iRobot 2012 Annual Report Download - page 80

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30
The following table sets forth our results of operations as a percentage of revenue for the periods shown:
Fiscal Year Ended
December 29,
2012
December 31,
2011
January 1,
2011
Revenue
Product revenue 95.9 % 91.6 % 89.9 %
Contract revenue 4.1
8.4
10.1
Total revenue 100.0
100.0
100.0
Cost of Revenue
Cost of product revenue 55.0
53.0
57.0
Cost of contract revenue 3.8
5.7
6.8
Total cost of revenue 58.8
58.7
63.7
Gross margin 41.2
41.3
36.3
Operating Expenses
Research and development 8.5
7.8
6.2
Selling and marketing 16.4
12.6
12.6
General and administrative 10.5
9.4
9.1
Total operating expenses 35.4
29.8
27.9
Operating Income 5.8
11.5
8.4
Other Income (Expense), Net 0.1
—
0.1
Income Before Income Taxes 5.9
11.5
8.5
Income Tax Expense 1.9
2.9
2.1
Net Income 4.0 % 8.6 % 6.4 %
Comparison of Years Ended December 29, 2012 and December 31, 2011
Revenue
Fiscal Year Ended
December 29,
2012
December 31,
2011 Dollar Change Percent Change
(In thousands)
Total Revenue $ 436,244 $ 465,500 $ (29,256) (6.3 )%
Our revenue decreased 6.3% to $436.2 million in fiscal 2012 from $465.5 million in fiscal 2011. Revenue increased
approximately $78.2 million, or 28.1%, in our home robots business unit, and decreased $107.5 million, or 57.5%, in our
defense and security business unit.
The $78.2 million increase in revenue from our home robots business unit was driven by an 18.2% increase in units
shipped and a 7.2% increase in net average selling price. In fiscal 2012, international home robots revenue increased
$43.3 million and domestic home robots revenue increased $34.9 million, including $3.8 million in the three month period
ended December 29, 2012 related to the newly acquired Mint floor sweeping robot. Total home robots shipped in fiscal 2012
were 1,621,000 units compared to 1,371,000 units in fiscal 2011. The increase in home robots business unit revenue and units
shipped was primarily attributable to a 22.1% increase in international sales of our home robots products and a 42.2% increase
in domestic sales of our home robots products. The increase in international sales is due primarily to increased demand in our
Asian and European markets. The increase in demand was driven by demand for our new Roomba 700 series robot and the
introduction of the Roomba 600 series robot, and an increase in marketing programs by us and our international distributors.
The increase in domestic sales of our home robots products was primarily attributable to increased sales to domestic retail
stores driven by the success of our recent domestic advertising campaign, expanded distribution of our Roomba 700 series
robot and the introduction of the Roomba 600 series robot, and favorable adjustments to our return provision due to gradual
improvement in returns resulting from sustained investment in product quality. In addition, net average selling prices in the
home robots business unit increased due to increased volume of higher priced products including the Roomba 700 series robot,
and fewer sales of our lower priced Roomba series.
The $107.5 million decrease in revenue from our defense and security robots business unit was driven by an $81.1
million decrease in defense and security robot revenue, a $21.3 million decrease in recurring contract development revenue