iRobot 2015 Annual Report Download - page 123

Download and view the complete annual report

Please find page 123 of the 2015 iRobot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 172

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172

40
margin decreasing 3.7 percentage points. The 1.2 percentage point increase in the home robots business unit was primarily
driven by favorable product and customer mix, with increased volume of higher margin Roomba 800 and 600 series robots in
fiscal 2014 compared to fiscal 2013. During 2014, we recorded a net benefit to revenue and gross margin of $4.3 million and
$5.7 million, respectively, related to adjustments to our product returns reserves, compared to a net benefit to both revenue and
gross margin of $7.9 million related to adjustments to our product returns reserves during fiscal 2013. 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 favorable product and customer mix was partially offset by the decrease in favorable adjustments to our
product returns reserve in fiscal 2014 compared to fiscal 2013. The 3.7 percentage point decrease in the defense and security
business unit is attributable to unfavorable overhead leverage associated with the 9.0% decrease in the defense and security
business unit revenue.
Research and Development
Fiscal Year Ended
December 27,
2014
December 28,
2013 Dollar Change Percent Change
(In thousands)
Total research and development $69,408 $63,649 $ 5,759 9.0%
As a percentage of total revenue 12.5% 13.1%
Research and development expenses increased $5.8 million, or 9.0%, to $69.4 million (12.5% of revenue) in fiscal 2014
from $63.6 million (13.1% of revenue) in fiscal 2013. This increase is attributable to increased efforts in product development
and continued product enhancements, including increases in consultant and other people-related costs of $3.5 million in 2014
compared to 2013.
Selling and Marketing
Fiscal Year Ended
December 27,
2014
December 28,
2013 Dollar Change Percent Change
(In thousands)
Total selling and marketing $86,091 $71,529 $ 14,562 20.4%
As a percentage of total revenue 15.5% 14.7%
Selling and marketing expenses increased by $14.6 million, or 20.4%, to $86.1 million (15.5% of revenue) in fiscal 2014
from $71.5 million (14.7% of revenue) in fiscal 2013. This increase is primarily attributable to $11.6 million in promotions,
marketing displays, on-line media and other selling and marketing costs incurred to support the retail launch of the Roomba
800 series and Scooba 450 robots and our continued global marketing and branding efforts, as well as increases in people-
related costs of $2.6 million driven by increased headcount in fiscal 2014 compared to fiscal 2013.
General and Administrative
Fiscal Year Ended
December 27,
2014
December 28,
2013 Dollar Change Percent Change
(
In thousands
)
General and administrative $49,439 $53,358 $ (3,919)(7.3)%
As a percentage of total revenue 8.9% 10.9%
General and administrative expenses decreased by $3.9 million, or 7.3%, to $49.4 million (8.9% of revenue) in fiscal
2014 from $53.4 million (10.9% of revenue) in fiscal 2013. This decrease is primarily attributable to a $3.9 million decrease in
people-related costs. Additionally, we recorded a $1.8 million write-down of an intangible asset in fiscal 2013, resulting from a
decision made in 2013 to refocus our funded research activities that significantly reduced our utilization of the technology
associated with the intangible asset, with no such write-down in fiscal 2014. These decreases are partially offset by increases in
consulting and other miscellaneous general and administrative costs.
Form 10-K