Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 30, 2018 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | IRBT | |
Entity Registrant Name | IROBOT CORP | |
Entity Central Index Key | 1,159,167 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 27,406,044 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 88,783 | $ 128,635 |
Short term investments | 38,551 | 37,225 |
Accounts receivable, net | 75,127 | 142,829 |
Inventory | 115,377 | 106,932 |
Other current assets | 30,608 | 19,105 |
Total current assets | 348,446 | 434,726 |
Property and equipment, net | 47,252 | 44,579 |
Deferred tax assets | 33,154 | 31,531 |
Goodwill | 118,319 | 121,440 |
Intangible assets, net | 34,079 | 44,712 |
Other assets | 15,531 | 14,534 |
Total assets | 596,781 | 691,522 |
Current liabilities: | ||
Accounts payable | 66,926 | 116,316 |
Accrued expenses | 51,574 | 73,647 |
Deferred revenue and customer advances | 2,223 | 7,761 |
Total current liabilities | 120,723 | 197,724 |
Deferred tax liabilities | 7,190 | 9,539 |
Other long-term liabilities | 10,827 | 13,932 |
Total long-term liabilities | 18,017 | 23,471 |
Total liabilities | 138,740 | 221,195 |
Commitments and contingencies (Note 12) | ||
Preferred stock, 5,000 shares authorized and none outstanding | 0 | 0 |
Common stock, $0.01 par value, 100,000 shares authorized; 27,402 and 27,945 shares issued and outstanding at June 30, 2018 and December 30, 2017, respectively | 274 | 279 |
Additional paid-in capital | 151,556 | 190,067 |
Retained earnings | 309,901 | 277,989 |
Accumulated other comprehensive (loss) income | (3,690) | 1,992 |
Total stockholders’ equity | 458,041 | 470,327 |
Total liabilities and stockholders’ equity | $ 596,781 | $ 691,522 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 30, 2017 |
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 | 27,402,313 | 27,945,144 |
Common stock, shares outstanding | 27,402,313 | 27,945,144 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | ||
Revenue | $ 226,317 | $ 183,148 | $ 443,385 | $ 351,615 | |
Cost of product revenue | 103,712 | 91,009 | 200,213 | 171,269 | |
Amortization of intangible assets | 4,679 | 2,248 | 9,461 | 3,112 | |
Total cost of revenue (1) | [1] | 108,391 | 93,257 | 209,674 | 174,381 |
Gross margin | 117,926 | 89,891 | 233,711 | 177,234 | |
Operating expenses: | |||||
Research and development (1) | [1] | 34,924 | 26,167 | 67,869 | 51,675 |
Selling and marketing (1) | [1] | 45,910 | 40,123 | 77,239 | 62,698 |
General and administrative (1) | [1] | 23,468 | 19,513 | 49,301 | 37,135 |
Amortization of intangible assets | 269 | 0 | 542 | 0 | |
Total operating expenses | 104,571 | 85,803 | 194,951 | 151,508 | |
Operating income | 13,355 | 4,088 | 38,760 | 25,726 | |
Other income, net | 1,507 | 1,686 | 2,026 | 1,689 | |
Income before income taxes | 14,862 | 5,774 | 40,786 | 27,415 | |
Income tax expense (benefit) | 4,391 | (2,129) | 9,914 | 3,153 | |
Net income | $ 10,471 | $ 7,903 | $ 30,872 | $ 24,262 | |
Net income per share: | |||||
Basic | $ 0.38 | $ 0.29 | $ 1.11 | $ 0.89 | |
Diluted | $ 0.37 | $ 0.27 | $ 1.08 | $ 0.85 | |
Number of weighted average common shares used in per share calculations | |||||
Basic | 27,615 | 27,516 | 27,802 | 27,410 | |
Diluted | 28,337 | 28,778 | 28,658 | 28,581 | |
Stock-based compensation | $ 6,431 | $ 4,704 | $ 12,377 | $ 9,035 | |
Cost of revenue | |||||
Number of weighted average common shares used in per share calculations | |||||
Stock-based compensation | 347 | 251 | 688 | 477 | |
Research and development | |||||
Number of weighted average common shares used in per share calculations | |||||
Stock-based compensation | 1,794 | 1,147 | 3,483 | 2,246 | |
Selling and marketing | |||||
Number of weighted average common shares used in per share calculations | |||||
Stock-based compensation | 750 | 571 | 1,488 | 1,141 | |
General and administrative | |||||
Number of weighted average common shares used in per share calculations | |||||
Stock-based compensation | $ 3,540 | $ 2,735 | $ 6,718 | $ 5,171 | |
[1] | Stock-based compensation recorded in the three and six months ended June 30, 2018 and July 1, 2017 breaks down by expense classification as follows: Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017Cost of revenue$347 $251 $688 $477Research and development1,794 1,147 3,483 2,246Selling and marketing750 571 1,488 1,141General and administrative3,540 2,735 6,718 5,171Total$6,431 $4,704 $12,377 $9,035 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Net income | $ 10,471 | $ 7,903 | $ 30,872 | $ 24,262 |
Other comprehensive income (loss): | ||||
Net foreign currency translation adjustments | (11,123) | 46 | (5,785) | (6) |
Net unrealized gains (losses) on cash flow hedges, net of tax | 1,619 | 221 | (232) | 221 |
Net (gains) losses on cash flow hedge reclassified into earnings, net of tax | (169) | 19 | 421 | 19 |
Net unrealized gains (losses) on marketable securities, net of tax | 87 | (5) | (85) | 30 |
Total comprehensive income | $ 885 | $ 8,184 | $ 25,191 | $ 24,526 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 30,872 | $ 24,262 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 17,662 | 8,815 |
Stock-based compensation | 12,377 | 9,035 |
Deferred income taxes, net | (4,208) | (2,656) |
Deferred rent | 586 | 0 |
Other | 258 | 806 |
Changes in operating assets and liabilities — (use) source | ||
Accounts receivable | (66,085) | (18,489) |
Inventory | (10,303) | (10,820) |
Other assets | (12,764) | (7,478) |
Accounts payable | (46,519) | (1,953) |
Accrued expenses | (20,266) | (1,945) |
Deferred revenue and customer advances | (3,970) | (1,875) |
Long-term liabilities | (2,975) | (278) |
Net cash provided by operating activities | 26,319 | 32,790 |
Cash flows from investing activities: | ||
Additions of property and equipment | (14,284) | (13,272) |
Change in other assets | (1,837) | (911) |
Proceeds from sale of cost method investment | 629 | 1,056 |
Cash paid for business acquisition, net of cash acquired | 0 | (16,524) |
Purchases of investments | (6,438) | (7,034) |
Sales and maturities of investments | 7,000 | 7,000 |
Net cash used in investing activities | (14,930) | (29,685) |
Cash flows from financing activities: | ||
Proceeds from employee stock plans | 2,605 | 5,365 |
Income tax withholding payment associated with restricted stock vesting | (3,532) | (2,974) |
Stock repurchases | (50,000) | 0 |
Net cash (used in) provided by financing activities | (50,927) | 2,391 |
Effect of exchange rate changes on cash and cash equivalents | (314) | 154 |
Net (decrease) increase in cash and cash equivalents | (39,852) | 5,650 |
Cash and cash equivalents, at beginning of period | 128,635 | 214,523 |
Cash and cash equivalents, at end of period | 88,783 | 220,173 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 25,791 | 9,948 |
Additions of property and equipment included in accounts payable | $ 1,537 | $ 2,237 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2018 | |
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 through distributor and retail sales channels, as well as its on-line stores. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
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 balances and transactions. iRobot has prepared the accompanying unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). In addition, certain prior year amounts have been reclassified to conform to the current year presentation. In the opinion of management, all adjustments necessary to the unaudited interim consolidated financial statements have been made to state fairly the Company's financial position. Interim results are not necessarily indicative of results for the full fiscal year or any future periods. The information included in this Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 30, 2017, filed with the SEC on February 16, 2018. 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, revenue and expenses. These estimates and judgments, include but are not limited to, revenue recognition, including performance obligations, variable consideration and other obligations such as product returns and incentives; valuation of goodwill and acquired intangible assets; accounting for business combinations; evaluating loss contingencies; accounting for stock-based compensation including performance-based assessments; and accounting for income taxes and related valuation allowances. The Company bases these estimates and judgments on historical experience, market participant fair value considerations, projected future cash flows and various other factors that the Company believes are reasonable under the circumstances. Actual results may differ from the Company’s estimates. Fiscal Year-End The Company operates and reports using a 52 -53 week fiscal year ending on the Saturday closest to December 31. Accordingly, the Company’s fiscal quarters end on the Saturday that falls closest to the last day of the third month of each quarter. Other Assets During the three months ended March 31, 2018, the Company adopted Accounting Standards Update No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities," which revises the classification and measurement of financial instruments. Upon adoption of this standard, the Company now classifies its cost method investments as equity securities without readily determinable fair values and measures these investments at cost, less any impairment, adjusted for observable price changes. At June 30, 2018 , other assets consisted primarily of equity securities without readily determinable fair values and an equity method investment totaling $15.4 million . There was no adjustment recorded to the carrying value of our equity securities without readily determinable fair values as a result of the adoption of ASU 2016-01. At December 30, 2017 , other assets consisted primarily of cost method investments and an equity method investment totaling $14.2 million . Net Income Per Share Basic income per share is calculated using the Company's weighted-average outstanding common shares. Diluted income per share is calculated using the Company's weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. The following table presents the calculation of both basic and diluted net income per share (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Net income $ 10,471 $ 7,903 $ 30,872 $ 24,262 Weighted-average common shares outstanding 27,615 27,516 27,802 27,410 Dilutive effect of employee stock awards 722 1,262 856 1,171 Diluted weighted-average common shares outstanding 28,337 28,778 28,658 28,581 Basic income per share $ 0.38 $ 0.29 $ 1.11 $ 0.89 Diluted income per share $ 0.37 $ 0.27 $ 1.08 $ 0.85 Restricted stock units and stock options representing approximately 0.2 million and 0.0 million shares of common stock for the three-month periods ended June 30, 2018 and July 1, 2017 , respectively, and approximately 0.1 million and 0.0 million shares of common stock for the six-month periods ended June 30, 2018 and July 1, 2017 , respectively, were excluded from the computation of diluted earnings per share as their effect would have been antidilutive. Recently Adopted Accounting Standards In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which provides an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate under the Tax Cuts and Jobs Act is recorded. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. During the first quarter of 2018, the Company early adopted this standard, which did not have a material impact on the Company's consolidated financial statements and related disclosures. In October 2016, 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. During the first quarter of 2018, the Company adopted this standard, which did not have a material impact on the Company's consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities," as amended by ASU No. 2018-03 in February 2018, which revises various aspects of the recognition, measurement, presentation and disclosure of financial instruments. The standard requires that marketable equity investments be measured at fair value with changes to fair value recognized in net income. ASU 2016-01 also provides a new measurement alternative for non-marketable equity investments that do not have a readily determinable fair value. Under the measurement alternative, investments are measured at cost, less any impairment, adjusted for changes from observable transactions for identical or similar investments of the same issuer. The Company adopted this guidance on December 31, 2017 and elected to record its non-marketable equity investments using the alternative measurement method, which did not have a material impact on the Company's consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," ("ASC 606") 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. On December 31, 2017, the Company adopted the guidance using the modified retrospective method applied to those contracts that were not completed as of the adoption date. Under the modified retrospective method, the Company recognized the cumulative effect of the adoption and recorded a net increase of $1.0 million to the beginning retained earnings as of December 31, 2017. See Note 3, "Revenue Recognition," for the required disclosures related to the impact of adopting this standard and a discussion of the Company's updated policies related to revenue recognition. Recently Issued Accounting Standards In August 2017, the FASB issued 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 March 2017, the FASB issued ASU No. 2017-08, "Receivables – Nonrefundable Fees and Other Costs," which shortens the amortization period of certain callable debt securities held at a premium. The guidance is effective for fiscal years beginning after December 15, 2018, 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 June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments," which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments. This may result in the earlier recognition of allowances for losses. The guidance is effective for fiscal years beginning after December 15, 2019, 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 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 pending adoption of ASU 2016-02 on its consolidated financial statements, and currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon its adoption of ASU 2016-02, which will increase the total assets and total liabilities that the Company reports relative to such amounts prior to adoption. 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 (Notes)
Revenue Recognition (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company primarily derives its revenue from product sales. The Company sells products directly to consumers through on-line stores and indirectly through resellers and distributors. Revenue is recognized upon transfer of control of promised products or services to customers, generally as title and risk of loss passes, in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue. Shipping and handling expenses are considered fulfillment activities and are expensed as incurred. The Company’s product portfolio includes various consumer robots, many of which are Wi-Fi connected. The consumer robots are generally highly dependent on, and interrelated with, the embedded software and cannot function without the software. As such, the consumer robots are accounted for as a single performance obligation, and the revenue is recognized at a point in time when the control is transferred to distributors, resellers or directly to end customers through online stores. For consumer robots with Wi-Fi capability ("connected robots"), each sale represents an arrangement with multiple promises consisting of the robot, an app, cloud services and potential future unspecified software upgrades. The Company has determined that the app, cloud services and potential future unspecified software upgrades represent one promised service to the customer to enhance the functionality and interaction with the robot (referred to collectively as "Cloud Services"). Under the previous revenue accounting standard, revenue allocated to the app and future unspecified software upgrades was deferred and recognized on a straight-line basis over the expected life of the connected robot. Under the newly adopted revenue standard, ASC 606, the Company has concluded that, on a quantitative and qualitative basis, the Cloud Services do not constitute a material performance obligation and, as such, are not considered a separate performance obligation that requires allocation of transaction price. For contracts that contain multiple consumer robots, the transaction price is allocated to each performance obligation based on a relative standalone selling price (SSP). The Company’s products generally carry a one-year limited warranty that promises customers that delivered products are as specified. The Company does not consider these assurance-type warranties as a separate performance obligation and therefore, the Company accounts for such warranties under ASC 460, Guarantees. Significant Judgments The Company provides limited rights of returns for direct-to-consumer sales generated through its on-line stores and certain resellers and distributors. In addition, the Company may provide other credits or incentives, including price protection, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Where appropriate, these estimates take into consideration relevant factors such as the Company’s historical experience, current contractual requirements, specific known market events and trends and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates, and the actual amounts of consideration ultimately received may differ from the Company’s estimates. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. As of June 30, 2018, the Company has reserves for product returns of $37.4 million and other credits and incentives of $48.0 million . As of December 30, 2017, the Company had reserves for product returns of $42.7 million and other credits and incentives of $61.4 million . Disaggregation of Revenue The following table provides information about disaggregated revenue by geographical region for the three and six months ended June 30, 2018 (in thousands): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Americas $ 120,816 $ 237,540 EMEA 70,123 139,710 APAC 35,378 66,135 Total revenue $ 226,317 $ 443,385 Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): June 30, 2018 (closing balance) December 31, 2017 (opening balance) Accounts receivable, net $ 75,127 $ 141,637 Contract liabilities 2,223 6,685 The Company invoices customers based upon contractual billing schedules, and accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities primarily relate to prepayments received from customers in advance of product shipments. The change in the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. During the three and six-month periods ended June 30, 2018, the Company recognized $6.3 million and $6.7 million , respectively, of the opening contract liability balance as revenue upon transfer of the products to customers. Practical Expedients and Exemptions The Company generally expenses sales commissions when incurred because the amortization period is generally one year or less. These costs are recorded within sales and marketing expenses. The Company does not assess whether a prepayment received represents a significant financing component as the period between when the payment is received and the transfer of the products to the customer is generally one year or less. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Financial Statement Impact of Adopting ASC 606 The Company adopted ASC 606 using the modified retrospective method. The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of December 30, 2017 was recorded as an increase of $1.0 million to retained earnings as of the adoption date. The adoption of the new guidance had an immaterial impact to the Company's consolidated balance sheet and statement of income as of and for the three and six months ended June 30, 2018. |
Business Combination (Notes)
Business Combination (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Business Acquisition [Line Items] | |
Business Combination Disclosure [Text Block] | Business Combination Acquisition of Robopolis On October 2, 2017, the Company closed the acquisition of its largest European distributor, Robopolis SAS, a French company ("Robopolis"), subsequently renamed iRobot France SAS. The acquisition will better enable the Company to maintain its leadership position and grow its business in several Western European countries through direct control of pre- and post-sales market activities including sales, marketing, branding, channel relationships and customer service. The initial purchase price was approximately $170.1 million in cash, net of acquired cash of $38.0 million , subject to the finalization of the working capital adjustment in accordance with the stock purchase agreement. During the first quarter of 2018, the working capital adjustment was finalized and resulted in a reduction in the purchase price of $0.7 million . The results of operations for this acquisition have been included in the Company’s operating results since the acquisition date. The estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the acquisition date to estimate the fair values. Therefore, the provisional measurements of fair value reflected are subject to change and such changes could be significant. The Company is continuing to analyze certain pre-acquisition income tax filing positions of Robopolis in various taxing jurisdictions that will assist the Company in finalizing the amounts to record for any assumed uncertain income tax positions. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date. The following table summarizes the preliminary allocation of the purchase price (in thousands): Cash $ 37,981 Accounts receivable 21,426 Inventory 36,304 Goodwill 78,926 Intangible assets 36,597 Other assets 2,456 Total assets acquired 213,690 Accounts payable (29,391 ) Accrued expenses (3,376 ) Deferred tax liabilities (10,864 ) Other liabilities (645 ) Total liabilities assumed (44,276 ) Net assets acquired $ 169,414 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) Reacquired distribution rights 2.25 years $ 29,296 Customer relationships 14 years 7,029 Non-competition agreements 3 years 272 Total $ 36,597 Pro Forma Results (Unaudited) The following table shows unaudited pro forma results of operations as if the Company had acquired Robopolis on January 1, 2017 (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Revenue $ 226,317 $ 189,088 $ 443,385 $ 368,212 Net income 10,471 5,441 30,872 21,088 Net income per share: Basic income per share $ 0.38 $ 0.20 $ 1.11 $ 0.77 Diluted income per share $ 0.37 $ 0.19 $ 1.08 $ 0.74 The unaudited pro forma results of operations are not necessarily indicative of the actual results that would have occurred had the transactions taken place at the beginning of the periods indicated. On April 3, 2017, the Company closed its acquisition of the iRobot-related distribution business of Sales on Demand Corporation ("SODC"). The Company has not furnished pro forma financial information relating to its acquisition of SODC, because such information is not material, individually or in the aggregate, to its financial results. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of the following (in thousands): June 30, 2018 December 30, 2017 Raw materials $ 3,822 $ 4,036 Finished goods 111,555 102,896 $ 115,377 $ 106,932 |
Goodwill, Other Intangible Asse
Goodwill, Other Intangible Assets and Other Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Other Intangible Assets and Other Assets | Goodwill and Other Intangible Assets The following table summarizes the activity in the carrying amount of goodwill for the six months ended June 30, 2018 (in thousands): June 30, 2018 Balance as of December 30, 2017 $ 121,440 Purchase accounting adjustments (663 ) Effect of foreign currency translation (2,458 ) Balance as of June 30, 2018 $ 118,319 Intangible assets at June 30, 2018 and December 30, 2017 consisted of the following (in thousands): June 30, 2018 December 30, 2017 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Completed technology $ 26,900 $ 19,879 $ 7,021 $ 26,900 $ 18,150 $ 8,750 Tradename 100 100 — 100 100 — Customer relationships 11,370 894 10,476 11,594 418 11,176 Reacquired distribution rights 32,825 16,443 16,382 33,760 9,226 24,534 Non-competition agreements 266 66 200 275 23 252 Total $ 71,461 $ 37,382 $ 34,079 $ 72,629 $ 27,917 $ 44,712 Amortization expense related to acquired intangible assets was $4.9 million and $2.3 million for the three months ended June 30, 2018 and July 1, 2017 , respectively. Amortization expense related to acquired intangible assets was $10.0 million and $3.2 million for the six months ended June 30, 2018 and July 1, 2017 , respectively. The estimated future amortization expense related to current intangible assets is expected to be as follows (in thousands): Cost of Revenue Operating Expenses Total Remainder of 2018 $ 9,107 $ 525 $ 9,632 2019 11,821 1,054 12,875 2020 900 1,032 1,932 2021 900 798 1,698 2022 675 798 1,473 Thereafter — 6,469 6,469 Total $ 23,403 $ 10,676 $ 34,079 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses at June 30, 2018 and December 30, 2017 consisted of the following (in thousands): June 30, 2018 December 30, 2017 Accrued compensation $ 18,982 $ 29,514 Accrued warranty 11,233 11,264 Accrued income taxes 4,563 7,110 Accrued sales and marketing 3,702 3,299 Accrued sales and other indirect taxes payable 3,033 7,256 Accrued accounting fees 1,353 1,221 Accrued direct fulfillment costs 937 1,885 Accrued other 7,771 12,098 $ 51,574 $ 73,647 |
Derivative Instruments (Notes)
Derivative Instruments (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
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 thirteen months or less. At June 30, 2018 and December 30, 2017 , the Company had outstanding cash flow hedges with a total notional value of $36.6 million and $73.7 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 June 30, 2018 and December 30, 2017 , the Company had outstanding economic hedges with a total notional value of $28.8 million and $36.6 million , respectively. The fair values of derivative instruments are as follows (in thousands): Fair Value Classification June 30, 2018 December 30, 2017 Derivatives not designated as hedging instruments: Foreign currency forward contracts Other current assets $ 1,200 $ 413 Foreign currency forward contracts Accrued expenses — 221 Derivatives designated as cash flow hedges: Foreign currency forward contracts Other current assets $ 440 $ 488 Foreign currency forward contracts Other assets — 116 Foreign currency forward contracts Accrued expenses — 279 Gain (loss) associated with derivative instruments not designated as hedging instruments are as follows (in thousands): Three Months Ended Six Months Ended Classification June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Gain (loss) recognized in income Other income, net $ 1,707 $ (254 ) $ 538 $ (479 ) The following tables reflect the effect of foreign exchange forward contracts that are designated as cash flow hedging instruments for the three and six months ended June 30, 2018 and July 1, 2017 (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 June 30, 2018 July 1, 2017 Classification June 30, 2018 July 1, 2017 Classification June 30, 2018 July 1, 2017 Foreign currency forward contracts $ 2,154 $ 221 Revenue $ (113 ) $ (19 ) Other income, net $ 355 $ (5 ) Cost of revenue $ 370 $ — 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) Six months ended Six months ended Six months ended June 30, 2018 July 1, 2017 Classification June 30, 2018 July 1, 2017 Classification June 30, 2018 July 1, 2017 Foreign currency forward contracts $ (560 ) $ 221 Revenue $ (279 ) $ (19 ) Other income, net $ 277 $ (5 ) Cost of revenue $ (386 ) $ — (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. |
Working Capital Facilities (Not
Working Capital Facilities (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Credit Facility [Abstract] | |
Debt Disclosure [Text Block] | Working Capital Facilities Credit Facility In June 2018, the Company entered into a new agreement with Bank of America, N.A., increasing the amount of its unsecured revolving line of credit from $75.0 million to $150.0 million . As of June 20, 2018, the full amount was available for borrowing. The new revolving line of credit is available to fund working capital and other corporate purposes. The new agreement extends the term of the credit facilities to June 2023. The interest on loans under the credit facility accrues, at the Company's election, at either (1) LIBOR plus a margin, currently equal to 1.0% , based on the Company's ratio of indebtedness to Adjusted EBITDA (the "Eurodollar Rate"), or (2) the lender’s base rate. The lender’s base rate is equal to the highest of (1) the federal funds rate plus 0.5% , (2) the lender’s prime rate and (3) the Eurodollar Rate plus 1.0% . As of June 30, 2018, the Company had no outstanding borrowings under its revolving credit facility. This credit facility contains customary terms and conditions for credit facilities of this type, including restrictions on the Company's ability to incur or guarantee additional indebtedness, create liens, enter into transactions with affiliates, make loans or investments, sell assets, pay dividends or make distributions on, or repurchase, the Company's stock, and consolidate or merge with other entities. In addition, the Company is required to meet certain financial covenants customary with this type of agreement, including maintaining a maximum ratio of indebtedness to Adjusted EBITDA and a minimum specified interest coverage ratio. This credit facility contains customary events of default, including for payment defaults, breaches of representations, breaches of affirmative or negative covenants, cross defaults to other material indebtedness, bankruptcy and failure to discharge certain judgments. If a default occurs and is not cured within any applicable cure period or is not waived, the Company's obligations under the credit facility may be accelerated. As of June 30, 2018, the Company was in compliance with all covenants under the revolving credit facility. |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Footnote [Abstract] | |
Fair Value Disclosures [Text Block] | Fair Value Measurements The Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2018 , were as follows (in thousands): Fair Value Measurements as of June 30, 2018 Level 1 Level 2 (1) Level 3 (2) Assets: Money market funds $ 24,212 $ — $ — Corporate and government bonds, $37,145 at cost (3) — 36,551 — Convertible note — — 2,000 Derivative instruments (Note 8) — 1,640 — Total assets measured at fair value $ 24,212 $ 38,191 $ 2,000 The Company’s financial assets and liabilities measured at fair value on a recurring basis at December 30, 2017 , were as follows (in thousands): Fair Value Measurements as of Level 1 Level 2 (1) Level 3 (2) Assets: Money market funds $ 3,165 $ — $ — Corporate and government bonds, $37,767 at cost (3) — 37,225 — Derivative instruments (Note 8) — 1,017 — Total assets measured at fair value $ 3,165 $ 38,242 $ — Liabilities: Derivative instruments (Note 8) $ — $ 500 $ — Total liabilities measured at fair value $ — $ 500 $ — (1) Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. (2) Level 3 fair value estimates are based on inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. (3) As of June 30, 2018 , the Company’s investments had maturity dates ranging from August 2018 to March 2021. There were no changes in our Level 3 financial instruments that are measured at fair value on a recurring basis during the periods presented. |
Stockholders Equity (Notes)
Stockholders Equity (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Stockholders' Equity Share Repurchase Activity On February 27, 2018, the Company's board of directors approved a stock repurchase program authorizing up to $50.0 million in share repurchases. This share repurchase program commenced on March 28, 2018 with an expiration date of December 28, 2018. During the six months ended June 30, 2018, the Company completed the repurchase program and repurchased a total of 798,794 shares of common stock. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time and in the ordinary course of business, the Company is subject to various claims, charges and litigation. The outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to us, which could materially affect our financial condition or results of operations. Lease Obligations The Company leases its facilities. Rental expense under operating leases for the three months ended June 30, 2018 and July 1, 2017 amounts to $3.4 million and $2.3 million , respectively and for the six months ended June 30, 2018 and July 1, 2017 amounts to $6.6 million and $3.9 million , respectively. Future minimum rental payments under operating leases were as follows as of June 30, 2018 (in thousands): Operating Leases Remainder of 2018 $ 3,301 2019 7,626 2020 7,303 2021 7,297 2022 7,235 Thereafter 41,796 Total minimum lease payments $ 74,558 Outstanding Purchase Orders At June 30, 2018 , the Company had outstanding purchase orders aggregating approximately $136.7 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 June 30, 2018 and December 30, 2017 , respectively. Warranty The Company provides warranties on most products and has established a reserve for warranty obligations based on estimated warranty costs. The reserve is included as part of accrued expenses (Note 7) in the accompanying consolidated balance sheets. Activity related to the warranty accrual was as follows (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Balance at beginning of period $ 11,833 $ 8,728 $ 11,264 $ 8,464 Liability assumed (1) — 2,186 — 2,186 Provision 2,193 1,624 4,628 3,619 Warranty usage (2) (2,793 ) (2,033 ) (4,659 ) (3,764 ) Balance at end of period $ 11,233 $ 10,505 $ 11,233 $ 10,505 (1) Warranty assumed as part of the acquisition of the iRobot-related distribution business of Sale On Demand Corporation. (2) Warranty usage includes costs incurred for warranty obligations. |
Income Taxes (Notes)
Income Taxes (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes The Company’s effective income tax rate for the three months ended June 30, 2018 and July 1, 2017, was 29.6% and (36.9)% , respectively. The Company’s effective income tax rate for the six months ended June 30, 2018 and July 1, 2017, was 24.3% and 11.5% , respectively. On December 22, 2017, the Tax Cuts and Jobs Act of 2017, or the "Act", was signed into law making significant changes to the Internal Revenue Code. Effective for the Company's 2018 tax year, the Act reduces the federal statutory tax rate from 35% to 21% and implements certain additional provisions for the 2018 tax year, including the Global Intangible Low-Taxed Income (GILTI) inclusion and the Foreign Derived Intangible Income (FDII) deduction. Due to the timing of the enactment and the complexity involved in applying the provisions of the Act, the Company made reasonable estimates of the effects and recorded a provisional amount relating to the transition tax on the mandatory deemed repatriation of foreign earnings in its financial statements as of December 30, 2017. Additional analysis is necessary to complete the calculation and accounting related to this provisional amount that was recorded in the Company’s financial statements for the year ending December 30, 2017. Any future adjustments to this amount will be recorded to the current income tax provision during the measurement period which is not expected to be beyond one year from the enactment date. The Company's effective income tax rate of 29.6% and 24.3% for the three and six months ended June 30, 2018, respectively differed from the federal statutory tax rate of 21% primarily due to the recording of a discrete charge for estimated taxes associated with a restructuring of the EMEA business. The increase in the effective income tax rate for the three and six months ended June 30, 2018 as compared to the three and six months ended July 1, 2017 was primarily due to decreased tax benefits of excess stock-based compensation during the periods and a discrete charge for estimated taxes associated with a restructuring of the EMEA business. |
Industry Segment, Geographic In
Industry Segment, Geographic Information and Significant Customers | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Industry Segment, Geographic Information and Significant Customers | Industry Segment, Geographic Information and Significant Customers The Company operates as one operating 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. Significant Customers For the three months ended June 30, 2018 , the Company generated 23.8% of total revenue from one of its retailers (Amazon). For the three months ended July 1, 2017 , the Company generated 15.9% and 11.6% of total revenue from one of its domestic retailers (Amazon) and a network of affiliated European distributors (Robopolis SAS), respectively. For the six months ended June 30, 2018 , the Company generated 17.7% of total revenue from one of its retailers (Amazon). For the six months ended July 1, 2017, the Company generated 12.5% and 12.4% of total revenue from a network of affiliated European distributors (Robopolis SAS) and one of its domestic retailers (Amazon), respectively. On October 2, 2017, the Company acquired Robopolis SAS (Note 4). |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include those of iRobot and its subsidiaries, after elimination of all intercompany balances and transactions. iRobot has prepared the accompanying unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). In addition, certain prior year amounts have been reclassified to conform to the current year presentation. In the opinion of management, all adjustments necessary to the unaudited interim consolidated financial statements have been made to state fairly the Company's financial position. Interim results are not necessarily indicative of results for the full fiscal year or any future periods. The information included in this Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 30, 2017, filed with the SEC on February 16, 2018. |
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, revenue and expenses. These estimates and judgments, include but are not limited to, revenue recognition, including performance obligations, variable consideration and other obligations such as product returns and incentives; valuation of goodwill and acquired intangible assets; accounting for business combinations; evaluating loss contingencies; accounting for stock-based compensation including performance-based assessments; and accounting for income taxes and related valuation allowances. The Company bases these estimates and judgments on historical experience, market participant fair value considerations, projected future cash flows and various other factors that the Company believes are reasonable under the circumstances. Actual results may differ from the Company’s estimates. |
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. |
Investment, Policy [Policy Text Block] | Other Assets During the three months ended March 31, 2018, the Company adopted Accounting Standards Update No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities," which revises the classification and measurement of financial instruments. Upon adoption of this standard, the Company now classifies its cost method investments as equity securities without readily determinable fair values and measures these investments at cost, less any impairment, adjusted for observable price changes. At June 30, 2018 , other assets consisted primarily of equity securities without readily determinable fair values and an equity method investment totaling $15.4 million . There was no adjustment recorded to the carrying value of our equity securities without readily determinable fair values as a result of the adoption of ASU 2016-01. At December 30, 2017 , other assets consisted primarily of cost method investments and an equity method investment totaling $14.2 million . |
Net Income Per Share | Net Income Per Share Basic income per share is calculated using the Company's weighted-average outstanding common shares. Diluted income per share is calculated using the Company's weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. The following table presents the calculation of both basic and diluted net income per share (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Net income $ 10,471 $ 7,903 $ 30,872 $ 24,262 Weighted-average common shares outstanding 27,615 27,516 27,802 27,410 Dilutive effect of employee stock awards 722 1,262 856 1,171 Diluted weighted-average common shares outstanding 28,337 28,778 28,658 28,581 Basic income per share $ 0.38 $ 0.29 $ 1.11 $ 0.89 Diluted income per share $ 0.37 $ 0.27 $ 1.08 $ 0.85 Restricted stock units and stock options representing approximately 0.2 million and 0.0 million shares of common stock for the three-month periods ended June 30, 2018 and July 1, 2017 , respectively, and approximately 0.1 million and 0.0 million shares of common stock for the six-month periods ended June 30, 2018 and July 1, 2017 , respectively, were excluded from the computation of diluted earnings per share as their effect would have been antidilutive. |
Recent Accounting Pronouncements | Recently Adopted Accounting Standards In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which provides an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate under the Tax Cuts and Jobs Act is recorded. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. During the first quarter of 2018, the Company early adopted this standard, which did not have a material impact on the Company's consolidated financial statements and related disclosures. In October 2016, 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. During the first quarter of 2018, the Company adopted this standard, which did not have a material impact on the Company's consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities," as amended by ASU No. 2018-03 in February 2018, which revises various aspects of the recognition, measurement, presentation and disclosure of financial instruments. The standard requires that marketable equity investments be measured at fair value with changes to fair value recognized in net income. ASU 2016-01 also provides a new measurement alternative for non-marketable equity investments that do not have a readily determinable fair value. Under the measurement alternative, investments are measured at cost, less any impairment, adjusted for changes from observable transactions for identical or similar investments of the same issuer. The Company adopted this guidance on December 31, 2017 and elected to record its non-marketable equity investments using the alternative measurement method, which did not have a material impact on the Company's consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," ("ASC 606") 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. On December 31, 2017, the Company adopted the guidance using the modified retrospective method applied to those contracts that were not completed as of the adoption date. Under the modified retrospective method, the Company recognized the cumulative effect of the adoption and recorded a net increase of $1.0 million to the beginning retained earnings as of December 31, 2017. See Note 3, "Revenue Recognition," for the required disclosures related to the impact of adopting this standard and a discussion of the Company's updated policies related to revenue recognition. Recently Issued Accounting Standards In August 2017, the FASB issued 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 March 2017, the FASB issued ASU No. 2017-08, "Receivables – Nonrefundable Fees and Other Costs," which shortens the amortization period of certain callable debt securities held at a premium. The guidance is effective for fiscal years beginning after December 15, 2018, 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 June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments," which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments. This may result in the earlier recognition of allowances for losses. The guidance is effective for fiscal years beginning after December 15, 2019, 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 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 pending adoption of ASU 2016-02 on its consolidated financial statements, and currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon its adoption of ASU 2016-02, which will increase the total assets and total liabilities that the Company reports relative to such amounts prior to adoption. 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 (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | Disaggregation of Revenue The following table provides information about disaggregated revenue by geographical region for the three and six months ended June 30, 2018 (in thousands): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Americas $ 120,816 $ 237,540 EMEA 70,123 139,710 APAC 35,378 66,135 Total revenue $ 226,317 $ 443,385 |
Revenue Recognition Contract Ba
Revenue Recognition Contract Balances (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability [Table Text Block] | Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): June 30, 2018 (closing balance) December 31, 2017 (opening balance) Accounts receivable, net $ 75,127 $ 141,637 Contract liabilities 2,223 6,685 The Company invoices customers based upon contractual billing schedules, and accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities primarily relate to prepayments received from customers in advance of product shipments. The change in the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. During the three and six-month periods ended June 30, 2018, the Company recognized $6.3 million and $6.7 million , respectively, of the opening contract liability balance as revenue upon transfer of the products to customers. |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the preliminary allocation of the purchase price (in thousands): Cash $ 37,981 Accounts receivable 21,426 Inventory 36,304 Goodwill 78,926 Intangible assets 36,597 Other assets 2,456 Total assets acquired 213,690 Accounts payable (29,391 ) Accrued expenses (3,376 ) Deferred tax liabilities (10,864 ) Other liabilities (645 ) Total liabilities assumed (44,276 ) Net assets acquired $ 169,414 |
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) Reacquired distribution rights 2.25 years $ 29,296 Customer relationships 14 years 7,029 Non-competition agreements 3 years 272 Total $ 36,597 |
Business Combination Business A
Business Combination Business Acq Pro Forma (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations Pro Forma [Abstract] | |
Business Acquisition, Pro Forma Information [Table Text Block] | The following table shows unaudited pro forma results of operations as if the Company had acquired Robopolis on January 1, 2017 (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Revenue $ 226,317 $ 189,088 $ 443,385 $ 368,212 Net income 10,471 5,441 30,872 21,088 Net income per share: Basic income per share $ 0.38 $ 0.20 $ 1.11 $ 0.77 Diluted income per share $ 0.37 $ 0.19 $ 1.08 $ 0.74 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Inventory Inventory consists of the following (in thousands): June 30, 2018 December 30, 2017 Raw materials $ 3,822 $ 4,036 Finished goods 111,555 102,896 $ 115,377 $ 106,932 |
Goodwill, Other Intangible As27
Goodwill, Other Intangible Assets and Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The following table summarizes the activity in the carrying amount of goodwill for the six months ended June 30, 2018 (in thousands): June 30, 2018 Balance as of December 30, 2017 $ 121,440 Purchase accounting adjustments (663 ) Effect of foreign currency translation (2,458 ) Balance as of June 30, 2018 $ 118,319 |
Other Intangible Assets | Intangible assets at June 30, 2018 and December 30, 2017 consisted of the following (in thousands): June 30, 2018 December 30, 2017 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Completed technology $ 26,900 $ 19,879 $ 7,021 $ 26,900 $ 18,150 $ 8,750 Tradename 100 100 — 100 100 — Customer relationships 11,370 894 10,476 11,594 418 11,176 Reacquired distribution rights 32,825 16,443 16,382 33,760 9,226 24,534 Non-competition agreements 266 66 200 275 23 252 Total $ 71,461 $ 37,382 $ 34,079 $ 72,629 $ 27,917 $ 44,712 |
Estimated Future Amortization Expense Related to Current Intangible Assets | The estimated future amortization expense related to current intangible assets is expected to be as follows (in thousands): Cost of Revenue Operating Expenses Total Remainder of 2018 $ 9,107 $ 525 $ 9,632 2019 11,821 1,054 12,875 2020 900 1,032 1,932 2021 900 798 1,698 2022 675 798 1,473 Thereafter — 6,469 6,469 Total $ 23,403 $ 10,676 $ 34,079 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Components of Accrued Expenses | June 30, 2018 December 30, 2017 Accrued compensation $ 18,982 $ 29,514 Accrued warranty 11,233 11,264 Accrued income taxes 4,563 7,110 Accrued sales and marketing 3,702 3,299 Accrued sales and other indirect taxes payable 3,033 7,256 Accrued accounting fees 1,353 1,221 Accrued direct fulfillment costs 937 1,885 Accrued other 7,771 12,098 $ 51,574 $ 73,647 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative Instruments, Gain (Loss) [Table Text Block] | Gain (loss) associated with derivative instruments not designated as hedging instruments are as follows (in thousands): Three Months Ended Six Months Ended Classification June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Gain (loss) recognized in income Other income, net $ 1,707 $ (254 ) $ 538 $ (479 ) The following tables reflect the effect of foreign exchange forward contracts that are designated as cash flow hedging instruments for the three and six months ended June 30, 2018 and July 1, 2017 (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 June 30, 2018 July 1, 2017 Classification June 30, 2018 July 1, 2017 Classification June 30, 2018 July 1, 2017 Foreign currency forward contracts $ 2,154 $ 221 Revenue $ (113 ) $ (19 ) Other income, net $ 355 $ (5 ) Cost of revenue $ 370 $ — 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) Six months ended Six months ended Six months ended June 30, 2018 July 1, 2017 Classification June 30, 2018 July 1, 2017 Classification June 30, 2018 July 1, 2017 Foreign currency forward contracts $ (560 ) $ 221 Revenue $ (279 ) $ (19 ) Other income, net $ 277 $ (5 ) Cost of revenue $ (386 ) $ — (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) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative [Line Items] | |
Schedule of Derivative Instruments [Table Text Block] | The fair values of derivative instruments are as follows (in thousands): Fair Value Classification June 30, 2018 December 30, 2017 Derivatives not designated as hedging instruments: Foreign currency forward contracts Other current assets $ 1,200 $ 413 Foreign currency forward contracts Accrued expenses — 221 Derivatives designated as cash flow hedges: Foreign currency forward contracts Other current assets $ 440 $ 488 Foreign currency forward contracts Other assets — 116 Foreign currency forward contracts Accrued expenses — 279 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2018 , were as follows (in thousands): Fair Value Measurements as of June 30, 2018 Level 1 Level 2 (1) Level 3 (2) Assets: Money market funds $ 24,212 $ — $ — Corporate and government bonds, $37,145 at cost (3) — 36,551 — Convertible note — — 2,000 Derivative instruments (Note 8) — 1,640 — Total assets measured at fair value $ 24,212 $ 38,191 $ 2,000 The Company’s financial assets and liabilities measured at fair value on a recurring basis at December 30, 2017 , were as follows (in thousands): Fair Value Measurements as of Level 1 Level 2 (1) Level 3 (2) Assets: Money market funds $ 3,165 $ — $ — Corporate and government bonds, $37,767 at cost (3) — 37,225 — Derivative instruments (Note 8) — 1,017 — Total assets measured at fair value $ 3,165 $ 38,242 $ — Liabilities: Derivative instruments (Note 8) $ — $ 500 $ — Total liabilities measured at fair value $ — $ 500 $ — (1) Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. (2) Level 3 fair value estimates are based on inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. (3) As of June 30, 2018 , the Company’s investments had maturity dates ranging from August 2018 to March 2021. There were no changes in our Level 3 financial instruments that are measured at fair value on a recurring basis during the periods presented. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 (in thousands): Operating Leases Remainder of 2018 $ 3,301 2019 7,626 2020 7,303 2021 7,297 2022 7,235 Thereafter 41,796 Total minimum lease payments $ 74,558 |
Activity Related to the Warranty Accrual | Activity related to the warranty accrual was as follows (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Balance at beginning of period $ 11,833 $ 8,728 $ 11,264 $ 8,464 Liability assumed (1) — 2,186 — 2,186 Provision 2,193 1,624 4,628 3,619 Warranty usage (2) (2,793 ) (2,033 ) (4,659 ) (3,764 ) Balance at end of period $ 11,233 $ 10,505 $ 11,233 $ 10,505 (1) Warranty assumed as part of the acquisition of the iRobot-related distribution business of Sale On Demand Corporation. (2) Warranty usage includes costs incurred for warranty obligations. |
Industry Segment, Geographic 33
Industry Segment, Geographic Information and Significant Customers (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information about Revenue, Cost of Revenue, Gross Margin and Income before Income Taxes | The Company operates as one operating 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. |
Summary of Significant Accoun34
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 | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | ||||
Net income | $ 10,471 | $ 7,903 | $ 30,872 | $ 24,262 |
Weighted-average shares outstanding | 27,615 | 27,516 | 27,802 | 27,410 |
Dilutive effect of employee stock options and restricted shares | 722 | 1,262 | 856 | 1,171 |
Diluted weighted-average shares outstanding | 28,337 | 28,778 | 28,658 | 28,581 |
Basic income per share | $ 0.38 | $ 0.29 | $ 1.11 | $ 0.89 |
Diluted income per share | $ 0.37 | $ 0.27 | $ 1.08 | $ 0.85 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 200 | 0 | 100 | 0 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies Revenue Recognition (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 30, 2017 |
Allowance for Sales Returns [Member] | ||
Valuation Allowances and Reserves, Balance | $ 37.4 | $ 42.7 |
Allowance for Promotions [Member] | ||
Valuation Allowances and Reserves, Balance | $ 48 | $ 61.4 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies Other Assets (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 30, 2017 |
Equity and cost method investments [Abstract] | ||
Investments | $ 15.4 | $ 14.2 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 226,317 | $ 443,385 |
Americas [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 120,816 | 237,540 |
EMEA [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 70,123 | 139,710 |
Asia Pacific [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 35,378 | $ 66,135 |
Revenue Recognition Contract 38
Revenue Recognition Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | ||||
Contract with Customer, Timing of Satisfaction of Performance Obligation and Payment | $ 6,300 | $ 6,700 | ||
Accounts receivable, net | 75,127 | 75,127 | $ 141,637 | $ 142,829 |
Contract liabilities | $ 2,223 | $ 2,223 | $ 6,685 |
Revenue Recognition Accounts Re
Revenue Recognition Accounts Receivable Allowances (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 30, 2017 |
Allowance for Sales Returns [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Valuation Allowances and Reserves, Balance | $ 37.4 | $ 42.7 |
Allowance for Promotions [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Valuation Allowances and Reserves, Balance | $ 48 | $ 61.4 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 02, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 30, 2017 |
Business Acquisition [Line Items] | |||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 0 | $ 16,524 | |||||
Goodwill, Purchase Accounting Adjustments | $ 700 | 663 | |||||
Goodwill | $ 118,319 | 118,319 | $ 121,440 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Revenue, Net | 226,317 | $ 183,148 | 443,385 | 351,615 | |||
Business Acquisition, Pro Forma Revenue | 189,088 | 368,212 | |||||
Net income | $ 10,471 | 7,903 | $ 30,872 | 24,262 | |||
Business Acquisition, Pro Forma Net Income (Loss) | $ 5,441 | $ 21,088 | |||||
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 0.38 | $ 0.20 | $ 1.11 | $ 0.77 | |||
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 0.37 | $ 0.19 | $ 1.08 | $ 0.74 | |||
Robopolis [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 170,100 | ||||||
Cash Acquired from Acquisition | 38,000 | ||||||
Cash Acquired from Acquisition | 37,981 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 21,426 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 36,304 | ||||||
Goodwill | 78,926 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 36,597 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 2,456 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | 213,690 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | (29,391) | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | (3,376) | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | (10,864) | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | (645) | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 44,276 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 169,414 | ||||||
Finite-lived Intangible Assets Acquired | $ 36,597 | ||||||
Robopolis [Member] | Distribution Rights [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 3 months | ||||||
Finite-lived Intangible Assets Acquired | $ 29,296 | ||||||
Robopolis [Member] | Customer Relationships [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 14 years | ||||||
Finite-lived Intangible Assets Acquired | $ 7,029 | ||||||
Robopolis [Member] | Noncompete Agreements [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||||||
Finite-lived Intangible Assets Acquired | $ 272 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Inventory, Raw Materials, Net of Reserves | $ 3,822 | $ 4,036 |
Inventory, Finished Goods, Net of Reserves | 111,555 | 102,896 |
Inventory | $ 115,377 | $ 106,932 |
Goodwill, Other Intangible As42
Goodwill, Other Intangible Assets and Other Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 30, 2017 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 118,319 | $ 118,319 | $ 121,440 | ||
Amortization of Acquired Intangible Assets | $ 4,900 | $ 2,300 | $ 10,000 | $ 3,200 |
Goodwill, Other Intangible As43
Goodwill, Other Intangible Assets and Other Assets - Other Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | $ 71,461 | $ 71,461 | $ 72,629 | ||
Intangible assets accumulated amortization | 37,382 | 37,382 | 27,917 | ||
Intangible Assets, Net | 34,079 | 34,079 | 44,712 | ||
Amortization of Acquired Intangible Assets | 4,900 | $ 2,300 | 10,000 | $ 3,200 | |
Completed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 26,900 | 26,900 | 26,900 | ||
Intangible assets accumulated amortization | 19,879 | 19,879 | 18,150 | ||
Intangible Assets, Net | 7,021 | 7,021 | 8,750 | ||
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 | 11,370 | 11,370 | 11,594 | ||
Intangible assets accumulated amortization | 894 | 894 | 418 | ||
Intangible Assets, Net | 10,476 | 10,476 | 11,176 | ||
Distribution Rights [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 32,825 | 32,825 | 33,760 | ||
Intangible assets accumulated amortization | 16,443 | 16,443 | 9,226 | ||
Intangible Assets, Net | 16,382 | 16,382 | 24,534 | ||
Noncompete Agreements [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 266 | 266 | 275 | ||
Intangible assets accumulated amortization | 66 | 66 | 23 | ||
Intangible Assets, Net | $ 200 | $ 200 | $ 252 |
Goodwill, Other Intangible As44
Goodwill, Other Intangible Assets and Other Assets Schedule of goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2018 | Dec. 30, 2017 | |
Goodwill [Line Items] | |||
Goodwill | $ 118,319 | $ 121,440 | |
Goodwill, Purchase Accounting Adjustments | $ (700) | (663) | |
Goodwill, Foreign Currency Translation Gain (Loss) | $ (2,458) |
Goodwill, Other Intangible As45
Goodwill, Other Intangible Assets and Other Assets Finite-lived intangible assets, schedule of future amortization (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Finite-lived intangible assets, schedule of amortization expense [Line Items] | |
Remainder of 2018 | $ 9,632 |
2,019 | 12,875 |
2,020 | 1,932 |
2,021 | 1,698 |
2,022 | 1,473 |
Thereafter | 6,469 |
Total | 34,079 |
Cost of revenue | |
Finite-lived intangible assets, schedule of amortization expense [Line Items] | |
Remainder of 2018 | 9,107 |
2,019 | 11,821 |
2,020 | 900 |
2,021 | 900 |
2,022 | 675 |
Thereafter | 0 |
Total | 23,403 |
Operating Expense [Member] | |
Finite-lived intangible assets, schedule of amortization expense [Line Items] | |
Remainder of 2018 | 525 |
2,019 | 1,054 |
2,020 | 1,032 |
2,021 | 798 |
2,022 | 798 |
Thereafter | 6,469 |
Total | $ 10,676 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Accounts Payable, Current [Abstract] | ||
Accrued compensation | $ 18,982 | $ 29,514 |
Accrued warranty | 11,233 | 11,264 |
Accrued federal and state income taxes | 4,563 | 7,110 |
Accrued sales and marketing | 3,702 | 3,299 |
Accrued sales and other taxes payable | 3,033 | 7,256 |
Accrued accounting fees | 1,353 | 1,221 |
Accrued direct fulfillment costs | 937 | 1,885 |
Accrued other | 7,771 | 12,098 |
Accrued expenses | $ 51,574 | $ 73,647 |
Derivative Instruments Schedu47
Derivative Instruments Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 30, 2017 | ||
Derivative [Line Items] | ||||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ 1,707 | $ (254) | $ 538 | $ (479) | ||
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | [1] | 355 | (5) | 277 | (5) | |
Designated as Hedging Instrument [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 36,600 | 36,600 | $ 73,700 | |||
Not Designated as Hedging Instrument [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 28,800 | 28,800 | 36,600 | |||
Accrued Liabilities [Member] | Foreign Exchange Forward [Member] | ||||||
Derivative [Line Items] | ||||||
Other Derivatives Not Designated as Hedging Instruments at Fair Value, Net | 0 | 0 | 221 | |||
Derivative, Fair Value, Net | 0 | 0 | 279 | |||
Other Current Assets [Member] | Foreign Exchange Forward [Member] | ||||||
Derivative [Line Items] | ||||||
Other Derivatives Not Designated as Hedging Instruments at Fair Value, Net | 1,200 | 1,200 | 413 | |||
Derivative, Fair Value, Net | 440 | 440 | 488 | |||
Other Assets [Member] | Foreign Exchange Forward [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative, Fair Value, Net | 0 | 0 | $ 116 | |||
Cash Flow Hedging [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | [2] | 2,154 | 221 | (560) | 221 | |
Cost of revenue | Cash Flow Hedging [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [3] | 370 | 0 | (386) | 0 | |
Sales Revenue, Net [Member] | Cash Flow Hedging [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [3] | $ (113) | $ (19) | $ (279) | $ (19) | |
[1] | 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. | |||||
[2] | The amount represents the change in fair value of derivative contracts due to changes in spot rates. | |||||
[3] | The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | [1] | $ 355 | $ (5) | $ 277 | $ (5) |
Cash Flow Hedging [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | [2] | 2,154 | 221 | (560) | 221 |
Sales Revenue, Net [Member] | Cash Flow Hedging [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [3] | (113) | (19) | (279) | (19) |
Cost of revenue | Cash Flow Hedging [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [3] | $ 370 | $ 0 | $ (386) | $ 0 |
[1] | 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. | ||||
[2] | The amount represents the change in fair value of derivative contracts due to changes in spot rates. | ||||
[3] | The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. |
Working Capital Facilities (Det
Working Capital Facilities (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Mar. 31, 2018 |
Credit Facility [Abstract] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 150 | $ 75 |
Interest Rate Above LIBOR Under Condition One | 1.00% | |
Interest Rate Above the Federal Fund Rate Under Condition Two | 0.50% | |
Interest Rate Above the Eurodollar Rate Under Condition Two | 1.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale Securities | [1] | $ 37,145 | $ 37,767 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds | 24,212 | 3,165 | |
Available-for-sale Securities | [1] | 0 | 0 |
Convertible debt | 0 | ||
Derivative Asset | 0 | 0 | |
Assets, Fair Value Disclosure | 24,212 | 3,165 | |
Derivative Liability | 0 | ||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds | [2] | 0 | 0 |
Available-for-sale Securities | [1],[2] | 36,551 | 37,225 |
Convertible debt | [2] | 0 | |
Derivative Asset | [2] | 1,640 | 1,017 |
Assets, Fair Value Disclosure | [2] | 38,191 | 38,242 |
Derivative Liability | [2] | 500 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | [2] | 500 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds | [3] | 0 | 0 |
Available-for-sale Securities | [1],[3] | 0 | 0 |
Convertible debt | [3] | 2,000 | |
Derivative Asset | [3] | 0 | 0 |
Assets, Fair Value Disclosure | [3] | $ 2,000 | 0 |
Derivative Liability | [3] | 0 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | [3] | $ 0 | |
[1] | As of June 30, 2018, the Company’s investments had maturity dates ranging from August 2018 to March 2021. | ||
[2] | 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. | ||
[3] | Level 3 fair value estimates are based on inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Feb. 27, 2018 | |
Equity [Abstract] | ||
Stock Repurchase Program, Authorized Amount | $ 50,000,000 | |
Stock Repurchased and Retired During Period, Shares | 798,794 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Jun. 30, 2018USD ($) |
Outstanding POs [Abstract] | |
Contractual Obligation | $ 136.7 |
Commitments and Contingencies53
Commitments and Contingencies - Summary of Future Minimum Rental Payments under Operating Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rental expense under operating leases | $ 3,400 | $ 2,300 | $ 6,600 | $ 3,900 |
Disclosure Summary Of Future Minimum Rental Payments Under Operating Leases [Abstract] | ||||
Remainder of 2018 | 3,301 | 3,301 | ||
2,019 | 7,626 | 7,626 | ||
2,020 | 7,303 | 7,303 | ||
2,021 | 7,297 | 7,297 | ||
2,022 | 7,235 | 7,235 | ||
Thereafter | 41,796 | 41,796 | ||
Total minimum lease payments | $ 74,558 | $ 74,558 |
Commitments and Contingencies54
Commitments and Contingencies - Activity Related to Warranty Accrual (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | ||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||||
Balance at beginning of period | $ 11,833 | $ 8,728 | $ 11,264 | $ 8,464 | |
Liability assumed | [1] | 0 | 2,186 | 0 | 2,186 |
Provision | 2,193 | 1,624 | 4,628 | 3,619 | |
Warranty usage | [2] | (2,793) | (2,033) | (4,659) | (3,764) |
Balance at end of period | $ 11,233 | $ 10,505 | $ 11,233 | $ 10,505 | |
[1] | Warranty assumed as part of the acquisition of the iRobot-related distribution business of Sale On Demand Corporation. | ||||
[2] | Warranty usage includes costs incurred for warranty obligations. |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, Percent | 29.60% | (36.90%) | 24.30% | 11.50% |
Industry Segment, Geographic 56
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 | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Jul. 01, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jul. 01, 2017USD ($) | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Number of Reportable Segments | segment | 1 | ||||
Revenue | $ 226,317 | $ 183,148 | $ 443,385 | $ 351,615 | |
Cost of revenue | [1] | 108,391 | 93,257 | 209,674 | 174,381 |
Gross margin | 117,926 | 89,891 | 233,711 | 177,234 | |
Research and development | [1] | 34,924 | 26,167 | 67,869 | 51,675 |
Selling and marketing | [1] | 45,910 | 40,123 | 77,239 | 62,698 |
General and administrative | [1] | 23,468 | 19,513 | 49,301 | 37,135 |
Other income, net | 1,507 | 1,686 | 2,026 | 1,689 | |
Income before income taxes | $ 14,862 | $ 5,774 | $ 40,786 | $ 27,415 | |
[1] | Stock-based compensation recorded in the three and six months ended June 30, 2018 and July 1, 2017 breaks down by expense classification as follows: Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017Cost of revenue$347 $251 $688 $477Research and development1,794 1,147 3,483 2,246Selling and marketing750 571 1,488 1,141General and administrative3,540 2,735 6,718 5,171Total$6,431 $4,704 $12,377 $9,035 |
Industry Segment, Geographic 57
Industry Segment, Geographic Information and Significant Customers - Additional Information (Detail) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Amazon [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration Risk, Percentage | 23.80% | 15.90% | 17.70% | 12.40% |
Robopolis SAS [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration Risk, Percentage | 11.60% | 12.50% |