iRobot 2009 Annual Report Download - page 84

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For fiscal 2008, these expenses amounted to $23.9 million compared to $18.8 million for the comparable period in
2007. These expenses have been classified as cost of revenue rather than research and development expense as they
are executed under funded research contracts.
Selling and Marketing
December 27,
2008
December 29,
2007 Dollar Change Percent Change
Fiscal Year Ended
(In thousands)
Total selling and marketing ......... $46,866 $44,894 $1,972 4.4%
As a percentage of total revenue ..... 15.2% 18.0%
Selling and marketing expenses increased by $2.0 million, or 4.4%, to $46.9 million (15.2% of revenue) in
fiscal 2008 from $44.9 million (18.0% of revenue) in fiscal 2007.
The increase was primarily driven by increases in our government and industrial division of $1.7 million in
costs associated with bid and proposal activities, increased labor costs and other marketing related costs. Corporate
marketing expenses increased by $0.7 million in fiscal 2008 as compared to fiscal 2007 primarily driven by public
relations spending to continue building brand awareness. These increases were partially offset by an overall
decrease in selling and marketing expenses of the home robots division of $0.4 million attributed to a decrease of
$4.0 million related to our direct response infomercial program, which ran during fiscal 2007 and was not repeated
in fiscal 2008, $0.2 decrease in other marketing related costs, offset by increases of $1.4 million in television, on-
line and print media, $1.8 million in freight and fulfillment related expenses, $0.7 million in labor and sales
commissions.
In fiscal 2009, we expect to continue to invest in sales and marketing to increase brand awareness.
Accordingly, we anticipate selling and marketing expenses will remain at the same level or slightly above fiscal
2008 in absolute dollars.
General and Administrative
December 27,
2008
December 29,
2007 Dollar Change Percent Change
Fiscal Year Ended
(In thousands)
General and administrative ......... $28,840 $20,919 $7,921 37.9%
As a percentage of total revenue ..... 9.4% 8.4%
General and administrative expenses increased by $7.9 million, or 37.9%, to $28.8 million (9.4% of revenue)
in fiscal 2008 from $20.9 million (8.4% of revenue) in fiscal 2007. The increase in general and administrative
expenses was primarily driven by increases of $2.1 million in compensation expense due to increased headcount,
$1.2 million in stock-based compensation, $1.0 million in incentive compensation, $1.0 million in bad debt expense
associated with collectability concerns of receivables due from three of our retail customers given their financial
condition and bankruptcy filings, $0.8 million in occupancy and depreciation expenses relating to the move to our
new corporate headquarters, $0.5 million in executive severance and $0.2 million of goodwill amortization relating
to our acquisition of Nekton.
Litigation and Related Expenses
December 27,
2008
December 29,
2007 Dollar Change Percent Change
Fiscal Year Ended
(In thousands)
Litigation and related expenses ...... — $2,341 $(2,341) N/A
As a percentage of total revenue ..... — 1.0%
50