iRobot 2007 Annual Report Download - page 66

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• difficulties in enforcing agreements and collecting receivables through foreign legal systems and other
relevant legal issues;
• fewer legal protections for intellectual property;
• foreign and U.S. taxation issues and international trade barriers;
• 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; and
• different and changing legal and regulatory requirements in the jurisdictions in which we currently operate
or may operate in the future.
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 are unable to continue to obtain U.S. federal government authorization regarding the export of our
products, or if current or future export laws limit or otherwise restrict our business, we could be prohib-
ited from shipping our products to certain countries, which would harm our ability to generate revenue.
We must comply with U.S. laws regulating the export of our products. In addition, we are required to obtain a
license from the U.S. federal government to export our PackBot line of tactical military robots. We cannot be sure of
our ability to obtain any licenses required to export our products or to receive authorization from the U.S. federal
government for international sales or domestic sales to foreign persons. Moreover, the export regimes and the
governing policies applicable to our business are subject to change. We cannot assure you of the extent that such
export authorizations will be available to us, if at all, in the future. In some cases where we act as a subcontractor, we
rely upon the compliance activities of our prime contractors, and we cannot assure you that they have taken or will
take all measures necessary to comply with applicable export laws. If we or our prime contractor partners cannot
obtain required government approvals under applicable regulations in a timely manner or at all, we would be
delayed or prevented from selling our products in international jurisdictions, which could materially harm our
business, operating results and ability to generate revenue.
We invest in auction rate securities that are subject to market risk and the recent problems in the finan-
cial markets could adversely affect the value and liquidity of our assets.
As of December 29, 2007, our $16.6 million of short-term investments consisted of auction rate securities.
Recent uncertainties in the credit markets may result in certain of our investments in auction rate securities
becoming subject to liquidity risk. Subsequent to December 29, 2007, the $16.6 million of auction rate securities
held at December 29, 2007 have been liquidated.
As of February 21, 2008, we held $17.5 million of variable rate bonds or auction rate securities, all of which
were purchased in January or February of 2008. A substantial majority of the underlying assets of these auction rate
securities are student loans which are backed by the federal government under the Federal Family Education Loan
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