iRobot 2008 Annual Report Download - page 67

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• costs and availability of labor and raw materials;
• costs of freight;
• changes in our rate of returns for our consumer products;
• our ability to introduce new products and enhancements to our existing products on a timely basis;
• price reductions;
• warranty costs associated with our consumer products;
• the amount of government funding and the political, budgetary and purchasing constraints of our govern-
ment agency customers; and
• cancellations, delays or contract amendments by government agency customers.
Predicting revenue for any particular quarter and from sales of our consumer products includes many
challenges. Chain stores and other national retailers typically place orders for the holiday season in the third
quarter and early in the fourth quarter. The timing of these holiday season shipments could materially affect our
third or fourth quarter results in any fiscal year. Because of quarterly fluctuations, we believe that quarter-to-quarter
comparisons of our operating results are not necessarily meaningful. Moreover, our operating results may not meet
expectations of equity research analysts or investors. If this occurs, the trading price of our common stock could fall
substantially either suddenly or over time.
Global economic conditions and any associated impact on consumer spending could have a material
adverse effect on our business, results of operations and financial condition.
Continued economic uncertainty and reductions in consumer spending may result in reductions in sales of our
consumer robots, which would adversely affect our business, results of operations and our financial condition. In
addition, recent disruptions in national and international credit markets have lead to a scarcity of credit, tighter
lending standards and higher interest rates on consumer and business loans. Continued disruptions in credit markets
may materially limit consumer credit availability and restrict credit availability of our retail customers, which
would also impact purchases of our consumer robots. Any reduction in sales of our consumer robots, resulting from
reductions in consumer spending or continued disruption in the availability of credit to retailers or consumers, could
materially and adversely affect our business, results of operations and financial condition.
Our future profitability may fluctuate, and we have a limited operating history on which you can base
your evaluation of our business.
As of December 27, 2008, we had an accumulated deficit of $10.9 million. Over the past five years, our
accumulated deficit has decreased by $16.2 million due to annual operating profitability. Because we operate in a
rapidly evolving industry, there are challenges to predicting our future operating results, and we cannot be certain
that our revenues will grow at rates that will allow us to maintain profitability during every fiscal quarter, or even
every fiscal year. In addition, we only have limited operating history on which you can base your evaluation of our
business. Failure to maintain profitability may result in the loss access to capital under our existing credit
arrangements.
A majority of our business currently depends on our consumer robots, and our sales growth and
operating results would be negatively impacted if we are unable to enhance our current consumer robots
or develop new consumer robots at competitive prices or in a timely manner.
For the years ended December 27, 2008 and December 29, 2007, we derived 56.4% and 58.0% of our total
revenue from our consumer robots, respectively. For the foreseeable future, we expect that a significant portion of
our revenue will continue to be derived from sales of consumer robots in general and home floor care products in
particular. Accordingly, our future success depends upon our ability to further penetrate the consumer home care
market, to enhance our current consumer products and develop and introduce new consumer products offering
enhanced performance and functionality at competitive prices. The development and application of new
19
Form 10-K