iRobot 2015 Annual Report Download - page 119

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36
Comparison of Years Ended January 2, 2016 and December 27, 2014
Revenue
Fiscal Year Ended
January 2,
2016
December 27,
2014 Dollar Change Percent Change
(In thousands)
Total Revenue $616,778 $556,846 $ 59,932 10.8%
Our revenue increased 10.8% to $616.8 million in fiscal 2015 from $556.8 million in fiscal 2014. Revenue increased
$52.2 million, or 10.3%, in our home robots business unit, and $9.5 million, or 20.9%, in our defense and security business
unit.
The $52.2 million increase in revenue from our home robots business unit was driven by a 12.1% increase in units
shipped, partially offset by a 1.5% decrease in net average selling price. In fiscal 2015, domestic home robots revenue
increased $47.3 million, or 25.2%, and international home robots revenue increased $4.9 million, or 1.5%, compared to fiscal
2014. Total home robots shipped in fiscal 2015 were 2,436,000 units compared to 2,174,000 units in fiscal 2014. The increase
in domestic home robots revenue was primarily attributable to increased sales as a result of significant investments in
advertising media and national promotions as well as the launch of Roomba 980. International home robots revenue growth
slowed compared to fiscal 2014 as a result of negative macroeconomic conditions, specifically in Japan and Russia, offset by a
significant growth increase in China. The increase in revenue also includes a $1.6 million favorable adjustment associated with
the release of marketing allowances to a former customer that went unused and for which the statute of limitations has lapsed.
During 2015, we recorded a net benefit to revenue and income before income taxes of $6.9 million related to adjustments to our
product returns reserves compared to a net benefit to revenue and income before income taxes of $4.3 million and $5.7 million
during fiscal 2014. The net adjustments recorded in each period resulted from lower product returns experience as compared to
estimates used to establish reserves in prior periods.
The $9.5 million increase in revenue from our defense and security business unit was driven by a $7.7 million increase in
defense and security robot revenue and a $4.1 million increase in product life cycle revenue (spare parts, accessories), partially
offset by a $2.3 million decrease in recurring contract revenue generated under research and development contracts. Total
defense and security robots shipped in fiscal 2015 were 294 units compared to 265 units in fiscal 2014, while the net average
selling price of our defense and security robots increased from approximately $56 thousand in fiscal 2014 to approximately $77
thousand in fiscal 2015. The increase in the number of units shipped and the increase in average selling price resulted from
increased sales of our higher-priced SUGV robot in fiscal 2015 as compared to fiscal 2014. The $2.3 million decrease in
contract revenue was primarily due to our change in strategy to not pursue funded research. The $4.1 million increase in
product life cycle revenue was driven primarily by the delivery of robots and spare parts under a contract with the Canadian
Department of National Defence.
Cost of Revenue
Fiscal Year Ended
January 2,
2016
December 27,
2014 Dollar Change Percent Change
(In thousands)
Total cost of revenue $327,852 $298,791 $ 29,061 9.7%
As a percentage of total revenue 53.2% 53.7%
Total cost of revenue increased $29.1 million, or 9.7% to $327.9 million in fiscal 2015, compared to $298.8 million in
fiscal 2014. The increase is primarily due to the 12.1% and 10.9% increase of units shipped in our home robots business unit
and defense and security business unit, respectively. These increases are partially offset by a higher mix of lower margin
products sold in the defense and security business unit.
Form 10-K