iRobot 2011 Annual Report Download - page 91

unreimbursed drawings under all letters of credit under the credit facility. The maturity date for letters of credit
issued under the credit facility must be no later than seven days prior to June 30, 2014.
As of December 31, 2011, we had letters of credit outstanding of $1.7 million under our revolving letter of
credit facility. The credit facility contains customary terms and conditions for credit facilities of this type,
including restrictions on our 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, its stock, and consolidate or merge with other entities. In addition, we are required to meet certain
financial covenants customary with this type of agreement, including maintaining a minimum specified
consolidated net worth, a minimum ratio of indebtedness to Adjusted EBITDA and a minimum specified ratio of
EBIT to interest expense.
The credit facility also 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 lender may accelerate the obligations under the credit facility.
As of December 31, 2011, we were in compliance with all covenants under the revolving letter of credit
facility.
Working Capital and Capital Expenditure Needs
We currently have no material cash commitments, except for normal recurring trade payables, expense
accruals and operating leases, all of which we anticipate funding through working capital, funds provided by
operating activities and our existing working capital line of credit. We do not currently anticipate significant
investment in property, plant and equipment, and we believe that our outsourced approach to manufacturing
provides us with flexibility in both managing inventory levels and financing our inventory. We believe our
existing cash and cash equivalents, short-term investments, cash provided by operating activities, and funds
available through our working capital line of credit will be sufficient to meet our working capital and capital
expenditure needs over at least the next twelve months. In the event that our revenue plan does not meet our
expectations, we may eliminate or curtail expenditures to mitigate the impact on our working capital. Our future
capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our
marketing and sales activities, the timing and extent of spending to support product development efforts, the
timing of introductions of new products and enhancements to existing products, the acquisition of new
capabilities or technologies, and the continuing market acceptance of our products and services. Moreover, to the
extent that existing cash and cash equivalents, short-term investments, cash from operations, and cash from short-
term borrowing are insufficient to fund our future activities, we may need to raise additional funds through public
or private equity or debt financing. As part of our business strategy, we may consider additional acquisitions of
companies, technologies and products, which could also require us to seek additional equity or debt financing.
Additional funds may not be available on terms favorable to us or at all.
Contractual Obligations
We generally do not enter into binding purchase commitments. Our principal commitments consist of
obligations under our working capital line of credit, leases for office space and minimum contractual obligations
for services. The following table describes our commitments to settle contractual obligations in cash as of
December 31, 2011:
Payments Due by Period
Less Than
1 Year
1to3
Years
3to5
Years
More Than
5 Years Total
(In thousands)
Operating leases ...................... $3,030 $5,062 $5,010 $8,187 $21,289
Minimum contractual payments .......... 794 4,194 — — 4,988
Other obligations ..................... 123 — — — 123
Total ............................... $3,947 $9,256 $5,010 $8,187 $26,400
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