iRobot 2011 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2011 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 136

  • 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

Proxy Statement
Exhibit A
iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
For the twelve months ended
December 31,
2011
January 1,
2011
Net income $40,191 $25,514
Interest income, net (967) (765)
Income tax expense 13,350 8,460
Depreciation 9,002 7,002
Amortization 1,310 539
EBITDA 62,886 40,750
Stock-based compensation expense 8,784 8,165
Merger and acquisition expense 41 205
Net intellectual property litigation expense 287 181
Restructuring expense 1,015 —
Adjusted EBITDA $73,013 $49,301
Use of Non-GAAP Financial Measures
In evaluating its business, iRobot considers and uses Adjusted EBITDA as a supplemental measure of its
operating performance. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation
and amortization, merger and acquisition expenses, net intellectual property litigation expenses, restructuring
expenses and non-cash stock compensation. The Company also presents Adjusted EBITDA because it believes it
is frequently used by securities analysts, investors and other interested parties as a measure of financial
performance.
The term Adjusted EBITDA is not defined under U.S. generally accepted accounting principles, or U.S. GAAP,
and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S.
GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company’s operating
performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss)
or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things,
Adjusted EBITDA does not reflect the Company’s actual cash expenditures. Other companies may calculate
similar measures differently than iRobot, limiting their usefulness as comparative tools. iRobot compensates for
these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally.
A-1