iRobot 2010 Annual Report Download - page 107

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6. Accrued Expenses
Accrued expenses consist of the following at:
January 1,
2011
January 2,
2010
(In thousands)
Accrued warranty ............................................ $ 9,284 $ 6,105
Accrued direct fulfillment costs .................................. 2,405 1,836
Accrued rent ................................................ 592 532
Accrued sales commissions . .................................... 432 472
Accrued accounting fees . . . .................................... 439 401
Accrued income taxes ......................................... — 2,177
Accrued other ............................................... 2,638 2,861
$15,790 $14,384
7. Revolving Line of Credit
The Company has 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 its credit facility is
$40.0 million. As of January 1, 2011, $38.1 million was available for borrowing. The interest on loans under the
credit facility will accrue, at the Company’s election, at either (i) the greater of the BBA LIBOR Daily Floating Rate
or the Prime Rate of Lender plus fifty (50) basis points, or (ii) the LIBOR rate plus 2.00%. The credit facility will
terminate and all amounts outstanding thereunder will be due and payable in full on June 5, 2012.
As of January 1, 2011, the Company had letters of credit outstanding of $1.9 million under its working capital
line of credit. This credit facility contains customary terms and conditions for credit facilities of this type, including
restrictions on the Company’s 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, the Company’s stock, and consolidate or merge with other entities.
In addition, the Company is required to meet certain financial covenants customary with this type of
agreement, including maintaining a minimum specified tangible net worth, a minimum specified adjusted EBITDA,
and minimum specified interest coverage ratio.
This credit facility contains customary events of default, including for payment defaults, breaches of
representations, breaches of affirmative or negative covenants, cross defaults to other material indebtedness,
bankruptcy and failure to discharge certain judgments. If a default occurs and is not cured within any applicable
cure period or is not waived, the Company’s obligations under the credit facility may be accelerated.
As of January 1, 2011, the Company was in compliance with all covenants under its credit facility.
8. Common Stock
Common stockholders are entitled to one vote for each share held and to receive dividends if and when
declared by the Board of Directors and subject to and qualified by the rights of holders of the preferred stock. Upon
dissolution or liquidation of the Company, holders of common stock will be entitled to receive all available assets
subject to any preferential rights of any then outstanding preferred stock.
9. Stock Option Plans and Stock-Based Compensation
The Company has options outstanding under three stock incentive plans: the 1994 Stock Option Plan (the
“1994 Plan”), the 2004 Stock Option and Incentive Plan (the “2004 Plan”) and the 2005 Stock Option and Incentive
61
iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Form 10-K