iRobot 2010 Annual Report Download - page 118

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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 1, 2011 of $7.9 million is from the acquisition of Nekton
completed in September 2008. In October 2010, 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 1, 2011 and January 2, 2010 consisted of the following:
Cost
Accumulated
Amortization Net Cost
Accumulated
Amortization Net
January 1, 2011 January 2, 2010
(In thousands) (In thousands)
Completed technology ....... $3,700 $ 865 $2,835 $3,700 $496 $3,204
Research contracts .......... 100 100 — 100 64 36
Tradename ............... 700 165 535 700 96 604
Total .................. $4,500 $1,130 $3,370 $4,500 $656 $3,844
Amortization expense related to acquired intangible assets was $475,000 and $492,000 for the fiscal years
ended January 1, 2011 and January 2, 2010. The estimated future amortization expense related to current intangible
assets in each of the five succeeding fiscal years is expected to be as follows:
(In thousands)
2011 ............................................................. 444
2012 ............................................................. 444
2013 ............................................................. 444
2014 ............................................................. 444
2015 ............................................................. 444
Total ............................................................. $2,220
15. Industry Segment, Geographic Information and Significant Customers
The Company operates in two reportable segments, the home robots division and the government and
industrial division. The nature of products and types of customers for the two segments vary significantly. As such,
the segments are managed separately.
Home Robots
The Company’s home robots division offers products to consumers through a network of retail businesses
throughout the United States, to various countries through international distributors and retailers, and through the
72
iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)