iRobot 2011 Annual Report Download - page 88

Form 10-K
General and administrative expenses increased by $6.5 million, or 21.6%, to $36.6 million (9.1% of
revenue) in fiscal 2010 from $30.1 million (10.1% of revenue) in fiscal 2009. This increase is attributable to
increased compensation, benefit and recruiting expenses related to increased headcount and an increase in
incentive compensation expense, stock-based compensation, and an increase in legal expense, primarily
attributable to our international expansion and intellectual property prosecution and enforcement, for fiscal 2010
as compared to fiscal 2009.
Other Income (Expense), Net
Fiscal Year Ended
January 1,
2011
January 2,
2010 Dollar Change Percent Change
(In thousands)
Other Income (expense), net .......... $504 $(81) $585 Not Meaningful
As a percentage of total revenue ....... 0.1% 0.0%
Other income (expense), net amounted to $0.5 million in fiscal 2010 compared to $(0.1) million in fiscal
2009. Other income (expense), net, for fiscal 2010 was related to interest income of $0.8 million offset by foreign
currency exchange losses of $0.3 million resulting from foreign currency exchange rate fluctuations. Other
income (expense), net, for fiscal 2009 was directly related to foreign currency exchange losses resulting from
foreign currency exchange rate fluctuations.
Income Tax Provision
Fiscal Year Ended
January 1,
2011
January 2,
2010 Dollar Change Percent Change
(In thousands)
Income tax provision ................ $8,460 $2,026 $6,434 Not Meaningful
As a percentage of total revenue ....... 2.1% 0.7%
In fiscal 2010, we recorded a $8.5 million tax provision based on an effective income tax rate of 24.9%. The
provision for income taxes for fiscal 2010 consists of $10.2 million of federal taxes, $0.1 million of foreign taxes
and $(1.8) million of state taxes, which includes the $2.3 million associated with the full release of our valuation
allowance relating to state deferred tax assets.
In fiscal 2009, we recorded a $2.0 million tax provision based on an effective income tax rate of 38%. The
provision for income taxes for fiscal 2009 consists of $1.6 million of federal taxes and $0.4 million of state taxes.
Included in the 2009 provision is a $0.2 million provision associated with an out-of-period error correction with
respect to the earnings of our India subsidiary and a $0.3 million one-time benefit from the conversion of
incentive stock options to non-qualified stock options as a result of our stock option exchange program which
concluded in our second fiscal quarter of 2009.
Liquidity and Capital Resources
At December 31, 2011, our principal sources of liquidity were cash and cash equivalents totaling
$166.3 million, short-term investments of $17.8 million and accounts receivable of $43.3 million.
We manufacture and distribute our products through contract manufacturers and third-party logistics
providers. We believe that this approach gives us the advantages of relatively low capital investment and
significant flexibility in scheduling production and managing inventory levels. By leasing our office facilities, we
also minimize the cash needed for expansion. Accordingly, our capital spending is generally limited to leasehold
improvements, computers, office furniture, product-specific production tooling, internal use software and test
equipment. In the fiscal years ended December 31, 2011 and January 1, 2011, we spent $13.0 million and
$12.6 million, respectively, on capital equipment.
Our strategy for delivering home robots products to our distributors and retail customers gives us the
flexibility to provide container shipments directly to the retailer from China and, alternatively, allows our
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