iRobot 2007 Annual Report Download - page 89

Net cash provided by our investing activities was $35.4 million in fiscal 2007 compared to net cash used by
investing activities of $72.3 million in fiscal 2006 and $5.5 million in fiscal 2005. Investment activities in 2007
represent the sale of short-term investments (net of the purchase of short-term investments) of $48.3 million, the
purchase of capital equipment of $10.4 million and an investment in Advanced Scientific Concepts, Inc. of
$2.5 million. Investment activities in 2006 represent the purchase of short-term investments (net of the sale of short-
term investments) of $64.8 million and the purchase of capital equipment of $7.5 million. Investment activities in
2005 represent the purchase of capital equipment in support of our growth, including computer equipment, internal
use software, furniture and fixtures, engineering and test equipment, and production tooling. The 2007 investment
in capital equipment of $10.4 million consisted primarily of purchases of production tooling, internal use
demonstration units, internal use software and computer equipment.
Net cash provided by our financing activities was approximately $1.4 million in fiscal 2007, $1.2 million in
fiscal 2006, and $71.1 million in fiscal 2005. Net cash provided by our financing activities in fiscal 2007 consisted
primarily of proceeds from stock option exercises and the tax benefit associated with excess stock-based
compensation deductions, partially offset by a tax payment associated with exercise of stock options by our Chief
Executive Officer. Net cash provided by our financing activities in fiscal 2006 consisted primarily of proceeds from
stock option exercises. Net cash provided by our financing activities in fiscal 2005 consisted primarily of
$70.4 million of proceeds from our initial public offering and $0.7 million from the exercise of common stock
options.
The majority of our long-lived assets for the years ended December 29, 2007, December 30, 2006 and
December 31, 2005 are located in the United States. However, we have invested in production tooling for the
manufacture of the Roomba, Scooba and Looj product lines in China.
We currently have a $11.6 million accumulated deficit as a result of significant losses incurred through 2003,
largely attributable to our investment in internally funded research and development. Based on our historical
product development efforts, we launched our first commercial products, our Roomba floor vacuuming robot and
our PackBot tactical military robot, in fiscal 2002. Since fiscal 2002, our revenue has significantly increased, our
investment in internally-funded research and development has declined as a percentage of revenue, and we achieved
annual profitability since fiscal 2004. We have not invested significantly in property, plant and equipment, primarily
as a result of our outsourced approach to manufacturing that provides significant flexibility in both managing
inventory levels and financing our inventory. Our consumer revenue has been highly seasonal. This seasonality
tends to result in the net use of cash during the second and third quarters and significant generation of cash in the
fourth and first quarters of the year. Given the recent success of our products and resulting growth in revenue, we
believe that existing cash, cash equivalents, cash provided by operating activities and funds available through our
bank line of credit will be sufficient to meet our working capital and capital expenditure needs for the next twelve
months and the foreseeable future.
Working Capital Facility
On June 5, 2007, we entered into a $35 million unsecured revolving credit facility with Bank of America, N.A.
to replace our expired working capital line of credit with Bank of America. The credit facility will be available to
fund working capital and other corporate purposes. The interest on loans under our working capital line of credit
will accrue, at our election, at either (i) Bank of America’s prime rate minus 1% or (ii) the Eurodollar rate plus
1.25%. The credit facility will terminate and all amounts outstanding thereunder will be due and payable in full on
June 5, 2010. As of December 29, 2007, we had letters of credit outstanding of $2.1 million and $32.9 million
available under our working capital line of credit. This credit facility contains customary terms and conditions for
credit facilities of this type, including restrictions on our ability to incur or guarantee additional indebtedness, create
liens, enter into transactions with affiliates, make loans or investments, sell assets, pay dividends or make
distributions on, or repurchase, our stock, and consolidate or merge with other entities.
In addition, we are required to meet certain financial covenants customary with this type of agreement,
including maintaining a minimum specified tangible net worth, a minimum specified ratio of current assets to
current liabilities and a minimum specified annual net income.
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Form 10-K