|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
77-0259 335
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
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8 Crosby Drive, Bedford, MA
|
|
01730
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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|
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Emerging growth company
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¨
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Page
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Part I
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Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
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Part II
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
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||
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Part III
|
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Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
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Part IV
|
|
Item 15.
|
||
Item 16.
|
•
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deeper household penetration of Roomba globally;
|
•
|
broader roll out of the Roomba i7 and i7+ which were launched in the U.S. in 2018;
|
•
|
continued investment in innovation to extend our technology and product leadership;
|
•
|
further adoption of Braava products through targeted marketing programs; and
|
•
|
introduction of additional new products mid-year in 2019.
|
•
|
Continue to strengthen our marketing capabilities globally and accelerate worldwide consumer adoption of Roomba to maintain our market-leading position in robotic vacuum cleaners;
|
•
|
Continue to develop our wet floor care business to generate a material, secondary revenue stream;
|
•
|
Launch iRobot Terra, an autonomous robotic lawn mower that will re-invent the robotic lawnmower category with state-of-the-art mapping and navigation technology. In 2019, iRobot plans to make Terra available for purchase in limited quantities in Germany and for beta testing in the U.S.;
|
•
|
Scale our infrastructure to support global operations and connected products;
|
•
|
Explore, develop and grow adjacent non-floor care consumer robot products that can generate meaningful diversified revenue streams; and
|
•
|
Make continued operational improvements that can reduce product and operating costs.
|
•
|
Roomba i7 brings a new level of intelligence and automation to robotic vacuum cleaners with the ability to learn, map and adapt to a home’s floor plan;
|
•
|
Roomba i7+ includes all the features of i7 plus the ability for the robot to empty its own bin into the Clean Base with Automatic Dirt Disposal. This brings a level of automation that allows users to forget about vacuuming for weeks at a time; and
|
•
|
Roomba e5 is an affordable, highly-featured product which includes WiFi connectivity, intelligent navigation with Dirt Detect technologies and iRobot’s dual multi-surface rubber brushes.
|
•
|
lack of direct control over production capacity and delivery schedules;
|
•
|
lack of direct control over quality assurance, manufacturing yields and production costs;
|
•
|
lack of enforceable contractual provisions over the production and costs of consumer products;
|
•
|
risk of loss of inventory while in transit;
|
•
|
risks associated with international commerce, including unexpected changes in legal and regulatory requirements, changes in tariffs and trade policies, risks associated with the protection of intellectual property and political and economic instability; and
|
•
|
risks that our attempts to add additional manufacturing resources may be significantly delayed and thereby create disruptions in production of our products.
|
•
|
costs incurred to combine the operations of businesses we acquire, such as transitional employee expenses and employee retention, redeployment or relocation expenses;
|
•
|
impairment of goodwill or intangible assets;
|
•
|
amortization of intangible assets acquired;
|
•
|
a reduction in the useful lives of intangible assets acquired;
|
•
|
identification of or changes to assumed contingent liabilities, both income tax and non-income tax related after our final determination of the amounts for these contingencies or the conclusion of the measurement period (generally up to one year from the acquisition date), whichever comes first;
|
•
|
charges to our operating results to eliminate certain duplicative pre-merger activities, to restructure our operations or to reduce our cost structure; and
|
•
|
charges to our operating results resulting from expenses incurred to effect the acquisition.
|
•
|
difficulties in staffing, managing and supporting operations in multiple countries;
|
•
|
difficulties in enforcing agreements and collecting receivables through foreign legal systems and other relevant legal issues;
|
•
|
fewer legal protections for intellectual property;
|
•
|
foreign and U.S. taxation issues, tariffs, and international trade barriers;
|
•
|
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
|
•
|
our relationships with international distributors, some of whom may be operating without written contracts.
|
•
|
limitations on the removal of directors;
|
•
|
a classified board of directors so that not all members of our board are elected at one time;
|
•
|
advance notice requirements for stockholder proposals and nominations;
|
•
|
the inability of stockholders to act by written consent or to call special meetings;
|
•
|
the ability of our board of directors to make, alter or repeal our by-laws; and
|
•
|
the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval.
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Year Ended
|
||||||||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
|
December 27,
2014 |
||||||||||
|
(In thousands, except earnings per share amounts)
|
||||||||||||||||||
Consolidated Statements of Income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
1,092,584
|
|
|
$
|
883,911
|
|
|
$
|
660,604
|
|
|
$
|
616,778
|
|
|
$
|
556,846
|
|
Gross profit
|
555,428
|
|
|
433,159
|
|
|
319,315
|
|
|
288,926
|
|
|
258,055
|
|
|||||
Operating income
|
105,822
|
|
|
72,690
|
|
|
57,557
|
|
|
60,618
|
|
|
53,117
|
|
|||||
Income tax expense
|
20,630
|
|
|
25,402
|
|
|
19,422
|
|
|
18,841
|
|
|
14,606
|
|
|||||
Net income
|
87,992
|
|
|
50,964
|
|
|
41,939
|
|
|
44,130
|
|
|
37,803
|
|
|||||
Net Income Per Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
3.18
|
|
|
$
|
1.85
|
|
|
$
|
1.51
|
|
|
$
|
1.49
|
|
|
$
|
1.28
|
|
Diluted
|
$
|
3.07
|
|
|
$
|
1.77
|
|
|
$
|
1.48
|
|
|
$
|
1.47
|
|
|
$
|
1.25
|
|
Shares Used In Per Share Calculations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
27,692
|
|
|
27,611
|
|
|
27,698
|
|
|
29,550
|
|
|
29,485
|
|
|||||
Diluted
|
28,640
|
|
|
28,753
|
|
|
28,292
|
|
|
30,107
|
|
|
30,210
|
|
|||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
130,373
|
|
|
$
|
128,635
|
|
|
$
|
214,523
|
|
|
$
|
179,915
|
|
|
$
|
185,957
|
|
Short term investments
|
31,605
|
|
|
37,225
|
|
|
39,930
|
|
|
33,124
|
|
|
36,166
|
|
|||||
Total assets
|
766,961
|
|
|
691,522
|
|
|
507,912
|
|
|
521,743
|
|
|
493,213
|
|
|||||
Total liabilities
|
231,639
|
|
|
221,195
|
|
|
118,956
|
|
|
104,332
|
|
|
102,777
|
|
|||||
Total stockholders’ equity
|
535,322
|
|
|
470,327
|
|
|
388,956
|
|
|
417,411
|
|
|
390,436
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Revenue
|
$
|
1,092,584
|
|
|
$
|
883,911
|
|
|
$
|
660,604
|
|
Cost of revenue:
|
|
|
|
|
|
||||||
Cost of product revenue
|
518,612
|
|
|
438,114
|
|
|
337,832
|
|
|||
Amortization of acquired intangible assets
|
18,544
|
|
|
12,638
|
|
|
3,457
|
|
|||
Total cost of revenue
|
537,156
|
|
|
450,752
|
|
|
341,289
|
|
|||
Gross profit
|
555,428
|
|
|
433,159
|
|
|
319,315
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
140,629
|
|
|
113,149
|
|
|
79,805
|
|
|||
Selling and marketing
|
210,411
|
|
|
162,110
|
|
|
115,125
|
|
|||
General and administrative
|
97,501
|
|
|
84,771
|
|
|
66,828
|
|
|||
Amortization of acquired intangible assets
|
1,065
|
|
|
439
|
|
|
—
|
|
|||
Total operating expenses
|
449,606
|
|
|
360,469
|
|
|
261,758
|
|
|||
Operating income
|
105,822
|
|
|
72,690
|
|
|
57,557
|
|
|||
Other income, net
|
2,800
|
|
|
3,676
|
|
|
3,804
|
|
|||
Income before income taxes
|
108,622
|
|
|
76,366
|
|
|
61,361
|
|
|||
Income tax expense
|
20,630
|
|
|
25,402
|
|
|
19,422
|
|
|||
Net income
|
$
|
87,992
|
|
|
$
|
50,964
|
|
|
$
|
41,939
|
|
|
Fiscal Year Ended
|
|||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
|||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenue:
|
|
|
|
|
|
|||
Cost of product revenue
|
47.5
|
|
|
49.6
|
|
|
51.1
|
|
Amortization of acquired intangible assets
|
1.7
|
|
|
1.4
|
|
|
0.6
|
|
Total cost of revenue
|
49.2
|
|
|
51.0
|
|
|
51.7
|
|
Gross margin
|
50.8
|
|
|
49.0
|
|
|
48.3
|
|
Operating expenses:
|
|
|
|
|
|
|||
Research and development
|
12.9
|
|
|
12.8
|
|
|
12.1
|
|
Selling and marketing
|
19.3
|
|
|
18.3
|
|
|
17.4
|
|
General and administrative
|
8.9
|
|
|
9.6
|
|
|
10.1
|
|
Amortization of acquired intangible assets
|
0.1
|
|
|
0.1
|
|
|
—
|
|
Total operating expenses
|
41.2
|
|
|
40.8
|
|
|
39.6
|
|
Operating income
|
9.6
|
|
|
8.2
|
|
|
8.7
|
|
Other income, net
|
0.3
|
|
|
0.5
|
|
|
0.5
|
|
Income before income taxes
|
9.9
|
|
|
8.7
|
|
|
9.2
|
|
Income tax expense
|
1.9
|
|
|
2.9
|
|
|
2.9
|
|
Net income
|
8.0
|
%
|
|
5.8
|
%
|
|
6.3
|
%
|
|
Fiscal Year Ended
|
|
|
|
|
||||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
||||||||||
Revenue
|
$
|
1,092,584
|
|
|
$
|
883,911
|
|
|
$
|
660,604
|
|
|
$
|
208,673
|
|
|
$
|
223,307
|
|
|
Fiscal Year Ended
|
|
|
|
|
||||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
||||||||||
Cost of product revenue
|
$
|
518,612
|
|
|
$
|
438,114
|
|
|
$
|
337,832
|
|
|
$
|
80,498
|
|
|
$
|
100,282
|
|
As a percentage of total revenue
|
47.5
|
%
|
|
49.6
|
%
|
|
51.1
|
%
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
|
||||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
||||||||||
Gross profit
|
$
|
555,428
|
|
|
$
|
433,159
|
|
|
$
|
319,315
|
|
|
$
|
122,269
|
|
|
$
|
113,844
|
|
Gross margin
|
50.8
|
%
|
|
49.0
|
%
|
|
48.3
|
%
|
|
|
|
|
•
|
salaries and related costs for our engineers;
|
•
|
costs for high technology components used in product and prototype development;
|
•
|
costs of test equipment used during product development; and
|
•
|
occupancy and other overhead costs.
|
|
Fiscal Year Ended
|
|
|
|
|
|||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
|||||||||
Research and development
|
$
|
140,629
|
|
|
$
|
113,149
|
|
|
$
|
79,805
|
|
|
$
|
27,480
|
|
|
33,344
|
|
As a percentage of total revenue
|
12.9
|
%
|
|
12.8
|
%
|
|
12.1
|
%
|
|
|
|
|
•
|
salaries and related costs for sales and marketing personnel;
|
•
|
advertising, marketing and other brand-building costs;
|
•
|
customer service costs; and
|
•
|
travel and related costs.
|
|
Fiscal Year Ended
|
|
|
|
|
|||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
|||||||||
Selling and marketing
|
$
|
210,411
|
|
|
$
|
162,110
|
|
|
$
|
115,125
|
|
|
$
|
48,301
|
|
|
46,985
|
|
As a percentage of total revenue
|
19.3
|
%
|
|
18.3
|
%
|
|
17.4
|
%
|
|
|
|
|
•
|
salaries and related costs for executives and administrative personnel;
|
•
|
professional services costs;
|
•
|
information systems and infrastructure costs;
|
•
|
travel and related costs; and
|
•
|
occupancy and other overhead costs.
|
|
Fiscal Year Ended
|
|
|
|
|
|||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31, 2016
|
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
|||||||||
General and administrative
|
$
|
97,501
|
|
|
$
|
84,771
|
|
|
$
|
66,828
|
|
|
$
|
12,730
|
|
|
17,943
|
|
As a percentage of total revenue
|
8.9
|
%
|
|
9.6
|
%
|
|
10.1
|
%
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
|
|||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31, 2016
|
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
|||||||||
Cost of revenue
|
$
|
18,544
|
|
|
$
|
12,638
|
|
|
$
|
3,457
|
|
|
$
|
5,906
|
|
|
9,181
|
|
Operating expense
|
1,065
|
|
|
439
|
|
|
—
|
|
|
626
|
|
|
439
|
|
||||
Total amortization expense
|
19,609
|
|
|
13,077
|
|
|
3,457
|
|
|
6,532
|
|
|
9,620
|
|
||||
As a percentage of total revenue
|
1.8
|
%
|
|
1.5
|
%
|
|
0.5
|
%
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
|
||||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31, 2016
|
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
||||||||||
Other income, net
|
$
|
2,800
|
|
|
$
|
3,676
|
|
|
$
|
3,804
|
|
|
$
|
(876
|
)
|
|
$
|
(128
|
)
|
As a percentage of total revenue
|
0.3
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
|
||||||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31, 2016
|
|
$ Change 2018 vs. 2017
|
|
$ Change 2017 vs. 2016
|
||||||||||
Income tax provision
|
$
|
20,630
|
|
|
$
|
25,402
|
|
|
$
|
19,422
|
|
|
$
|
(4,772
|
)
|
|
$
|
5,980
|
|
As a percentage of pre-tax income
|
19.0
|
%
|
|
33.3
|
%
|
|
31.7
|
%
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Less Than
1 Year
|
|
1 to 3
Years
|
|
3 to 5
Years
|
|
More Than
5 Years
|
|
Total
|
||||||||||
Operating leases
|
$
|
7,848
|
|
|
$
|
14,742
|
|
|
$
|
14,313
|
|
|
$
|
34,806
|
|
|
$
|
71,709
|
|
Minimum contractual payments
|
2,804
|
|
|
3,594
|
|
|
—
|
|
|
—
|
|
|
6,398
|
|
|||||
Other obligations
|
1,692
|
|
|
2,412
|
|
|
—
|
|
|
—
|
|
|
4,104
|
|
|||||
Total
|
$
|
12,344
|
|
|
$
|
20,748
|
|
|
$
|
14,313
|
|
|
$
|
34,806
|
|
|
$
|
82,211
|
|
|
Page
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
130,373
|
|
|
$
|
128,635
|
|
Short term investments
|
31,605
|
|
|
37,225
|
|
||
Accounts receivable, net
|
162,166
|
|
|
142,829
|
|
||
Inventory
|
164,633
|
|
|
106,932
|
|
||
Other current assets
|
25,660
|
|
|
19,105
|
|
||
Total current assets
|
514,437
|
|
|
434,726
|
|
||
Property and equipment, net
|
57,026
|
|
|
44,579
|
|
||
Deferred tax assets
|
36,979
|
|
|
31,531
|
|
||
Goodwill
|
118,896
|
|
|
121,440
|
|
||
Intangible assets, net
|
24,273
|
|
|
44,712
|
|
||
Other assets
|
15,350
|
|
|
14,534
|
|
||
Total assets
|
$
|
766,961
|
|
|
$
|
691,522
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
136,742
|
|
|
$
|
116,316
|
|
Accrued expenses
|
71,259
|
|
|
73,647
|
|
||
Deferred revenue and customer advances
|
5,756
|
|
|
7,761
|
|
||
Total current liabilities
|
213,757
|
|
|
197,724
|
|
||
Deferred tax liabilities
|
4,005
|
|
|
9,539
|
|
||
Other long-term liabilities
|
13,877
|
|
|
13,932
|
|
||
Total long-term liabilities
|
17,882
|
|
|
23,471
|
|
||
Total liabilities
|
231,639
|
|
|
221,195
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
||||
Preferred stock, 5,000 shares authorized and none outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 100,000 shares authorized; 27,788 and 27,945 shares issued and outstanding, respectively
|
278
|
|
|
279
|
|
||
Additional paid-in capital
|
172,771
|
|
|
190,067
|
|
||
Retained earnings
|
367,021
|
|
|
277,989
|
|
||
Accumulated other comprehensive (loss) income
|
(4,748
|
)
|
|
1,992
|
|
||
Total stockholders’ equity
|
535,322
|
|
|
470,327
|
|
||
Total liabilities and stockholders’ equity
|
$
|
766,961
|
|
|
$
|
691,522
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Revenue
|
$
|
1,092,584
|
|
|
$
|
883,911
|
|
|
$
|
660,604
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|||
Cost of product revenue
|
518,612
|
|
|
438,114
|
|
|
337,832
|
|
|||
Amortization of acquired intangible assets
|
18,544
|
|
|
12,638
|
|
|
3,457
|
|
|||
Total cost of revenue
|
537,156
|
|
|
450,752
|
|
|
341,289
|
|
|||
Gross profit
|
555,428
|
|
|
433,159
|
|
|
319,315
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
140,629
|
|
|
113,149
|
|
|
79,805
|
|
|||
Selling and marketing
|
210,411
|
|
|
162,110
|
|
|
115,125
|
|
|||
General and administrative
|
97,501
|
|
|
84,771
|
|
|
66,828
|
|
|||
Amortization of acquired intangible assets
|
1,065
|
|
|
439
|
|
|
—
|
|
|||
Total operating expenses
|
449,606
|
|
|
360,469
|
|
|
261,758
|
|
|||
Operating income
|
105,822
|
|
|
72,690
|
|
|
57,557
|
|
|||
Other income, net
|
2,800
|
|
|
3,676
|
|
|
3,804
|
|
|||
Income before income taxes
|
108,622
|
|
|
76,366
|
|
|
61,361
|
|
|||
Income tax expense
|
20,630
|
|
|
25,402
|
|
|
19,422
|
|
|||
Net income
|
$
|
87,992
|
|
|
$
|
50,964
|
|
|
$
|
41,939
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.18
|
|
|
$
|
1.85
|
|
|
$
|
1.51
|
|
Diluted
|
$
|
3.07
|
|
|
$
|
1.77
|
|
|
$
|
1.48
|
|
Number of shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic
|
27,692
|
|
|
27,611
|
|
|
27,698
|
|
|||
Diluted
|
28,640
|
|
|
28,753
|
|
|
28,292
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Net income
|
$
|
87,992
|
|
|
$
|
50,964
|
|
|
$
|
41,939
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Net foreign currency translation adjustments
|
(5,896
|
)
|
|
1,994
|
|
|
—
|
|
|||
Net unrealized (losses) gains on cash flow hedges, net of tax
|
(327
|
)
|
|
490
|
|
|
—
|
|
|||
Net gains on cash flow hedge reclassified into earnings, net of tax
|
(499
|
)
|
|
(295
|
)
|
|
—
|
|
|||
Net unrealized (losses) gains on marketable securities, net of tax
|
(18
|
)
|
|
(46
|
)
|
|
85
|
|
|||
Total comprehensive income
|
$
|
81,252
|
|
|
$
|
53,107
|
|
|
$
|
42,024
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Value
|
|
||||||||||||||||||
Balance at January 2, 2016
|
29,092
|
|
|
$
|
291
|
|
|
$
|
232,345
|
|
|
$
|
185,011
|
|
|
$
|
(236
|
)
|
|
$
|
417,411
|
|
Issuance of common stock under employee stock plans
|
456
|
|
|
4
|
|
|
9,340
|
|
|
|
|
|
|
9,344
|
|
|||||||
Conversion of deferred compensation
|
7
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|||||||
Vesting of restricted stock units
|
364
|
|
|
4
|
|
|
(4
|
)
|
|
|
|
|
|
—
|
|
|||||||
Tax benefit of excess stock-based compensation deduction
|
|
|
|
|
2,421
|
|
|
|
|
|
|
2,421
|
|
|||||||||
Stock-based compensation
|
|
|
|
|
15,995
|
|
|
|
|
|
|
15,995
|
|
|||||||||
Stock withheld to cover tax withholdings requirements upon restricted stock vesting
|
(40
|
)
|
|
—
|
|
|
(1,300
|
)
|
|
|
|
|
|
(1,300
|
)
|
|||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
85
|
|
|
85
|
|
|||||||||
Directors' deferred compensation
|
|
|
|
|
82
|
|
|
|
|
|
|
82
|
|
|||||||||
Stock repurchases
|
(2,641
|
)
|
|
(27
|
)
|
|
(96,994
|
)
|
|
|
|
|
|
(97,021
|
)
|
|||||||
Net income
|
|
|
|
|
|
|
41,939
|
|
|
|
|
41,939
|
|
|||||||||
Balance at December 31, 2016
|
27,238
|
|
|
$
|
272
|
|
|
$
|
161,885
|
|
|
$
|
226,950
|
|
|
$
|
(151
|
)
|
|
$
|
388,956
|
|
Issuance of common stock under employee stock plans
|
367
|
|
|
4
|
|
|
10,569
|
|
|
|
|
|
|
10,573
|
|
|||||||
Conversion of deferred compensation
|
15
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|||||||
Vesting of restricted stock units
|
376
|
|
|
4
|
|
|
(4
|
)
|
|
|
|
|
|
—
|
|
|||||||
Stock-based compensation
|
|
|
|
|
19,751
|
|
|
|
|
|
|
19,751
|
|
|||||||||
Stock withheld to cover tax withholdings requirements upon restricted stock vesting
|
(51
|
)
|
|
(1
|
)
|
|
(2,982
|
)
|
|
|
|
|
|
(2,983
|
)
|
|||||||
Other comprehensive income
|
|
|
|
|
—
|
|
|
|
|
2,143
|
|
|
2,143
|
|
||||||||
Directors' deferred compensation
|
|
|
|
|
65
|
|
|
|
|
|
|
65
|
|
|||||||||
Cumulative effect of a change in accounting principle related to stock-based compensation
|
|
|
|
|
783
|
|
|
75
|
|
|
|
|
858
|
|
||||||||
Net income
|
|
|
|
|
|
|
50,964
|
|
|
|
|
50,964
|
|
|||||||||
Balance at December 30, 2017
|
27,945
|
|
|
$
|
279
|
|
|
$
|
190,067
|
|
|
$
|
277,989
|
|
|
$
|
1,992
|
|
|
$
|
470,327
|
|
Issuance of common stock under employee stock plans
|
285
|
|
|
3
|
|
|
10,363
|
|
|
|
|
|
|
10,366
|
|
|||||||
Vesting of restricted stock units
|
408
|
|
|
4
|
|
|
(4
|
)
|
|
|
|
|
|
—
|
|
|||||||
Stock-based compensation
|
|
|
|
|
25,804
|
|
|
|
|
|
|
25,804
|
|
|||||||||
Stock withheld to cover tax withholdings requirements upon restricted stock vesting
|
(51
|
)
|
|
—
|
|
|
(3,532
|
)
|
|
|
|
|
|
(3,532
|
)
|
|||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(6,740
|
)
|
|
(6,740
|
)
|
|||||||||
Directors' deferred compensation
|
|
|
|
|
65
|
|
|
|
|
|
|
65
|
|
|||||||||
Stock repurchases
|
(799
|
)
|
|
(8
|
)
|
|
(49,992
|
)
|
|
|
|
|
|
(50,000
|
)
|
|||||||
Cumulative effect of a change in accounting principle related to adoption of ASC 606
|
|
|
|
|
|
|
1,040
|
|
|
|
|
|
1,040
|
|
||||||||
Net income
|
|
|
|
|
|
|
87,992
|
|
|
|
|
87,992
|
|
|||||||||
Balance at December 29, 2018
|
27,788
|
|
|
$
|
278
|
|
|
$
|
172,771
|
|
|
$
|
367,021
|
|
|
$
|
(4,748
|
)
|
|
$
|
535,322
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
87,992
|
|
|
$
|
50,964
|
|
|
$
|
41,939
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
36,574
|
|
|
25,499
|
|
|
13,606
|
|
|||
Gain on business acquisition
|
—
|
|
|
(2,243
|
)
|
|
—
|
|
|||
Stock-based compensation
|
25,804
|
|
|
19,751
|
|
|
15,995
|
|
|||
Deferred income taxes, net
|
(10,848
|
)
|
|
(999
|
)
|
|
3,557
|
|
|||
Tax benefit of excess stock-based compensation deductions
|
—
|
|
|
—
|
|
|
(2,971
|
)
|
|||
Deferred rent
|
1,374
|
|
|
—
|
|
|
—
|
|
|||
Other
|
463
|
|
|
864
|
|
|
(2,361
|
)
|
|||
Changes in operating assets and liabilities — (use) source
|
|
|
|
|
|
||||||
Accounts receivable
|
(23,920
|
)
|
|
(53,251
|
)
|
|
25,682
|
|
|||
Inventory
|
(58,546
|
)
|
|
(1,470
|
)
|
|
(981
|
)
|
|||
Other assets
|
(8,533
|
)
|
|
(10,562
|
)
|
|
3,187
|
|
|||
Accounts payable
|
22,470
|
|
|
17,457
|
|
|
6,502
|
|
|||
Accrued expenses
|
(3,618
|
)
|
|
23,447
|
|
|
10,181
|
|
|||
Deferred revenue and customer advances
|
2,392
|
|
|
2,149
|
|
|
2,996
|
|
|||
Long-term liabilities
|
81
|
|
|
4,709
|
|
|
(908
|
)
|
|||
Net cash provided by operating activities
|
71,685
|
|
|
76,315
|
|
|
116,424
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions of property and equipment
|
(32,422
|
)
|
|
(23,371
|
)
|
|
(10,817
|
)
|
|||
Change in other assets
|
(2,363
|
)
|
|
(1,542
|
)
|
|
(2,093
|
)
|
|||
Proceeds from sale of equity investments
|
856
|
|
|
1,267
|
|
|
634
|
|
|||
Proceeds from sale of business unit
|
—
|
|
|
—
|
|
|
23,520
|
|
|||
Cash paid for business acquisitions, net of cash acquired
|
—
|
|
|
(148,765
|
)
|
|
—
|
|
|||
Purchases of investments
|
(6,438
|
)
|
|
(10,578
|
)
|
|
(16,554
|
)
|
|||
Sales and maturities of investments
|
14,000
|
|
|
13,066
|
|
|
9,500
|
|
|||
Net cash (used in) provided by investing activities
|
(26,367
|
)
|
|
(169,923
|
)
|
|
4,190
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from employee stock plans
|
10,366
|
|
|
10,573
|
|
|
9,344
|
|
|||
Income tax withholding payment associated with restricted stock vesting
|
(3,532
|
)
|
|
(2,983
|
)
|
|
(1,300
|
)
|
|||
Stock repurchases
|
(50,000
|
)
|
|
—
|
|
|
(97,021
|
)
|
|||
Tax benefit of excess stock-based compensation deductions
|
—
|
|
|
—
|
|
|
2,971
|
|
|||
Net cash (used in) provided by financing activities
|
(43,166
|
)
|
|
7,590
|
|
|
(86,006
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(414
|
)
|
|
130
|
|
|
—
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
1,738
|
|
|
(85,888
|
)
|
|
34,608
|
|
|||
Cash and cash equivalents, at beginning of period
|
128,635
|
|
|
214,523
|
|
|
179,915
|
|
|||
Cash and cash equivalents, at end of period
|
$
|
130,373
|
|
|
$
|
128,635
|
|
|
$
|
214,523
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
39,517
|
|
|
$
|
25,879
|
|
|
$
|
14,061
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Additions of property and equipment included in accounts payable
|
$
|
2,795
|
|
|
$
|
5,001
|
|
|
$
|
1,550
|
|
1.
|
Nature of the Business
|
2.
|
Summary of Significant Accounting Policies
|
|
December 29,
2018 |
|
December 30,
2017 |
||||||||||||
|
Cost
|
|
Fair
Market Value |
|
Cost
|
|
Fair
Market Value |
||||||||
Corporate and government bonds
|
$
|
30,035
|
|
|
$
|
29,605
|
|
|
$
|
37,767
|
|
|
$
|
37,225
|
|
Convertible note
|
2,000
|
|
|
2,000
|
|
|
—
|
|
|
—
|
|
||||
Total short term investments
|
$
|
32,035
|
|
|
$
|
31,605
|
|
|
$
|
37,767
|
|
|
$
|
37,225
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Allowance for product returns
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
42,693
|
|
|
$
|
27,673
|
|
|
$
|
25,992
|
|
Acquired balance
|
—
|
|
|
6,088
|
|
|
—
|
|
|||
Provision
|
68,476
|
|
|
54,981
|
|
|
33,992
|
|
|||
Deduction
|
(56,164
|
)
|
|
(43,831
|
)
|
|
(28,826
|
)
|
|||
Other adjustments
|
(1,085
|
)
|
|
(2,218
|
)
|
|
(3,485
|
)
|
|||
Balance at end of period
|
$
|
53,920
|
|
|
$
|
42,693
|
|
|
$
|
27,673
|
|
|
|
|
|
|
|
||||||
Allowance for other credits and incentives
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
61,359
|
|
|
$
|
23,658
|
|
|
$
|
23,005
|
|
Acquired balance
|
—
|
|
|
11,932
|
|
|
—
|
|
|||
Adjustment related to adoption of ASC 606
|
1,192
|
|
|
—
|
|
|
—
|
|
|||
Provision
|
198,371
|
|
|
110,605
|
|
|
47,419
|
|
|||
Deduction
|
(161,672
|
)
|
|
(81,269
|
)
|
|
(46,610
|
)
|
|||
Other adjustments
|
(1,513
|
)
|
|
(3,567
|
)
|
|
(156
|
)
|
|||
Balance at end of period
|
$
|
97,737
|
|
|
$
|
61,359
|
|
|
$
|
23,658
|
|
|
Estimated Useful Life
|
|
Computer and research equipment
|
2-5 years
|
|
Furniture
|
5
|
|
Machinery
|
2-5
|
|
Tooling
|
2-5
|
|
Business applications software
|
3-7
|
|
Leasehold improvements
|
Lesser of economic benefit period or term of lease
|
|
•
|
Level 2 - inputs other than quoted prices in active markets that are either directly or indirectly observable; and
|
•
|
Level 3 - unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Net income
|
$
|
87,992
|
|
|
$
|
50,964
|
|
|
$
|
41,939
|
|
Weighted-average shares outstanding
|
27,692
|
|
|
27,611
|
|
|
27,698
|
|
|||
Dilutive effect of employee stock options and restricted stock units
|
948
|
|
|
1,142
|
|
|
594
|
|
|||
Diluted weighted-average shares outstanding
|
28,640
|
|
|
28,753
|
|
|
28,292
|
|
|||
Basic income per share
|
$
|
3.18
|
|
|
$
|
1.85
|
|
|
$
|
1.51
|
|
Diluted income per share
|
$
|
3.07
|
|
|
$
|
1.77
|
|
|
$
|
1.48
|
|
3.
|
Revenue Recognition
|
|
December 29, 2018
|
||
Americas
|
$
|
610,294
|
|
EMEA
|
311,659
|
|
|
APAC
|
170,631
|
|
|
Total revenue
|
$
|
1,092,584
|
|
|
December 29, 2018
(closing balance)
|
|
December 31, 2017
(opening balance)
|
||||
Accounts receivable, net
|
$
|
162,166
|
|
|
$
|
141,637
|
|
Contract liabilities
|
5,756
|
|
|
6,685
|
|
4.
|
Business Combinations
|
Cash
|
$
|
37,981
|
|
Accounts receivable, net (1)
|
21,426
|
|
|
Inventory
|
36,304
|
|
|
Goodwill
|
80,419
|
|
|
Intangible assets
|
36,597
|
|
|
Other assets
|
2,456
|
|
|
Total assets
|
215,183
|
|
|
|
|
||
Accounts payable
|
(29,391
|
)
|
|
Accrued expenses
|
(3,376
|
)
|
|
Deferred tax liabilities
|
(10,864
|
)
|
|
Other liabilities
|
(2,138
|
)
|
|
Total liabilities assumed
|
(45,769
|
)
|
|
Net assets acquired
|
$
|
169,414
|
|
|
|
Useful Life
|
|
Fair Value
|
||
Reacquired distribution rights
|
|
2.25 years
|
|
$
|
29,296
|
|
Customer relationships
|
|
14 years
|
|
7,029
|
|
|
Non-competition agreements
|
|
3 years
|
|
272
|
|
|
Total
|
|
|
|
$
|
36,597
|
|
Cash
|
$
|
125
|
|
Accounts receivable, net (1)
|
(5,496
|
)
|
|
Inventory
|
18,290
|
|
|
Other assets
|
2,065
|
|
|
Deferred tax assets, net
|
409
|
|
|
Goodwill
|
—
|
|
|
Intangible assets
|
8,640
|
|
|
Total assets acquired
|
24,033
|
|
|
|
|
||
Accrued expenses and other current liabilities
|
(4,450
|
)
|
|
Other liabilities
|
(691
|
)
|
|
Total liabilities assumed
|
(5,141
|
)
|
|
Net assets acquired
|
$
|
18,892
|
|
Gain on business acquisition
|
(2,243
|
)
|
|
Total purchase price
|
$
|
16,649
|
|
|
|
Useful Life
|
|
Fair Value
|
||
Customer relationships
|
|
13 years
|
|
$
|
4,490
|
|
Reacquired distribution rights
|
|
9 months
|
|
4,150
|
|
|
Total
|
|
|
|
$
|
8,640
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Revenue
|
$
|
1,092,584
|
|
|
$
|
901,612
|
|
|
$
|
718,917
|
|
Net income
|
87,992
|
|
|
51,887
|
|
|
53,320
|
|
|||
Net income per share:
|
|
|
|
|
|
||||||
Basic income per share
|
$
|
3.18
|
|
|
$
|
1.88
|
|
|
$
|
1.93
|
|
Diluted income per share
|
$
|
3.07
|
|
|
$
|
1.80
|
|
|
$
|
1.88
|
|
5.
|
Inventory
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Raw materials
|
$
|
2,992
|
|
|
$
|
4,036
|
|
Finished goods
|
161,641
|
|
|
102,896
|
|
||
|
$
|
164,633
|
|
|
$
|
106,932
|
|
6.
|
Property and Equipment
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Computer and equipment
|
$
|
12,339
|
|
|
$
|
10,669
|
|
Furniture
|
5,231
|
|
|
4,120
|
|
||
Machinery
|
20,606
|
|
|
14,202
|
|
||
Tooling
|
39,675
|
|
|
31,783
|
|
||
Leasehold improvements
|
28,701
|
|
|
26,136
|
|
||
Business applications software
|
15,638
|
|
|
12,757
|
|
||
Subtotal
|
122,190
|
|
|
99,667
|
|
||
Less: accumulated depreciation
|
65,164
|
|
|
55,088
|
|
||
Property and equipment, net
|
$
|
57,026
|
|
|
$
|
44,579
|
|
7.
|
Goodwill and other intangible assets
|
Balance as of December 31, 2016
|
$
|
41,041
|
|
Acquisitions (Note 4)
|
79,558
|
|
|
Effect of foreign currency translation
|
841
|
|
|
Balance as of December 30, 2017
|
121,440
|
|
|
Purchase accounting adjustments (Note 4)
|
830
|
|
|
Effect of foreign currency translation
|
(3,374
|
)
|
|
Balance as of December 29, 2018
|
$
|
118,896
|
|
|
December 29, 2018
|
|
December 30, 2017
|
||||||||||||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Completed technology
|
$
|
26,900
|
|
|
$
|
21,607
|
|
|
$
|
5,293
|
|
|
$
|
26,900
|
|
|
$
|
18,150
|
|
|
$
|
8,750
|
|
Tradename
|
100
|
|
|
100
|
|
|
—
|
|
|
100
|
|
|
100
|
|
|
—
|
|
||||||
Customer relationships
|
11,291
|
|
|
1,365
|
|
|
9,926
|
|
|
11,594
|
|
|
418
|
|
|
11,176
|
|
||||||
Reacquired distribution rights
|
32,499
|
|
|
23,598
|
|
|
8,901
|
|
|
33,760
|
|
|
9,226
|
|
|
24,534
|
|
||||||
Non-competition agreements
|
263
|
|
|
110
|
|
|
153
|
|
|
275
|
|
|
23
|
|
|
252
|
|
||||||
Total
|
$
|
71,053
|
|
|
$
|
46,780
|
|
|
$
|
24,273
|
|
|
$
|
72,629
|
|
|
$
|
27,917
|
|
|
$
|
44,712
|
|
|
Cost of Revenue
|
|
Operating Expenses
|
|
Total
|
||||||
2019
|
$
|
11,719
|
|
|
$
|
1,042
|
|
|
$
|
12,761
|
|
2020
|
900
|
|
|
1,020
|
|
|
1,920
|
|
|||
2021
|
900
|
|
|
794
|
|
|
1,694
|
|
|||
2022
|
675
|
|
|
794
|
|
|
1,469
|
|
|||
2023
|
—
|
|
|
794
|
|
|
794
|
|
|||
Thereafter
|
—
|
|
|
5,635
|
|
|
5,635
|
|
|||
Total
|
$
|
14,194
|
|
|
$
|
10,079
|
|
|
$
|
24,273
|
|
8.
|
Accrued Expenses
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Accrued bonus
|
$
|
21,226
|
|
|
$
|
20,443
|
|
Accrued warranty
|
11,964
|
|
|
11,264
|
|
||
Accrued sales and other taxes
|
11,397
|
|
|
7,256
|
|
||
Accrued other compensation
|
10,518
|
|
|
9,071
|
|
||
Accrued direct fulfillment costs
|
5,372
|
|
|
1,885
|
|
||
Accrued accounting fees
|
2,052
|
|
|
1,221
|
|
||
Accrued federal and state income taxes
|
1,936
|
|
|
7,110
|
|
||
Accrued other
|
6,794
|
|
|
15,397
|
|
||
|
$
|
71,259
|
|
|
$
|
73,647
|
|
9.
|
Working Capital Facility
|
10.
|
Derivative Instruments and Hedging Activities
|
|
|
|
Fair Value
|
||||||
|
Classification
|
|
December 29, 2018
|
|
December 30, 2017
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|||||
Foreign currency forward contracts
|
Other current assets
|
|
$
|
551
|
|
|
$
|
413
|
|
Foreign currency forward contracts
|
Accrued expenses
|
|
—
|
|
|
221
|
|
||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|||||
Foreign currency forward contracts
|
Other current assets
|
|
$
|
53
|
|
|
$
|
488
|
|
Foreign currency forward contracts
|
Other assets
|
|
172
|
|
|
116
|
|
||
Foreign currency forward contracts
|
Accrued expenses
|
|
335
|
|
|
279
|
|
||
Foreign currency forward contracts
|
Long-term liabilities
|
|
795
|
|
|
—
|
|
|
|
|
Fiscal year ended
|
||||||
|
Classification
|
|
December 29, 2018
|
|
December 30, 2017
|
||||
Gain (loss) recognized in income
|
Other income, net
|
|
$
|
1,568
|
|
|
$
|
(444
|
)
|
|
|
Gain (loss) recognized in OCI on Derivative (1)
|
||||||
|
|
Fiscal year ended
|
||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
||||
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
$
|
(686
|
)
|
|
$
|
584
|
|
|
|
|
|
|
(1)
|
The amount represents the change in fair value of derivative contracts due to changes in spot rates.
|
|
|
Gain (loss) recognized in earnings on cash flow hedging instruments
|
||||||||||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
||||||||||||
|
|
Revenue
|
|
Cost of revenue
|
|
Revenue
|
|
Cost of revenue
|
||||||||
Consolidated statements of income in which the effects of cash flow hedging instruments are recorded
|
|
$
|
1,092,584
|
|
|
$
|
537,156
|
|
|
$
|
883,911
|
|
|
$
|
450,752
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gain or (loss) on cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts:
|
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from AOCI into earnings
|
|
$
|
948
|
|
|
$
|
(386
|
)
|
|
$
|
320
|
|
|
$
|
(63
|
)
|
11.
|
Fair Value Measurements
|
|
Fair Value Measurements as of
|
||||||||||
|
December 29, 2018
|
||||||||||
|
Level 1
|
|
Level 2 (1)
|
|
Level 3 (2)
|
||||||
Assets:
|
|
|
|
|
|
||||||
Money market funds
|
$
|
3,730
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate and government bonds, $30,035 at cost (3)
|
—
|
|
|
29,605
|
|
|
—
|
|
|||
Convertible note
|
—
|
|
|
—
|
|
|
2,000
|
|
|||
Derivative instruments (Note 10)
|
—
|
|
|
776
|
|
|
—
|
|
|||
Total assets measured at fair value
|
$
|
3,730
|
|
|
$
|
30,381
|
|
|
$
|
2,000
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Derivative instruments (Note 10)
|
$
|
—
|
|
|
$
|
1,130
|
|
|
$
|
—
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
1,130
|
|
|
$
|
—
|
|
|
Fair Value Measurements as of
|
||||||||||
|
December 30, 2017
|
||||||||||
|
Level 1
|
|
Level 2 (1)
|
|
Level 3 (2)
|
||||||
Assets:
|
|
|
|
|
|
||||||
Money market funds
|
$
|
3,165
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate and government bonds, $37,767 at cost
|
—
|
|
|
37,225
|
|
|
—
|
|
|||
Derivative instruments (Note 10)
|
—
|
|
|
1,017
|
|
|
—
|
|
|||
Total assets measured at fair value
|
$
|
3,165
|
|
|
$
|
38,242
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Derivative instruments (Note 10)
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
—
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
—
|
|
(1)
|
Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
(2)
|
Level 3 fair value estimates are based on inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities.
|
(3)
|
As of December 29, 2018, the Company’s investments had maturity dates ranging from March 2019 to March 2021.
|
Balance as of December 30, 2017
|
$
|
—
|
|
Investment
|
2,000
|
|
|
Balance as of December 29, 2018
|
$
|
2,000
|
|
12.
|
Stockholders' Equity
|
13.
|
Stock-Based Compensation
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Cost of revenue
|
$
|
1,407
|
|
|
$
|
1,082
|
|
|
$
|
760
|
|
Research and development
|
7,494
|
|
|
5,009
|
|
|
3,646
|
|
|||
Selling and marketing
|
2,842
|
|
|
2,571
|
|
|
2,008
|
|
|||
General and administrative
|
14,061
|
|
|
11,089
|
|
|
9,581
|
|
|||
Total
|
$
|
25,804
|
|
|
$
|
19,751
|
|
|
$
|
15,995
|
|
|
Number of
Shares
|
|
Weighted Average
Exercise Price
|
|
Weighted Average
Remaining
Contractual Term
|
|
Aggregate
Intrinsic
Value(1)
|
|||
Outstanding at January 2, 2016
|
1,287,550
|
|
|
$
|
26.73
|
|
|
|
|
|
Granted
|
314,770
|
|
|
38.03
|
|
|
|
|
|
|
Exercised
|
(456,498
|
)
|
|
20.47
|
|
|
|
|
|
|
Canceled
|
(57,648
|
)
|
|
33.28
|
|
|
|
|
|
|
Outstanding at December 31, 2016
|
1,088,174
|
|
|
$
|
32.27
|
|
|
|
|
|
Granted
|
10,975
|
|
|
57.33
|
|
|
|
|
|
|
Exercised
|
(367,267
|
)
|
|
28.79
|
|
|
|
|
|
|
Canceled
|
(18,928
|
)
|
|
36.72
|
|
|
|
|
|
|
Outstanding at December 30, 2017
|
712,954
|
|
|
$
|
34.34
|
|
|
|
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|
Exercised
|
(239,830
|
)
|
|
33.40
|
|
|
|
|
|
|
Canceled
|
(10,863
|
)
|
|
46.20
|
|
|
|
|
|
|
Outstanding at December 29, 2018
|
462,261
|
|
|
$
|
34.55
|
|
|
3.58 years
|
|
$21.6 million
|
Vested and expected to vest at December 29, 2018
|
462,261
|
|
|
$
|
34.55
|
|
|
3.58 years
|
|
$21.6 million
|
Exercisable as of December 29, 2018
|
317,997
|
|
|
$
|
33.10
|
|
|
3.26 years
|
|
$15.3 million
|
(1)
|
The aggregate intrinsic value on the table above represents the difference between the Company's closing stock price on
December 29, 2018
of
$81.32
and the exercise price of the underlying in-the-money option.
|
|
Fiscal Year Ended
|
||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
Risk-free interest rate
|
—
|
|
2.11%
|
|
1.17% — 1.89%
|
Expected dividend yield
|
—
|
|
—
|
|
—
|
Expected life
|
—
|
|
4.01 years
|
|
4.01 — 4.03 years
|
Expected volatility
|
—
|
|
38.0%
|
|
38.9% — 42.1%
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Number
Outstanding
|
|
Weighted Average
Remaining
Contractual Life
|
|
Weighted Average
Exercise Price
|
Number
Exercisable
|
|
Weighted Average
Exercise Price
|
|||||||
$ 3.54 - $ 22.86
|
|
46,918
|
|
|
1.55 years
|
|
$
|
19.84
|
|
|
46,918
|
|
|
$
|
19.84
|
|
26.59 - 32.38
|
|
83,084
|
|
|
3.51
|
|
30.98
|
|
|
62,968
|
|
|
31.05
|
|
||
33.14 - 33.14
|
|
85,984
|
|
|
4.19
|
|
33.14
|
|
|
48,436
|
|
|
33.14
|
|
||
33.29 - 34.30
|
|
71,864
|
|
|
3.26
|
|
34.07
|
|
|
57,664
|
|
|
34.07
|
|
||
35.43 - 37.08
|
|
28,276
|
|
|
2.52
|
|
35.69
|
|
|
28,276
|
|
|
35.69
|
|
||
37.62 - 37.62
|
|
78,419
|
|
|
4.44
|
|
37.62
|
|
|
38,874
|
|
|
37.62
|
|
||
39.09 - 39.09
|
|
23,367
|
|
|
4.70
|
|
39.09
|
|
|
7,566
|
|
|
39.09
|
|
||
43.35 - 43.35
|
|
19,194
|
|
|
2.19
|
|
43.35
|
|
|
19,194
|
|
|
43.35
|
|
||
57.33 - 57.33
|
|
8,046
|
|
|
5.19
|
|
57.33
|
|
|
2,985
|
|
|
57.33
|
|
||
58.55 - 58.55
|
|
17,109
|
|
|
4.95
|
|
58.55
|
|
|
5,116
|
|
|
58.55
|
|
||
$ 3.54 - $58.55
|
|
462,261
|
|
|
3.58 years
|
|
$
|
34.55
|
|
|
317,997
|
|
|
$
|
33.10
|
|
|
Number of
Shares Underlying
Restricted Stock
|
|
Weighted Average
Grant Date Fair
Value
|
|||
Outstanding at January 2, 2016
|
933,877
|
|
|
$
|
31.42
|
|
Granted
|
458,237
|
|
|
37.93
|
|
|
Vested
|
(358,018
|
)
|
|
30.81
|
|
|
Forfeited
|
(98,917
|
)
|
|
32.13
|
|
|
Outstanding at December 31, 2016
|
935,179
|
|
|
$
|
35.07
|
|
Granted
|
396,164
|
|
|
72.63
|
|
|
Vested
|
(351,543
|
)
|
|
33.73
|
|
|
Forfeited
|
(41,347
|
)
|
|
39.52
|
|
|
Outstanding at December 30, 2017
|
938,453
|
|
|
$
|
51.24
|
|
Granted
|
307,614
|
|
|
81.55
|
|
|
Vested
|
(351,816
|
)
|
|
47.30
|
|
|
Forfeited
|
(38,362
|
)
|
|
60.62
|
|
|
Outstanding at December 29, 2018
|
855,889
|
|
|
$
|
63.32
|
|
|
Number of
Shares Underlying PSU (1) |
|
Weighted Average
Grant Date Fair Value |
|||
Outstanding at January 2, 2016
|
90,492
|
|
|
$
|
36.78
|
|
Granted
|
82,085
|
|
|
33.36
|
|
|
Vested
|
(5,625
|
)
|
|
34.30
|
|
|
Forfeited
|
(3,041
|
)
|
|
34.30
|
|
|
Outstanding at December 31, 2016
|
163,911
|
|
|
$
|
35.03
|
|
Granted
|
105,650
|
|
|
57.33
|
|
|
Vested
|
(24,792
|
)
|
|
43.35
|
|
|
Forfeited
|
(2,708
|
)
|
|
39.71
|
|
|
Outstanding at December 30, 2017
|
242,061
|
|
|
$
|
43.97
|
|
Granted
|
91,538
|
|
|
68.41
|
|
|
Vested
|
(56,259
|
)
|
|
34.30
|
|
|
Forfeited
|
(3,221
|
)
|
|
45.71
|
|
|
Outstanding at December 29, 2018
|
274,119
|
|
|
$
|
54.10
|
|
14.
|
Commitments and Contingencies
|
|
Operating
Leases
|
||
2019
|
$
|
7,848
|
|
2020
|
7,397
|
|
|
2021
|
7,345
|
|
|
2022
|
7,292
|
|
|
2023
|
7,021
|
|
|
Thereafter
|
34,806
|
|
|
Total minimum lease payments
|
$
|
71,709
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Balance at beginning of period
|
$
|
11,264
|
|
|
$
|
8,464
|
|
|
$
|
6,907
|
|
Liability assumed (1)
|
—
|
|
|
2,186
|
|
|
—
|
|
|||
Provision
|
10,798
|
|
|
8,591
|
|
|
7,494
|
|
|||
Warranty usage (2)
|
(10,098
|
)
|
|
(7,977
|
)
|
|
(5,937
|
)
|
|||
Balance at end of period
|
$
|
11,964
|
|
|
$
|
11,264
|
|
|
$
|
8,464
|
|
(1)
|
Warranty assumed as part of the acquisition of the iRobot-related distribution business of Sales On Demand Corporation.
|
(2)
|
Warranty usage includes costs incurred for warranty obligations.
|
15.
|
Employee Benefits
|
16.
|
Income Taxes
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Domestic
|
113,078
|
|
|
71,382
|
|
|
61,706
|
|
|||
Foreign
|
(4,456
|
)
|
|
4,984
|
|
|
(345
|
)
|
|||
Income before income taxes
|
$
|
108,622
|
|
|
$
|
76,366
|
|
|
$
|
61,361
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
17,627
|
|
|
$
|
17,555
|
|
|
$
|
17,639
|
|
State
|
3,676
|
|
|
1,691
|
|
|
1,054
|
|
|||
Foreign
|
10,732
|
|
|
7,355
|
|
|
310
|
|
|||
Total current income tax provision
|
32,035
|
|
|
26,601
|
|
|
19,003
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
$
|
(2,475
|
)
|
|
$
|
6,664
|
|
|
$
|
781
|
|
State
|
(1,149
|
)
|
|
(2,470
|
)
|
|
(95
|
)
|
|||
Foreign
|
(7,781
|
)
|
|
(5,393
|
)
|
|
(267
|
)
|
|||
Total deferred income tax provision
|
(11,405
|
)
|
|
(1,199
|
)
|
|
419
|
|
|||
Total income tax provision
|
$
|
20,630
|
|
|
$
|
25,402
|
|
|
$
|
19,422
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29,
2018 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Statutory federal income tax
|
$
|
22,812
|
|
|
$
|
26,728
|
|
|
$
|
21,476
|
|
Miscellaneous permanent items
|
1,837
|
|
|
2,979
|
|
|
516
|
|
|||
State taxes (net of federal benefit)
|
4,312
|
|
|
2,089
|
|
|
1,360
|
|
|||
Federal and state credits
|
(5,638
|
)
|
|
(4,486
|
)
|
|
(2,233
|
)
|
|||
Domestic production activities deduction
|
—
|
|
|
(1,528
|
)
|
|
(1,731
|
)
|
|||
Excess tax benefits relating to stock-based compensation
|
(6,529
|
)
|
|
(11,709
|
)
|
|
—
|
|
|||
Tax Cuts and Jobs Act of 2017
|
2,127
|
|
|
11,861
|
|
|
—
|
|
|||
Foreign-derived intangible income deduction
|
(2,678
|
)
|
|
—
|
|
|
—
|
|
|||
EMEA business restructuring
|
2,292
|
|
|
—
|
|
|
—
|
|
|||
Other
|
2,095
|
|
|
(532
|
)
|
|
34
|
|
|||
|
$
|
20,630
|
|
|
$
|
25,402
|
|
|
$
|
19,422
|
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Deferred tax assets
|
|
|
|
||||
Reserves and accruals
|
$
|
27,991
|
|
|
$
|
24,315
|
|
Tax credits and net operating loss carryforwards
|
7,781
|
|
|
6,810
|
|
||
Property and equipment
|
1,360
|
|
|
1,382
|
|
||
Stock-based compensation
|
4,975
|
|
|
4,277
|
|
||
Gross deferred tax assets
|
42,107
|
|
|
36,784
|
|
||
Valuation allowance
|
(1,148
|
)
|
|
(800
|
)
|
||
Total deferred tax assets
|
40,959
|
|
|
35,984
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Intangible assets
|
7,317
|
|
|
13,419
|
|
||
Other
|
668
|
|
|
573
|
|
||
Total deferred tax liabilities
|
7,985
|
|
|
13,992
|
|
||
Net deferred tax assets
|
$
|
32,974
|
|
|
$
|
21,992
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 29, 2018
|
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Balance at beginning of period
|
$
|
4,590
|
|
|
$
|
5,146
|
|
|
$
|
6,616
|
|
Increase for tax positions related to the current year
|
2,891
|
|
|
580
|
|
|
2,851
|
|
|||
Increase for tax positions related to acquisition
|
1,493
|
|
|
—
|
|
|
—
|
|
|||
Increase (decrease) for tax positions related to prior years
|
407
|
|
|
(523
|
)
|
|
(4,224
|
)
|
|||
Decreases for settlements with applicable taxing authorities
|
(2,262
|
)
|
|
—
|
|
|
—
|
|
|||
Decreases for lapses of statute of limitations
|
—
|
|
|
(613
|
)
|
|
(97
|
)
|
|||
Balance at end of period
|
$
|
7,119
|
|
|
$
|
4,590
|
|
|
$
|
5,146
|
|
17.
|
Industry Segment, Geographic Information and Significant Customers
|
18.
|
Quarterly Information (Unaudited)
|
|
Fiscal Quarter Ended
|
||||||||||||||||||||||||||||||
|
December 29,
2018 |
|
September 29,
2018 |
|
June 30,
2018 |
|
March 31,
2018 |
|
December 30,
2017 |
|
September 30,
2017 |
|
July 1,
2017 |
|
April 1,
2017 |
||||||||||||||||
Revenue
|
$
|
384,665
|
|
|
$
|
264,534
|
|
|
$
|
226,317
|
|
|
$
|
217,068
|
|
|
$
|
326,897
|
|
|
$
|
205,399
|
|
|
$
|
183,148
|
|
|
$
|
168,467
|
|
Gross profit
|
186,511
|
|
|
135,206
|
|
|
117,926
|
|
|
115,785
|
|
|
153,542
|
|
|
102,383
|
|
|
89,891
|
|
|
87,343
|
|
||||||||
Net income
|
25,191
|
|
|
31,929
|
|
|
10,471
|
|
|
20,401
|
|
|
4,620
|
|
|
22,082
|
|
|
7,903
|
|
|
16,359
|
|
||||||||
Diluted earnings per share
|
$
|
0.88
|
|
|
$
|
1.12
|
|
|
$
|
0.37
|
|
|
$
|
0.71
|
|
|
$
|
0.16
|
|
|
$
|
0.76
|
|
|
$
|
0.27
|
|
|
$
|
0.58
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibits — See item 15(b) of this report below
|
(b)
|
Exhibits
|
Exhibit
Number |
|
Description
|
|
Asset Purchase Agreement, dated as of February 2, 2016, by and between the Registrant and iRobot Defense Holdings, Inc. (filed as Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on February 4, 2016 and incorporated by reference herein)
|
|
|
Share Purchase Agreement, dated as of July 25, 2017, by and among the Registrant, iRobot UK Ltd., Robopolis SAS, the shareholders of Robopolis SAS named therein, and the Shareholders’ Representative named therein (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on July 26, 2017 and incorporated by reference herein)
|
|
|
Form of Second Amended and Restated Certificate of Incorporation of the Registrant dated November 15, 2005
|
|
|
Amended and Restated By-laws of the Registrant (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on March 9, 2016 and incorporated by reference herein)
|
|
|
Specimen Stock Certificate for shares of the Registrant’s Common Stock
|
|
|
Form of Indemnification Agreement between the Registrant and its Directors and Executive Officers
|
|
|
Form of Executive Agreement between the Registrant and certain executive officers of the Registrant, as amended (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 2, 2010 and incorporated by reference herein)
|
|
|
Employment Agreement between the Registrant and Colin Angle, dated as of January 1, 1997
|
|
|
2005 Stock Option and Incentive Plan, as amended, and forms of agreements thereunder (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 2, 2009 and incorporated by reference herein)
|
|
|
Non-Employee Directors’ Deferred Compensation Program, as amended (filed as Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K for the year ended December 29, 2007 and incorporated by reference herein)
|
|
Lease Agreement between the Registrant and Boston Properties Limited Partnership for premises located at 4-18 Crosby Drive, Bedford, Massachusetts, dated as of February 22, 2007 (as amended to date) (filed as Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2017 and incorporated by reference herein)
|
|
|
Senior Executive Incentive Compensation Plan (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2011 and incorporated by reference herein)
|
|
|
Form of Deferred Stock Award Agreement under the 2005 Stock Option and Incentive Plan (filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2008 and incorporated by reference herein)
|
|
|
Form of Restricted Stock Award Agreement under the 2005 Stock Option and Incentive Plan (filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2008 and incorporated by reference herein)
|
|
|
Manufacturing Services Agreement between the Registrant and Jabil Circuit, Inc., dated as of March 18, 2010 (as amended to date) (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2017 and incorporated by reference herein)
|
|
|
Amended and Restated Credit Agreement between the Registrant and Bank of America N.A., dated December 20, 2013 (filed as Exhibit 10.15 to the Registrant's Annual Report on Form 10-K for the year ended December 28, 2013 and incorporated by reference herein)
|
|
|
First Amendment to Amended and Restated Credit Agreement between the Registrant and Bank of America N.A., dated June 29, 2018 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 5, 2018 and incorporated by reference herein)
|
|
|
Amended and Restated Reimbursement Agreement between the Registrant and Bank of America N.A., dated December 20, 2013 (filed as Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K for the year ended December 28, 2013 and incorporated by reference herein)
|
|
|
First Amendment to Amended and Restated Reimbursement Agreement between the Registrant and Bank of America N.A., dated June 29, 2018 (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on July 5, 2018 and incorporated by reference herein)
|
|
|
Manufacturing Services Agreement between the Registrant and Kin Yat Industrial Company Limited, dated as of January 22, 2014 (as amended to date)
|
|
|
Evolution Robotics, Inc. 2007 Stock Plan and forms of agreements thereunder (filed as Exhibit 10.16 to the Registrant's Annual Report on Form 10-K for the year ended December 27, 2014 and incorporated by reference herein)
|
|
|
2015 Stock Option and Incentive Plan and forms of agreements thereunder (filed as Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 27, 2015 and incorporated by reference herein)
|
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement under the 2015 Stock Option Incentive Plan (filed as Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended April 2, 2016 and incorporated by reference herein)
|
|
|
iRobot Corporation 2017 Employee Stock Purchase Plan (filed as Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2017 and incorporated by reference herein)
|
|
|
iRobot Corporation 2018 Stock Option and Incentive Plan (filed as exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 filed on June 7, 2018 (File No. 333-225482) and incorporated by reference herein)
|
|
|
Subsidiaries of the Registrant
|
|
|
Consent of PricewaterhouseCoopers LLP
|
|
24.1
|
|
Power of Attorney (incorporated by reference to the signature page of this report on Form 10-K)
|
|
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101*
|
|
The following materials from the Registrant’s Annual Report on Form 10-K for the year ended December 29, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders' Equity, (v) the Consolidated Statements of Cash Flows, and (vi) related notes to these financial statements
|
†
|
Indicates a management contract or any compensatory plan, contract or arrangement.
|
#
|
Confidential treatment requested for portions of this document.
|
(1)
|
Incorporated by reference herein to the exhibits to the Company’s Registration Statement on Form S-1 (File No. 333-126907)
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
|
iROBOT CORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ Colin M. Angle
|
|
|
|
Colin M. Angle
Chairman of the Board,
Chief Executive Officer and Director
|
Signature
|
Title(s)
|
/s/ C
OLIN
M. A
NGLE
|
Chairman of the Board, Chief Executive Officer and Director
(Principal Executive Officer)
|
Colin M. Angle
|
|
|
|
/s/ A
LISON
D
EAN
|
Executive Vice President, Chief Financial Officer and
Treasurer (Principal Financial and Accounting Officer)
|
Alison Dean
|
|
|
|
/s/ M
OHAMAD
A
LI
|
Director
|
Mohamad Ali
|
|
|
|
/s/ M
ICHAEL
B
ELL
|
Director
|
Michael Bell
|
|
|
|
/s/ D
EBORAH
G. E
LLINGER
|
Director
|
Deborah G. Ellinger
|
|
|
|
/s/ E
LISHA
F
INNEY
|
Director
|
Elisha Finney
|
|
|
|
/s/ R
UEY-
B
IN
K
AO
|
Director
|
Ruey-Bin Kao
|
|
|
|
|
|
/s/ A
NDREW
M
ILLER
|
Director
|
Andrew Miller
|
|
|
|
/s/ M
ICHELLE
V. S
TACY
|
Director
|
Michelle V. Stacy
|
|
|
|
1
|
Definitions
.
In addition to terms defined elsewhere in this Agreement, the capitalized terms set forth below shall have the following meaning:
|
5
|
Warranty & Remedy
.
|
11
|
Forecast, Purchase Orders; Change Orders, Rescheduling and Cancellation
.
|
•
|
As soon as is commercially practical reduce or cancel Component and material orders to the extent contractually permitted.
|
•
|
Return all Components and materials to the extent contractually permitted.
|
•
|
Make all Commercially Reasonable Efforts to sell Components and materials to iRobot approved third parties.
|
•
|
Assist iRobot to determine whether current WIP should be completed, scrapped or shipped to iRobot or its designee “as is”.
|
Days Prior to
Delivery Date
|
Reschedule
Terms
|
Cancellation
Liability
|
[***] Days
|
Kin Yat is not obligated to adhere to the request, but must consider each request in good faith.
|
iRobot may not cancel a Purchase Order to be delivered within [***] days of the applicable delivery date without payment to Kin Yat for the work incurred to date.
|
[***] Days from original delivery date
|
iRobot may reschedule out the delivery, reduce quantity or cancel the order.
|
Material on hand, non-cancelable and non-returnable materials, to the extent issued under a Material Authorization by iRobot, and applicable labor charges for WIP, provided, that such liability applies only to the extent that Kin Yat is unable to reallocate such material to any existing Purchase Order of iRobot, or, if authorized by iRobot, to a purchase order of another customer of Kin Yat.
|
16
|
Confidentiality
.
|
17
|
Intellectual Property Rights
.
|
22
|
Business Continuity Plan
.
|
Notice to Kin Yat:
|
Kin Yat Industrial Company Limited
7th Floor Galaxy Factory Building
25-27 Luk Hop Street
San Po Kong, Kowloon
Hong Kong
Facsimile: (852) 2351 1867
Attn: Mr. Vincent Fung
|
|
|
with a copy to:
|
Kin Yat Holdings Limited
25-27 Luk Hop Street
San Po Kong, Kowloon
Hong Kong
Facsimile: (852) 2351 1867
Attn: General Counsel
|
|
|
Notice to iRobot:
|
iRobot Corporation
8 Crosby Drive
Bedford, MA 01730
Facsimile: (781) 430-3001
Attn: General Counsel
|
IROBOT CORPORATION
|
|
KIN YAT INDUSTRIAL COMPANY LIMITED
|
||
|
|
|
|
|
By:
|
/s/ Alison Dean
|
|
By:
|
/s/ Vincent Fung
|
|
Signature
|
|
|
Signature
|
|
|
|
|
|
Name:
|
Alison Dean
|
|
Name:
|
Vincent Fung
|
|
(Print)
|
|
|
(Print)
|
|
|
|
|
|
Title:
|
CFO
|
|
Title:
|
Director
|
|
|
|
|
|
Date:
|
1/22/14 *
|
|
Date:
|
Feb.10.2014
|
|
* agreed to be effective as of 9/23/13
|
|
|
|
(1)
|
iRobot Corporation,
a Delaware corporation with its principal place of business at 8 Crosby Drive, Bedford, Massachusetts, 01730, USA ("Buyer").
|
(2)
|
Kin Yat Industrial Co. Ltd.,
a Hong Kong Company having its place of business at 7/F Galaxy Factory Building, 25-27 Luk Hop Steet, San Po Kong, Kowloon, Hong Kong (hereinafter referred to as ("Seller")
|
Signed by a duly authorised director or officer for and on behalf of iRobot Corporation
|
|
|
|
Print full name:
|
Oscar Zamorano
|
|
Signature:
|
Position:
|
SVP Operations & Supply Chain
|
/s/ Oscar Zamorano
|
Signed by a duly authorised director or officer for and on behalf of Kin Yat Industrial Co. Ltd
|
|
|
|
Print full name:
|
Vincent Fung
|
|
Signature:
|
Position:
|
Executive Director
|
/s/ Vincent Fung
|
Signed by a duly authorised director or officer for and on behalf of iRobot Corporation
|
|
|
|
Print full name:
|
Oscar Zamorano
|
|
Signature:
|
Position:
|
SVP Operations & Supply Chain
|
/s/ Oscar Zamorano
|
|
Date:
|
|
|
|
Signed by a duly authorised director or officer for and on behalf of Kin Yat Industrial Co. Ltd
|
|
|
|
Print full name:
|
Vincent Fung
|
|
Signature:
|
Position:
|
Director
|
/s/ Vincent Fung
|
|
Date:
|
July 6, 2015
|
|
|
(1)
|
iRobot Corporation,
a Delaware corporation with its principal place of business at 8 Crosby Drive, Bedford Massachusetts, 01730, USA ("iRobot")
|
(2)
|
Kin Yat Industrial Company Ltd.,
a Hong Kong corporation, having its principal place of business at 7
/
F.,
Galaxy Factory Building, 25-27 Luk Hop Street, San Po Kong, Kowloon, Hong Kong
|
Signed by a duly authorised director or officer for and on behalf of iRobot Corporation
|
|
|
|
Print full name:
|
Oscar Zamorano
|
|
Signature:
|
Position:
|
SVP Operations & Supply Chain
|
/s/ Oscar Zamorano
|
|
Date:
|
Oct. 24, 2016
|
|
|
Signed by a duly authorised director or officer for and on behalf of Guangzhou iRobot Robot Technology Consulting Company Limited
|
|
|
|
Print full name:
|
Philip Li
|
|
Signature:
|
Position:
|
General Manager of Far East
|
/s/ Philip Li
|
|
Date:
|
Oct. 24, 2016
|
|
|
Signed by a duly authorised director or officer for and on behalf of Kin Yat Industrial Company Ltd.
|
|
|
|
Print full name:
|
FUNG Wah Cheong, Vincent
|
Signature:
|
|
Position:
|
Director
|
/s/ Vincent Fung
|
|
Date:
|
Oct. 20, 2016
|
|
|
Signed by a duly authorised director or officer for and on behalf of Kin Yat (HK) Holdings Limited
|
|
|
|
Print full name:
|
FUNG Wah Cheong, Vincent
|
Signature:
|
|
Position:
|
Director
|
/s/ Vincent Fung
|
|
Date:
|
Oct. 20, 2016
|
|
|
(1)
|
iRobot Corporation,
a Delaware corporation with its principal place of business at 8 Crosby Drive, Bedford Massachusetts, 01730, USA ("iRobot")
|
(2)
|
Kin Yat (HK) Holdings Limited,
including but not limited to its subsidiaries
Kin Yat Industrial Company Limited
and
Kin Yat (Guizhou) Robot Company limited ("Kin Yat"),
a Hong Kong corporation, having its principal place of business at 7/F., Galaxy Factory Building, 25-27 Luk Hop Street, San Po Kong, Kowloon, Hong Kong
|
Signed by a duly authorised director or officer for and on behalf of iRobot Corporation
|
|
|
|
Print full name:
|
Oscar Zamorano
|
|
Signature:
|
Position:
|
SVP Operations & Supply Chain
|
/s/ Oscar Zamarano
|
|
Date:
|
March 23, 2017
|
|
|
Signed by a duly authorised director or officer for and on behalf of Kin Yat (HK) Holdings Limited
|
|
|
|
Print full name:
|
Vincent Fung
|
|
Signature:
|
Position:
|
Director
|
/s/ Vincent Fung
|
|
Date:
|
March 23, 2017
|
|
|
Between:
|
iRobot Corporation and Kin Yat Industrial Company, Limited n/k/a Kin Yat (HK) Holdings Limited
|
(1)
|
iRobot Corporation
, a Delaware corporation with its principal place on business at 8 Crosby Drive, Bedford, Massachusetts, 01730, USA (“iRobot”)
|
(2)
|
Kin Yat (HK) Holdings Limited
, including but not limited to its subsidiaries
Kin Yat Industrial Company Limited
and
Kin Yat (Guizhou) Robot Company Limited
, a Hong Kong corporation, having its principal place of business at 7/F, Galaxy Factory Building, 25-27 Luk Hop Street, San Po Kong, Kowloon, Hong Kong (“Supplier”) (together the “Parties”)
|
Signed by a duly authorised director or officer for and on behalf of iRobot Corporation
|
|
|
|
Print full name:
|
Oscar Zamorano
|
|
Signature:
|
Position:
|
SVP Operations & Supply Chain
|
/s/ Oscar Zamarano
|
|
Date:
|
|
|
|
Signed by a duly authorised director or officer for and on behalf of Kin Yat (HK) Holdings Limited
|
|
|
|
Print full name:
|
Vincent Fung
|
|
Signature:
|
Position:
|
Director
|
/s/ Vincent Fung
|
|
Date:
|
19 April 2018
|
|
|
(1)
|
iRobot Corporation
, a Delaware corporation with its principal place of business at 8 Crosby Drive, Bedford, Massachusetts, 01730 (“
iRobot
”); and
|
(2)
|
Kin Yat Industrial Company Limited
, a Hong Kong corporation, having its principal place of business at 7/F, Galaxy Factory Building, 25-27 Luk Hop Street, San Po Kong, Kowloon, Hong Kong (“
Kin Yat
”).
|
(1)
|
If the total units of Products delivered by Kin Yat under accepted Purchase Orders for delivery in [***] exceeds [***] units, iRobot agrees to pay to Kin Yat a bonus in the amount of US$[***];
|
(2)
|
If the total units of Products delivered by Kin Yat under accepted Purchase Orders for delivery in [***] exceeds [***] units, iRobot agrees to pay to Kin Yat additional bonus in the amount of US$[***];
|
(3)
|
If the total units of Products delivered by Kin Yat under accepted Purchase Orders for delivery in [***]exceeds [***] units, iRobot agrees to pay to Kin Yat further additional bonus in the amount of US$[***];
|
(4)
|
Within [***] upon fulfillment of each of the above-mentioned delivery targets, Kin Yat shall issue an invoice to iRobot stating the exact amount of Products delivered, the SKUs and details of the relevant Purchase Orders under which the Products were delivered;
|
(5)
|
Upon receipts of the invoices and verification of contents of the same, iRobot shall pay such bonus to Kin Yat in accordance with the usual payment terms between the Parties.
|
9.2
|
Price
. The Price for each Product is set forth in Schedule 2 (the “Product Price), and includes the complete price for such Product, including the fully-costed bill of materials, Kin Yat’s Gross Margin (as defined in Schedule 2), and any and all other added fees and costs related to the Manufacturing Services, Reasonable and Customary Support Services. The Product Price for each Product shall not be increased during the period beginning on the Effective Date and ending on [***], during such time Kin Yat shall manage its supply chain and absorb any and all increases. Pricing will be reviewed by the Parties on [***] basis, on or before [***], and will be revised consistent with increases or decreases in materials, components, equipment and other costs and expenses applicable to the manufacture of the Product. By [***], Kin Yat shall provide final fixed price quotation for upcoming iRobot fiscal year. Once such final fixed price quotation has been agreed by the Parties for the upcoming iRobot fiscal year, the Product Price based on such final fixed price quotation for that fiscal year shall not be increased for whatever reason.
|
11.1
|
Forecast
. iRobot will provide to Kin Yat, on [***], a non-binding, rolling [***] planning forecasts at a core robot level and on a SKU based level, indicating iRobot’s monthly Product requirements, as amended by iRobot from time to time (each, a “
Forecast
”). Unless otherwise indicated by Kin Yat within [***] from receiving the Forecast or the amendment thereto by iRobot, Kin Yat is deemed to agree and undertake with iRobot that it will have the capacity and ability to manufacture, produce, and deliver such amount of Products as indicated in the Forecast. If Kin Yat indicates that it is not capable of manufacture, produce, and deliver such amount of Products as indicate in the Forecast within [***], the Parties shall negotiate to reach an mutually agreeable Forecast, provided that unless there is substantial change in the circumstances which is notified to iRobot in advance, Kin Yat is not entitled to unilaterally refuse to agree to the Forecast if the monthly production amount stated in such Forecast is substantially the same as the actual production volume for previous months. If Kin Yat unilaterally refuses to agree to a Forecast without notifying iRobot of any substantial change in the circumstances in advance, Kin Yat shall and undertakes to indemnify iRobot for any loss and damage it may incur due to such refusal.
|
11.2
|
Purchase Orders
. iRobot will issue orders for Products hereunder using its standard form of purchase order (“
Purchase Order
”). Each Purchase Order will identify the applicable Product by SKU, quantity, price denominated in US currency, delivery terms, and other customary terms. The Product Price stated in the Purchase Order shall be the same as agreed upon by the Parties in accordance with Clause 9.2 hereinabove. The delivery date contained in such Purchase Order shall correspond to the agreed lead time. The terms and conditions in this Agreement shall prevail over any conflicting terms and conditions in any Purchase Order. Such Purchase Orders will be issued by iRobot at least [***] prior to the date of ex-factory for all Products on each such Purchase Order. For select SKUs and as defined in Schedule 1, iRobot and Kin Yat will develop strategies to achieve [***] lead time. The total production volume in a month shall not deviate substantially from the amount stated in the correspondent Forecast for that particular month provided in accordance with Clause 11.1 above.
|
11.3
|
Purchase Order Acknowledgment
. Kin Yat will notify iRobot electronically within [***] if it utilizes EDI, or if in writing, within [***] of receipt of a Purchase Order. Unless the amount of Products stipulated in a Purchase Order exceeds the amount stated in the correspondent Forecast provided in accordance with Clause 11.1 above, Kin Yat is not entitled to refuse to accept such Purchase Order, under which circumstance such Purchase Order shall constitute a binding obligation on Kin Yat to perform its obligations in accordance with this Agreement.
|
11.6
|
Production Increases. Rescheduling Delivery
. iRobot may, in writing, request increases in production volume or acceleration of open Purchase Order at any time. Unless such request to increase production volume or acceleration of open Purchase Order would cause the production amount to exceed the relevant Forecast, Kin Yat is not entitled to refuse such request to increase production volume or acceleration of open Purchase Order and shall use its best endeavors to comply with such request in accordance with this Agreement, provided that unless the resultant total production volume in a month shall not deviate substantially from the amount stated in the correspondent Forecast for that particular month provided in accordance with Clause 11.1 above. Any such change to an open Purchase Order shall be documented in a written change order and shall become effective upon signature of iRobot. Kin Yat shall utilize its global supply network to assess availability of shared material across accounts to minimize instances in which Kin Yat is unable to meet an increase in a Purchase Order quantity requested by iRobot. It is further understood that iRobot will not incur additional charges due to Kin Yat’s decision to meet an accelerated delivery schedule or request for increased quantities by utilizing Generic Components from another account’s material.
|
Signed by a duly authorised director or officer for and on behalf of iRobot Corporation
|
|
|
|
By:
|
/s/ Christian Cerda
|
|
|
Name:
|
Christian Cerda
|
|
|
Title:
|
Chief Operating Officer
|
|
|
Date:
|
15 October 2018
|
|
|
Signed by a duly authorised director or officer for and on behalf of Kin Yat (HK) Holdings Limited
|
|
|
|
By:
|
/s/ Cheng Chor Kit
|
|
|
Name:
|
Cheng Chor Kit
|
|
|
Title:
|
Director
|
|
|
Date:
|
15 Oct 2018
|
|
|
|
|
|
Subsidiary Legal Name
|
|
Jurisdiction of Incorporation/Formation
|
|
|
|
iRobot Securities Corporation
|
|
Massachusetts
|
iRobot US Holdings Inc.
|
|
Delaware
|
iRobot Holdings LLC.
|
|
Delaware
|
iRobot (India) Private Limited
|
|
India
|
Guangzhou iRobot Technology Consulting Company Limited
|
|
China
|
Shanghai iRobot Robot Trading Co., Ltd.
|
|
China
|
iRobot (HK) Limited
|
|
Hong Kong
|
iRobot Japan G.K.
|
|
Japan
|
iRobot UK Ltd.
|
|
United Kingdom
|
iRobot France SAS
|
|
France
|
iRobot Belgium SPRL
|
|
Belgium
|
iRobot Portugal, Unipessoal Lda
|
|
Portugal
|
iRobot Austria GmbH
|
|
Austria
|
iRobot Germany GmbH
|
|
Germany
|
iRobot Netherlands B.V.
|
|
Netherlands
|
iRobot Iberia SL
|
|
Spain
|
1.
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I have reviewed this Annual Report on Form 10-K of iRobot Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ C
OLIN
M. A
NGLE
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Colin M. Angle
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Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of iRobot Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ ALISON DEAN
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Alison Dean
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Chief Financial Officer
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(1)
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the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated
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February 14, 2019
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/s/ C
OLIN
M. A
NGLE
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Colin M. Angle
Chief Executive Officer
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Dated
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February 14, 2019
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/s/ ALISON DEAN
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Alison Dean
Chief Financial Officer
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