We maintain certifications for AS9100 and Capability Maturity Model Integra-
tion. These certifications enable us to service our military products and services.
As of January 1, 2011, we had 657 full-time employees. We have developed expertise in the disciplines
necessary to build durable, high-performance and cost-effective robots through the close integration of software,
electronics and hardware. Our core technologies serve as reusable building blocks that we adapt and expand to
develop next generation and new products, reducing the time, cost and risk of product development. Our significant
expertise in robot design and engineering, combined with our management team’s experience in military and
consumer markets, positions us to capitalize on the expected growth in the market for robots.
Although we have successfully launched consumer and government and industrial products, our continued
success depends upon our ability to respond to a number of future challenges. We believe the most significant of
these challenges include increasing competition in the markets for both our consumer and government and
industrial products, our ability to obtain U.S. federal government funding for research and development programs,
and our ability to successfully develop and introduce products and product enhancements.
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