iRobot 2011 Annual Report Download - page 70

Form 10-K
• difficulties in obtaining any necessary governmental authorizations for the export of our products to
certain foreign jurisdictions;
• potential fluctuations in foreign economies;
• government currency control and restrictions on repatriation of earnings;
• fluctuations in the value of foreign currencies and interest rates;
• general economic and political conditions in the markets in which we operate;
• domestic and international economic or political changes, hostilities and other disruptions in regions
where we currently operate or may operate in the future;
• changes in foreign currency exchange rates;
• different and changing legal and regulatory requirements in the jurisdictions in which we currently operate
or may operate in the future; and
• outside of the United States, we primarily rely on a network of exclusive distributors, some of whom may
be operating without written contracts.
Negative developments in any of these areas in one or more countries could result in a reduction in demand
for our products, the cancellation or delay of orders already placed, threats to our intellectual property, difficulty
in collecting receivables, and a higher cost of doing business, any of which could negatively impact our business,
financial condition or results of operations. Moreover, our sales, including sales to customers outside the United
States, are primarily denominated in U.S. dollars, and downward fluctuations in the value of foreign currencies
relative to the U.S. dollar may make our products more expensive than other products, which could harm our
business.
If we experience a disaster or other business continuity problem, we may not be able to recover successfully,
which could cause material financial loss, loss of human capital, regulatory actions, reputational harm, or
legal liability.
If we experience a local or regional disaster or other business continuity problem, such as an earthquake,
terrorist attack, pandemic or other natural or man-made disaster, our continued success will depend, in part, on
the availability of our personnel, our office facilities, and the proper functioning of our computer,
telecommunication and other related systems and operations. As we grow our operations in new geographic
regions, the potential for particular types of natural or man-made disasters, political, economic or infrastructure
instabilities, or other country- or region-specific business continuity risks increases.
If we suffer any data breaches involving the designs, schematics or source code for our products, our
business and financial results could be adversely affected.
We attempt to securely store our designs, schematics and source code for our products as they are created.
A breach, whether physical, electronic or otherwise, of the systems on which this sensitive data is stored could
lead to damage or piracy of our products. In addition, we work with e-commerce providers who hold significant
sensitive customer data. If we or our partners are subject to data security breaches, we may have a loss in sales or
increased costs arising from the restoration or implementation of additional security measures, either of which
could materially and adversely affect our business and financial results.
Our income tax provision and other tax liabilities may be insufficient if taxing authorities are successful in
asserting tax positions that are contrary to our position. Additionally, there is no guarantee that we will
realize our deferred tax assets.
From time to time, we are audited by various federal, state and local authorities regarding income tax
matters. Significant judgment is required to determine our provision for income taxes and our liabilities for
federal, state, local and other taxes. Although we believe our approach to determining the appropriate tax
treatment is supportable and in accordance with relevant authoritative guidance it is possible that the final tax
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