iRobot 2015 Annual Report Download - page 106

23
• difficulties in obtaining any necessary governmental authorizations for the export of our products to certain foreign
jurisdictions;
• potential fluctuations in foreign economies;
• government currency control and restrictions on repatriation of earnings;
• fluctuations in the value of foreign currencies and interest rates;
• general economic and political conditions in the markets in which we operate;
• domestic and international economic or political changes, hostilities and other disruptions in regions where we
currently operate or may operate in the future;
• changes in foreign currency exchange rates;
• different and changing legal and regulatory requirements in the jurisdictions in which we currently operate or may
operate in the future; and
• outside of the United States, we primarily rely on a network of exclusive distributors, some of whom may be
operating without written contracts.
Negative developments in any of these areas in one or more countries could result in a reduction in demand for our
products, the cancellation or delay of orders already placed, threats to our intellectual property, difficulty in collecting
receivables, and a higher cost of doing business, any of which could negatively impact our business, financial condition or
results of operations. Moreover, our sales, including sales to customers outside the United States, are primarily denominated in
U.S. dollars, and downward fluctuations in the value of foreign currencies relative to the U.S. dollar may make our products
more expensive than other products, which could harm our business.
If we experience a disaster or other business continuity problem, we may not be able to recover successfully, which could
cause material financial loss, loss of human capital, regulatory actions, reputational harm, or legal liability.
If we experience a local or regional disaster or other business continuity problem, such as an earthquake, terrorist attack,
pandemic or other natural or man-made disaster, our continued success will depend, in part, on the availability of our personnel,
our office facilities, and the proper functioning of our computer, telecommunication and other related systems and operations.
As we grow our operations in new geographic regions, the potential for particular types of natural or man-made disasters,
political, economic or infrastructure instabilities, or other country- or region-specific business continuity risks increases.
The effects of new regulations relating to conflict minerals may adversely affect our business.
On August 22, 2012, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC adopted
new requirements for companies that use certain minerals and metals, known as conflict minerals, in their products, whether or
not these products are manufactured by third parties. These requirements require companies to research, disclose and report
whether or not such minerals originate from the Democratic Republic of Congo and adjoining countries. We have to research
whether such minerals are used in the manufacture of our products. However, the implementation of these requirements could
adversely affect the sourcing, availability and pricing of such minerals if they are found to be used in the manufacture of our
products. In addition, we continue to incur additional costs to comply with the disclosure requirements, including costs related
to determining the source of any of the relevant minerals and metals used in our products. Since our supply chain is complex,
we may not be able to sufficiently verify the origins for these minerals and metals used in our products through the due
diligence procedures that we implement, which may harm our reputation. In such event, we may also face difficulties in
satisfying customers who require that all of the components of our products are certified as conflict mineral free.
Our income tax provision and other tax liabilities may be insufficient if taxing authorities are successful in asserting
tax positions that are contrary to our position. Additionally, there is no guarantee that we will realize our deferred tax assets.
From time to time, we are audited by various federal, state, local and foreign authorities regarding income tax matters.
Significant judgment is required to determine our provision for income taxes and our liabilities for federal, state, local and
foreign taxes. Although we believe our approach to determining the appropriate tax treatment is supportable and in accordance
with relevant authoritative guidance it is possible that the final tax authority will take a tax position that is materially different
than that which is reflected in our income tax provision. Such differences could have a material adverse effect on our income