iRobot 2011 Annual Report Download - page 89

distributors and retail partners to take possession of product on a domestic basis. Accordingly, our home robots
product inventory consists of goods shipped to our third-party logistics providers for the fulfillment of
distributor, retail and direct-to-consumer sales. Our inventory of government and industrial products is relatively
low as they are generally built to order. Our contract manufacturers are responsible for purchasing and stocking
the majority of components required for the production of our products, and they typically invoice us when the
finished goods are shipped.
The balance of cash and short-term investments of $184.1 million at December 31, 2011 is primarily the
result of improving profitability and our on-going focus on managing working capital. As of December 31, 2011,
we did not have any borrowings outstanding under our working capital line of credit and had $1.7 million in
letters of credit outstanding under our revolving letter of credit facility.
Discussion of Cash Flows
Net cash provided by operating activities for the fiscal year ended December 31, 2011 was $55.7 million, an
increase of $6.5 million compared to the $49.2 million of net cash provided by operating activities for the fiscal
year ended January 1, 2011. The increase in net cash provided by operating activities was primarily driven by the
following factors:
• An increase in cash of $14.7 million resulting from net income of $40.2 million in 2011 versus net income
of $25.5 million in 2010;
• An increase in cash of $3.2 million resulting from non-cash depreciation and amortization of
$10.3 million and losses on the disposition of fixed assets of $0.6 million in 2011 versus non-cash
depreciation and amortization of $7.5 million and losses on the disposition of fixed assets of $0.2 million
in 2010. The losses on disposition of fixed assets in 2011 primarily relate to four robots sent to Japan to
explore reactor buildings at the Fukushima Daiichi nuclear plant;
• A decrease in cash of $6.6 million resulting from an increase in accounts receivable (including unbilled
revenue) of $7.6 million in 2011 versus an increase of $1.0 million in 2010, primarily due to growth in
revenue;
• A decrease in cash of $9.2 million resulting from an increase in inventory of $3.9 million in 2011 versus a
decrease of $5.3 million in 2010, primarily due to increased inventory requirements to support growth in
our home robots division revenue and expansion of the home robots product line;
• A decrease in cash of $4.3 million (offset as an increase in cash from financing activities) resulting from
an increase in the tax benefit associated with excess stock-based compensation deductions of $6.9 million
in 2011 versus an increase of $2.6 million in 2010 primarily due to an increasing number of stock options
exercised in 2011;
• An increase in cash of $1.6 million resulting from an increase in accounts payable of $9.7 million in 2011
versus an increase of $8.1 million in 2010, primarily due to the timing of purchases and payments to
suppliers;
• A decrease in cash of $4.2 million resulting from an increase in accrued compensation of $0.1 million in
2011 versus an increase of $4.3 million in 2010, primarily due to the impact of improving profitability on
the incentive compensation expense in 2010 and related payment in 2011; and
• An increase in cash of $11.1 million resulting from a decrease in deferred tax assets of $6.1 million in
2011 compared to an increase of $5.0 million in 2010, primarily due to the estimated net utilization of
deferred tax assets in 2011 and the impact of the release of a valuation allowance on state deferred tax
assets in 2010.
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