iRobot 2012 Annual Report Download - page 85

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efforts in the areas of new product development. The increase in our defense and security robots business unit is the result of
our increased efforts in product development relating to our FirstLook, PackBot and Warrior programs.
In addition to our research and development activities classified as research and development expense, we incur research
and development expenses under funded development arrangements with governments and industrial third parties. For fiscal
2011, these expenses amounted to $26.5 million, compared to $27.1 million for fiscal 2010. In accordance with generally
accepted accounting principles, these expenses have been classified as cost of contract revenue rather than research and
development expense. The combined investment in future technologies, classified as cost of revenue and research and
development expense, was $63.0 million for fiscal 2011, compared to $51.9 million for fiscal 2010.
Selling and Marketing
Fiscal Year Ended
December 31,
2011
January 1,
2011 Dollar Change Percent Change
(In thousands)
Total selling and marketing $ 58,544
$ 50,535 $ 8,009 15.8 %
As a percentage of total revenue 12.6 % 12.6 %
Selling and marketing expenses increased by $8.0 million, or 15.8%, to $58.5 million (12.6% of revenue) in fiscal 2011
from $50.5 million (12.6% of revenue) in fiscal 2010. This was driven by an increase in our home robots business unit of $6.4
million primarily attributable to increases in advertising as part of our continued global marketing and branding efforts, other
marketing, compensation, and employee-related expense for fiscal 2011 as compared to fiscal 2010. Selling and marketing
expenses in our defense and security robots business unit increased by $1.2 million attributable to an increase in compensation,
trade show, depreciation related to demonstration robots and travel expenses in fiscal 2011.
In fiscal 2012, we expect to continue to invest in sales and marketing to increase brand awareness. Accordingly, we
anticipate selling and marketing expenses will increase in absolute dollars but remain at the same level or slightly above fiscal
2011 as a percentage of revenue.
General and Administrative
Fiscal Year Ended
December 31,
2011
January 1,
2011 Dollar Change Percent Change
(In thousands)
General and administrative $ 43,753
$ 36,618 $ 7,135 19.5 %
As a percentage of total revenue 9.4 % 9.1 %
General and administrative expenses increased by $7.1 million, or 19.5%, to $43.8 million (9.4% of revenue) in fiscal
2011 from $36.6 million (9.1% of revenue) in fiscal 2010. This increase is primarily attributable to increased compensation and
employee benefit expenses related to increased headcount, incentive compensation expense, stock-based compensation
expense, enterprise software expense, consulting expense, legal expense primarily attributable to our international expansion
and intellectual property prosecution and enforcement, and expenses relating to four robots sent to Japan to explore reactor
buildings at the Fukushima Daiichi nuclear plant.
Other Income (Expense), Net
Fiscal Year Ended
December 31,
2011
January 1,
2011 Dollar Change Percent Change
(In thousands)
Other Income (expense), net $ 218
$ 504 $ (286) (56.7 )%
As a percentage of total revenue —
0.1 %
Other income (expense), net, amounted to $0.2 million in fiscal 2011 compared to $0.5 million in fiscal 2010. Other
income (expense), net, for fiscal 2011 was related to interest income of $1.0 million offset by foreign currency exchange losses
of $0.5 million resulting from foreign currency exchange rate fluctuations and other expenses of $0.3 million. Other income
(expense), net, for fiscal 2010 was related to interest income of $0.8 million offset by foreign currency exchange losses of
$0.3 million resulting from foreign currency exchange rate fluctuations.
Form 10-K