iRobot 2009 Annual Report Download - page 117

Download and view the complete annual report

Please find page 117 of the 2009 iRobot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

Form 10-K
or aggregate claims that might arise will ultimately have a material effect on its consolidated results of operations,
financial position or cash flows.
12. Employee Benefits
The Company sponsors a retirement plan under Section 401(k) of the Internal Revenue Code (the “Retirement
Plan”). All Company employees, with the exception of temporary, contract and international employees are eligible
to participate in the Retirement Plan after satisfying age and length of service requirements prescribed by the plan.
Under the Retirement Plan, employees may make tax-deferred contributions, and the Company, at its sole
discretion, and subject to the limits prescribed by the IRS, may make either a nonelective contribution on behalf
of all eligible employees or a matching contribution on behalf of all plan participants.
The Company elected to make a matching contribution of approximately $1.2 million, $0.9 million and
$0.8 million for the plan years ended January 2, 2010, December 27, 2008 and December 29, 2007 (“Plan-Year
2008,” “Plan-Year 2007” and “Plan-Year 2006”), respectively. The employer contribution represents a matching
contribution at a rate of 50% of each employee’s first six percent contribution. Accordingly, each employee
participating during Plan-Year 2009, Plan-Year 2008 and Plan-Year 2007 is entitled up to a maximum of three
percent of his or her eligible annual payroll. The employer matching contribution for Plan-Year 2009 is included in
accrued compensation.
13. Acquisition of Nekton Research, LLC
In September 2008 the Company acquired Nekton, an unmanned underwater robot technology company based
in Raleigh, North Carolina. The Company acquired Nekton for a purchase price of $10 million, consisting primarily
of cash and direct acquisition costs, with the potential for additional consideration up to $5 million based on the
achievement of certain business and financial milestones. In connection with the acquisition, the Company assumed
$0.1 million in net liabilities, and initially recorded $4.5 million of intangible assets and $5.4 million of goodwill.
Approximately $0.2 million of the purchase price was allocated to in-process research and development and was
expensed upon completion of the acquisition. In December 2009, $2.5 million of additional consideration was paid
and recorded as goodwill, under the earn-out provisions of the original agreement, bringing the total goodwill
recorded for this acquisition to $7.9 million. There will be no additional consideration paid in connection with this
acquisition.
The consolidated financial statements for the year ended December 27, 2008 include the results of operations
of Nekton commencing as of September 8, 2008, the acquisition date. No supplemental pro forma information is
presented for the acquisition due to the immaterial effect of the acquisition on the Company’s results of operations.
14. Goodwill and other intangible assets
The carrying amount of the goodwill at January 2, 2010 of $7.9 million is from the acquisition of Nekton
completed in September 2008. In October 2009, the Company completed its annual goodwill impairment test and
did not identify any goodwill impairment.
Other intangible assets include the value assigned to completed technology, research contracts, and a trade
name. 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 economic benefits of the
intangible assets are expected to be utilized.
Intangible assets at January 2, 2010 and December 27, 2008 consisted of the following:
Cost
Accumulated
Amortization Net Cost
Accumulated
Amortization Net
January 2, 2010 December 27, 2008
(In thousands) (In thousands)
Completed technology ..... $3,700 $496 $3,204 $3,700 $124 $3,576
Research contracts ........ 100 64 36 100 16 84
Tradename . . . ........... 700 96 604 700 24 676
Total ................ $4,500 $656 $3,844 $4,500 $164 $4,336
83
iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)