iRobot 2007 Annual Report Download - page 82

Download and view the complete annual report

Please find page 82 of the 2007 iRobot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

Cost of Revenue
December 29,
2007
December 30,
2006 Dollar Change Percent Change
Fiscal Year Ended
(Dollars in thousands)
Total cost of revenue.............. $166,494 $119,220 $47,274 39.7%
As a percentage of total revenue ..... 66.8% 63.1%
Total cost of revenue increased to $166.5 million in fiscal 2007, compared to $119.2 million in fiscal 2006. The
increase is primarily due to a 23.9% increase in the unit sales of our home care robots, and a 22.3% increase in the
unit sales of our military robots in fiscal 2007 as compared to fiscal 2006.
The home robots division cost of revenue increased as a percent of revenue by 7.2 percentage points in fiscal
2007 as compared to fiscal 2006. This increase was primarily attributable to a 15.4% increase in average unit costs
driven primarily by the mix of higher cost products and increased battery costs due to the increased cost of nickel.
The government and industrial robots division cost of revenue decreased as a percent of revenue by
1.3 percentage points for fiscal 2007 as compared to fiscal 2006. This decrease was due to the above-mentioned
increase in average selling prices and higher margins on increased product life cycle revenue, partially offset by a
3.1% increase in the average unit cost of products sold.
Gross Profit
December 29,
2007
December 30,
2006 Dollar Change Percent Change
Fiscal Year Ended
(Dollars in thousands)
Total gross profit ................ $82,587 $69,735 $12,852 18.4%
As a percentage of total revenue ..... 33.2% 36.9%
Gross profit increased 18.4% to $82.6 million in fiscal 2007, from $69.7 million in fiscal 2006. Gross profit as
a percentage of revenue decreased to 33.2% in fiscal 2007 from 36.9% of revenue in fiscal 2006. This 3.7 percentage
decrease in gross profit was the result of the home robots division gross profit decreasing 7.2 percentage points
partially offset by the government and industrial gross profit increasing 1.3 percentage points, and the higher mix of
government and industrial revenue in fiscal 2007 as compared to fiscal 2006. The home robots division decrease
was driven primarily by higher average unit costs due to the mix of higher cost products and increased battery costs,
while the government and industrial increase was driven by the mix of higher margin products and a higher
percentage of product revenue as compared to contract revenue in fiscal 2007 as compared to fiscal 2006.
Research and Development
December 29,
2007
December 30,
2006 Dollar Change Percent Change
Fiscal Year Ended
(Dollars in thousands)
Total research and development ...... $17,082 $17,025 $57 0.3%
As a percentage of total revenue ..... 6.9% 9.0%
Research and development expenses increased by $0.1 million or 0.3% to $17.1 million (6.9% percent of
revenue) in fiscal 2007, from $17.0 million (9.0% of revenue) for fiscal 2006. The home robots division research
and development expenses increased in fiscal 2007 as compared to fiscal 2006 due to hiring, depreciation and costs
associated with the India design center, offset by reductions in the government and industrial division. This
reduction in government and industrial expenses was largely attributable to the fact that 2006 expenses included
accelerated spending as a result of our decision to invest higher than planned earnings in research and development
activities, a strategy that was not repeated in 2007.
Overall internal research and development headcount increased to 105 at December 29, 2007 compared to 104
as of December 30, 2006, an increase of 1 employee.
48