iRobot 2014 Annual Report Download - page 136

iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
63
Pro Forma Disclosures (Unaudited)
The following unaudited pro forma consolidated results of operations for fiscal 2012 assume that the acquisition of
Evolution occurred as of January 2, 2011.
Fiscal Year Ended
December 29, 2012
(In thousands)
Revenue $ 445,469
Net Income 8,723
These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the
acquisitions had occurred at the beginning of the periods presented or that may be obtained in the future.
14. Goodwill and other intangible assets
The carrying amount of the goodwill at December 27, 2014 is $48.8 million. $41.0 million resulted from the acquisition
of Evolution Robotics, Inc. in October 2012 and was assigned to the home robots reporting unit. $7.7 million (net of a
subsequent write-down of $0.2 million) resulted from the acquisition of Nekton Research, LLC completed in September 2008
and was assigned to the defense and security reporting unit. In conjunction with the reorganization completed as of the
beginning of the fiscal year 2013, the defense and security reporting unit was divided into two reporting units: the defense and
security reporting unit and the research reporting unit. As a result, the goodwill of $7.9 million was reassigned utilizing a
relative fair value allocation approach. $7.7 million and $0.2 million were reassigned to the defense and security and research
reporting units, respectively.
During the second quarter of 2013, the Company decided to refocus its funded research activities. The Company
considered this decision to be an impairment indicator, requiring an interim impairment test within the research reporting unit.
The Company performed an impairment assessment using the income approach, and determined that goodwill was impaired.
The Company recorded an impairment loss of $0.2 million within general and administrative expenses during the fiscal year
ended December 28, 2013.
In the fourth quarter of 2014, the Company completed its annual goodwill impairment test. The first step of the two-step
impairment test, which involves comparing the fair values of the applicable reporting units with their aggregate carrying values,
including goodwill, was completed, and the Company did not identify any additional goodwill impairment.
Other intangible assets include the value assigned to completed technology, research contracts, and trade names. The
estimated useful lives for all of these intangible assets are two to ten years. The intangible assets are being amortized on a
straight-line basis, which is consistent with the pattern that the estimated economic benefits of the intangible assets are expected
to be utilized.
Intangible assets at December 27, 2014 and December 28, 2013 consisted of the following:
December 27, 2014 December 28, 2013
Cost Accumulated
Amortization Impairment Loss Net Cost Accumulated Amortization Impairment Loss Net
(In thousands)
Completed technology $ 30,600 $ 9,691 $ 1,788 $ 19,121 $ 30,600 $ 6,202 $ 1,788 $ 22,610
Research contracts 100 100 — — 100 100 — —
Tradename 800 775 — 25 800 742 — 58
Total $ 31,500 $ 10,566 $ 1,788 $ 19,146 $ 31,500 $ 7,044 $ 1,788 $ 22,668
As part of the Company's decision during 2013 to refocus its funded research activities, the Company decided to no
longer pursue certain research contracts in which completed technology acquired as part of the acquisition of Nekton Research,
LLC was utilized. As a result, the Company performed an impairment assessment of the associated intangible asset using the
income approach, and recorded an impairment loss of $1.8 million within general and administrative expenses during the fiscal
year ended December 28, 2013.