iRobot 2008 Annual Report Download - page 100

accounts receivable and unbilled revenue of $6.0 million, an increase in inventory of $5.0 million, an increase in
other assets of $1.3 million, and a decrease in provision for contract settlement and deferred revenue of $5.7 million.
In addition, in fiscal 2006, we had depreciation and amortization of approximately $3.7 million and amortization of
deferred compensation of $2.6 million, both of which are non-cash expenses. The increase in accounts receivable,
inventory and liabilities in fiscal 2006 are directly attributable to the 33.1% growth in revenue from the comparable
period in fiscal 2005.
Net cash used by our investing activities was $8.0 million in fiscal 2008 compared to net cash provided by
investing activities of $35.4 million in fiscal 2007 and net cash used by investing activities of $72.3 million in fiscal
2006. Investment activities in 2008 represent the funds used in the acquisition of Nekton of $9.7 million and the
purchase of capital equipment of $14.8 million, partially offset by the sale of short-term investments (net of
purchases) of $16.6 million. The fiscal 2008 investment in capital equipment of $14.8 million consisted primarily of
leasehold improvements and furniture related to our new home office location, internal use demonstration units,
internal use software and computer equipment. 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.
Net cash provided by our financing activities was approximately $3.0 million in fiscal 2008, $1.4 million in
fiscal 2007, and $1.2 million in fiscal 2006. Net cash provided by our financing activities in fiscal 2008 consisted of
proceeds from stock option exercises and the tax benefit associated with excess stock-based compensation
deductions. 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.
The majority of our long-lived assets for the years ended December 27, 2008, December 29, 2007 and
December 30, 2006 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 $10.9 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 have
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.
Working Capital Facility
We have an unsecured revolving credit facility with Bank of America, N.A., which is available to fund working
capital and other corporate purposes. The amount available for borrowing under our credit facility is the lesser of:
(a) $45.0 million or (b) amounts available pursuant to a borrowing base calculation determined pursuant to the terms
and conditions of the credit facility. The interest on loans under our credit facility 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 27, 2008, we had letters of credit outstanding of $2.1 million and $42.9 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 guaranty 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.
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