iRobot 2011 Annual Report Download - page 83

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demand is due in part to our increased and sustained domestic marketing activities which began in the fourth
quarter of 2010. The increase in our direct to consumer sales through our website was driven by the introduction
of our Roomba 700 series and Scooba 230 robots. Home robots division revenue from international sales was
70.3% of total home robots division revenue in fiscal 2011 as compared to 66.0% in fiscal 2010. The increase in
net average selling prices was primarily driven by customer mix and product mix relating to the introduction of
our Roomba 700 series and Scooba 230 robots.
The $15.3 million increase in revenue from our government and industrial robots division was driven by a
$4.5 million increase in product life cycle revenue (spare parts, accessories) and a $12.5 million increase in
government and industrial robot revenue offset by a $1.6 million decrease in recurring contract development
revenue generated under research and development contracts. The $4.5 million increase in product life cycle
revenue is the result of a higher installed base of our government and industrial robots. The $1.6 million decrease
in recurring contract development revenue generated under research and development contracts was primarily the
result of decreases in funding and timing of work efforts for our Maritime and Warrior programs. The
$12.5 million increase in government and industrial robots revenue was primarily due to a 27.7% increase in net
average selling prices partially offset by a 11.3% decrease in units shipped in fiscal 2011 as compared to fiscal
2010. The increase in net average selling price was due to product mix primarily attributable to PackBot and
SUGV units with a higher selling price shipped in fiscal 2011 as compared to lower priced PackBot FasTac units
and lower priced configuration of SUGV units shipped in fiscal 2010. Total government and industrial robots
shipped in fiscal 2011 were 773 units compared to 871 units in fiscal 2010.
Cost of Revenue
Fiscal Year Ended
December 31,
2011
January 1,
2011 Dollar Change Percent Change
(In thousands)
Total cost of revenue ................ $273,382 $255,520 $17,862 7.0%
As a percentage of total revenue ....... 58.7% 63.7%
Total cost of revenue increased to $273.4 million in fiscal 2011, compared to $255.5 million in fiscal 2010.
The increase is primarily due to the 8.0% increase in home robot units shipped in fiscal 2011 as compared to
fiscal 2010.
Gross Margin
Fiscal Year Ended
December 31,
2011
January 1,
2011 Dollar Change Percent Change
(In thousands)
Total gross margin .................. $192,118 $145,432 $46,686 32.1%
As a percentage of total revenue ....... 41.3% 36.3%
Gross margin increased $46.7 million, or 32.1%, to $192.1 million (41.3% of revenue) in fiscal 2011 from
$145.4 million (36.3% of revenue) in fiscal 2010. The increase in gross margin as a percentage of revenue was
the result of the home robots division gross margin increasing 5.2 percentage points and the government and
industrial robots division gross margin increasing 4.3 percentage points. The 5.2 percentage point increase in the
home robots division is attributable to changes in customer and product mix to higher margin home robots
products including the introduction of our Roomba 700 series and Scooba 230 robots, improved leverage of our
overhead expense against higher revenue, and lower return provisions and warranty expense in fiscal 2011 as
compared to fiscal 2010. The 4.3 percentage point increase in the government and industrial robots division is
primarily due to lower overhead expenses with improved leverage of our overhead expense against higher
revenue, lower sustaining engineering expense and lower warranty expense in fiscal 2011 as compared to fiscal
2010.
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