iRobot 2014 Annual Report Download - page 106

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33
Comparison of Years Ended December 28, 2013 and December 29, 2012
Revenue
Fiscal Year Ended
December 28,
2013 December 29,
2012 Dollar Change Percent Change
(In thousands)
Total Revenue $ 487,401 $ 436,244 $ 51,157 11.7%
Our revenue increased 11.7% to $487.4 million in fiscal 2013 from $436.2 million in fiscal 2012. Revenue increased
$71.0 million, or 19.9%, in our home robots business unit, and decreased $20.9 million, or 29.5%, in our defense and security
business unit.
The $71.0 million increase in revenue from our home robots business unit was driven by a 19.2% increase in units
shipped and a 4.1% increase in net average selling price. In fiscal 2013, international home robots revenue increased
$34.6 million and domestic home robots revenue increased $36.4 million. Total home robots shipped in fiscal 2013 were
1,933,000 units compared to 1,621,000 units in fiscal 2012. The increase in home robots business unit revenue and units
shipped was primarily attributable to a 30.9% increase in domestic sales of our home robots products and a 14.5% increase in
international sales of our home robots products. 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, and
expanded distribution of our Roomba 700 and 600 series robots. The increase in international sales is due primarily to
increased demand in our Asian markets, partially offset by a decrease in sales in our European markets. The increased demand
in our Asian markets was driven by demand for our Roomba 700 and 600 series robots, and the introduction of our Braava
robot. 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 and 600 series robots, and fewer sales of our lower priced Roomba series.
The $20.9 million decrease in revenue from our defense and security robots business unit was driven by a $1.3 million
decrease in defense and security robot revenue, a $9.4 million decrease in recurring contract development revenue generated
under research and development contracts, and a $10.2 million decrease in product life cycle revenue (spare parts, accessories).
The net average selling price of our defense and security robots decreased by 52.6% due to product mix primarily attributable
to an increase in FirstLook units shipped in 2013, which have a lower selling price than the SUGV units that comprised a larger
portion of the units shipped in 2012. Total defense and security robots shipped in 2013 were 534 units compared to 274 units in
2012. The $1.3 million decrease in defense and security robot revenue resulted from decreased shipments of higher priced
SUGV robots in 2013 compared to 2012. The $9.4 million decrease in recurring contract development revenue generated
under research and development contracts was primarily the result of decreases in government funding for our SUGV
programs. The $10.2 million decrease in product life cycle revenue was due to reduction in spares associated with lower robot
sales and a decrease in PackBot upgrades. Continued funding delays for government contracts have reduced our near-term
visibility in our defense and security robots business unit and contributed to the decrease in period-over-period revenue in this
business unit. We cannot predict with any certainty the extent to which these funding delays will continue.
Cost of Revenue
Fiscal Year Ended
December 28,
2013 December 29,
2012 Dollar Change Percent Change
(In thousands)
Total cost of revenue $ 266,247 $ 241,896 $ 24,351 10.1%
As a percentage of total revenue 54.6% 55.4%
Total cost of revenue increased to $266.2 million in fiscal 2013, compared to $241.9 million in fiscal 2012. The increase
is primarily due to the 19.2% increase in home robot units shipped and the 94.9% increase in defense and security units shipped
in fiscal 2013 as compared to fiscal 2012. Additionally, favorable adjustments of $5.2 million relating to reductions in our
international warranty accrual for our home robots business, attributable to declining warranty cost experience were recorded in
2012 with no such adjustments recorded in 2013.