iRobot 2010 Annual Report Download - page 83

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costs associated with internal research and development projects in our home robots division and expenses related
to our healthcare research. The increase in our home robots division is primarily the result of our increased efforts in
the areas of product development and advanced development relating to our consumer products.
In addition to our research and development activities classified as research and development expense, we
incur research and development expenses under funded development arrangements with governments and industrial
third parties. For fiscal 2010, these expenses amounted to $27.1 million compared to $30.8 million for fiscal 2009.
In accordance with generally accepted accounting principles, these expenses have been classified as cost of contract
revenue rather than research and development expense. The combined investment in future technologies, classified
as cost of revenue and research and development expense, was $51.9 million for fiscal 2010, compared to
$45.5 million for fiscal 2009.
Selling and Marketing
January 1,
2011
January 2,
2010 Dollar Change Percent Change
Fiscal Year Ended
(In thousands)
Total selling and marketing ............. $50,535 $40,902 $9,633 23.6%
As a percentage of total revenue ......... 12.6% 13.7%
Selling and marketing expenses increased by $9.6 million, or 23.6%, to $50.5 million (12.6% of revenue) in
fiscal 2010 from $40.9 million (13.7% of revenue) in fiscal 2009. This was driven by an increase in our home robots
division of $7.9 million attributable to increases in advertising, promotions, on-line media, sales commission
expenses as a result of higher sales, and an increase in compensation and employee-related expense supporting our
international home robot sales for fiscal 2010 as compared to fiscal 2009. Selling and marketing expenses in our
government and industrial division increased by $1.7 million attributable to an increase in compensation expenses
and other expenses relating to bid and proposal activities, and sales commissions as a result of higher sales in fiscal
2010 as compared to fiscal 2009.
In fiscal 2011, we expect to continue to invest in sales and marketing to increase brand awareness.
Accordingly, we anticipate selling and marketing expenses will increase in absolute dollars but remain at the
same level or slightly above fiscal 2010 as a percentage of revenue.
General and Administrative
January 1,
2011
January 2,
2010 Dollar Change Percent Change
Fiscal Year Ended
(In thousands)
General and administrative ............. $36,618 $30,110 $6,508 21.6%
As a percentage of total revenue ......... 9.1% 10.1%
General and administrative expenses increased by $6.5 million, or 21.6%, to $36.6 million (9.1% of revenue)
in fiscal 2010 from $30.1 million (10.1% of revenue) in fiscal 2009. This increase is attributable to increased
compensation, benefit and recruiting expenses related to increased headcount and an increase in incentive
compensation expense, stock based compensation, and an increase in legal expense, primarily attributable to
our international expansion and intellectual property prosecution and enforcement, for fiscal 2010 as compared to
fiscal 2009.
Other Income (Expense), Net
January 1,
2011
January 2,
2010 Dollar Change Percent Change
Fiscal Year Ended
(In thousands)
Other Income (expense), net .......... $504 $(81) $585 Not Meaningful
As a percentage of total revenue ....... 0.1% 0.0%
37
Form 10-K