iRobot 2009 Annual Report Download - page 86

are responsible for purchasing and stocking the majority of components required for the production of our products,
and they invoice us when the finished goods are shipped.
Our consumer product sales are, and are expected to continue to be, highly seasonal. This seasonality has
historically resulted in a net use of cash in support of operating needs during the second and third quarters of the
year, with the low point generally occurring in the third quarter, and a favorable cash flow during the first and fourth
quarters. The cash balance of $71.9 million at January 2, 2010 is primarily the result of our significant focus over the
past year on managing working capital, with specific emphasis placed on reducing inventory levels. We have relied
on our working capital line of credit to cover short-term cash needs resulting from the seasonality of our consumer
business in prior years. We currently do not have any borrowings outstanding under our existing working capital line
of credit.
Discussion of Cash Flows
Net cash provided by operating activities for the fiscal year ended January 2, 2010 was $40.6 million, an
increase of $21.5 million compared to the $19.1 million of net cash provided by operating activities for the fiscal
year ended December 27, 2008. The increase in net cash provided by operating activities was primarily driven by
the following factors:
• An increase in cash resulting from an increase in accounts payable, accrued expenses and accrued
compensation of $21.5 million in 2009 compared to a decrease of $20.7 million in 2008, primarily due
to the timing of cash payments under normal operating cycles;
• An increase in cash resulting from a decrease in inventory of $2.2 million in 2009 compared to a decrease of
$10.7 million in 2008, primarily driven by the implementation of operational initiatives to improve our
inventory management and reduce overall inventory levels beginning in 2008, with less of an impact in
2009; and
• An increase in cash resulting from a decrease in accounts receivable of $0.8 million in 2009 compared to a
decrease of $12.2 million in 2008, primarily driven by improvements in payment terms and accounts
receivable management focused on improved accounts receivable turns beginning in 2008, with less of an
impact in 2009.
Net cash used in investing activities for the fiscal year ended January 2, 2010 was $12.5 million, an increase of
$4.5 million compared to the $8.0 million of net cash used in investing activities for the fiscal year ended
December 27, 2008. This increase in net cash used in investing activities was primarily driven by the following:
• Purchase of investments of $5.0 million in 2009 compared to proceeds from the net sale of investments of
$16.6 million in 2008;
• Purchases of property and equipment associated with the move to our new headquarters in 2008; and
• The purchase of Nekton Research, LLC in 2008, with the initial investment of $9.7 million compared to an
additional investment of $2.5 million in 2009.
Net cash provided from financing activities for fiscal year ended January 2, 2010 was $2.9 million, a decrease
of $0.1 million compared to the $3.0 million of net cash provided by financing activities for the fiscal year ended
December 27, 2008.
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. As of January 2, 2010, $43.0 million was available for borrowing. 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.
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