iRobot 2011 Annual Report Download - page 69

Acquisitions and potential future acquisitions could be difficult to integrate, divert the attention of key
personnel, disrupt our business, dilute stockholder value and impair our financial results.
As part of our business strategy, we intend to consider additional acquisitions of companies, technologies
and products that we believe could accelerate our ability to compete in our core markets or allow us to enter new
markets. Acquisitions and combinations are accompanied by a number of risks, including the difficulty of
integrating the operations and personnel of the acquired companies, the potential disruption of our ongoing
business, the potential distraction of management, expenses related to the acquisition and potential unknown
liabilities associated with acquired businesses. Any inability to integrate completed acquisitions or combinations
in an efficient and timely manner could have an adverse impact on our results of operations. In addition, we may
not be able to recognize any expected synergies or benefits in connection with a future acquisition or
combination. If we are not successful in completing acquisitions or combinations that we may pursue in the
future, we may incur substantial expenses and devote significant management time and resources without a
successful result. In addition, future acquisitions could require use of substantial portions of our available cash or
result in dilutive issuances of securities.
We may not be able to obtain capital when desired on favorable terms, if at all, or without dilution to our
stockholders.
We anticipate that our current cash, cash equivalents, cash provided by operating activities and funds
available through our working capital line of credit, will be sufficient to meet our current and anticipated needs
for general corporate purposes. We operate in an emerging market, however, which makes our prospects difficult
to evaluate. It is possible that we may not generate sufficient cash flow from operations or otherwise have the
capital resources to meet our future capital needs. In such cases we may need additional financing to execute on
our current or future business strategies. If we raise additional funds through the issuance of equity or convertible
debt securities, the percentage ownership of our stockholders could be significantly diluted, and these newly-
issued securities may have rights, preferences or privileges senior to those of existing stockholders. We cannot
assure you that additional financing will be available on terms favorable to us, or at all. If adequate funds are not
available or are not available on acceptable terms, if and when needed, our ability to fund our operations, take
advantage of unanticipated opportunities, develop or enhance our products, or otherwise respond to competitive
pressures would be significantly limited. In addition, our access to credit through our working capital line of
credit may be limited by the restrictive financial covenants contained in that agreement, which require us to
maintain profitability.
Environmental laws and regulations and unforeseen costs could negatively impact our future earnings.
The manufacture and sale of our products in certain states and countries may subject us to environmental
and other regulations. We also face increasing complexity in our product design as we adjust to legal and
regulatory requirements relating to our products. There is no assurance that such existing laws or future laws will
not impair future earnings or results of operations.
Business disruptions resulting from international uncertainties could negatively impact our profitability.
We derive, and expect to continue to derive, a significant portion of our revenue from international sales in
various European and Far East markets, and Canada. For the fiscal years ended December 31, 2011 and
January 1, 2011, sales to non-U.S. customers accounted for 45.5% and 42.1% of total revenue, respectively. Our
international revenue and operations are subject to a number of material risks, including, but not limited to:
• difficulties in staffing, managing and supporting operations in multiple countries;
• difficulties in enforcing agreements and collecting receivables through foreign legal systems and other
relevant legal issues;
• fewer legal protections for intellectual property;
• foreign and U.S. taxation issues, tariffs, and international trade barriers;
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