iRobot 2012 Annual Report Download - page 113

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iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
63
Sales Taxes
The Company collects and remits sales tax in jurisdictions in which it has a physical presence or it believes nexus exists,
which therefore obligates the Company to collect and remit sales tax. The Company continually evaluates whether it has
established a nexus in new jurisdictions with respect to sales tax. The Company has recorded a liability for potential exposure
in several states where there is uncertainty about the point in time at which the Company established a sufficient business
connection to create nexus. The Company continues to analyze possible sales tax exposure, but does not currently believe that
any individual claim or aggregate claims that might arise will ultimately have a material effect on its consolidated results of
operations, financial position or cash flows.
12. Employee Benefits
The Company sponsors a retirement plan under Section 401(k) of the Internal Revenue Code (the “Retirement Plan”). All
Company employees, with the exception of temporary, contract and international employees are eligible to participate in the
Retirement Plan after satisfying age and length of service requirements prescribed by the plan. Under the Retirement Plan,
employees may make tax- deferred contributions, and the Company, at its sole discretion, and subject to the limits prescribed
by the IRS, may make either a nonelective contribution on behalf of all eligible employees or a matching contribution on behalf
of all plan participants.
The Company elected to make a matching contribution of approximately $1.7 million, $1.7 million and $1.5 million for
the plan years ended December 29, 2012, December 31, 2011 and January 1, 2011 (“Plan-Year 2012,” “Plan-Year 2011” and
“Plan-Year 2010”), respectively. The employer contribution represents a matching contribution at a rate of 50% of each
employee’s first six percent contribution. Accordingly, each employee participating during Plan-Year 2012, Plan-Year 2011
and Plan-Year 2010 is entitled up to a maximum of three percent of his or her eligible annual payroll. The employer matching
contribution for Plan-Year 2012 is included in accrued compensation.
13. Acquisition of Evolution Robotics, Inc.
On October 1, 2012, the Company acquired 100% of the equity of Evolution Robotics, Inc. (Evolution) for $74.8 million
in cash, including the effect of working capital adjustments and cash received, with $8.88 million of the purchase price placed
into an escrow account to settle certain claims for indemnification for breaches or inaccuracies in Evolution’s representations
and warranties, covenants and agreements. Evolution is the developer of Mint and Mint Plus automatic floor cleaning robots,
based in Pasadena, California, and is included in the Company's home robots business unit.
The assets and liabilities associated with Evolution were recorded at their fair values as of the acquisition date and the
amounts are as follows:
(In thousands)
Cash and cash equivalents $ 356
Accounts receivable 1,635
Inventory 5,069
Other current assets 770
Deferred tax asset 1,740
Fixed assets 384
Goodwill 41,041
Intangible assets 27,000
Total Assets 77,995
Accounts payable (2,793 )
Accrued expenses (51 )
Accrued compensation (91 )
Other liabilities (174 )
Total consideration transferred $ 74,886
Intangible assets acquired totaling $27.0 million include completed technology of $26.9 million and a tradename of $0.1
million.
Form 10-K