e10vq
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|
|
|
þ |
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED March 28, 2009
OR
|
|
|
o |
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
FOR
THE TRANSITION PERIOD
FROM TO
COMMISSION FILE NUMBER 000-51598
iROBOT CORPORATION
(Exact name of registrant as specified in its charter)
|
|
|
Delaware
|
|
77-0259 335 |
(State or other jurisdiction of
|
|
(I.R.S. Employer |
incorporation or organization)
|
|
Identification No.) |
8 Crosby Drive
Bedford, MA 01730
(Address of principal executive offices)
(Zip code)
(781) 430-3000
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company.
See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
|
|
|
|
|
|
|
Large accelerated filer
o |
|
Accelerated filer
þ |
|
Non-accelerated filer o
(Do not check if a smaller reporting company) |
|
Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
The number of shares outstanding of the Registrants Common Stock as of April 24, 2009 was 24,957,515.
iROBOT CORPORATION
FORM 10-Q
THREE MONTHS ENDED MARCH 28, 2009
INDEX
The
accompanying notes are an integral part of the consolidated financial statements.
1
iROBOT CORPORATION
Consolidated Balance Sheets
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
|
December 27, |
|
|
|
2009 |
|
|
2008 |
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
54,737 |
|
|
$ |
40,852 |
|
Accounts receivable, net of allowance of
$65 and $65 at March 28, 2009 and December
27, 2008, respectively |
|
|
23,192 |
|
|
|
35,930 |
|
Unbilled revenue |
|
|
3,133 |
|
|
|
2,014 |
|
Inventory, net |
|
|
30,742 |
|
|
|
34,560 |
|
Deferred tax assets |
|
|
7,256 |
|
|
|
7,299 |
|
Other current assets |
|
|
4,502 |
|
|
|
3,340 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
123,562 |
|
|
|
123,995 |
|
Property and equipment, net |
|
|
21,899 |
|
|
|
22,929 |
|
Deferred tax assets |
|
|
4,508 |
|
|
|
4,508 |
|
Other assets |
|
|
12,123 |
|
|
|
12,246 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
162,092 |
|
|
$ |
163,678 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
19,127 |
|
|
$ |
19,544 |
|
Accrued expenses |
|
|
10,731 |
|
|
|
10,989 |
|
Accrued compensation |
|
|
5,371 |
|
|
|
6,393 |
|
Deferred revenue and customer advances |
|
|
2,718 |
|
|
|
2,632 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
37,947 |
|
|
|
39,558 |
|
Long term liabilities |
|
|
4,337 |
|
|
|
4,444 |
|
Commitments and contingencies (Note 6): |
|
|
|
|
|
|
|
|
Redeemable convertible preferred stock, 5,000
shares authorized and zero outstanding at
March 28, 2009 and December 27, 2008 |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, 100,000 and
100,000 shares authorized and 24,942 and
24,811 issued and outstanding at March 28,
2009 and December 27, 2008, respectively |
|
|
249 |
|
|
|
248 |
|
Additional paid-in capital |
|
|
132,512 |
|
|
|
130,637 |
|
Deferred compensation |
|
|
(271 |
) |
|
|
(314 |
) |
Accumulated deficit |
|
|
(12,682 |
) |
|
|
(10,895 |
) |
|
|
|
|
|
|
|
Total stockholders equity |
|
|
119,808 |
|
|
|
119,676 |
|
|
|
|
|
|
|
|
Total liabilities, redeemable
convertible preferred stock and
stockholders equity |
|
$ |
162,092 |
|
|
$ |
163,678 |
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of the consolidated financial statements.
2
iROBOT CORPORATION
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 28, |
|
|
March 29, |
|
|
|
2009 |
|
|
2008 |
|
Revenue: |
|
|
|
|
|
|
|
|
Product revenue |
|
$ |
49,691 |
|
|
$ |
50,575 |
|
Contract revenue |
|
|
7,245 |
|
|
|
6,727 |
|
|
|
|
|
|
|
|
Total revenue |
|
|
56,936 |
|
|
|
57,302 |
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Cost of product revenue (1) |
|
|
33,439 |
|
|
|
36,195 |
|
Cost of contract revenue (1) |
|
|
7,291 |
|
|
|
5,747 |
|
|
|
|
|
|
|
|
Total cost of revenue |
|
|
40,730 |
|
|
|
41,942 |
|
|
|
|
|
|
|
|
Gross margin |
|
|
16,206 |
|
|
|
15,360 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development (1) |
|
|
3,578 |
|
|
|
3,973 |
|
Selling and marketing (1) |
|
|
8,966 |
|
|
|
11,458 |
|
General and administrative (1) |
|
|
7,130 |
|
|
|
6,778 |
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
19,674 |
|
|
|
22,209 |
|
|
|
|
|
|
|
|
Operating loss |
|
|
(3,468 |
) |
|
|
(6,849 |
) |
Other income (expense), net |
|
|
(299 |
) |
|
|
495 |
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(3,767 |
) |
|
|
(6,354 |
) |
Income tax benefit |
|
|
(1,980 |
) |
|
|
(2,349 |
) |
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,787 |
) |
|
$ |
(4,005 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.16 |
) |
Number of shares used in per share calculations
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
24,902 |
|
|
|
24,506 |
|
|
|
|
(1) |
|
Total stock-based compensation recorded in the three months ended March 28, 2009 and March
29, 2008 included in the above figures breaks down by expense classification as follows: |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 28, |
|
|
March 29, |
|
|
|
2009 |
|
|
2008 |
|
Cost of product revenue |
|
$ |
213 |
|
|
$ |
154 |
|
Cost of contract revenue |
|
|
163 |
|
|
|
59 |
|
Research and development |
|
|
(3 |
) |
|
|
(33 |
) |
Selling and marketing |
|
|
317 |
|
|
|
161 |
|
General and administrative |
|
|
912 |
|
|
|
597 |
|
|
|
|
|
|
|
|
Total stock-based compensation |
|
$ |
1,602 |
|
|
$ |
938 |
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of the consolidated financial statements.
3
iROBOT CORPORATION
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 28, |
|
|
March 29, |
|
|
|
2009 |
|
|
2008 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,787 |
) |
|
$ |
(4,005 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,914 |
|
|
|
1,566 |
|
Loss on disposal of fixed assets |
|
|
15 |
|
|
|
45 |
|
Stock-based compensation |
|
|
1,602 |
|
|
|
938 |
|
Non-cash director deferred compensation |
|
|
33 |
|
|
|
24 |
|
Changes in working capital (use) source
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
12,738 |
|
|
|
25,758 |
|
Unbilled revenue |
|
|
(1,119 |
) |
|
|
(365 |
) |
Inventory |
|
|
3,818 |
|
|
|
(994 |
) |
Other assets |
|
|
(1,162 |
) |
|
|
(4,069 |
) |
Accounts payable |
|
|
(417 |
) |
|
|
(16,731 |
) |
Accrued expenses |
|
|
(258 |
) |
|
|
(2,061 |
) |
Accrued compensation |
|
|
(1,022 |
) |
|
|
521 |
|
Deferred revenue |
|
|
86 |
|
|
|
(448 |
) |
Change in long term liabilities |
|
|
(107 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
14,334 |
|
|
|
179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(776 |
) |
|
|
(3,937 |
) |
Purchases of investments |
|
|
|
|
|
|
(29,997 |
) |
Sales of investments |
|
|
|
|
|
|
29,050 |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(776 |
) |
|
|
(4,884 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from stock option exercises |
|
|
327 |
|
|
|
570 |
|
Tax benefit
of excess stock based compensation deductions |
|
|
|
|
|
|
261 |
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
327 |
|
|
|
831 |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
13,885 |
|
|
|
(3,874 |
) |
Cash and cash equivalents, at beginning of period |
|
|
40,852 |
|
|
|
26,735 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, at end of period |
|
$ |
54,737 |
|
|
$ |
22,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
|
|
|
$ |
40 |
|
Cash paid for income taxes |
|
|
435 |
|
|
|
24 |
|
Supplemental disclosure of noncash investing and financing activities (in thousands):
During the three months ended March 28, 2009 and March 29, 2008, the Company transferred $267
and $173, respectively, of inventory to fixed assets.
The
accompanying notes are an integral part of the consolidated financial statements.
4
iROBOT CORPORATION
Notes To Consolidated Financial Statements
(unaudited)
1. Description of Business
iRobot Corporation (iRobot or the Company) was incorporated in 1990 to develop robotics
and artificial intelligence technologies and apply these technologies in producing and marketing
robots. The majority of the Companys revenue is generated from product sales and government and
industrial research and development contracts.
The Company is subject to risks common to companies in high-tech industries including, but not
limited to, uncertainty of progress in developing technologies, new technological innovations,
dependence on key personnel, protection of proprietary technology, compliance with government
regulations, uncertainty of market acceptance of products, the need to obtain financing, if
necessary, global economic conditions and associated impact on consumer spending, and changes in
policies and spending priorities of the U.S. federal government and other government agencies.
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.
The accompanying financial data as of March 28, 2009 and for the three months ended March 28,
2009 and March 29, 2008 has been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). Certain information and footnote
disclosures normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or omitted pursuant to such
rules and regulations. However, the Company believes that the disclosures are adequate to make the
information presented not misleading. The year-end condensed balance sheet data was derived from
audited financial statements, but does not include all disclosures required by accounting
principles generally accepted in the United States. These consolidated financial statements should
be read in conjunction with the Companys audited consolidated financial statements and the notes
thereto included in its Annual Report on Form 10-K for the fiscal year ended December 27, 2008,
filed with the SEC on February 13, 2009.
In the opinion of management, all adjustments necessary to present a fair statement of
financial position as of March 28, 2009 and results of operations and cash flows for the periods
ended March 28, 2009 and March 29, 2008 have been made. The results of operations and cash flows
for any interim period are not necessarily indicative of the operating results and cash flows for
the full fiscal year or any future periods.
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, 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 Companys estimates.
5
iROBOT CORPORATION
Notes To Consolidated Financial Statements Continued
(unaudited)
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 Companys fiscal quarters end on the Saturday that falls closest
to the last day of the third month of each quarter.
Revenue Recognition
The Company derives its revenue from product sales, government research and development
contracts, and commercial research and development contracts. The Company sells products directly
to customers and indirectly through resellers and distributors. The Company recognizes revenue from
sales of home robots under the terms of the customer agreement upon transfer of title to the
customer, net of estimated returns, provided that collection is determined to be probable and no
significant obligations remain. Sales to resellers are subject to agreements allowing for limited
rights of return for defective products only, rebates and price protection. The Company has
typically not taken product returns except for defective products. Accordingly, the Company reduces
revenue for its estimates of liabilities for these rights at the time the related sale is recorded.
The Company makes an estimate of sales returns for products sold by resellers directly or through
its distributors based on historical returns experience and other relevant data. The Company has
aggregated and analyzed historical returns from resellers and end users which form the basis of its
estimate of future sales returns by resellers or end users. In accordance with Statement of
Financial Accounting Standards (SFAS) No. 48, Revenue Recognition When Right of Return Exists,
the provision for these estimated returns is recorded as a reduction of revenue at the time that
the related revenue is recorded. If actual returns differ significantly from its estimates, such
differences could have a material impact on the Companys results of operations for the period in
which the returns become known. The estimates for returns are adjusted periodically based upon
historical rates of returns. The estimates and reserve for rebates and price protection are based
on specific programs, expected usage and historical experience. Actual results could differ from
these estimates.
Under cost-plus-fixed-fee (CPFF) type contracts, the Company recognizes revenue based on costs
incurred plus a pro rata portion of the total fixed fee. Revenue on firm fixed price (FFP)
contracts is recognized using the percentage-of-completion method. For government product FFP
contracts revenue is recognized as the product is shipped or in accordance with the contract terms.
Costs and estimated gross margins on contracts are recorded as revenue as work is performed based
on the percentage that incurred costs compare to estimated total costs utilizing the most recent
estimates of costs and funding. Changes in job performance, job conditions, and estimated
profitability, including those arising from final contract settlements, may result in revisions to
costs and income and are recognized in the period in which the revisions are determined. Since many
contracts extend over a long period of time, revisions in cost and funding estimates during the
progress of work have the effect of adjusting earnings applicable to past performance in the
current period. When the current contract estimate indicates a loss, a provision is made for the
total anticipated loss in the current period. Revenue earned in excess of billings, if any, is
recorded as unbilled revenue. Billings in excess of revenue earned, if any, are recorded as
deferred revenue.
Accounting for Share-Based Payments
The Company accounts for share-based payments to employees, including grants of employee stock
options and awards in the form of restricted shares and restricted stock units under the provisions
of SFAS No. 123(R), Share-Based Payment (SFAS 123(R)). Under the provisions of SFAS 123(R), the
Company establishes the fair value of each option grant using the Black-Scholes option-pricing
model. SFAS 123(R) requires the recognition of the fair value of share-based payments as a charge
against earnings. The Company recognizes share-based payment expense over the requisite service
period of the underlying grants and awards. Based on the provisions of SFAS 123(R), the Companys
share-based payment awards are accounted for as equity instruments.
6
iROBOT CORPORATION
Notes To Consolidated Financial Statements Continued
(unaudited)
Net Income Per Share
The following table presents the calculation of both basic and diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 28, |
|
|
March 29, |
|
|
|
2009 |
|
|
2008 |
|
|
|
(In thousands, except per share data) |
|
Net loss |
|
$ |
(1,787 |
) |
|
$ |
(4,005 |
) |
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding |
|
|
24,902 |
|
|
|
24,506 |
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share |
|
$ |
(0.07 |
) |
|
$ |
(0.16 |
) |
Income Taxes
Deferred taxes are determined based on the difference between the financial statement and tax
basis of assets and liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse. Valuation allowances are provided if based upon the weight of
available evidence, it is more likely than not that some or all of the deferred tax assets will not
be realized.
In fiscal 2007, the Company completed an analysis of historical and projected future
profitability which resulted in the full release of the valuation allowance relating to federal
deferred tax assets. The Company continues to maintain a valuation allowance against state deferred
tax assets due to less certainty of their realizability given the shorter expiration period
associated with them and the generation of state tax credits in excess of the state tax liability.
At March 28, 2009, the Company has total deferred tax assets of $15.2 million and a valuation
allowance of $3.4 million resulting in a net deferred tax asset of $11.8 million.
Fair Value Measurements
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair
Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring
fair value in accordance with accounting principles generally accepted in the United States, and
expands disclosures about fair value measurements. The Company has adopted the provisions of SFAS
157 as of December 30, 2007, for financial instruments. Although the adoption of SFAS 157 did not
materially impact its financial condition, results of operations, or cash flow, the Company is now
required to provide additional disclosures as part of its financial statements.
In February 2008, FASB issued FSP FAS 157-2, which delays the effective date of SFAS 157 for
all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed
at fair value in the financial statements on a recurring basis (at least annually). This FSP
partially deferred the effective date of SFAS 157 to fiscal years beginning after November 15,
2008, and interim periods within those fiscal years for items within the scope of this FSP. The
Company has adopted the provisions of SFAS 157 as of December 28, 2008 for nonfinancial assets and
nonfinancial liabilities. This adoption did not impact the Companys consolidated financial
statements.
SFAS 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in
measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted
prices in active markets; Level 2, defined as inputs other than quoted prices in active markets
that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in
which little or no market data exists, therefore requiring an entity to develop its own
assumptions.
7
iROBOT CORPORATION
Notes To Consolidated Financial Statements Continued
(unaudited)
The Companys assets measured at fair value on a recurring basis subject to the disclosure
requirements of SFAS 157 at March 28, 2009, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of March 28, 2009 |
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
Description |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Money Market Accounts |
|
$ |
52,527 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets measured at fair value |
|
$ |
52,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
Goodwill is recorded as the difference, if any, between the aggregate consideration paid for
an acquisition and the fair value of the net tangible and intangible assets acquired. In accordance
with SFAS No. 142, Goodwill and Other Intangible Assets, the Company tests goodwill for impairment
at the reporting unit level (operating segment or one level below an operating segment) annually or
more frequently if the Company believes indicators of impairment exist. The performance of the test
involves a two-step process. The first step of the impairment test involves comparing the fair
values of the applicable reporting units with their aggregate carrying values, including goodwill.
If the carrying amount of a reporting unit exceeds the reporting units fair value, the Company
performs the second step of the goodwill impairment test to determine the amount of impairment
loss. The second step of the goodwill impairment test involves comparing the implied fair value of
the affected reporting units goodwill with the carrying value of that goodwill.
Recent Accounting Pronouncements
In February 2008, FASB issued FSP FAS 157-2, which delays the effective date of SFAS 157 for
all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed
at fair value in the financial statements on a recurring basis (at least annually). This FSP
partially deferred the effective date of SFAS 157 to fiscal years beginning after November 15,
2008, and interim periods within those fiscal years for items within the scope of this FSP. The
implementation of SFAS 157 for nonfinancial assets and nonfinancial liabilities did not impact the
Companys consolidated financial statements.
In December 2007, FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS 141R)
and SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of
Accounting Research Bulletin No. 51( SFAS 160). SFAS 141R will change how business acquisitions
are accounted for and will impact financial statements both on the acquisition date and in
subsequent periods. SFAS 160 will change the accounting and reporting for minority interests, which
will be recharacterized as noncontrolling interests and classified as a component of equity. The
provisions of SFAS 141R and SFAS 160 are effective for fiscal years beginning on or after December
15, 2008. The Company adopted SFAS 141R and SFAS 160 at the beginning of fiscal 2009 and will change its
accounting treatment for business combinations, if any, on a prospective basis.
In March 2008, FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities ( SFAS 161). The new standard is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures to enable investors
to better understand their effects on an entitys financial position, financial performance and
cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged. The implementation of
SFAS 161 did not impact the Companys consolidated financial statements.
From time to time, new accounting pronouncements are issued by FASB that are adopted by the
Company as of the specified effective date. Unless otherwise discussed, the Company believes that
the impact of recently issued standards, which are not yet effective, will not have a material
impact on the Companys consolidated financial statements upon adoption.
8
iROBOT CORPORATION
Notes To Consolidated Financial Statements Continued
(unaudited)
3. Inventory
Inventory consists of the following at:
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
|
December 27, |
|
|
|
2009 |
|
|
2008 |
|
|
|
(In thousands) |
|
Raw materials |
|
$ |
4,125 |
|
|
$ |
3,443 |
|
Work in process |
|
|
1,246 |
|
|
|
746 |
|
Finished goods |
|
|
25,371 |
|
|
|
30,371 |
|
|
|
|
|
|
|
|
|
|
$ |
30,742 |
|
|
$ |
34,560 |
|
|
|
|
|
|
|
|
4. Stock Option Plans
The
Company has options outstanding under three stock incentive plans: the 1994 Stock Option
Plan (the 1994 Plan), the 2004 Stock Option
and Incentive Plan (the 2004 Plan) and the 2005 Stock Option and Incentive Plan (the 2005 Plan
and together with the 1994 Plan and the 2004 Plan, the Plans). The 2005 Plan is
the only one of the three plans under which new awards may currently be granted. Under the 2005
Plan, which became effective October 10, 2005, 1,583,682 shares were initially reserved for
issuance in the form of incentive stock options, non-qualified stock options, stock appreciation
rights, deferred stock awards and restricted stock awards. Additionally, the 2005 Plan provides
that the number of shares reserved and available for issuance under the plan will automatically
increase each January 1, beginning in 2007, by 4.5% of the outstanding number of shares of common
stock on the immediately preceding December 31. Stock options returned to the Plans as a result of
their expiration, cancellation or termination are automatically made available for issuance under
the 2005 Plan. Eligibility for incentive stock options is limited to those individuals
whose employment status would qualify them for the tax treatment associated with incentive stock
options in accordance with the Internal Revenue Code of 1986, as amended. As of March 28, 2009,
there were 2,410,348 shares available for future grant under the 2005 Plan.
Options granted under the Plans are subject to terms and conditions as determined by the
compensation committee of the board of directors, including vesting periods. Options granted under
the Plans are exercisable in full at any time subsequent to vesting, generally vest over periods
from zero to five years, and expire seven or ten years from the date of grant or, if earlier, 60 or
90 days from employee termination. The exercise price of incentive stock options is equal to the
closing price on the NASDAQ Global Market on the date of grant. The exercise price of nonstatutory
options may be set at a price other than the fair market value of the common stock.
The Company has determined that the grants, exercises and other stock-based compensation
activity during the three months ended March 28, 2009 were not material.
5. Accrued Expenses
Accrued expenses consist of the following at:
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
|
December 27, |
|
|
|
2009 |
|
|
2008 |
|
|
|
(In thousands) |
|
Accrued warranty |
|
$ |
4,984 |
|
|
$ |
5,380 |
|
Accrued direct fulfillment costs |
|
|
1,353 |
|
|
|
1,236 |
|
Accrued rent |
|
|
485 |
|
|
|
470 |
|
Accrued sales commissions |
|
|
384 |
|
|
|
801 |
|
Accrued accounting fees |
|
|
334 |
|
|
|
376 |
|
Accrued income taxes |
|
|
|
|
|
|
248 |
|
Accrued other |
|
|
3,191 |
|
|
|
2,478 |
|
|
|
|
|
|
|
|
|
|
$ |
10,731 |
|
|
$ |
10,989 |
|
|
|
|
|
|
|
|
9
iROBOT CORPORATION
Notes To Consolidated Financial Statements Continued
(unaudited)
6. Commitments and Contingencies
Lease Obligations
The Company leases its facilities. Rental expense under operating leases for the three months
ended March 28, 2009 and March 29, 2008 amounted to $1.0 million and $0.6 million, respectively.
Future minimum rental payments under operating leases were as follows as of March 28, 2009:
|
|
|
|
|
|
|
Operating |
|
|
|
Leases |
|
|
|
(In thousands) |
|
Remainder of 2009 |
|
$ |
1,995 |
|
2010 |
|
|
2,434 |
|
2011 |
|
|
2,307 |
|
2012 |
|
|
2,254 |
|
2013 |
|
|
2,087 |
|
Thereafter |
|
|
12,698 |
|
|
|
|
|
Total minimum lease payments |
|
$ |
23,775 |
|
|
|
|
|
Sales Taxes
The Company collects and remits sales tax in jurisdictions in which it has a physical presence
or it believes a nexus exists, which therefore obligates the Company to collect and remit sales
tax. The Company is currently being audited by one state and has recorded a liability in the
quarter ended March 28, 2009 for the expected sales tax exposure from this audit. The Company is
not currently aware of any asserted claims for sales tax liabilities for prior taxable periods in
any other state.
The Company has conducted an evaluation of whether it has established a nexus in various
jurisdictions with respect to sales tax. In conjunction with this evaluation, the Company has
approached several states pursuant to voluntary disclosure arrangements. As a result of this
process, the Company has registered and filed prospectively in four states in accordance with the
terms of the voluntary disclosure agreements. The Company has recorded a liability for potential exposure
in those states, in addition to a liability recorded for potential exposure in one other state. 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.
Guarantees and Indemnification Obligations
The Company enters into standard indemnification agreements in the ordinary course of
business. Pursuant to these agreements, the Company indemnifies and agrees to reimburse the
indemnified party for losses incurred by the indemnified party, generally the Companys customers,
in connection with any patent, copyright, trade secret or other proprietary right infringement
claim by any third party with respect to the Companys products. The term of these indemnification
agreements is generally perpetual any time after execution of the agreement. The maximum potential
amount of future payments the Company could be required to make under these indemnification
agreements is unlimited. The Company has never incurred costs to defend lawsuits or settle claims
related to these indemnification agreements. As a result, the Company believes the estimated fair
value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for
these agreements as of March 28, 2009 and March 29, 2008, respectively.
10
iROBOT CORPORATION
Notes To Consolidated Financial Statements Continued
(unaudited)
Warranty
The Company provides warranties on most products and has established a reserve for warranty
based on identified warranty costs. The reserve is included as part of accrued expenses (Note 5) in
the accompanying balance sheets.
Activity related to the warranty accrual was as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 28, |
|
|
March 29, |
|
|
|
2009 |
|
|
2008 |
|
|
|
(In thousands) |
|
Balance at beginning of period |
|
$ |
5,380 |
|
|
$ |
2,491 |
|
Provision |
|
|
854 |
|
|
|
1,541 |
|
Warranty usage(1) |
|
|
(1,250 |
) |
|
|
(1,508 |
) |
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
4,984 |
|
|
$ |
2,524 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Warranty usage includes the pro rata expiration of product warranties unutilized. |
7. Industry Segment, Geographic Information and Significant Customers
The Company operates in two reportable segments, the home robots division and government and
industrial division. The nature of products and types of customers for the two segments vary
significantly. As such, the segments are managed separately.
Home Robots
The Companys home robots division offers products to consumers through a network of retail
businesses throughout the United States and to certain countries through international distributors
and through the Companys on-line store. The Companys home robots division includes mobile robots
used in the maintenance of domestic households which are sold primarily to retail outlets and
through the Companys on-line store.
Government and Industrial
The Companys government and industrial division offers products through a small U.S.
government-focused sales force, while products are sold to a limited number of countries other than
the United States through international distribution. The Companys government and industrial
products are robots used by various U.S. and foreign governments, primarily for reconnaissance and
bomb disposal missions.
11
iROBOT CORPORATION
Notes To Consolidated Financial Statements Continued
(unaudited)
The table below presents segment information about revenue, cost of revenue, gross margin and
loss before income taxes:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 28, |
|
|
March 29, |
|
|
|
2009 |
|
|
2008 |
|
|
|
(In thousands) |
|
Revenue: |
|
|
|
|
|
|
|
|
Home Robots |
|
$ |
32,823 |
|
|
$ |
30,148 |
|
Government & Industrial |
|
|
24,113 |
|
|
|
27,154 |
|
|
|
|
|
|
|
|
Total revenue |
|
|
56,936 |
|
|
|
57,302 |
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Home Robots |
|
|
22,671 |
|
|
|
22,079 |
|
Government & Industrial |
|
|
18,059 |
|
|
|
19,863 |
|
|
|
|
|
|
|
|
Total cost of revenue |
|
|
40,730 |
|
|
|
41,942 |
|
|
|
|
|
|
|
|
Gross margin: |
|
|
|
|
|
|
|
|
Home Robots |
|
|
10,152 |
|
|
|
8,069 |
|
Government & Industrial |
|
|
6,054 |
|
|
|
7,291 |
|
|
|
|
|
|
|
|
Total gross margin |
|
|
16,206 |
|
|
|
15,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
3,578 |
|
|
|
3,973 |
|
|
|
|
|
|
|
|
|
|
Selling and marketing |
|
|
8,966 |
|
|
|
11,458 |
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
7,130 |
|
|
|
6,778 |
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
(299 |
) |
|
|
495 |
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
$ |
(3,767 |
) |
|
$ |
(6,354 |
) |
|
|
|
|
|
|
|
Geographic Information
For the three months ended March 28, 2009 and March 29, 2008, sales to non-U.S. customers
accounted for 35.7% and 19.6% of total revenue, respectively.
Significant Customers
For the three months ended March 28, 2009 and March 29, 2008, U.S. federal government orders,
contracts and subcontracts accounted for 36.2% and 43.7% total revenue, respectively.
12
iROBOT CORPORATION
Notes To Consolidated Financial Statements Continued
(unaudited)
8. Comprehensive Income (Loss)
SFAS No. 130, Reporting Comprehensive Income, establishes standards for the reporting and
display of comprehensive income (loss) and its components in financial statements. Comprehensive
loss includes unrealized losses on certain investments. The differences between net loss and
comprehensive loss were as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 28, |
|
|
March 29, |
|
|
|
2009 |
|
|
2008 |
|
|
|
(In thousands) |
|
Net loss, as reported |
|
$ |
(1,787 |
) |
|
$ |
(4,005 |
) |
Unrealized losses on investments, net of tax |
|
|
|
|
|
|
(1,315 |
) |
|
|
|
|
|
|
|
|
Total comprehensive loss |
|
$ |
(1,787 |
) |
|
$ |
(5,320 |
) |
|
|
|
|
|
|
|
9. Goodwill and other intangible assets
The carrying amount of the goodwill at March 28, 2009 of $5.4 million is from the acquisition
of Nekton Research, LLC completed in September 2008.
Other intangible assets include the value assigned to completed technology, research
contracts, and a trade name. The estimated useful lives for all of these intangible assets are two
to ten years. The intangible assets are being amortized on a straight-line basis, which is
consistent with the pattern that the economic benefits of the intangible assets are expected to be
utilized.
Intangible assets at March 28, 2009 and December 27, 2008 consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 28, 2009 |
|
|
December 27, 2008 |
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
Cost |
|
|
Amortization |
|
|
Net |
|
|
Cost |
|
|
Amortization |
|
|
Net |
|
|
|
(In thousands) |
|
Completed technology |
|
$ |
3,700 |
|
|
$ |
217 |
|
|
$ |
3,483 |
|
|
$ |
3,700 |
|
|
$ |
124 |
|
|
$ |
3,576 |
|
Research contracts |
|
|
100 |
|
|
|
28 |
|
|
|
72 |
|
|
|
100 |
|
|
|
16 |
|
|
|
84 |
|
Tradename |
|
|
700 |
|
|
|
42 |
|
|
|
658 |
|
|
|
700 |
|
|
|
24 |
|
|
|
676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
4,500 |
|
|
$ |
287 |
|
|
$ |
4,213 |
|
|
$ |
4,500 |
|
|
$ |
164 |
|
|
$ |
4,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense related to acquired intangible assets was $123,000 for the three months
ended March 28, 2009. The estimated future amortization expense related to current intangible
assets in the current fiscal year and each of the four succeeding fiscal years is expected to be as
follows:
|
|
|
|
|
|
|
(In thousands) |
|
Remainder of 2009 |
|
$ |
369 |
|
2010 |
|
|
480 |
|
2011 |
|
|
444 |
|
2012 |
|
|
444 |
|
2013 |
|
|
444 |
|
|
|
|
|
Total |
|
$ |
2,181 |
|
|
|
|
|
13
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of the financial condition and results of operations of iRobot
Corporation should be read in conjunction with the consolidated financial statements and the
related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited
financial statements and notes thereto and Managements Discussion and Analysis of Financial
Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended
December 27, 2008, which has been filed with the Securities and Exchange Commission (the SEC). This
Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and are subject to the safe harbor created by those sections.
In particular, statements contained in this Quarterly Report on Form 10-Q, and in the documents
incorporated by reference into this Quarterly Report on Form 10-Q, that are not historical facts,
including, but not limited to statements concerning new product sales, product development and
offerings, Roomba, Scooba, Looj and Verro products, PackBot tactical military robots, our home
robot and government and industrial robots divisions, our competition, our strategy, our market
position, market acceptance of our products, seasonal factors, revenue recognition, our profits,
growth of our revenues, composition of our revenues, our cost of revenues, operating expenses,
selling and marketing expenses, general and administrative expenses, research and development
expenses, and compensation costs, our projected income tax rate, our credit facility and equipment
facility, our valuations of investments, valuation and composition of our stock-based awards, SFAS
No. 123(R) and liquidity, constitute forward-looking statements and are made under these safe
harbor provisions. Some of the forward-looking statements can be identified by the use of
forward-looking terms such as believes, expects, may, will, should, could, seek,
intends, plans, estimates, anticipates, or other comparable terms. Forward-looking
statements involve inherent risks and uncertainties which could cause actual results to differ
materially from those in the forward-looking statements, including those risks and uncertainties
described in our Annual Report on Form 10-K for the year ended December 27, 2008, as well as
elsewhere in this report. We urge you to consider the risks and uncertainties discussed in our
Annual Report on Form 10-K and in Item 1A contained herein in evaluating our forward-looking
statements. We have no plan to update our forward-looking statements to reflect events or
circumstances after the date of this report. We caution readers not to place undue reliance upon
any such forward-looking statements, which speak only as of the date made.
Overview
iRobot designs and builds robots that make a difference. Founded in 1990 by roboticists who
performed research at the Massachusetts Institute of Technology, we have developed proprietary
technology incorporating advanced concepts in navigation, mobility, manipulation and artificial
intelligence to build industry-leading robots. Our Roomba floor vacuuming robot and Scooba floor
washing robot perform time-consuming domestic chores in the home, while our Looj gutter cleaning
robot and Verro pool cleaning robot perform tasks outside the home, and our PackBot tactical
military robots perform battlefield reconnaissance and bomb disposal. In addition, we are
developing the Small Unmanned Ground Vehicle, or SUGV, reconnaissance robot for the U.S. Armys
Future Combat Systems program. We sell our robots to consumers through a variety of distribution
channels, including chain stores and other national retailers, and our on-line store, and to the
U.S. military and other government agencies worldwide.
As of March 28, 2009, we had 481 full-time employees. We have developed expertise in the
disciplines necessary to build durable, high-performance and cost-effective robots through the
close integration of software, electronics and hardware. Our core technologies serve as reusable
building blocks that we adapt and expand to develop next generation and new products, reducing the
time, cost and risk of product development. Our significant expertise in robot design and
engineering, combined with our management teams experience in military and consumer markets,
positions us to capitalize on the expected growth in the market for robots.
Although we have successfully launched consumer and government and industrial products, our
continued success depends upon our ability to respond to a number of future challenges. We believe
the most significant of these challenges include increasing competition in the markets for both our
consumer and government and industrial products, our ability to obtain U.S. federal government
funding for research and development programs, and our ability to successfully develop and
introduce products and product enhancements.
14
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles in the United States requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the dates of the financial statements and the reported amounts of revenue and
expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and
judgments, in particular those related to revenue recognition (specifically sales returns and other
allowances); valuation allowances; assumptions used in valuing stock-based compensation
instruments; evaluating loss contingencies; and valuation allowances for deferred tax assets.
Actual amounts could differ significantly from these estimates. Our management bases its estimates
and judgments on historical experience and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities and the amounts of revenue and expenses that are not
readily apparent from other sources. Additional information about these critical accounting
policies may be found in the Managements Discussion and Analysis of Financial Condition and
Results of Operations section included in our Annual Report on Form 10-K for the fiscal year ended
December 27, 2008.
Overview of Results of Operations
The following table sets forth our results of operations as a percentage of revenue for the
three month periods ended March 28, 2009 and March 29, 2008:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 29, |
|
|
2009 |
|
2008 |
Revenue |
|
|
|
|
|
|
|
|
Product revenue |
|
|
87.3 |
% |
|
|
88.3 |
% |
Contract revenue |
|
|
12.7 |
|
|
|
11.7 |
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
|
100.0 |
|
|
|
100.0 |
|
|
|
|
|
|
|
|
|
|
Cost of Revenue |
|
|
|
|
|
|
|
|
Cost of product revenue |
|
|
58.7 |
|
|
|
63.2 |
|
Cost of contract revenue |
|
|
12.8 |
|
|
|
10.0 |
|
|
|
|
|
|
|
|
|
|
Total cost of revenue |
|
|
71.5 |
|
|
|
73.2 |
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
28.5 |
|
|
|
26.8 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
6.3 |
|
|
|
6.9 |
|
Selling and marketing |
|
|
15.8 |
|
|
|
20.0 |
|
General and administrative |
|
|
12.5 |
|
|
|
11.9 |
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
34.6 |
|
|
|
38.8 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(6.1 |
) |
|
|
(12.0 |
) |
Other income (expense), net |
|
|
(0.5 |
) |
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(6.6 |
) |
|
|
(11.1 |
) |
Income tax benefit |
|
|
(3.5 |
) |
|
|
(4.1 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(3.1 |
)% |
|
|
(7.0 |
)% |
|
|
|
|
|
|
|
|
|
Comparison of Three Months Ended March 28, 2009 and March 29, 2008
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 29, |
|
Dollar |
|
Percent |
|
|
2009 |
|
2008 |
|
Change |
|
Change |
|
|
(In thousands) |
|
|
|
|
Total revenue |
|
$ |
56,936 |
|
|
$ |
57,302 |
|
|
$ |
(366 |
) |
|
|
(0.6 |
)% |
Total revenue for the three months ended March 28, 2009 decreased to $56.9 million, or 0.6%,
compared to $57.3 million for the three months ended March 29, 2008. Revenue increased
approximately $2.7 million, or 8.9%, in our home robots division and decreased approximately $3.0 million, or 11.2%, in our
government and industrial division.
15
The $2.7 million increase in revenue from our home robots division for the three months ended
March 28, 2009 was driven by a 7.9% increase in units shipped, as compared to the three months
ended March 29, 2008. Total home robots shipped in the three months ended March 28, 2009 were
approximately 183,000 units compared to approximately 169,000 units in the three months ended March
29, 2008. The increase in home robot division revenue and units shipped was primarily attributable
to increased international demand for our home robot products resulting from our increased efforts
to expand our global presence. In the three months ended March 28, 2009, home robots units shipped
internationally increased 57% as compared to the three months ended March 29, 2008. International
home robots revenue increased $7.1 million in the three months ended March 28, 2009 as compared to
the three months ended March 29, 2008. This was offset by decreases in revenue from domestic
retailers of $2.3 million and direct to consumers sales through our on-line store of $2.2 million
in the three months ended March 28, 2009 as compared to the three months ended March 29, 2008.
The $3.0 million decrease in revenue from our government and industrial division was driven by
a $4.8 million decrease in government and industrial robots revenue due primarily to a decrease in
net average selling prices related to product mix primarily attributable to a shift of our military
product line into lower priced FasTac units as compared to MTRS, or
Man Transportable Robot System,
units in the comparable period in 2008. This was partially offset by a $1.2 million increase in
product life cycle revenue (spare parts and accessories) in the three months ended March 28, 2009
as compared to the three months ended March 29, 2008.
Recurring contract development revenue generated under research and development contracts
increased $0.6 million in our government and industrial division in the three months ended March
28, 2009 as compared to the three months ended March 29, 2008. This was the result of revenue from
contracts acquired through our acquisition in September 2008 of
Nekton Research, LLC and new contract
awards for our Warrior and PackBot programs partially offset by a decrease of revenue in our SUGV
program resulting from additional funding to accelerate the timeline for building SUGV units that
occurred in the three months ended March 29, 2008.
Cost of Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 29, |
|
Dollar |
|
Percent |
|
|
2009 |
|
2008 |
|
Change |
|
Change |
|
|
(In thousands) |
|
|
|
|
Total cost of revenue |
|
$ |
40,730 |
|
|
$ |
41,942 |
|
|
$ |
(1,212 |
) |
|
|
(2.9 |
)% |
As a percentage of total revenue |
|
|
71.5 |
% |
|
|
73.2 |
% |
|
|
|
|
|
|
|
|
Total cost of revenue decreased to $40.7 million in the three months ended March 28, 2009,
compared to $41.9 million in the three months ended March 29, 2008. The decrease was due to lower
costs associated with product mix in our government and industrial division primarily attributable
to a shift of our military product line into lower priced FasTac units as compared to MTRS units in
the comparable period in 2008.
We incur research and development expenses under funded development arrangements with both
governments and industrial third parties, which, in accordance with generally accepted accounting
principles in the United States of America, are classified as cost of revenue rather than research
and development expense. For the three months ended March 28, 2009, these expenses amounted to
$7.3 million compared to $5.7 million for the comparable period in 2008. The increase in these
expenses was primarily due to increased labor and subcontract
expenses.
Gross Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 29, |
|
Dollar |
|
Percent |
|
|
2009 |
|
2008 |
|
Change |
|
Change |
|
|
(In thousands) |
|
|
|
|
Total gross margin |
|
$ |
16,206 |
|
|
$ |
15,360 |
|
|
$ |
846 |
|
|
|
5.5 |
% |
As a percentage of total revenue |
|
|
28.5 |
% |
|
|
26.8 |
% |
|
|
|
|
|
|
|
|
16
Gross margin increased $0.8 million, or 5.5%, to $16.2 million (28.5% of revenue) in the three
months ended March 28, 2009, from $15.4 million (26.8% of revenue) in the three months ended March
29, 2008. The increase in gross margin as a percentage of revenue was the result of the home robots
division gross margin increasing 4.2 percentage points offset by the government and industrial
division gross margin decreasing 1.7 percentage points. The 4.2 percentage point increase in the
home robots division is attributable to channel mix as international sales, which carry a higher
gross margin than domestic sales, represented a higher percentage of total revenue than in the comparable period in
2008. In addition during the three month period ending March 29, 2008 we recorded costs but did not
record revenue for shipments to Linens N Things as a result of its bankruptcy filing.
The 1.7 percentage point decrease in gross margin in the government and industrial division
was primarily the result of lower overhead absorption on decreased revenue for the three month
period ending March 29, 2008 as compared to the three month period ending March 28, 2009.
Research and Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 29, |
|
Dollar |
|
Percent |
|
|
2009 |
|
2008 |
|
Change |
|
Change |
|
|
(In thousands) |
|
|
|
|
Total research and development expense |
|
$ |
3,578 |
|
|
$ |
3,973 |
|
|
$ |
(395 |
) |
|
|
(9.9 |
)% |
As a percentage of total revenue |
|
|
6.3 |
% |
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
Research and development expenses decreased by $0.4 million, or 9.9%, to $3.6 million (6.3% of
revenue) in the three months ended March 28, 2009, from $4.0 million (6.9% of revenue) for the
three months ended March 29, 2008. The decrease in research and development expenses is primarily
due to a decrease in compensation and employee-related costs.
Overall research and development headcount decreased to 99 at March 28, 2009 compared to 104
at March 29, 2008, a decrease of five employees or 5%.
In addition to our internal research and development activities discussed above, we incur
research and development expenses under funded development arrangements with both governments and
industrial third parties. For the three months ended March 28, 2009, these expenses amounted to
$7.3 million compared to $5.7 million for the three months ended March 28, 2008. However, these
expenses have been classified as cost of revenue rather than research and development expense as
they are executed under funded research contracts.
Selling and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 29, |
|
Dollar |
|
Percent |
|
|
2009 |
|
2008 |
|
Change |
|
Change |
|
|
(In thousands) |
|
|
|
|
Total selling and marketing expense |
|
$ |
8,966 |
|
|
$ |
11,458 |
|
|
$ |
(2,492 |
) |
|
|
(21.7 |
)% |
As a percentage of total revenue |
|
|
15.8 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
|
|
Selling and marketing expenses decreased by $2.5 million, or 21.7%, to $9.0 million (15.8% of
revenue) in the three months ended March 28, 2009 from $11.5 million (20.0% of revenue) in the
three months ended March 29, 2008. This was driven by a decrease in our home robots division of
$3.1 million primarily attributable to a reduction of $2.6 million in television, online media and
other marketing expenses for the three month period ended March 28, 2009 as compared to the three
months ended March 29, 2008 as a result of our strategy to aggressively manage our expenses. The
decrease of selling and marketing expenses in our home robots division was also attributable to a
decrease of $0.4 million in sales commission expenses as a result of lower sales to domestic
retailers in the three months ended March 28, 2009 as compared to the three months ended March 29,
2008. Selling and marketing expenses in our government and industrial division increased by $0.5
million primarily due to increases in costs associated with bid and proposal activity in the three
months ended March 28, 2009 as compared to the three months ended March 29, 2008.
17
Overall selling and marketing headcount increased to 45 at March 28, 2009 compared to 36 as of
March 29, 2008, an increase of nine employees or 25% growth.
General and Administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 28, |
|
Dollar |
|
Percent |
|
|
2009 |
|
2007 |
|
Change |
|
Change |
|
|
(In thousands) |
|
|
|
|
Total general and administrative expense |
|
$ |
7,130 |
|
|
$ |
6,778 |
|
|
$ |
352 |
|
|
|
5.2 |
% |
As a percentage of total revenue |
|
|
12.5 |
% |
|
|
11.9 |
% |
|
|
|
|
|
|
|
|
General and administrative expenses increased by $0.4 million, or 5.2%, to $7.1 million (12.5%
of revenue) in the three months ended March 28, 2009 from $6.8 million (11.9% of revenue) in the
three months ended March 28, 2008. The increase in general and administrative expenses was
primarily driven by an increase of $0.4 million in stock-based compensation for the three months
ended March 28, 2009 over the comparable period in 2008.
Overall general and administrative headcount increased to 104 at March 28, 2009 compared to 97
as of March 28, 2008, an increase of seven employees or 7% growth.
Other Income (Expense), Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 29, |
|
Dollar |
|
Percent |
|
|
2009 |
|
2008 |
|
Change |
|
Change |
|
|
(In thousands) |
|
|
|
|
Total other income (expense), net |
|
$ |
(299 |
) |
|
$ |
495 |
|
|
$ |
(794 |
) |
|
|
(160.4 |
%) |
As a percentage of total revenue |
|
|
(0.5 |
)% |
|
|
0.9 |
% |
|
|
|
|
|
|
|
|
Other income (expense), net amounted to $(0.3) million for the three months ended March 28,
2009 compared to $0.5 million for the three months ended March 29, 2008. Other income (expense),
net for the three month period ended March 28, 2009 was directly related to foreign currency
exchange losses which were the result of foreign currency exchange rate fluctuations. Other income
(expense), net for the three month period ended March 29, 2008 was directly related to interest
income resulting from investments in auction rate securities and money market accounts. All of our
auction rate securities investments have been settled and our current money market investments have
significantly reduced interest rates earned as compared to the three month period ended Match 29,
2008.
Income Tax Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 29, |
|
Dollar |
|
Percent |
|
|
2009 |
|
2008 |
|
Change |
|
Change |
|
|
(In thousands) |
|
|
|
|
Total income tax benefit |
|
$ |
(1,980 |
) |
|
$ |
(2,349 |
) |
|
$ |
369 |
|
|
|
(15.7 |
)% |
As a percentage of total revenue |
|
|
(3.5 |
)% |
|
|
(4.1 |
)% |
|
|
|
|
|
|
|
|
In the three months ended March 28, 2009, we recorded a $2.0 million tax benefit based on a
projected effective 2009 income tax rate of 52% as compared to a $2.3 million tax benefit for
the three months ended March 29, 2008 based on a projected effective 2008 income tax rate of 37%.
This increase in rate was primarily due to the impact of permanent
book-tax differences, federal taxes computed at the Federal Graduated Rate, and the impact of
additional state taxes, partially offset by the benefit of research and development tax credits anticipated in 2009.
Liquidity and Capital Resources
At March 28, 2009 our principal sources of liquidity were cash and cash equivalents totaling
$54.7 million and accounts receivable of $23.2 million.
We manufacture and distribute our products through contract manufacturers and third-party
logistics providers. We believe that this approach gives us the advantages of relatively low
capital investment and significant flexibility
18
in scheduling production and managing inventory levels. By leasing our office facilities, we
also minimize the cash needed for expansion. Accordingly, our capital spending is generally limited
to leasehold improvements, computers, office furniture and product-specific production tooling,
internal use software and test equipment. In the three months ended March 28, 2009 and March 29,
2008, we spent $0.8 million and $3.9 million, respectively, on capital equipment.
Our strategy for delivering products to our retail customers gives us the flexibility to
provide container shipments directly to the retailer from China and allows our 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 logistic providers for the fulfillment of retail
orders and direct-to-consumer sales. Our inventory of government and industrial products is minimal
as they are generally built to order. Our contract manufacturers are responsible for purchasing and
stocking the components required for the production of our products, and they invoice us when the
finished goods are shipped.
Our consumer product sales are, and are expected to continue to be, highly seasonal. This
seasonality typically results in a net use of cash in support of operating needs during the second
and third quarters of the year, with the low point generally occurring in the middle of the third
quarter, and a favorable cash flow during the first and fourth quarters. We have relied on, and we
may continue to rely on, our working capital line of credit to cover short-term cash needs
resulting from the seasonality of our consumer business.
Discussion of Cash Flows
Net cash provided by our operating activities in the three months ended March 28, 2009
was $14.3 million compared to net cash provided by operating activities of $0.2 million in the
three months ended March 29, 2008. The cash provided by our operating activities in the three
months ended March 28, 2009 was primarily due to a decrease in accounts receivable (including
unbilled revenue) of $11.6 million and a decrease in inventory of $3.8 million, offset by a net
loss of $1.8 million, a decrease in accounts payable of $0.4 million, a decrease in accrued
expenses of $0.3 million, a decrease in accrued compensation of $1.0 million, and an increase in
other assets of $1.2 million. In addition, in the three months ended March 28, 2009, we had
depreciation and amortization expenses of approximately $1.9 million and stock-based compensation
of $1.6 million, both of which are non-cash expenses. The cash provided by our operating activities
in the three months ended March 29, 2008 was primarily due to a decrease in accounts receivable
(including unbilled revenue) of $25.3 million, partially offset by a net loss of $4.0 million, a
decrease in accounts payable of $16.7 million, a decrease in accrued expenses of $2.0 million, an
increase in inventory of $1.0 million and an increase in other assets of $4.1 million. In addition,
in the three months ended March 29, 2008, we had depreciation and amortization expenses of
approximately $1.6 million and stock-based compensation of $0.9 million, both of which are non-cash
expenses.
Net cash used by our investing activities was $0.8 million in the three months ended March
28, 2009 compared to net cash used by our investing activities of $4.9 million in the three months
ended March 29, 2008. Investing activities in the three months ended March 28, 2009 represent the
purchase of capital equipment and leasehold improvements. Investing activities in the three months
ended March 29, 2008 represent the sale of investments of $29.0 million, offset by the purchase of
investments of $30.0 million and the purchase of capital equipment and leasehold improvements of
$3.9 million.
Net cash provided by our financing activities was approximately $0.3 million in the three
months ended March 28, 2009 compared to net cash used by our financing activities of $0.8 million
in the three months ended March 29, 2008. Included in the financing activities for the three months
ended March 28, 2009 was $0.3 million in proceeds from the exercise of stock options. Included in
the financing activities for the three months ended March 29, 2008 was $0.6 million in proceeds
from the exercise of stock options and a tax benefit of $0.2 million associated with excess
stock-based compensation deductions.
Working Capital Facility
We have an unsecured revolving credit facility with Bank of America, N.A., which is available
to fund working capital and other corporate purposes. The amount available for borrowing under our
credit facility is the lesser of: (a) $45.0 million or (b) amounts available pursuant to a
borrowing base calculation determined pursuant to the terms
19
and conditions of the credit facility. The interest on loans under our credit facility will
accrue, at our election, at either (i) Bank of Americas prime rate minus 1% or (ii) the Eurodollar
rate plus 1.25%. The credit facility will terminate and all amounts outstanding thereunder will be
due and payable in full on June 5, 2010.
As of March 28, 2009, we had letters of credit outstanding of $2.1 million under our working
capital line of credit. This 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, our 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 tangible net worth and a minimum specified
annual net income.
This credit facility 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, our obligations under the
credit facility may be accelerated.
As of March 28, 2009, we were in compliance with all covenants under the credit facility.
Equipment Financing Facility
We have a $5.0 million secured equipment facility with Banc of America Leasing & Capital, LLC
under which we can finance the acquisition of equipment, furniture and leasehold improvements. We
may borrow amounts under the equipment facility until April 30, 2009 and any amounts borrowed
during that period will accrue interest at 30-day LIBOR plus 1%. After April 30, 2009, all amounts
then outstanding under the equipment line will be repaid in 60 equal monthly installments
commencing in April 2009 and will accrue interest, at our election, at either a fixed or variable
rate of interest determined as a function of LIBOR at the time of borrowing. Our obligations under
the equipment facility will be secured by any financed equipment. We
intend to renew this equipment financing facility when it expires
on April 30, 2009.
As of March 28, 2009, we had no amounts outstanding and $5.0 million available under our
equipment financing line of credit.
This equipment facility contains customary terms and conditions for equipment facilities of
this type, including, without limitation, restrictions on our ability to transfer, encumber or
dispose of the financed equipment. In addition, we are required to meet certain financial covenants
customary to this type of agreement, including maintaining a minimum specified tangible net worth
and a minimum specified annual net income.
This equipment facility 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, or if we repay all of our
indebtedness under our credit facility with Bank of America, N.A., our obligations under this
equipment facility may be accelerated.
As of March 28, 2009 we were in compliance with all covenants under the equipment 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. Pursuant to the terms of the Nekton Research, LLC acquisition
agreement, additional consideration of up to $5 million may be paid based on the achievement of
certain business and financial milestones. 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
20
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. Although we are currently not a party to any agreement or binding
letter of intent with respect to potential investments in, or acquisitions of, businesses, services
or technologies, we may enter into these types of arrangements in the future, 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. We do not have any commitments to settle contractual obligations related to our working capital line of credit as of March 28, 2009. The following table describes our commitments to settle
contractual obligations in cash as of March 28, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period |
|
|
|
Less Than |
|
|
1 to 3 |
|
|
3 to 5 |
|
|
More Than |
|
|
|
|
|
|
1 Year |
|
|
Years |
|
|
Years |
|
|
5 Years |
|
|
Total |
|
|
|
(In thousands) |
|
Operating leases |
|
$ |
2,628 |
|
|
$ |
4,692 |
|
|
$ |
4,279 |
|
|
$ |
12,176 |
|
|
$ |
23,775 |
|
Minimum contractual payments |
|
|
3,435 |
|
|
|
10,500 |
|
|
|
1,500 |
|
|
|
|
|
|
|
15,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
6,063 |
|
|
$ |
15,192 |
|
|
$ |
5,779 |
|
|
$ |
12,176 |
|
|
$ |
39,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our minimum contractual payments consist entirely of payments to our provider of direct
fulfillment services for direct to consumer sales of our home robots, which payments are incurred
in the ordinary course of business. Based on historical and current operations, we believe that we
will exceed these minimum contractual obligations in our ordinary course of business.
Off-Balance Sheet Arrangements
As of March 28, 2009, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of
Regulation S-K.
Recently Issued Accounting Pronouncements
See Footnote 2 to the Consolidated Financial Statements for a discussion of recently issued
accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Interest Rate Sensitivity
At March 28, 2009, we had unrestricted cash and cash equivalents of $54.7 million. The
unrestricted cash and cash equivalents are held for working capital purposes. We do not enter into
investments for trading or speculative purposes. Some of the securities in which we invest,
however, may be subject to market risk. This means that a change in prevailing interest rates may
cause the principal amount of the investment to fluctuate. To minimize this risk in the future, we
intend to maintain our portfolio of cash equivalents in a variety of securities, commercial paper,
money market funds, debt securities and certificates of deposit. Due to the short-term nature of
these investments, we believe that we do not have any material exposure to changes in the fair
value of our investment portfolio as a result of changes in interest rates. As of March 28, 2009,
all of our cash equivalents were held in money market accounts.
21
Our exposure to market risk also relates to the increase or decrease in the amount of interest
expense we must pay on any outstanding debt instruments, primarily certain borrowings under our
working capital line of credit and our equipment financing facility. The advances under the working
capital line of credit bear a variable rate of interest determined as a function of the prime rate
or the Eurodollar rate at the time of the borrowing. The advances under the equipment financing
facility bear either a variable or fixed rate of interest, at our election, determined as a
function of the LIBOR rate at the time of borrowing. At March 28, 2009, we had letters of credit
outstanding of $2.1 million under our working capital line of credit and no amounts outstanding
under our equipment financing facility.
Exchange Rate Sensitivity
We maintain sales and business operations in foreign countries. As such, we have exposure to
adverse changes in exchange rates associated with operating expenses of our foreign operations, but
we believe this exposure to be immaterial. In late 2007, we began to accept orders for home robot
products in currencies other than the U.S. dollar and we expect this practice to continue in the
future. We regularly monitor the level of non-U.S. dollar accounts receivable balances to determine
if any actions, including possibly entering into foreign currency forward contracts, should be
taken to minimize the impact of fluctuating exchange rates on our results of operations.
Item 4. Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of the end of the
period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures as of the end of the period
covered by this report were effective in ensuring that information required to be disclosed by us
in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange Commissions rules and
forms; and (ii) accumulated and communicated to management, including our Chief Executive Officer
and Chief Financial Officer, as appropriate, to allow timely discussions regarding required
disclosure. We believe that a control system, no matter how well designed and operated, cannot
provide absolute assurance that the objectives of the control system are met, and no evaluation of
controls can provide absolute assurance that all control issues and instances of fraud, if any,
within a company have been detected.
There was no change in our internal control over financial reporting (as defined in Rule
13a-15(f) of the Exchange Act) that occurred during the period covered by this report that has
materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.
Part II. Other Information
Item 1. Legal Proceedings
From time to time and in the ordinary course of business, we are subject to various claims,
charges and litigation. The outcome of litigation cannot be predicted with certainty and some
lawsuits, claims or proceedings may be disposed of unfavorably to us, which could materially affect
our financial condition or results of operations.
Item 1A. Risk Factors
We operate in a rapidly changing environment that involves a number of risks that could
materially affect our business, financial condition or future results, some of which are beyond our
control. In addition to the other information set forth in this report, the risks and uncertainties
that we believe are most important for you to consider are discussed in Part I, Item 1A. Risk
Factors in our Annual Report on Form 10-K for the year ended December 27, 2008, which could
materially affect our business, financial condition or future results. Additional risks and
uncertainties not presently known to us, which we currently deem immaterial or which are similar to
those faced by other companies in our industry or business in general, may also impair our business
operations. There are no material changes to the Risk Factors described in our Annual Report on
Form 10-K for the fiscal year ended December 27, 2008.
22
Item 5. Other Information
Our policy governing transactions in our securities by our directors, officers, and employees
permits our officers, directors, funds affiliated with our directors, and certain other persons to
enter into trading plans complying with Rule 10b5-l under the Securities Exchange Act of 1934, as
amended. We have been advised that certain of our officers and directors (including Helen Greiner, Director) of the Company have
entered into a trading plan (each a Plan and collectively, the Plans) covering periods after
the date of this quarterly report on Form 10-Q in accordance with Rule 10b5-l and our policy
governing transactions in our securities. Generally, under these trading plans, the individual
relinquishes control over the transactions once the trading plan is put into place. Accordingly,
sales under these plans may occur at any time, including possibly before, simultaneously with, or
immediately after significant events involving our company.
We anticipate that, as permitted by Rule 10b5-l and our policy governing transactions in our
securities, some or all of our officers, directors and employees may establish trading plans in the
future. We intend to disclose the names of our executive officers and directors who establish a
trading plan in compliance with Rule 10b5-l and the requirements of our policy governing
transactions in our securities in our future quarterly and annual reports on Form 10-Q and 10-K
filed with the Securities and Exchange Commission. We, however, undertake no obligation to update
or revise the information provided herein.
23
Item 6. Exhibits
|
|
|
Exhibit Number |
|
Description |
|
31.1
|
|
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of the Securities Exchange Act of 1934 |
|
|
|
31.2
|
|
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of the Securities Exchange Act of 1934 |
|
|
|
32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 |
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
iROBOT CORPORATION
|
|
Date: April 30, 2009 |
By: |
/s/ JOHN LEAHY
|
|
|
|
John Leahy |
|
|
|
Executive Vice President, Chief Financial Officer
and Treasurer (Duly Authorized Officer and
Principal Financial Officer) |
|
25
EXHIBIT INDEX
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
31.1
|
|
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 |
|
|
|
31.2
|
|
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 |
|
|
|
32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
26