iRobot 2014 Annual Report Download - page 105

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Selling and marketing expenses increased by $14.6 million, or 20.4%, to $86.1 million (15.5% of revenue) in fiscal 2014
from $71.5 million (14.7% of revenue) in fiscal 2013. This increase is primarily attributable to $11.6 million in promotions,
marketing displays, on-line media and other selling and marketing costs incurred to support the retail launch of the Roomba
800 series and Scooba 450 robots and our continued global marketing and branding efforts, as well as increases in people-
related costs of $2.6 million driven by increased headcount in fiscal 2014 compared to fiscal 2013.
General and Administrative
Fiscal Year Ended
December 27,
2014 December 28, 2013 Dollar Change Percent Change
(In thousands)
General and administrative $ 49,439 $ 53,358 $ (3,919) (7.3)%
As a percentage of total revenue 8.9% 10.9%
General and administrative expenses decreased by $3.9 million, or 7.3%, to $49.4 million (8.9% of revenue) in fiscal
2014 from $53.4 million (10.9% of revenue) in fiscal 2013. This decrease is primarily attributable to a $3.9 million decrease in
people-related costs. Additionally, we recorded a $1.8 million write-down of an intangible asset in fiscal 2013, resulting from a
decision made in 2013 to refocus our funded research activities that significantly reduced our utilization of the technology
associated with the intangible asset, with no such write-down in fiscal 2014. These decreases are partially offset by increases in
consulting and other miscellaneous general and administrative costs.
Other Income (Expense), Net
Fiscal Year Ended
December 27,
2014 December 28, 2013 Dollar Change Percent Change
(In thousands)
Other Income (expense), net $ (708) $ (203) $ (505) 248.8%
As a percentage of total revenue (0.1)% 0.0 %
Other income (expense), net, amounted to $(0.7) million and $(0.2) million for fiscal 2014 and fiscal 2013, respectively,
and consisted primarily foreign currency exchange losses resulting from foreign currency exchange rate fluctuations, offset by
interest income.
Income Tax Provision
Fiscal Year Ended
December 27,
2014 December 28, 2013 Dollar Change Percent Change
(In thousands)
Income tax provision $ 14,606 $ 4,774 $ 9,832 205.9%
As a percentage of pre-tax income 27.9% 14.7%
We recorded an income tax provision of $14.6 million and $4.8 million for fiscal 2014 and fiscal 2013, respectively. The
$14.6 million income tax provision for fiscal 2014 was based upon a 2014 effective income tax rate of 31.5% plus a net income
tax benefit of $1.9 million primarily resulting from the release of $2.1 million of valuation allowance related to certain state tax
attributes of Evolution Robotics, Inc. The $4.8 million provision for fiscal 2013 was based upon a 2013 effective income tax
rate of 28.5% plus a net income tax benefit of $4.5 million primarily resulting from the extension of the federal research and
development tax credit in 2013 and the settlement of uncertain tax positions upon completion of an IRS audit.
In January 2013, legislation was enacted that included the extension of the federal research and development tax credits.
The legislation retroactively reinstated the research and development tax credit for 2012 and extended it through December 31,
2013. As a result, we recorded a discrete benefit of approximately $1.7 million related to 2012 in 2013.
The federal research and development tax credit expired at the end of 2014. The federal research and development tax
credit has not yet been enacted for 2015 and, unless retroactively reinstated, will cause our 2015 effective tax rate to increase.
The increase in the effective tax rate from 28.5% in 2013 to 31.5% in 2014 was primarily due to a smaller research and
development credit in 2014 as compared to 2013 and an increase in state tax expense in 2014 as compared to 2013.
Form 10-K