iRobot 2011 Annual Report Download - page 60

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Form 10-K
ITEM 1A. RISK FACTORS
We operate in a rapidly changing environment that involves a number of risks, some of which are beyond
our control. This discussion highlights some of the risks which may affect future operating results. These are the
risks and uncertainties we believe are most important for you to consider. Additional risks and uncertainties not
presently known to us, which we currently deem immaterial or which are similar to those faced by other
companies in our industry or business in general, may also impair our business operations. If any of the following
risks or uncertainties actually occurs, our business, financial condition and operating results would likely suffer.
Risks Related to Our Business
We operate in an emerging market, which makes it difficult to evaluate our business and future prospects.
Robots represent a new and emerging market. Accordingly, our business and future prospects are difficult to
evaluate. We cannot accurately predict the extent to which demand for consumer robots will increase, if at all.
Moreover, there are only a limited number of major programs under which the U.S. federal government is
currently funding the development or purchase of military robots. You should consider the challenges, risks and
uncertainties frequently encountered by companies using new and unproven business models in rapidly evolving
markets. These challenges include our ability to:
• generate sufficient revenue and gross margin to maintain profitability;
• acquire and maintain market share in our consumer and military markets;
• attract and retain customers of our consumer robots;
• develop and renew government contracts for our military robots;
• attract and retain additional engineers and other highly-qualified personnel;
• expand our product offerings beyond our existing robots; and
• adapt to new or changing policies and spending priorities of governments and government agencies.
If we fail to successfully address these and other challenges, risks and uncertainties, our business, results of
operations and financial condition would be materially harmed.
Our financial results often vary significantly from quarter-to-quarter due to a number of factors, which
may lead to volatility in our stock price.
Our quarterly revenue and other operating results have varied in the past and are likely to continue to vary
significantly from quarter-to-quarter. These fluctuations will be due to numerous factors including:
• the size and timing of orders from military and other government agencies;
• the size, timing and mix of orders from retail stores and international distributors for our home care
robots;
• the mix of products that we sell in the period;
• disruption of supply of our products from our manufacturers;
• seasonality in the sales of our military and consumer products;
• the inability to attract and retain qualified, revenue-generating personnel;
• unanticipated costs incurred in the introduction of new products;
• costs and availability of labor and raw materials;
• costs of freight;
• changes in our rate of returns for our consumer products;
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