iRobot 2012 Annual Report Download - page 88

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and we believe that our outsourced approach to manufacturing provides us with flexibility in both managing inventory levels
and financing our inventory. We believe our existing cash and cash equivalents, short-term investments, cash provided by
operating activities, and funds available through our working capital line of credit will be sufficient to meet our working capital
and capital expenditure needs over at least the next twelve months. In the event that our revenue plan does not meet our
expectations, we may eliminate or curtail expenditures to mitigate the impact on our working capital. Our future capital
requirements will depend on many factors, including our rate of revenue growth, the expansion of our marketing and sales
activities, the timing and extent of spending to support product development efforts, the timing of introductions of new
products and enhancements to existing products, the acquisition of new capabilities or technologies, and the continuing market
acceptance of our products and services. Moreover, to the extent that existing cash and cash equivalents, short-term
investments, cash from operations, and cash from short-term borrowing are insufficient to fund our future activities, we may
need to raise additional funds through public or private equity or debt financing. As part of our business strategy, we may
consider additional acquisitions of companies, technologies and products, which could also require us to seek additional equity
or debt financing. Additional funds may not be available on terms favorable to us or at all.
Contractual Obligations
We generally do not enter into binding purchase commitments. Our principal commitments consist of obligations under
our working capital line of credit, leases for office space and minimum contractual obligations for services. The following table
describes our commitments to settle contractual obligations in cash as of December 29, 2012:
Payments Due by Period
Less Than
1 Year 1 to 3
Years 3 to 5
Years More Than
5 Years Total
(In thousands)
Operating leases $ 3,158 $ 5,657 $ 5,252 $ 5,682 $ 19,749
Minimum contractual payments 554 2,639 —
— 3,193
Other obligations 97 405 —
— 502
Total $ 3,809 $ 8,701 $ 5,252 $ 5,682 $ 23,444
Our minimum contractual obligations consist of obligations to key component suppliers for our home robots, which payments
are incurred in the ordinary course of business. Other obligations consist of advertising agreements for corporate branding.
Off-Balance Sheet Arrangements
As of December 29, 2012, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.
Recently Issued Accounting Pronouncements
In May 2011, the Financial Accounting Standards Board (“FASB”) issued amended guidance on fair value measurement
and related disclosures. The new guidance clarifies the concepts applicable for fair value measurement of non-financial assets
and requires the disclosure of quantitative information about the unobservable inputs used in a fair value measurement. This
guidance will be effective for reporting periods beginning after December 15, 2011, and will be applied prospectively. This
updated guidance did not have a material impact on our consolidated financial statements.
In June 2011, the FASB amended its accounting guidance on the presentation of other comprehensive income (OCI) in an
entity’s financial statements. The amended guidance eliminates the option to present the components of OCI as part of the
statement of changes in shareholders’ equity and provides two options for presenting OCI: in a statement included in the
income statement or in a separate statement immediately following the income statement. The amendments do not change the
guidance for the items that have to be reported in OCI or when an item of OCI has to be moved into net income. For public
entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15,
2011. This updated guidance did not have a material impact on our consolidated financial statements.
In September 2011, the FASB issued updated guidance on the periodic testing of goodwill for impairment. The updated
guidance gives companies the option to perform a qualitative assessment to determine whether it is more likely than not that the
fair value of a reporting unit is less than its carrying amount. The amendment is intended to reduce the cost and complexity of
the annual goodwill impairment test by providing entities an option to perform a qualitative assessment to determine whether
further impairment testing is necessary. The updated accounting guidance is effective for fiscal years beginning after
December 15, 2011, with early adoption permitted. We elected to adopt the updated guidance in 2011. The adoption of this
guidance did not impact our consolidated financial statements.
In February 2013, the FASB issued guidance requiring disclosure of amounts reclassified out of accumulated other
comprehensive income by component. In addition, an entity is required to present either on the face of the statement of