iRobot 2015 Annual Report Download - page 87

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an emphasis on software, that allow our robots to understand the homes in which they operate. It is our intent to continue
investing in these critical technologies and the economic opportunities they unlock.
In addition to the above, we achieved a number of significant milestones in 2015 that we believe will assist us in
continuing to generate profitable growth and enhance value for our shareholders. In particular, we successfully launched
Roomba 980, our first connected home robot incorporating Visual Simultaneous Location and Mapping, or vSLAM, which
provides the robot with the capability to dynamically create and update a map of its surroundings. This is our first step into the
Internet of Things, enabling new functionality such as remote app-control and systematic navigation, as well as paving the way
for new products and capabilities in the future. Additionally, we implemented new Roomba marketing programs in the United
States that resulted in a significant return on our investment and which we plan to leverage as part of our strategy to accelerate
growth in international markets.
In our continuing effort to return capital to our shareholders, we repurchased 1,260,276 shares of our common stock for
an aggregate purchase price of $37.4 million during fiscal year 2015. In conjunction with the announcement to divest our
defense and security business unit, we also announced a $65 million increase to our current share repurchase initiative, partially
funded from the expected proceeds from the divestiture, bringing total repurchases authorized under the 2016 program to more
than $100 million. We intend to initiate the incremental program in the first quarter of fiscal 2016 in conjunction with the
completion of the defense and security business unit divestiture. This initiative, coupled with the previous return of capital,
balances our interest to return cash to shareholders while maintaining sufficient cash to operate and invest in our business.
Our total revenue for 2015 was $616.8 million, which represents an 11% increase from 2014 revenue of $556.8 million.
This increase in revenue was largely attributable to a $52.2 million increase in revenue in our home robots business unit as a
direct result of growth in our domestic market. Domestic growth 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. Revenue increased $9.5 million in our defense and security
business, primarily attributable to increased sales of our SUGV robot. Our home robots revenue represented 91% of our total
revenue for both 2015 and 2014. With the anticipated divestiture of our defense and security business unit, our revenue for the
next few years will almost entirely be driven by our rapidly growing home robots business.
Our financial performance in 2016 will be driven by our home robots business unit. Our strategy is to maintain
Roomba’s market leadership while positioning it as a key component in the connected home. We expect growth to be driven
by:
• Expanded worldwide consumer adoption of Roomba supported by targeted marketing programs similar to the
successful programs we introduced in the United States in 2015;
• Wider geographic distribution of Roomba 980;
• Building a second material revenue stream, which we expect to do with our wet floor care products; and
• Regional growth in China, with specific emphasis on further accelerating growth in the e-commerce channel.
Strategy
We are a technology company with the goal of designing and marketing innovative robots that empower people to do
more. Our deep understanding of the consumer, the consumer's needs and how robots meet those needs ensures that every
robot is created with a person in mind. We strive to drive innovation, serve as an industry catalyst and change the world by
fueling the era of robots. We intend to increase the penetration of our products in existing markets, expand existing products
into new markets, and develop and launch new products into current and adjacent markets. Our strategy is to maintain a
leadership position by delivering robotic technology-based automated home maintenance solutions that delight our customers
and anticipate their needs, while extending our technical leadership in the areas of autonomous navigation, manipulation and
cloud connectivity and services. With increasing levels of autonomy, continued mobility improvements, more sophisticated
sensor suites and advanced human interfaces, our robots will expand in effectiveness and efficiency and reduce the
requirements for actual physical operator presence and control. In the area of automated home maintenance, we seek to
improve the quality of life with robotic solutions requiring as little human physical intervention as possible.
Form 10-K