iRobot 2015 Annual Report Download - page 136

Download and view the complete annual report

Please find page 136 of the 2015 iRobot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 172

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172

53
iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of the Business
iRobot Corporation ("iRobot" or the "Company") develops robotics and artificial intelligence technologies and applies
these technologies in producing and marketing robots. The Company’s revenue is primarily generated from product sales.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements include those of iRobot and its subsidiaries, after elimination of all
intercompany accounts and transactions. iRobot has prepared the accompanying consolidated financial statements in
conformity with accounting principles generally accepted in the United States of America.
Use of Estimates
The preparation of these financial statements in conformity with accounting principles generally accepted in the United
States requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues
and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates these estimates
and judgments, including those related to revenue recognition, sales returns, bad debts, warranty claims, inventory reserves,
valuation of investments, valuation of goodwill and intangible assets, assumptions used in valuing stock-based compensation
instruments and income taxes. The Company bases these estimates on historical and anticipated results, and trends and on
various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to
future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual
results may differ from the Company’s estimates.
Fiscal Year-End
The Company operates and reports using a 52-53 week fiscal year ending on the Saturday closest to December 31.
Accordingly, the Company’s fiscal quarters end on the Saturday that falls closest to the last day of the third month of each
quarter.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the
time of purchase to be cash equivalents. The Company invests its excess cash primarily in money market funds or savings
accounts of major financial institutions. Accordingly, its cash equivalents are subject to minimal credit and market risk. At
January 2, 2016 and December 27, 2014, cash equivalents were comprised of money market funds totaling $110.8 million and
$109.8 million, respectively. These cash equivalents are carried at cost, which approximates fair value.
Short Term Investments
The Company’s investments are classified as available-for-sale and are recorded at fair value with any unrealized gain or
loss recorded as an element of stockholders’ equity. The fair value of investments is determined based on quoted market prices
at the reporting date for those instruments. As of January 2, 2016 and December 27, 2014, investments consisted of:
January 2,
2016
December 27,
2014
Cost Fair
Market Value Cost Fair
Market Value
(In thousands)
Corporate and government bonds $33,622 $33,124 $ 36,659 $36,166
Total short term investments $ 33,622 $ 33,124 $ 36,659 $ 36,166