Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 30, 2017 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | IRBT | |
Entity Registrant Name | IROBOT CORP | |
Entity Central Index Key | 1,159,167 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 27,874,550 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 241,786 | $ 214,523 |
Short term investments | 36,442 | 39,930 |
Accounts receivable, net of allowances | 76,956 | 72,909 |
Unbilled revenue | 1,668 | 139 |
Inventory | 92,813 | 50,578 |
Other current assets | 18,395 | 5,591 |
Total current assets | 468,060 | 383,670 |
Property and equipment, net | 37,093 | 27,532 |
Deferred tax assets | 35,088 | 30,585 |
Goodwill | 41,041 | 41,041 |
Intangible assets, net | 15,315 | 12,207 |
Other assets | 14,064 | 12,877 |
Total assets | 610,661 | 507,912 |
Current liabilities: | ||
Accounts payable | 88,798 | 67,281 |
Accrued expenses | 28,949 | 19,854 |
Accrued compensation | 23,773 | 21,015 |
Deferred revenue and customer advances | 4,607 | 4,486 |
Total current liabilities | 146,127 | 112,636 |
Long term liabilities | 8,042 | 6,320 |
Liabilities | 154,169 | 118,956 |
Commitments and contingencies (Note 7) | ||
Preferred stock, 5,000,000 shares authorized and none outstanding | 0 | 0 |
Common stock, $0.01 par value, 100,000,000 shares authorized; 27,874,351 and 27,237,870 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 279 | 272 |
Additional paid-in capital | 182,786 | 161,885 |
Retained earnings | 273,368 | 226,950 |
Accumulated other comprehensive income (loss) | 59 | (151) |
Total stockholders’ equity | 456,492 | 388,956 |
Total liabilities and stockholders’ equity | $ 610,661 | $ 507,912 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Net allowances on Accounts receivables | $ 28 | $ 29 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,874,351 | 27,237,870 |
Common stock, shares outstanding | 27,874,351 | 27,237,870 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | ||
Revenue | $ 205,399 | $ 168,610 | $ 557,014 | $ 448,110 | |
Cost of revenue (1) | [1] | 103,016 | 87,550 | 277,397 | 235,437 |
Gross margin | 102,383 | 81,060 | 279,617 | 212,673 | |
Operating expenses: | |||||
Research and development (1) | [1] | 28,843 | 19,672 | 80,518 | 57,944 |
Selling and marketing (1) | [1] | 28,646 | 17,925 | 91,344 | 66,972 |
General and administrative (1) | [1] | 21,002 | 16,012 | 58,137 | 48,919 |
Total operating expenses | 78,491 | 53,609 | 229,999 | 173,835 | |
Operating income | 23,892 | 27,451 | 49,618 | 38,838 | |
Other income, net | 2,601 | 523 | 4,290 | 2,142 | |
Income before income taxes | 26,493 | 27,974 | 53,908 | 40,980 | |
Income tax expense | 4,411 | 8,462 | 7,565 | 12,722 | |
Net income | $ 22,082 | $ 19,512 | $ 46,343 | $ 28,258 | |
Net income per share: | |||||
Basic | $ 0.80 | $ 0.72 | $ 1.68 | $ 1.01 | |
Diluted | $ 0.76 | $ 0.70 | $ 1.61 | $ 0.99 | |
Number of weighted average common shares used in calculations per share | |||||
Basic | 27,739 | 27,237 | 27,520 | 27,878 | |
Diluted | 28,916 | 27,778 | 28,719 | 28,423 | |
Stock-based compensation | $ 14,069 | $ 11,781 | |||
Cost of revenue | |||||
Number of weighted average common shares used in calculations per share | |||||
Stock-based compensation | $ 274 | $ 184 | 751 | 555 | |
Research and development | |||||
Number of weighted average common shares used in calculations per share | |||||
Stock-based compensation | 1,261 | 1,028 | 3,508 | 2,598 | |
Selling and marketing | |||||
Number of weighted average common shares used in calculations per share | |||||
Stock-based compensation | 728 | 444 | 1,869 | 1,316 | |
General and administrative | |||||
Number of weighted average common shares used in calculations per share | |||||
Stock-based compensation | $ 2,771 | $ 2,247 | $ 7,941 | $ 7,312 | |
[1] | Total stock-based compensation recorded in the three and nine months ended September 30, 2017 and October 1, 2016 included in the above figures breaks down by expense classification as follows: Three Months Ended Nine Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016Cost of revenue$274 $184 $751 $555Research and development1,261 1,028 3,508 2,598Selling and marketing728 444 1,869 1,316General and administrative2,771 2,247 7,941 7,312 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Net income | $ 22,082 | $ 19,512 | $ 46,343 | $ 28,258 |
Other comprehensive income: | ||||
Net foreign currency translation adjustments | 3 | 0 | (3) | 0 |
Net unrealized gains (losses) on cash flow hedges, net of tax | (95) | 0 | 126 | 0 |
Net losses on cash flow hedge reclassified into earnings, net of tax | 17 | 0 | 36 | 0 |
Net unrealized gains (losses) on marketable securities, net of tax | 21 | (66) | 51 | 216 |
Total comprehensive income | $ 22,028 | $ 19,446 | $ 46,553 | $ 28,474 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 46,343 | $ 28,258 |
Adjustments to reconcile net income to net cash provided by operating activities, net of the effects of acquisitions: | ||
Depreciation and amortization | 14,523 | 10,171 |
Loss on disposal of property and equipment | 46 | 205 |
Loss on equity method investment | 32 | 0 |
Impairment on cost method investment | 155 | 0 |
Gain on sale of business unit | 0 | (433) |
Gain on sale of cost method investment | (1,056) | (634) |
Gain on business acquisition | (2,243) | 0 |
Stock-based compensation | 14,069 | 11,781 |
Deferred income taxes, net | (3,226) | 6,314 |
Tax benefit of excess stock based compensation deductions | 0 | (1,115) |
Non-cash director deferred compensation | 49 | 66 |
Changes in operating assets and liabilities — (use) source | ||
Accounts receivable | 9,429 | (30,781) |
Unbilled revenue | 1,528 | (198) |
Inventory | (23,944) | (11,472) |
Other assets | (11,099) | (1,579) |
Accounts payable | 20,824 | (2,261) |
Accrued expenses | 6,085 | (2,046) |
Accrued compensation | 949 | 1,990 |
Deferred revenue and customer advances | (965) | (193) |
Long term liabilities | 1,513 | (2,997) |
Net cash provided by operating activities | 51,098 | 67,034 |
Cash flows from investing activities: | ||
Additions of property and equipment | 16,630 | 8,352 |
Change in other assets | 1,374 | 435 |
Proceeds from sale of business unit | 0 | 23,520 |
Cash paid for business acquisition, net of cash acquired | (16,524) | 0 |
Purchases of investments | (7,034) | (16,556) |
Sales and maturities of investments | 10,500 | 11,502 |
Proceeds from sale of cost method investment | 1,056 | 634 |
Net cash provided by (used in) investing activities | (30,006) | 10,313 |
Cash flows from financing activities: | ||
Proceeds from stock option exercises | 8,990 | 4,496 |
Income tax withholding payment associated with restricted stock vesting | 2,974 | 1,300 |
Stock repurchases | 0 | (97,021) |
Tax benefit of excess stock-based compensation deductions | 0 | 1,115 |
Net cash provided by (used in) financing activities | 6,016 | (92,710) |
Effect of exchange rate changes on cash and cash equivalents | 155 | 0 |
Net increase (decrease) in cash and cash equivalents | 27,263 | (15,363) |
Cash and cash equivalents, at beginning of period | 214,523 | 179,915 |
Cash and cash equivalents, at end of period | 241,786 | 164,552 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 18,338 | 11,818 |
Transfer of inventory to property and equipment | 0 | 5 |
Additions of property and equipment included in accounts payable | $ 2,058 | $ 694 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business iRobot Corporation ("iRobot" or the "Company") designs and builds robots that empower people to do more. The Company develops robotic technology and applies it to produce and market consumer robots. The Company’s revenue is primarily generated from product sales. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP). The accompanying unaudited financial data as of September 30, 2017 , and for the three and nine months ended September 30, 2017 and October 1, 2016 have been prepared by the Company 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 GAAP 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 balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2016 , filed with the SEC on February 17, 2017. In the opinion of management, all adjustments necessary to state fairly the Company's statement of financial position as of September 30, 2017 and results of operations, comprehensive income and cash flows for the periods ended September 30, 2017 and October 1, 2016 have been made. The results of operations, comprehensive income and cash flows for any interim period are not necessarily indicative of the operating results, comprehensive income and cash flows for the full fiscal year or any future periods. Use of Estimates The preparation of these financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, management evaluates these estimates and judgments, in particular those related to revenue recognition (specifically sales returns and other allowances); valuation allowances; assumptions used in valuing goodwill and intangible assets; assumptions used in accounting for business combinations; assumptions used in valuing stock-based compensation instruments, evaluating loss contingencies; and valuation allowances for deferred tax assets. Actual results may differ from the Company’s estimates. The Company bases these estimates and judgments on historical experience and various other factors that the Company believes are 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. By their nature, estimates are subject to an inherent degree of uncertainty. Fiscal Year-End The Company operates and reports using a 52 -53 week fiscal year ending on the Saturday closest to December 31. Accordingly, the Company’s fiscal quarters end on the Saturday that falls closest to the last day of the third month of each quarter. Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-12, "Derivatives and Hedging," that was created to better align accounting rules with a company’s risk management activities, better reflect the economic results of hedging in the financial statements, and simplify hedge accounting treatment. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. For cash flow hedges existing at the adoption date, the standard requires adoption on a modified retrospective basis with a cumulative-effect adjustment to the consolidated balance sheet as of the beginning of the year of adoption. The amendments to presentation guidance and disclosure requirements are required to be adopted prospectively. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, "Stock Compensation – Scope of Modification Accounting," that clarifies that all changes to share-based payment awards are not necessarily accounted for as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. This guidance is effective prospectively beginning January 1, 2018, with early adoption permitted. This guidance will apply to any future modifications. The Company does not believe the standard will have a material effect on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other." ASU 2017-04 eliminates step 2 from the goodwill impairment test, instead requiring that an entity recognize an impairment charge for the amount by which the carrying amount of goodwill exceeds the reporting unit's fair value. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company does not believe the standard will have a material effect on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations; Clarifying the Definition of a Business." ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, "Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory." ASU 2016-16 clarifies the accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 refines how companies classify certain aspects of the cash flow statement in regards to debt prepayment, settlement of debt instruments, contingent consideration payments, proceeds from insurance claims and life insurance policies, distribution from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted ASU 2016-09 effective January 1, 2017. As of the adoption date, this standard did not have a material impact on the Company's consolidated financial statements. Upon the adoption, the Company elected to account for forfeitures of share-based payments as they occur prospectively. For the three and nine months ended September 30, 2017, the Company recorded a tax benefit of $4.7 million and $10.7 million, respectively, related to share-based compensation in accordance with ASU 2016-09. In February 2016, the FASB issued ASU No. 2016-02, "Leases." ASU 2016-02 requires lessees to recognize the assets and liabilities on their balance sheet for the rights and obligations created by most leases and continue to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, "Inventory: Simplifying the Measurement of Inventory." ASU 2015-11 applies only to inventory for which cost is determined by methods other than last-in, first-out and the retail inventory method, which includes inventory that is measured using first-in, first-out or average cost. Inventory within the scope of this standard is required to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company adopted ASU 2015-11 effective January 1, 2017. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance was originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. In July 2015, the FASB voted to defer the effective date of the new accounting guidance related to revenue recognition by one year to December 17, 2017 for annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. The standard will be effective for the Company beginning in the first quarter of 2018. The Company will adopt the standard using the modified retrospective method. The Company has and is continuing to conduct a comprehensive analysis of the provisions of the new standard and the impact it will have on the Company's processes, policies, and consolidated financial statements. The Company is currently finalizing its conclusions on the number of its performance obligations. Once the Company has concluded, it will finalize the standalone selling price for each performance obligation and assess the allocation of discounts and variable consideration to each. The new revenue standard is expected to have a minor impact on the timing of revenue recognized in the Company’s consolidated financial statements. The Company does not expect the provisions of the new standard to impact the manner in which it treats certain costs to fulfill contracts (i.e., shipping and handling costs) and costs to acquire new contracts (i.e., commissions). Under the new standard, the Company will elect the practical expedient on shipping and handling costs and continue to treat these costs as fulfillment costs and expense as incurred. Further, commissions will continue to be expensed as incurred as the impact to the consolidated financial statements is immaterial. The new standard will also result in enhanced revenue related disclosures. 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 recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. Revenue Recognition The Company primarily derives its revenue from product sales. Until the divestiture of the defense and security business unit on April 4, 2016 (see Note 11), the Company also generated minimal revenue from government 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 robots under the terms of the customer agreement upon transfer of title and risk of loss to the customer, net of estimated returns and allowances, provided that collection is determined to be reasonably assured and no significant obligations remain. Beginning in the third quarter of 2015, the Company introduced its first connected robot. Each sale of a connected robot represents a multi-element arrangement containing the robot, an app and potential future unspecified software upgrades. Revenue is allocated to the deliverables based on their relative selling prices which have been determined using best estimate of selling price (BESP), as the Company has not been able to establish vendor specific objective evidence (VSOE) or obtain relevant third party evidence (TPE). Revenue allocated to the app and unspecified software upgrades is then deferred and recognized on a straight-line basis over the period in which the Company expects to provide the upgrades which is the estimated life of the robot. Sales to retailers of consumer robots are typically subject to agreements allowing for limited rights of return, rebates and price protection. The Company also provides limited rights of returns for direct-to-consumer sales generated through its on-line stores and certain international distributors. Accordingly, the Company reduces revenue for its estimates of liabilities for these rights of return, rebates, and price protection, as well as discounts and promotions, at the time the related sale is recorded. The estimates for rights of return are directly based on specific terms and conditions included in the customer agreements, historical returns experience and various other assumptions that the Company believes are reasonable under the circumstances. In the case of new product introductions, the estimates for returns applied to the new products are based upon the estimates for the most similar predecessor products until such time that the Company has enough actual returns experience for the new products, which is typically two holiday return cycles. At that time, the Company incorporates that data into the development of returns estimates for the new products. The Company updates its analysis of returns on a quarterly basis. If actual returns differ significantly from the Company's estimates, or if modifications to individual customer agreements are entered into that impact their rights of returns, such differences could result in an adjustment to previously established reserves and could have a material impact, either favorably or unfavorably, on the Company’s results of operations for the period in which the actual returns become known or the agreement is modified. In 2016, the Company began selling to one domestic distributor under an agreement that provides product return privileges. As a result, the Company recognizes revenue from sales to this distributor when the product is resold by the distributor. The estimates and adjustments for rebates and price protection are based on specific programs, expected usage and historical experience. Actual results could differ from these estimates. As of September 30, 2017 , the Company had reserves for product returns of $28.4 million , discounts and promotions of $20.0 million and price protection of $3.2 million . As of December 31, 2016, the Company had reserves for product returns of $27.7 million , discounts and promotions of $21.9 million and price protection of $1.5 million . Prior to the Company's divestiture of the defense and security business unit on April 4, 2016 (see Note 11), the Company generated minimal revenue from government contracts. Under cost-plus-fixed-fee (CPFF) type contracts, the Company recognized revenue based on costs incurred plus a pro rata portion of the total fixed fee. Costs incurred included labor and material that were directly associated with individual CPFF contracts plus indirect overhead and general and administrative type costs based upon billing rates submitted by the Company to the Defense Contract Management Agency (DCMA). Annually, the Company submits final indirect billing rates to DCMA based upon actual costs incurred throughout the year. In the situation where the Company’s final actual billing rates are greater than the estimated rates used, the Company records a cumulative revenue adjustment in the period in which the rate differential is collected from the customer. These final billing rates are subject to audit by the Defense Contract Audit Agency (DCAA), which can occur several years after the final billing rates are submitted and may result in material adjustments to revenue recognized based on estimated final billing rates. As of September 30, 2017 , fiscal years 2015 and 2016 are open for audit by the DCAA. In the situation where the Company’s anticipated actual billing rates will be lower than the provisional rates used, the Company records a cumulative revenue adjustment in the period in which the rate differential is identified. Revenue on firm fixed price (FFP) contracts was recognized using the percentage-of-completion method. For government product FFP contracts, revenue was recognized as the product was shipped or in accordance with the contract terms. Costs and estimated gross margins on contracts were recorded as revenue as work was performed based on the percentage that incurred costs compared to estimated total costs utilizing the most recent estimates of costs and funding. Revenue earned in excess of billings, if any, was recorded as unbilled revenue. Billings in excess of revenue earned, if any, were recorded as deferred revenue. Stock-Based Compensation The Company accounts for stock-based compensation through recognition of the fair value of the stock-based compensation as a charge against earnings. Stock-based compensation cost for stock options is estimated at the grant date based on each option's fair value as calculated by the Black-Scholes option-pricing model. Stock-based compensation cost for restricted stock awards, time-based restricted stock units and performance-based restricted stock units is measured based on the closing fair market value of the Company's common stock on the date of grant. For performance-based restricted stock units, the compensation costs will be subsequently adjusted for assumptions of achievement during the period in which the assumption of achievement changes, as applicable. The Company recognizes stock-based compensation cost as expense ratably on a straight-line basis over the requisite service period. The Company has elected to account for forfeitures as they occur, rather than applying an estimated forfeiture rate, following its adoption of ASU 2016-09 in the first quarter of 2017. Net Income Per Share The following table presents the calculation of both basic and diluted net income per share: Three Months Ended Nine Months Ended (In thousands, except per share amounts) September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Net income $ 22,082 $ 19,512 $ 46,343 $ 28,258 Basic weighted-average shares outstanding 27,739 27,237 27,520 27,878 Dilutive effect of employee stock options and restricted shares 1,177 541 1,199 545 Diluted weighted-average shares outstanding 28,916 27,778 28,719 28,423 Basic income per share $ 0.80 $ 0.72 $ 1.68 $ 1.01 Diluted income per share $ 0.76 $ 0.70 $ 1.61 $ 0.99 Restricted stock units and stock options representing approximately 0.0 million and 0.5 million shares of common stock for the three-month periods ended September 30, 2017 and October 1, 2016 , respectively, and approximately 0.0 million and 0.6 million shares of common stock for the nine-month periods ended September 30, 2017 and October 1, 2016 , respectively, were excluded from the computation of diluted earnings per share for these periods because their effect would have been antidilutive. 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 in each jurisdiction. A valuation allowance is provided if, based upon the weight of available evidence, it is more likely than not that the related benefits will not be realized. In determining the amount of the valuation allowance, each quarter, the Company considers future reversals of existing taxable temporary differences, estimated future taxable income and taxable income in prior carryback year(s), as well as feasible tax planning strategies in each jurisdiction to determine if the deferred tax assets are realizable. The Company's income tax provision and its assessment of the ability to realize its deferred tax assets involve significant judgments and estimates. As of September 30, 2017 and December 31, 2016, the Company did not record a valuation allowance against its deferred tax assets. The Company recorded a tax provision of $4.4 million and $8.5 million for the three months ended September 30, 2017 and October 1, 2016 , respectively. The $4.4 million provision for the three months ended September 30, 2017 resulted in an effective income tax rate of 16.6% . The $8.5 million provision for the three months ended October 1, 2016 resulted in an effective income tax rate of 30.2% . The difference between the effective income tax rate of 16.6% for the three months ended September 30, 2017 and 30.2% for the three months ended October 1, 2016 was primarily due to a $4.7 million tax benefit related to share-based compensation in accordance with ASU 2016-09, adopted in the first quarter of 2017, and the jurisdictional mix of earnings. The Company recorded a tax provision of $7.6 million and $12.7 million for the nine months ended September 30, 2017 and October 1, 2016, respectively. The $7.6 million provision for the nine months ended September 30, 2017 resulted in an effective income tax rate of 14.0% . The $12.7 million provision for the nine months ended October 1, 2016 resulted in an effective income tax rate of 31.0% . The difference between the effective income tax rate of 14.0% for the nine months ended September 30, 2017 and 31.0% for the nine months ended October 1, 2016 was primarily due to a $10.7 million tax benefit related to share-based compensation in accordance with ASU 2016-09, adopted in the first quarter of 2017, and the jurisdictional mix of earnings. The statute of limitations for examinations by the Internal Revenue Service is closed for tax years prior to 2014. Financial Instruments and Hedging Activities The Company utilizes derivative instruments to hedge specific financial risks including foreign exchange risk. The Company does not engage in speculative hedging activity. In order to account for a derivative instrument as a hedge, specific criteria must be met, including: (i) ensuring at the inception of the hedge that formal documentation exists for both the hedging relationship and the entity’s risk management objective and strategy for undertaking the hedge and (ii) at the inception of the hedge and on an ongoing basis, the hedging relationship is expected to be highly effective in achieving offsetting changes in fair value attributed to the hedged risk during the period that the hedge is designated. Further, an assessment of effectiveness is required whenever financial statements or earnings are reported. Absent meeting these criteria, changes in fair value are recognized in other income, net, in the consolidated statements of income. Once the underlying forecasted transaction is realized, the gain or loss from the derivative designated as a hedge of the transaction is reclassified from accumulated other comprehensive income (loss) to the statement of income, in revenue. Any ineffective portion of the derivatives designated as cash flow hedges is recognized in current earnings. Fair Value Measurements The authoritative guidance for fair value 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. The Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2017 , were as follows: Fair Value Measurements as of September 30, 2017 Level 1 Level 2 (1) Level 3 (In thousands) Description Assets: Cash and cash equivalents Money market funds $ 10,998 $ — $ — Short term investments Corporate and government bonds — 36,442 — Other current assets Derivative instruments (Note 6) — 849 — Total assets measured at fair value $ 10,998 $ 37,291 $ — Liabilities: Accrued expenses Derivative instruments (Note 6) $ — $ 315 $ — Total liabilities measured at fair value $ — $ 315 $ — The Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016 , were as follows: Fair Value Measurements as of Level 1 Level 2 (1) Level 3 (In thousands) Description Assets: Cash and cash equivalents Money market funds $ 156,980 $ — $ — Short term investments Corporate and government bonds — 39,930 — Other current assets Derivative instruments (Note 6) — 180 — Total assets measured at fair value $ 156,980 $ 40,110 $ — Liabilities: Accrued expenses Derivative instruments (Note 6) $ — $ 43 $ — Total liabilities measured at fair value $ — $ 43 $ — (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. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of the following: September 30, 2017 December 31, 2016 (In thousands) Raw materials $ 2,928 $ 4,717 Finished goods 89,885 45,861 $ 92,813 $ 50,578 |
Stock Option Plans
Stock Option Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Plans | Stock Option Plans and Stock-Based Compensation The Company has options outstanding under three stock incentive plans: the 2005 Stock Option and Incentive Plan (the "2005 Plan"), the Evolution Robotics, Inc. 2007 Stock Plan (the "2007 Plan") and the 2015 Stock Option and Incentive Plan (the "2015 Plan" and together with the 2005 Plan and the 2007 Plan, the "Plans"). The Company also has restricted stock units outstanding under the 2005 Plan and the 2015 Plan. The 2015 Plan is the only one of the three plans under which new awards may currently be granted. Under the 2015 Plan, which became effective May 20, 2015 , 3,100,000 shares were initially reserved for issuance in the form of incentive stock options, non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock units, unrestricted stock awards, cash-based awards, performance share awards and dividend equivalent rights. Stock awards returned to the Plans, with the exception of those issued under the 2007 Plan, as a result of their expiration, cancellation or termination are automatically made available for issuance under the 2015 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. The grant of any full value award (e.g., restricted stock units) under the 2015 Plan is counted against the share reserve for future grants under the 2015 Plan as 1.61 shares for every one share actually subject to such award. As of September 30, 2017 , there were 895,418 shares available for future grant under the 2015 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 four years, and expire five or ten years from the date of grant or, if earlier, 60 or 90 days from employee termination. The exercise price of stock options is equal to the closing price on the NASDAQ Global Select Market on the date of grant. Other awards granted under the Plans generally vest over periods from one to four years. On September 8, 2017, the Company issued 79,300 time-based restricted stock unit grants to certain employees. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following: September 30, 2017 December 31, 2016 (In thousands) Accrued warranty $ 10,279 $ 8,464 Accrued sales and other taxes payable 5,569 482 Accrued customer deposits and payables 3,016 4,682 Accrued sales and marketing 2,911 404 Accrued accounting fees 1,030 686 Accrued direct fulfillment costs 634 1,722 Accrued federal and state income taxes 476 1,059 Accrued other 5,034 2,355 $ 28,949 $ 19,854 Accrued compensation consists of the following: September 30, 2017 December 31, 2016 (In thousands) Accrued bonus $ 15,079 $ 14,226 Accrued other compensation 8,694 6,789 $ 23,773 $ 21,015 |
Derivative Instruments (Notes)
Derivative Instruments (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Derivative Instruments The Company operates internationally and, in the normal course of business, is exposed to fluctuations in foreign currency exchange rates. The foreign currency exposures typically arise from transactions denominated in currencies other than the functional currency of the Company's operations, primarily the Japanese Yen, Canadian dollar and the Euro. The Company uses derivative instruments that are designated in cash flow hedge relationships to reduce or eliminate the effects of foreign exchange rate changes on purchases and sales. These contracts typically have maturities of ten months or less. At September 30, 2017 and December 31, 2016 , the Company had outstanding cash flow hedges with a total notional value of $17.7 million and $0.0 million , respectively. The Company also enters into economic hedges that are not designated as hedges from an accounting standpoint to reduce or eliminate the effects of foreign exchange rate changes typically related to short term trade receivables and payables. These contracts typically have maturities of two months or less. At September 30, 2017 and December 31, 2016 , we had outstanding economic hedges with a total notional value of $27.5 million and $8.1 million , respectively. The fair values of derivative instruments are as follows: Fair Value Classification September 30, 2017 December 31, 2016 (In thousands) Derivatives not designated as hedging instruments: Foreign currency option contracts Other current assets $ — $ 180 Foreign currency forward contracts Other current assets 711 — Foreign currency forward contracts Accrued expenses 315 43 Derivatives designated as cash flow hedges: Foreign currency forward contracts Other current assets $ 138 $ — Gains (losses) associated with derivative instruments not designated as hedging instruments are as follows: Three Months Ended Nine Months Ended Classification September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 (In thousands) Gain (loss) recognized in income Other income, net $ 9 $ (18 ) $ (495 ) $ (392 ) The following tables reflect the effect of foreign exchange forward contracts that are designated as cash flow hedging instruments for the three and nine months ended September 30, 2017 and October 1, 2016 (in thousands): Effective Portion Ineffective Portion Gain (loss) recognized in OCI on Derivative (1) Gain (loss) reclassified from accumulated OCI into income (2) Gain (loss) recognized in income (3) Three months ended Three months ended Three months ended September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Foreign currency forward contracts $ (21 ) $ — Revenue $ (39 ) $ — Other income, net $ — $ — Effective Portion Ineffective Portion Gain (loss) recognized in OCI on Derivative (1) Gain (loss) reclassified from accumulated OCI into income (2) Gain (loss) recognized in income (3) Nine months ended Nine months ended Nine months ended September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Foreign currency forward contracts $ 200 $ — Revenue $ (58 ) $ — Other income, net $ (5 ) $ — (1) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (2) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (3) The amount represents the change in fair value of derivative contracts due to changes in the forward rates. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Obligations Rental expense under operating leases for the three months ended September 30, 2017 and October 1, 2016 were $2.2 million and $1.6 million , respectively, and for the nine months ended September 30, 2017 and October 1, 2016 were $6.1 million and $4.4 million , respectively. Future minimum rental payments under operating leases were as follows as of September 30, 2017 : Operating Leases (In thousands) Remainder of 2017 $ 1,287 2018 5,279 2019 5,146 2020 5,120 2021 5,259 Thereafter 39,275 Total minimum lease payments $ 61,366 During the three months ended September 30, 2017, the Company amended its lease for its corporate headquarters and extended the lease term until 2030. Outstanding Purchase Orders At September 30, 2017 , the Company had outstanding purchase orders aggregating approximately $181.2 million . These purchase orders, the majority of which are with contract manufacturers for the purchase of inventory in the normal course of business, are for manufacturing and non-manufacturing related goods and services, and are generally cancelable without penalty. In circumstances where the Company determines that it has financial exposure associated with any of these commitments, the Company records a liability in the period in which that exposure is identified. 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 Company’s customers, in connection with any patent, copyright, trade secret or other proprietary right infringement claim by any third party. The term of these indemnification agreements is generally perpetual 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 September 30, 2017 and December 31, 2016 , respectively. Warranty The Company provides warranties on most products and has established a reserve for warranties based on estimated 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 Nine Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 (In thousands) Balance at beginning of period $ 10,505 $ 6,622 $ 8,464 $ 6,907 Liability assumed (1) — — 2,186 — Provision 2,433 2,823 6,051 5,619 Warranty usage (2) (2,659 ) (1,598 ) (6,422 ) (4,679 ) Balance at end of period $ 10,279 $ 7,847 $ 10,279 $ 7,847 (1) Warranty assumed as part of the acquisition of the iRobot-related distribution business of Sales On Demand Corporation (see Note 9). (2) Warranty usage includes costs incurred for warranty obligations and, for the nine month period ended October 1, 2016 , the release of warranty liabilities associated with the divestiture of the defense and security business unit. Sales Taxes The Company collects and remits sales tax in jurisdictions in which it has a physical presence or it believes nexus exists, which therefore obligates the Company to collect and remit sales tax. The Company continually evaluates whether it has established nexus in new jurisdictions with respect to sales tax. The Company has recorded a liability for potential exposure in states where there is uncertainty about the point in time at which the Company established a sufficient business connection to create nexus. The Company continues to analyze possible sales tax exposure, but does not currently believe that any individual claim or aggregate claims that might arise will ultimately have a material effect on its consolidated results of operations, financial position or cash flows. |
Industry Segment, Geographic In
Industry Segment, Geographic Information and Significant Customers | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Industry Segment, Geographic Information and Significant Customers | Industry Segment, Geographic Information and Significant Customers Prior to completing the sale of the Company's defense and security business (see Note 11), the Company’s reportable segments consisted of the home business unit and the defense and security business unit. Following this divestiture, which was completed on April 4, 2016, the Company now operates as one business segment, consumer robots, the results of which are included in the Company's consolidated statements of income and comprehensive income. The Company's consumer robots products are offered to consumers through a network of retail businesses and one distributor throughout the United States, to various countries through international distributors and retailers, and through the Company's on-line store. Geographic Information For the three months ended September 30, 2017 and October 1, 2016 , sales to non-U.S. customers accounted for 57.3% and 60.9% of total revenue, respectively, and sales to non-U.S. customers for the nine months ended September 30, 2017 and October 1, 2016 accounted for 51.5% and 62.4% of total revenue, respectively. Significant Customers For the three months ended September 30, 2017 , the Company generated 14.3% of total revenue from a network of affiliated European distributors (Robopolis SAS) and 11.0% of total revenue from one of its domestic retailers (Amazon). For the three months ended October 1, 2016 , the Company generated 13.3% and 12.0% of total revenue from its distributor in Japan (Sales On Demand Corporation) and a network of affiliated European distributors (Robopolis SAS), respectively. On April 3, 2017, the Company acquired the iRobot-related distribution business of Sales On Demand Corporation (see Note 9). On October 2, 2017, the Company acquired Robopolis SAS (see Note 12). For the nine months ended September 30, 2017 , the Company generated 13.2% of total revenue from a network of affiliated European distributors (Robopolis SAS) and 11.9% of total revenue from one of its domestic retailers (Amazon). For the nine months ended October 1, 2016 , the Company generated 13.5% and 13.1% of total revenue from its distributor in Japan (Sales On Demand Corporation) and a network of affiliated European distributors (Robopolis SAS), respectively. On April 3, 2017, the Company acquired the iRobot-related distribution business of Sales On Demand Corporation (see Note 9). On October 2, 2017, the Company acquired Robopolis SAS (see Note 12). |
Business Combination (Notes)
Business Combination (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Business Acquisition [Line Items] | |
Business Combination Disclosure [Text Block] | Business Combination On April 3, 2017, the Company closed its acquisition of the iRobot-related distribution business of Sales On Demand Corporation (SODC) for approximately $16.6 million in cash, equal to the book value of the acquired assets. The acquisition will better enable the Company to maintain its leadership position and accelerate the growth of its business in Japan through direct control of pre- and post-sales market activities including sales, marketing, branding, channel relationships and customer service. It also expands the Company's presence and customer outreach opportunities in Japan. The acquisition was a stock purchase. The results of operations for this acquisition have been included in the Company's operating results since the acquisition date. The Company has not separately presented revenue or the results of operations for this acquisition, from the date of acquisition, as the impact is neither material nor significant to the consolidated financial results. The Company has also not furnished pro forma financial information related to this acquisition because such information is not material, individually or in the aggregate, to the financial results. During the three months ended September 30, 2017, the Company finalized the purchase price allocation and made measurement period adjustments to the provisional amounts reported as the estimated fair values of assets acquired. Compared to the provisional value reported as of July 1, 2017, the fair values presented in the table below reflect a decrease to the returns reserve of $7.4 million , a decrease to related inventory of $3.6 million and a decrease to related deferred tax assets of $1.3 million . These adjustments resulted in a $2.2 million non-taxable gain on business acquisition which represents the excess of the fair value of the net assets acquired over the purchase price. The gain on business acquisition was recorded within other income, net in the consolidated statements of income during the three months ended September 30, 2017. The Company believes that the gain on business acquisition was due to the transaction not being subjected to a competitive bidding process and the purchase price being determined based on the net book value of the net assets acquired. The following table summarizes the final allocation of the purchase price (in thousands): Cash $ 125 Accounts receivable, net (1) (5,496 ) Inventories 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 (1) The accounts receivable balance reflects reserves for product returns, discounts and promotions assumed as part of the acquisition. The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives: Useful Life Fair Value (in thousands) Customer relationships 13 Years $ 4,490 Reacquired distribution rights 9 Months 4,150 Total $ 8,640 |
Goodwill, Other Intangible Asse
Goodwill, Other Intangible Assets and Other Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Other Intangible Assets and Other Assets | Goodwill and Other Intangible Assets Goodwill The carrying amount of the Company's goodwill was $41.0 million at September 30, 2017 and December 31, 2016. Other Intangible Assets Other intangible assets include the value assigned to completed technology and a trade name acquired with the acquisition of Evolution Robotics, and the value assigned to customer relationships and the reacquired distribution rights acquired with the acquisition of the iRobot-related distribution business of SODC. The estimated useful lives for all of these intangible assets are nine months to thirteen 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 September 30, 2017 and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Cost Accumulated Amortization Net Cost Accumulated Amortization Net (In thousands) Completed technology $ 26,900 $ 17,286 $ 9,614 $ 26,900 $ 14,693 $ 12,207 Tradename 100 100 — 100 100 — Customer relationships 4,490 173 4,317 — — — Reacquired distribution rights 4,150 2,766 1,384 — — — Total $ 35,640 $ 20,325 $ 15,315 $ 27,000 $ 14,793 $ 12,207 Amortization expense related to acquired intangible assets was $2.3 million and $0.9 million for the three months ended September 30, 2017 and October 1, 2016 , respectively. Amortization expense related to acquired intangible assets was $5.5 million and $2.6 million for the nine months ended September 30, 2017 and October 1, 2016 , respectively. The estimated future amortization expense is expected to be as follows (in thousands): Remainder of 2017 $ 2,334 2018 3,803 2019 3,163 2020 1,245 2021 1,245 Thereafter 3,525 Total $ 15,315 |
Divestiture (Notes)
Divestiture (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Divestiture On April 4, 2016, the Company completed the sale of its defense and security business unit to iRobot Defense Holdings, Inc., a portfolio company of Arlington Capital Partners. The final purchase price, including adjustments for working capital and indebtedness, was $24.5 million . The Company recognized a gain of $0.4 million on the sale of assets. The sale of its defense and security business did not meet the criteria for discontinued operations presentation as it did not represent a strategic shift that had a major effect on the Company's operations and financial results. The Company and iRobot Defense Holdings, Inc. also entered into a Transition Services Agreement (TSA), pursuant to which the Company continued to perform certain functions on iRobot Defense Holdings Inc.’s behalf during a transition period not to exceed 12 months. The TSA provided for the reimbursement of the Company for direct costs incurred in order to provide such functions and was recorded as a component of other income. The transition period was completed during the three months ended April 1, 2017. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | Subsequent Event On October 2, 2017, the Company closed the previously-announced acquisition of its largest European distributor, Robopolis SAS (Robopolis), through the acquisition of the issued and outstanding capital shares of Robopolis. At the closing, the Company paid approximately $170.1 million in cash offset by acquired cash of approximately $31.6 million held by Robopolis and its subsidiaries at closing, resulting in a net cash outlay of approximately $138.4 million . Pursuant to the Share Purchase Agreement, $16.0 million of the purchase price was placed into an escrow account to settle certain claims for indemnification for breaches or inaccuracies in Robopolis’ and its shareholders’ representations and warranties, covenants and agreements, and approximately $2.4 million of the purchase price was deposited in escrow to satisfy, in part, any payments due to iRobot for certain post-closing purchase price adjustments. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Derivatives, Reporting of Derivative Activity [Policy Text Block] | Financial Instruments and Hedging Activities The Company utilizes derivative instruments to hedge specific financial risks including foreign exchange risk. The Company does not engage in speculative hedging activity. In order to account for a derivative instrument as a hedge, specific criteria must be met, including: (i) ensuring at the inception of the hedge that formal documentation exists for both the hedging relationship and the entity’s risk management objective and strategy for undertaking the hedge and (ii) at the inception of the hedge and on an ongoing basis, the hedging relationship is expected to be highly effective in achieving offsetting changes in fair value attributed to the hedged risk during the period that the hedge is designated. Further, an assessment of effectiveness is required whenever financial statements or earnings are reported. Absent meeting these criteria, changes in fair value are recognized in other income, net, in the consolidated statements of income. Once the underlying forecasted transaction is realized, the gain or loss from the derivative designated as a hedge of the transaction is reclassified from accumulated other comprehensive income (loss) to the statement of income, in revenue. Any ineffective portion of the derivatives designated as cash flow hedges is recognized in current earnings. |
Basis of Presentation | 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 unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP). The accompanying unaudited financial data as of September 30, 2017 , and for the three and nine months ended September 30, 2017 and October 1, 2016 have been prepared by the Company 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 GAAP 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 balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2016 , filed with the SEC on February 17, 2017. In the opinion of management, all adjustments necessary to state fairly the Company's statement of financial position as of September 30, 2017 and results of operations, comprehensive income and cash flows for the periods ended September 30, 2017 and October 1, 2016 have been made. The results of operations, comprehensive income and cash flows for any interim period are not necessarily indicative of the operating results, comprehensive income and cash flows for the full fiscal year or any future periods. |
Use of Estimates | Use of Estimates The preparation of these financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, management evaluates these estimates and judgments, in particular those related to revenue recognition (specifically sales returns and other allowances); valuation allowances; assumptions used in valuing goodwill and intangible assets; assumptions used in accounting for business combinations; assumptions used in valuing stock-based compensation instruments, evaluating loss contingencies; and valuation allowances for deferred tax assets. Actual results may differ from the Company’s estimates. The Company bases these estimates and judgments on historical experience and various other factors that the Company believes are 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. By their nature, estimates are subject to an inherent degree of uncertainty. |
Fiscal Year-End | Fiscal Year-End The Company operates and reports using a 52 -53 week fiscal year ending on the Saturday closest to December 31. Accordingly, the Company’s fiscal quarters end on the Saturday that falls closest to the last day of the third month of each quarter. |
Revenue Recognition | Revenue Recognition The Company primarily derives its revenue from product sales. Until the divestiture of the defense and security business unit on April 4, 2016 (see Note 11), the Company also generated minimal revenue from government 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 robots under the terms of the customer agreement upon transfer of title and risk of loss to the customer, net of estimated returns and allowances, provided that collection is determined to be reasonably assured and no significant obligations remain. Beginning in the third quarter of 2015, the Company introduced its first connected robot. Each sale of a connected robot represents a multi-element arrangement containing the robot, an app and potential future unspecified software upgrades. Revenue is allocated to the deliverables based on their relative selling prices which have been determined using best estimate of selling price (BESP), as the Company has not been able to establish vendor specific objective evidence (VSOE) or obtain relevant third party evidence (TPE). Revenue allocated to the app and unspecified software upgrades is then deferred and recognized on a straight-line basis over the period in which the Company expects to provide the upgrades which is the estimated life of the robot. Sales to retailers of consumer robots are typically subject to agreements allowing for limited rights of return, rebates and price protection. The Company also provides limited rights of returns for direct-to-consumer sales generated through its on-line stores and certain international distributors. Accordingly, the Company reduces revenue for its estimates of liabilities for these rights of return, rebates, and price protection, as well as discounts and promotions, at the time the related sale is recorded. The estimates for rights of return are directly based on specific terms and conditions included in the customer agreements, historical returns experience and various other assumptions that the Company believes are reasonable under the circumstances. In the case of new product introductions, the estimates for returns applied to the new products are based upon the estimates for the most similar predecessor products until such time that the Company has enough actual returns experience for the new products, which is typically two holiday return cycles. At that time, the Company incorporates that data into the development of returns estimates for the new products. The Company updates its analysis of returns on a quarterly basis. If actual returns differ significantly from the Company's estimates, or if modifications to individual customer agreements are entered into that impact their rights of returns, such differences could result in an adjustment to previously established reserves and could have a material impact, either favorably or unfavorably, on the Company’s results of operations for the period in which the actual returns become known or the agreement is modified. In 2016, the Company began selling to one domestic distributor under an agreement that provides product return privileges. As a result, the Company recognizes revenue from sales to this distributor when the product is resold by the distributor. The estimates and adjustments for rebates and price protection are based on specific programs, expected usage and historical experience. Actual results could differ from these estimates. As of September 30, 2017 , the Company had reserves for product returns of $28.4 million , discounts and promotions of $20.0 million and price protection of $3.2 million . As of December 31, 2016, the Company had reserves for product returns of $27.7 million , discounts and promotions of $21.9 million and price protection of $1.5 million . Prior to the Company's divestiture of the defense and security business unit on April 4, 2016 (see Note 11), the Company generated minimal revenue from government contracts. Under cost-plus-fixed-fee (CPFF) type contracts, the Company recognized revenue based on costs incurred plus a pro rata portion of the total fixed fee. Costs incurred included labor and material that were directly associated with individual CPFF contracts plus indirect overhead and general and administrative type costs based upon billing rates submitted by the Company to the Defense Contract Management Agency (DCMA). Annually, the Company submits final indirect billing rates to DCMA based upon actual costs incurred throughout the year. In the situation where the Company’s final actual billing rates are greater than the estimated rates used, the Company records a cumulative revenue adjustment in the period in which the rate differential is collected from the customer. These final billing rates are subject to audit by the Defense Contract Audit Agency (DCAA), which can occur several years after the final billing rates are submitted and may result in material adjustments to revenue recognized based on estimated final billing rates. As of September 30, 2017 , fiscal years 2015 and 2016 are open for audit by the DCAA. In the situation where the Company’s anticipated actual billing rates will be lower than the provisional rates used, the Company records a cumulative revenue adjustment in the period in which the rate differential is identified. Revenue on firm fixed price (FFP) contracts was recognized using the percentage-of-completion method. For government product FFP contracts, revenue was recognized as the product was shipped or in accordance with the contract terms. Costs and estimated gross margins on contracts were recorded as revenue as work was performed based on the percentage that incurred costs compared to estimated total costs utilizing the most recent estimates of costs and funding. Revenue earned in excess of billings, if any, was recorded as unbilled revenue. Billings in excess of revenue earned, if any, were recorded as deferred revenue. |
Accounting for Share-Based Payments | Stock-Based Compensation The Company accounts for stock-based compensation through recognition of the fair value of the stock-based compensation as a charge against earnings. Stock-based compensation cost for stock options is estimated at the grant date based on each option's fair value as calculated by the Black-Scholes option-pricing model. Stock-based compensation cost for restricted stock awards, time-based restricted stock units and performance-based restricted stock units is measured based on the closing fair market value of the Company's common stock on the date of grant. For performance-based restricted stock units, the compensation costs will be subsequently adjusted for assumptions of achievement during the period in which the assumption of achievement changes, as applicable. The Company recognizes stock-based compensation cost as expense ratably on a straight-line basis over the requisite service period. The Company has elected to account for forfeitures as they occur, rather than applying an estimated forfeiture rate, following its adoption of ASU 2016-09 in the first quarter of 2017. |
Net Income Per Share | Net Income Per Share The following table presents the calculation of both basic and diluted net income per share: Three Months Ended Nine Months Ended (In thousands, except per share amounts) September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Net income $ 22,082 $ 19,512 $ 46,343 $ 28,258 Basic weighted-average shares outstanding 27,739 27,237 27,520 27,878 Dilutive effect of employee stock options and restricted shares 1,177 541 1,199 545 Diluted weighted-average shares outstanding 28,916 27,778 28,719 28,423 Basic income per share $ 0.80 $ 0.72 $ 1.68 $ 1.01 Diluted income per share $ 0.76 $ 0.70 $ 1.61 $ 0.99 Restricted stock units and stock options representing approximately 0.0 million and 0.5 million shares of common stock for the three-month periods ended September 30, 2017 and October 1, 2016 , respectively, and approximately 0.0 million and 0.6 million shares of common stock for the nine-month periods ended September 30, 2017 and October 1, 2016 , respectively, were excluded from the computation of diluted earnings per share for these periods because their effect would have been antidilutive. |
Income Taxes | 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 in each jurisdiction. A valuation allowance is provided if, based upon the weight of available evidence, it is more likely than not that the related benefits will not be realized. In determining the amount of the valuation allowance, each quarter, the Company considers future reversals of existing taxable temporary differences, estimated future taxable income and taxable income in prior carryback year(s), as well as feasible tax planning strategies in each jurisdiction to determine if the deferred tax assets are realizable. The Company's income tax provision and its assessment of the ability to realize its deferred tax assets involve significant judgments and estimates. As of September 30, 2017 and December 31, 2016, the Company did not record a valuation allowance against its deferred tax assets. The Company recorded a tax provision of $4.4 million and $8.5 million for the three months ended September 30, 2017 and October 1, 2016 , respectively. The $4.4 million provision for the three months ended September 30, 2017 resulted in an effective income tax rate of 16.6% . The $8.5 million provision for the three months ended October 1, 2016 resulted in an effective income tax rate of 30.2% . The difference between the effective income tax rate of 16.6% for the three months ended September 30, 2017 and 30.2% for the three months ended October 1, 2016 was primarily due to a $4.7 million tax benefit related to share-based compensation in accordance with ASU 2016-09, adopted in the first quarter of 2017, and the jurisdictional mix of earnings. The Company recorded a tax provision of $7.6 million and $12.7 million for the nine months ended September 30, 2017 and October 1, 2016, respectively. The $7.6 million provision for the nine months ended September 30, 2017 resulted in an effective income tax rate of 14.0% . The $12.7 million provision for the nine months ended October 1, 2016 resulted in an effective income tax rate of 31.0% . The difference between the effective income tax rate of 14.0% for the nine months ended September 30, 2017 and 31.0% for the nine months ended October 1, 2016 was primarily due to a $10.7 million tax benefit related to share-based compensation in accordance with ASU 2016-09, adopted in the first quarter of 2017, and the jurisdictional mix of earnings. The statute of limitations for examinations by the Internal Revenue Service is closed for tax years prior to 2014. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements The authoritative guidance for fair value 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. The Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2017 , were as follows: Fair Value Measurements as of September 30, 2017 Level 1 Level 2 (1) Level 3 (In thousands) Description Assets: Cash and cash equivalents Money market funds $ 10,998 $ — $ — Short term investments Corporate and government bonds — 36,442 — Other current assets Derivative instruments (Note 6) — 849 — Total assets measured at fair value $ 10,998 $ 37,291 $ — Liabilities: Accrued expenses Derivative instruments (Note 6) $ — $ 315 $ — Total liabilities measured at fair value $ — $ 315 $ — The Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016 , were as follows: Fair Value Measurements as of Level 1 Level 2 (1) Level 3 (In thousands) Description Assets: Cash and cash equivalents Money market funds $ 156,980 $ — $ — Short term investments Corporate and government bonds — 39,930 — Other current assets Derivative instruments (Note 6) — 180 — Total assets measured at fair value $ 156,980 $ 40,110 $ — Liabilities: Accrued expenses Derivative instruments (Note 6) $ — $ 43 $ — Total liabilities measured at fair value $ — $ 43 $ — (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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-12, "Derivatives and Hedging," that was created to better align accounting rules with a company’s risk management activities, better reflect the economic results of hedging in the financial statements, and simplify hedge accounting treatment. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. For cash flow hedges existing at the adoption date, the standard requires adoption on a modified retrospective basis with a cumulative-effect adjustment to the consolidated balance sheet as of the beginning of the year of adoption. The amendments to presentation guidance and disclosure requirements are required to be adopted prospectively. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, "Stock Compensation – Scope of Modification Accounting," that clarifies that all changes to share-based payment awards are not necessarily accounted for as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. This guidance is effective prospectively beginning January 1, 2018, with early adoption permitted. This guidance will apply to any future modifications. The Company does not believe the standard will have a material effect on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other." ASU 2017-04 eliminates step 2 from the goodwill impairment test, instead requiring that an entity recognize an impairment charge for the amount by which the carrying amount of goodwill exceeds the reporting unit's fair value. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company does not believe the standard will have a material effect on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations; Clarifying the Definition of a Business." ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, "Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory." ASU 2016-16 clarifies the accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 refines how companies classify certain aspects of the cash flow statement in regards to debt prepayment, settlement of debt instruments, contingent consideration payments, proceeds from insurance claims and life insurance policies, distribution from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted ASU 2016-09 effective January 1, 2017. As of the adoption date, this standard did not have a material impact on the Company's consolidated financial statements. Upon the adoption, the Company elected to account for forfeitures of share-based payments as they occur prospectively. For the three and nine months ended September 30, 2017, the Company recorded a tax benefit of $4.7 million and $10.7 million, respectively, related to share-based compensation in accordance with ASU 2016-09. In February 2016, the FASB issued ASU No. 2016-02, "Leases." ASU 2016-02 requires lessees to recognize the assets and liabilities on their balance sheet for the rights and obligations created by most leases and continue to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the standard on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, "Inventory: Simplifying the Measurement of Inventory." ASU 2015-11 applies only to inventory for which cost is determined by methods other than last-in, first-out and the retail inventory method, which includes inventory that is measured using first-in, first-out or average cost. Inventory within the scope of this standard is required to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company adopted ASU 2015-11 effective January 1, 2017. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance was originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. In July 2015, the FASB voted to defer the effective date of the new accounting guidance related to revenue recognition by one year to December 17, 2017 for annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. The standard will be effective for the Company beginning in the first quarter of 2018. The Company will adopt the standard using the modified retrospective method. The Company has and is continuing to conduct a comprehensive analysis of the provisions of the new standard and the impact it will have on the Company's processes, policies, and consolidated financial statements. The Company is currently finalizing its conclusions on the number of its performance obligations. Once the Company has concluded, it will finalize the standalone selling price for each performance obligation and assess the allocation of discounts and variable consideration to each. The new revenue standard is expected to have a minor impact on the timing of revenue recognized in the Company’s consolidated financial statements. The Company does not expect the provisions of the new standard to impact the manner in which it treats certain costs to fulfill contracts (i.e., shipping and handling costs) and costs to acquire new contracts (i.e., commissions). Under the new standard, the Company will elect the practical expedient on shipping and handling costs and continue to treat these costs as fulfillment costs and expense as incurred. Further, commissions will continue to be expensed as incurred as the impact to the consolidated financial statements is immaterial. The new standard will also result in enhanced revenue related disclosures. 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 recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. |
Subsequent Events (Policies)
Subsequent Events (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event On October 2, 2017, the Company closed the previously-announced acquisition of its largest European distributor, Robopolis SAS (Robopolis), through the acquisition of the issued and outstanding capital shares of Robopolis. At the closing, the Company paid approximately $170.1 million in cash offset by acquired cash of approximately $31.6 million held by Robopolis and its subsidiaries at closing, resulting in a net cash outlay of approximately $138.4 million . Pursuant to the Share Purchase Agreement, $16.0 million of the purchase price was placed into an escrow account to settle certain claims for indemnification for breaches or inaccuracies in Robopolis’ and its shareholders’ representations and warranties, covenants and agreements, and approximately $2.4 million of the purchase price was deposited in escrow to satisfy, in part, any payments due to iRobot for certain post-closing purchase price adjustments. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | As of September 30, 2017 , the Company had reserves for product returns of $28.4 million , discounts and promotions of $20.0 million and price protection of $3.2 million . As of December 31, 2016, the Company had reserves for product returns of $27.7 million , discounts and promotions of $21.9 million and price protection of $1.5 million . |
Basic and Diluted Net Income Per Share | The following table presents the calculation of both basic and diluted net income per share: Three Months Ended Nine Months Ended (In thousands, except per share amounts) September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 Net income $ 22,082 $ 19,512 $ 46,343 $ 28,258 Basic weighted-average shares outstanding 27,739 27,237 27,520 27,878 Dilutive effect of employee stock options and restricted shares 1,177 541 1,199 545 Diluted weighted-average shares outstanding 28,916 27,778 28,719 28,423 Basic income per share $ 0.80 $ 0.72 $ 1.68 $ 1.01 Diluted income per share $ 0.76 $ 0.70 $ 1.61 $ 0.99 |
Fair Value Assets Measured on Recurring Basis | The Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2017 , were as follows: Fair Value Measurements as of September 30, 2017 Level 1 Level 2 (1) Level 3 (In thousands) Description Assets: Cash and cash equivalents Money market funds $ 10,998 $ — $ — Short term investments Corporate and government bonds — 36,442 — Other current assets Derivative instruments (Note 6) — 849 — Total assets measured at fair value $ 10,998 $ 37,291 $ — Liabilities: Accrued expenses Derivative instruments (Note 6) $ — $ 315 $ — Total liabilities measured at fair value $ — $ 315 $ — The Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016 , were as follows: Fair Value Measurements as of Level 1 Level 2 (1) Level 3 (In thousands) Description Assets: Cash and cash equivalents Money market funds $ 156,980 $ — $ — Short term investments Corporate and government bonds — 39,930 — Other current assets Derivative instruments (Note 6) — 180 — Total assets measured at fair value $ 156,980 $ 40,110 $ — Liabilities: Accrued expenses Derivative instruments (Note 6) $ — $ 43 $ — Total liabilities measured at fair value $ — $ 43 $ — (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. |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Inventory consists of the following: September 30, 2017 December 31, 2016 (In thousands) Raw materials $ 2,928 $ 4,717 Finished goods 89,885 45,861 $ 92,813 $ 50,578 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities, Current [Abstract] | |
Components of Accrued Expenses | Accrued expenses consist of the following: September 30, 2017 December 31, 2016 (In thousands) Accrued warranty $ 10,279 $ 8,464 Accrued sales and other taxes payable 5,569 482 Accrued customer deposits and payables 3,016 4,682 Accrued sales and marketing 2,911 404 Accrued accounting fees 1,030 686 Accrued direct fulfillment costs 634 1,722 Accrued federal and state income taxes 476 1,059 Accrued other 5,034 2,355 $ 28,949 $ 19,854 Accrued compensation consists of the following: September 30, 2017 December 31, 2016 (In thousands) Accrued bonus $ 15,079 $ 14,226 Accrued other compensation 8,694 6,789 $ 23,773 $ 21,015 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative Instruments, Gain (Loss) [Table Text Block] | Gains (losses) associated with derivative instruments not designated as hedging instruments are as follows: Three Months Ended Nine Months Ended Classification September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 (In thousands) Gain (loss) recognized in income Other income, net $ 9 $ (18 ) $ (495 ) $ (392 ) The following tables reflect the effect of foreign exchange forward contracts that are designated as cash flow hedging instruments for the three and nine months ended September 30, 2017 and October 1, 2016 (in thousands): Effective Portion Ineffective Portion Gain (loss) recognized in OCI on Derivative (1) Gain (loss) reclassified from accumulated OCI into income (2) Gain (loss) recognized in income (3) Three months ended Three months ended Three months ended September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Foreign currency forward contracts $ (21 ) $ — Revenue $ (39 ) $ — Other income, net $ — $ — Effective Portion Ineffective Portion Gain (loss) recognized in OCI on Derivative (1) Gain (loss) reclassified from accumulated OCI into income (2) Gain (loss) recognized in income (3) Nine months ended Nine months ended Nine months ended September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Foreign currency forward contracts $ 200 $ — Revenue $ (58 ) $ — Other income, net $ (5 ) $ — (1) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (2) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (3) The amount represents the change in fair value of derivative contracts due to changes in the forward rates. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
Derivative Instruments Schedule
Derivative Instruments Schedule of Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative [Line Items] | |
Schedule of Derivative Instruments [Table Text Block] | The fair values of derivative instruments are as follows: Fair Value Classification September 30, 2017 December 31, 2016 (In thousands) Derivatives not designated as hedging instruments: Foreign currency option contracts Other current assets $ — $ 180 Foreign currency forward contracts Other current assets 711 — Foreign currency forward contracts Accrued expenses 315 43 Derivatives designated as cash flow hedges: Foreign currency forward contracts Other current assets $ 138 $ — Gains (losses) associated with derivative instruments not designated as hedging instruments are as follows: Three Months Ended Nine Months Ended Classification September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 (In thousands) Gain (loss) recognized in income Other income, net $ 9 $ (18 ) $ (495 ) $ (392 ) The following tables reflect the effect of foreign exchange forward contracts that are designated as cash flow hedging instruments for the three and nine months ended September 30, 2017 and October 1, 2016 (in thousands): Effective Portion Ineffective Portion Gain (loss) recognized in OCI on Derivative (1) Gain (loss) reclassified from accumulated OCI into income (2) Gain (loss) recognized in income (3) Three months ended Three months ended Three months ended September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Foreign currency forward contracts $ (21 ) $ — Revenue $ (39 ) $ — Other income, net $ — $ — Effective Portion Ineffective Portion Gain (loss) recognized in OCI on Derivative (1) Gain (loss) reclassified from accumulated OCI into income (2) Gain (loss) recognized in income (3) Nine months ended Nine months ended Nine months ended September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Classification September 30, 2017 October 1, 2016 Foreign currency forward contracts $ 200 $ — Revenue $ (58 ) $ — Other income, net $ (5 ) $ — (1) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (2) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (3) The amount represents the change in fair value of derivative contracts due to changes in the forward rates. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Future Minimum Rental Payments under Operating Leases | Future minimum rental payments under operating leases were as follows as of September 30, 2017 : Operating Leases (In thousands) Remainder of 2017 $ 1,287 2018 5,279 2019 5,146 2020 5,120 2021 5,259 Thereafter 39,275 Total minimum lease payments $ 61,366 During the three months ended September 30, 2017, the Company amended its lease for its corporate headquarters and extended the lease term until 2030. |
Activity Related to the Warranty Accrual | Activity related to the warranty accrual was as follows: Three Months Ended Nine Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016 (In thousands) Balance at beginning of period $ 10,505 $ 6,622 $ 8,464 $ 6,907 Liability assumed (1) — — 2,186 — Provision 2,433 2,823 6,051 5,619 Warranty usage (2) (2,659 ) (1,598 ) (6,422 ) (4,679 ) Balance at end of period $ 10,279 $ 7,847 $ 10,279 $ 7,847 (1) Warranty assumed as part of the acquisition of the iRobot-related distribution business of Sales On Demand Corporation (see Note 9). (2) Warranty usage includes costs incurred for warranty obligations and, for the nine month period ended October 1, 2016 , the release of warranty liabilities associated with the divestiture of the defense and security business unit. |
Industry Segment, Geographic 27
Industry Segment, Geographic Information and Significant Customers (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information about Revenue, Cost of Revenue, Gross Margin and Income before Income Taxes | Prior to completing the sale of the Company's defense and security business (see Note 11), the Company’s reportable segments consisted of the home business unit and the defense and security business unit. Following this divestiture, which was completed on April 4, 2016, the Company now operates as one business segment, consumer robots, the results of which are included in the Company's consolidated statements of income and comprehensive income. The Company's consumer robots products are offered to consumers through a network of retail businesses and one distributor throughout the United States, to various countries through international distributors and retailers, and through the Company's on-line store. |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the final allocation of the purchase price (in thousands): Cash $ 125 Accounts receivable, net (1) (5,496 ) Inventories 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 (1) The accounts receivable balance reflects reserves for product returns, discounts and promotions assumed as part of the acquisition. |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives: Useful Life Fair Value (in thousands) Customer relationships 13 Years $ 4,490 Reacquired distribution rights 9 Months 4,150 Total $ 8,640 |
Goodwill, Other Intangible As29
Goodwill, Other Intangible Assets and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Intangible assets at September 30, 2017 and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Cost Accumulated Amortization Net Cost Accumulated Amortization Net (In thousands) Completed technology $ 26,900 $ 17,286 $ 9,614 $ 26,900 $ 14,693 $ 12,207 Tradename 100 100 — 100 100 — Customer relationships 4,490 173 4,317 — — — Reacquired distribution rights 4,150 2,766 1,384 — — — Total $ 35,640 $ 20,325 $ 15,315 $ 27,000 $ 14,793 $ 12,207 |
Estimated Future Amortization Expense Related to Current Intangible Assets | The estimated future amortization expense is expected to be as follows (in thousands): Remainder of 2017 $ 2,334 2018 3,803 2019 3,163 2020 1,245 2021 1,245 Thereafter 3,525 Total $ 15,315 |
Divestiture (Tables)
Divestiture (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | On April 4, 2016, the Company completed the sale of its defense and security business unit to iRobot Defense Holdings, Inc., a portfolio company of Arlington Capital Partners. The final purchase price, including adjustments for working capital and indebtedness, was $24.5 million . The Company recognized a gain of $0.4 million on the sale of assets. The sale of its defense and security business did not meet the criteria for discontinued operations presentation as it did not represent a strategic shift that had a major effect on the Company's operations and financial results. The Company and iRobot Defense Holdings, Inc. also entered into a Transition Services Agreement (TSA), pursuant to which the Company continued to perform certain functions on iRobot Defense Holdings Inc.’s behalf during a transition period not to exceed 12 months. The TSA provided for the reimbursement of the Company for direct costs incurred in order to provide such functions and was recorded as a component of other income. The transition period was completed during the three months ended April 1, 2017. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | ||||
Net income | $ 22,082 | $ 19,512 | $ 46,343 | $ 28,258 |
Weighted-average shares outstanding | 27,739 | 27,237 | 27,520 | 27,878 |
Dilutive effect of employee stock options and restricted shares | 1,177 | 541 | 1,199 | 545 |
Diluted weighted-average shares outstanding | 28,916 | 27,778 | 28,719 | 28,423 |
Basic income per share | $ 0.80 | $ 0.72 | $ 1.68 | $ 1.01 |
Diluted income per share | $ 0.76 | $ 0.70 | $ 1.61 | $ 0.99 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 500 | 0 | 600 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 35,640 | $ 27,000 |
Finite-Lived Intangible Assets, Net | $ 15,315 | $ 12,207 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Tax provision | $ 4,411 | $ 8,462 | $ 7,565 | $ 12,722 |
Effective income tax rate | 16.60% | 30.20% | 14.00% | 31.00% |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Fair Value Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | $ 10,998 | $ 156,980 | |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 10,998 | 156,980 | |
Fair Value, Inputs, Level 1 [Member] | Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Fair Value, Inputs, Level 1 [Member] | Derivative [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | [1] | 37,291 | 40,110 |
Liabilities, Fair Value Disclosure, Recurring | [1] | 315 | 43 |
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | [1] | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | [1] | 36,442 | 39,930 |
Fair Value, Inputs, Level 2 [Member] | Derivative [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | [1] | 849 | 180 |
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Liabilities, Fair Value Disclosure, Recurring | 0 | ||
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Fair Value, Inputs, Level 3 [Member] | Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Fair Value, Inputs, Level 3 [Member] | Derivative [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities, Fair Value Disclosure, Recurring | 0 | 0 | |
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities, Fair Value Disclosure, Recurring | [1] | 315 | 43 |
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities, Fair Value Disclosure, Recurring | $ 0 | $ 0 | |
[1] | (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. |
Summary of Significant Accoun35
Summary of Significant Accounting Policies Revenue Recognition (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Allowance for Sales Returns [Member] | ||
Valuation Allowances and Reserves, Balance | $ 28.4 | $ 27.7 |
Allowance for Promotions [Member] | ||
Valuation Allowances and Reserves, Balance | 20 | 21.9 |
Allowance for Price Protection [Member] | ||
Valuation Allowances and Reserves, Balance | $ 3.2 | $ 1.5 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Fair Value Assets Measured on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill | $ 41,041 | $ 41,041 |
Finite-Lived Intangible Assets, Gross | 35,640 | 27,000 |
Finite-Lived Intangible Assets, Net | $ 15,315 | $ 12,207 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Inventory, Raw Materials, Net of Reserves | $ 2,928 | $ 4,717 |
Inventory, Finished Goods, Net of Reserves | 89,885 | 45,861 |
Inventory | $ 92,813 | $ 50,578 |
Stock Option Plans - Additional
Stock Option Plans - Additional Information (Detail) - shares | May 20, 2015 | Sep. 30, 2017 | Sep. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Effective date for stock options plan | May 20, 2015 | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for options | 1 year | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for options | 4 years | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum period for expiration of options in case of employee termination | 60 days | ||
Maximum period for expiration of options in case of employee termination | 90 days | ||
Employee Stock Option [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum expiration period for options | 5 years | ||
Employee Stock Option [Member] | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for options | 4 years | ||
Minimum expiration period for options | 10 years | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock units granted | 79,300 | ||
Two Thousand Fifteen Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for issuance in different forms | 3,100,000 | ||
Share based compensation arrangement shares available for grant | 895,418 | 895,418 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts Payable, Current [Abstract] | ||
Accrued warranty | $ 10,279 | $ 8,464 |
Accrued sales and other taxes payable | 5,569 | 482 |
Accrued customer deposits and payables | 3,016 | 4,682 |
Accrued sales and marketing | 2,911 | 404 |
Accrued accounting fees | 1,030 | 686 |
Accrued direct fulfillment costs | 634 | 1,722 |
Accrued federal and state income taxes | 476 | 1,059 |
Accrued other | 5,034 | 2,355 |
Accrued expenses | 28,949 | 19,854 |
Accrued Bonuses, Current | 15,079 | 14,226 |
Accrued compensation | 23,773 | 21,015 |
Accrued Employee Benefits | $ 8,694 | $ 6,789 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments, Loss Recognized in Other Comprehensive Income (Loss), Effective Portion | [1] | $ (21) | |||
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion | [1] | $ 0 | $ 200 | $ 0 | |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [2] | (39) | 0 | (58) | 0 |
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | [3] | $ 0 | $ 0 | $ (5) | $ 0 |
[1] | (1)The amount represents the change in fair value of derivative contracts due to changes in spot rates. | ||||
[2] | (2)The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. | ||||
[3] | (3)The amount represents the change in fair value of derivative contracts due to changes in the forward rates. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
Derivative Instruments Schedu41
Derivative Instruments Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | ||
Derivative [Line Items] | ||||||
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion | [1] | $ 0 | $ 200 | $ 0 | ||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ 9 | (18) | (495) | (392) | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [2] | (39) | 0 | (58) | 0 | |
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | [3] | 0 | $ 0 | (5) | $ 0 | |
Designated as Hedging Instrument [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 17,700 | 17,700 | $ 0 | |||
Not Designated as Hedging Instrument [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 27,500 | 27,500 | 8,100 | |||
Accrued Liabilities [Member] | Foreign Exchange Forward [Member] | ||||||
Derivative [Line Items] | ||||||
Other Derivatives Not Designated as Hedging Instruments at Fair Value, Net | 315 | 315 | 43 | |||
Other Current Assets [Member] | Foreign Exchange Forward [Member] | ||||||
Derivative [Line Items] | ||||||
Other Derivatives Not Designated as Hedging Instruments at Fair Value, Net | 711 | 711 | 0 | |||
Derivative, Fair Value, Net | 138 | 138 | 0 | |||
Other Current Assets [Member] | Foreign Exchange Option [Member] | ||||||
Derivative [Line Items] | ||||||
Other Derivatives Not Designated as Hedging Instruments at Fair Value, Net | $ 0 | $ 0 | $ 180 | |||
[1] | (1)The amount represents the change in fair value of derivative contracts due to changes in spot rates. | |||||
[2] | (2)The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. | |||||
[3] | (3)The amount represents the change in fair value of derivative contracts due to changes in the forward rates. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Sep. 30, 2017USD ($) |
Outstanding POs [Abstract] | |
Contractual Obligation | $ 181.2 |
Commitments and Contingencies43
Commitments and Contingencies - Summary of Future Minimum Rental Payments under Operating Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rental expense under operating leases | $ 2,200 | $ 1,600 | $ 6,100 | $ 4,400 |
Disclosure Summary Of Future Minimum Rental Payments Under Operating Leases [Abstract] | ||||
Remainder of 2017 | 1,287 | 1,287 | ||
2,018 | 5,279 | 5,279 | ||
2,019 | 5,146 | 5,146 | ||
2,020 | 5,120 | 5,120 | ||
2,021 | 5,259 | 5,259 | ||
Thereafter | 39,275 | 39,275 | ||
Total minimum lease payments | 61,366 | 61,366 | ||
Thereafter | $ 3,525 | $ 3,525 |
Commitments and Contingencies44
Commitments and Contingencies - Activity Related to Warranty Accrual (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | ||
Commitments and Contingencies Disclosure [Abstract] | |||||
Standard Product Warranty Accrual, Additions from Business Acquisition | [1] | $ 0 | $ 0 | $ 2,186 | $ 0 |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||||
Balance at beginning of period | 10,505 | 6,622 | 8,464 | 6,907 | |
Provision | 2,433 | 2,823 | 6,051 | 5,619 | |
Warranty usage | [2] | (2,659) | (1,598) | (6,422) | (4,679) |
Balance at end of period | $ 10,279 | $ 7,847 | $ 10,279 | $ 7,847 | |
[1] | (1)Warranty assumed as part of the acquisition of the iRobot-related distribution business of Sales On Demand Corporation (see Note 9). | ||||
[2] | Warranty usage includes costs incurred for warranty obligations and, for the nine month period ended October 1, 2016, the release of warranty liabilities associated with the divestiture of the defense and security business unit. |
Industry Segment, Geographic 45
Industry Segment, Geographic Information and Significant Customers - Segment Information about Revenue, Cost of Revenue, Gross Margin and Income before Income Taxes (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Oct. 01, 2016USD ($) | Sep. 30, 2017USD ($)segment | Oct. 01, 2016USD ($) | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Number of Reportable Segments | segment | 1 | ||||
Revenue | $ 205,399 | $ 168,610 | $ 557,014 | $ 448,110 | |
Cost of revenue | [1] | 103,016 | 87,550 | 277,397 | 235,437 |
Gross margin | 102,383 | 81,060 | 279,617 | 212,673 | |
Research and development | [1] | 28,843 | 19,672 | 80,518 | 57,944 |
Selling and marketing | [1] | 28,646 | 17,925 | 91,344 | 66,972 |
General and administrative | [1] | 21,002 | 16,012 | 58,137 | 48,919 |
Other income, net | 2,601 | 523 | 4,290 | 2,142 | |
Income before income taxes | $ 26,493 | $ 27,974 | $ 53,908 | $ 40,980 | |
[1] | Total stock-based compensation recorded in the three and nine months ended September 30, 2017 and October 1, 2016 included in the above figures breaks down by expense classification as follows: Three Months Ended Nine Months Ended September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016Cost of revenue$274 $184 $751 $555Research and development1,261 1,028 3,508 2,598Selling and marketing728 444 1,869 1,316General and administrative2,771 2,247 7,941 7,312 |
Industry Segment, Geographic 46
Industry Segment, Geographic Information and Significant Customers - Additional Information (Detail) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Retail Site [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration Risk, Percentage | 11.00% | 11.90% | ||
Customer Concentration Risk [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration Risk, Percentage | 57.30% | 60.90% | 51.50% | 62.40% |
International distributors of home robots products | Distributor One | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration Risk, Percentage | 13.30% | 13.50% | ||
International distributors of home robots products | Distributor Two | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration Risk, Percentage | 14.30% | 12.00% | 13.20% | 13.10% |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Thousands | Apr. 03, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Oct. 01, 2016 | |
Business Acquisition [Line Items] | |||||
Cash Acquired from Acquisition | $ 125 | ||||
Business Combination, Consideration Transferred | 16,649 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 18,290 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 2,065 | ||||
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets | 409 | ||||
Goodwill | 0 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 18,892 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | [1] | (5,496) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 8,640 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | 24,033 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | (4,450) | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | (691) | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 5,141 | ||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | (2,243) | $ (2,243) | $ 0 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory | $ 3,600 | ||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments Related to Previous Period | 2,200 | ||||
Customer-Related Intangible Assets [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 4,490 | ||||
Distribution Rights [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 4,150 | ||||
Deferred Tax Asset [Domain] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Assets | 1,300 | ||||
Nonrecurring Adjustment [Domain] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Assets | $ 7,400 | ||||
[1] | (1) The accounts receivable balance reflects reserves for product returns, discounts and promotions assumed as part of the acquisition. |
Goodwill, Other Intangible As48
Goodwill, Other Intangible Assets and Other Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 41,041 | $ 41,041 | $ 41,041 | ||
Amortization of Acquired Intangible Assets | $ 2,300 | $ 900 | $ 5,500 | $ 2,600 | |
Minimum | |||||
Business Acquisition [Line Items] | |||||
Estimated useful life of intangible assets | 9 months | ||||
Maximum | |||||
Business Acquisition [Line Items] | |||||
Estimated useful life of intangible assets | 13 years |
Goodwill, Other Intangible As49
Goodwill, Other Intangible Assets and Other Assets - Other Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | $ 35,640 | $ 35,640 | $ 27,000 | ||
Intangible assets accumulated amortization | 20,325 | 20,325 | 14,793 | ||
Intangible Assets, Net | 15,315 | 15,315 | 12,207 | ||
Amortization of Acquired Intangible Assets | 2,300 | $ 900 | 5,500 | $ 2,600 | |
Completed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 26,900 | 26,900 | 26,900 | ||
Intangible assets accumulated amortization | 17,286 | 17,286 | 14,693 | ||
Intangible Assets, Net | 9,614 | 9,614 | 12,207 | ||
Trade Names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 100 | 100 | 100 | ||
Intangible assets accumulated amortization | 100 | 100 | 100 | ||
Intangible Assets, Net | 0 | 0 | 0 | ||
Customer-Related Intangible Assets [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 4,490 | 4,490 | 0 | ||
Intangible assets accumulated amortization | 173 | 173 | 0 | ||
Intangible Assets, Net | 4,317 | 4,317 | 0 | ||
Distribution Rights [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 4,150 | 4,150 | 0 | ||
Intangible assets accumulated amortization | 2,766 | 2,766 | 0 | ||
Intangible Assets, Net | $ 1,384 | $ 1,384 | $ 0 | ||
Minimum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 9 months |
Goodwill, Other Intangible As50
Goodwill, Other Intangible Assets and Other Assets - Estimated Future Amortization Expense Related to Current Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Disclosure Estimated Future Amortization Expense Related To Current Intangible Assets [Abstract] | ||
Remainder of 2017 | $ 2,334 | |
2,018 | 3,803 | |
2,019 | 3,163 | |
2,020 | 1,245 | |
2,021 | 1,245 | |
Thereafter | 3,525 | |
Intangible Assets, Net | $ 15,315 | $ 12,207 |
Divestiture (Details)
Divestiture (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | On April 4, 2016, the Company completed the sale of its defense and security business unit to iRobot Defense Holdings, Inc., a portfolio company of Arlington Capital Partners. The final purchase price, including adjustments for working capital and indebtedness, was $24.5 million . The Company recognized a gain of $0.4 million on the sale of assets. The sale of its defense and security business did not meet the criteria for discontinued operations presentation as it did not represent a strategic shift that had a major effect on the Company's operations and financial results. The Company and iRobot Defense Holdings, Inc. also entered into a Transition Services Agreement (TSA), pursuant to which the Company continued to perform certain functions on iRobot Defense Holdings Inc.’s behalf during a transition period not to exceed 12 months. The TSA provided for the reimbursement of the Company for direct costs incurred in order to provide such functions and was recorded as a component of other income. The transition period was completed during the three months ended April 1, 2017. |
Proceeds from Divestiture of Businesses, Net of Cash Divested | $ 24.5 |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 0.4 |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Event (Details) - USD ($) $ in Thousands | Oct. 02, 2017 | Apr. 03, 2017 |
Subsequent Event [Line Items] | ||
Cash Acquired from Acquisition | $ 125 | |
Payments to Acquire Businesses, Gross | 16,649 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $ 18,892 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Cash Acquired from Acquisition | $ 31,600 | |
Payments to Acquire Businesses, Gross | 170,100 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 138,400 | |
Business Acquisition, Purchase Price Deposit In Escrow, Indemnification For Breach | 16,000 | |
Escrow Deposit | $ 2,400 |