Press Releases

iRobot Reports Strong Third-Quarter Financial Results
Exceeds Third-Quarter and Increases Full-Year 2016 Financial Expectations

BEDFORD, Mass., Oct. 25, 2016 /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the third quarter ended October 1, 2016.

iRobot logo.

"Our third-quarter performance was outstanding. We delivered revenue and profitability exceeding our expectations. Based on our Q3 results and the excellent momentum we have going into the holiday season, created by our successful marketing programs, we are increasing our full-year financial expectations for the second quarter in a row. We now expect fiscal 2016 revenue of $650 to $655 million, Net Income of between $38 and $41 million, EPS of between $1.36 and $1.44, and Adjusted EBITDA of $88 to $92 million. These expectations reflect our increased confidence that 2016 growth in the United States, of more than 25%, will drive total consumer revenue growth of approximately 15% for the full year," said Colin Angle, chairman and chief executive officer of iRobot.

"As we have said previously, the revenue split between Q3 and Q4 is always difficult to predict due to the timing and shipment of consumer products for the holiday season. This year, our new partner in China requested Q3 delivery of some Braava jet and Roomba orders that we were expecting to ship in Q4. This resulted in higher than anticipated consumer revenue and profitability in Q3. 

"We are very excited about our results year-to-date and the outlook for the fourth quarter as our successful marketing programs continue to drive demand generation in the U.S. and overseas. It is very satisfying that, in this transformative year, our current full-year expectations are well above those we provided in February."

Financial Results

  • Note: Financial results for the third quarter of 2015 include the Defense & Security business which was sold on April 4, 2016. There are no results for the Defense & Security business included in our financial results for the third quarter of 2016, other than support services provided by iRobot, recorded as other income.
  • Revenue for the third quarter of 2016 was $168.6 million, compared with $143.6 million for the third quarter of 2015.
  • Net income in the third quarter of 2016 was $19.5 million, compared with $12.8 million in the third quarter of 2015.
  • Quarterly earnings per share were $0.70 for the third quarter of 2016, compared with $0.42 in the third quarter of 2015.
  • Adjusted EBITDA for the third quarter of 2016 was $35.5 million, compared with $25.9 million in the third quarter of 2015.

Business Highlights

  • Year-over-year consumer quarterly revenue growth of 23% was driven by APAC following a very successful launch of Braava jet in that region. 
  • Domestic revenue grew 13% over Q3 last year, and orders-in-hand plus anticipated Q4 orders support our expectation of substantial year-over-year quarterly growth in Q4.
  • We introduced the Roomba 960 and connectivity for Braava jet, expanding our suite of connected products for the home.

Financial Expectations

Management provides the following expectations with respect to the fourth quarter and fiscal year ending December 31, 2016.

Q4 2016:


Revenue                    

$202 - $207 million

Net Income                   

$10 - $13 million

Earnings Per Share          

$0.36 - $0.44                          

Adjusted EBITDA               

$22 - $26 million

 

Fiscal Year 2016:            


Revenue                           

$650 - $655 million                                        

Net Income                      

$38 - $41 million

Earnings Per Share           

$1.36 - $1.44                                      

Adjusted EBITDA              

$88 - $92 million                                            

 

Third-Quarter Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the third fiscal quarter 2016, business outlook, and outlook for fourth-quarter and fiscal year 2016 financial performance. Pertinent details include:

Date:          

Wednesday, October 26, 2016  

Time:                     

8:30 a.m. ET

Call-In Number:      

847-619-6396

Passcode:              

40924300

 

A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/phoenix.zhtml?c=193096&p=irol-EventDetails&EventId=5206143.  

An archived version of the broadcast will be available on the same website shortly after the conclusion of the live event. A replay of the telephone conference call will be available through November 3, and can be accessed by dialing 630-652-3042, passcode 40924300#.

About iRobot Corp.

iRobot designs and builds robots that empower people to do more. The company's home robots help people find smarter ways to clean and accomplish more in their daily lives. iRobot's portfolio of solutions features proprietary technologies for the connected home and advanced concepts in navigation, mobility and artificial intelligence. For more information about iRobot, please visit www.irobot.com.

For iRobot Investors

Certain statements made in this press release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This press release contains express or implied forward-looking statements relating to, among other things, iRobot Corp.'s expectations regarding future financial performance, future operating performance and growth, the impact of our marketing programs, demand for our robots, revenue growth, and anticipated revenue, net income, earnings per share and Adjusted EBITDA for fiscal year 2016 and the fourth quarter ending December 31, 2016.  These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: our ability to operate in an emerging market, the financial strength of our customers and retailers, general economic conditions, market acceptance of our products, and competition.  Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. iRobot Corp. undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise. For additional disclosure regarding these and other risks faced by iRobot Corp., see the disclosure contained in our public filings with the Securities and Exchange Commission.

This press release includes Adjusted EBITDA, which is a non-GAAP financial measure as defined by SEC Regulation G.  We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, net merger, acquisition and divestiture expense, net intellectual property litigation (income) expense, and restructuring (income) expense.  A reconciliation between net income and Adjusted EBITDA is provided in the financial tables at the end of this press release.

 

iRobot Corporation 

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)














 For the three months ended 


 For the nine months ended 


October 1,

September 26,


October 1,

 September 26, 


2016

2015


2016

2015







Revenue

$       168,610

$       143,609


$       448,110

$       410,358

Cost of revenue

87,550

73,751


235,437

216,759







Gross margin

81,060

69,858


212,673

193,599







Operating expenses:






  Research and development

19,672

18,122


57,944

55,886

  Selling and marketing

17,925

19,379


66,972

60,896

  General and administrative

16,012

13,701


48,919

39,195

      Total operating expenses

53,609

51,202


173,835

155,977







Operating income

27,451

18,656


38,838

37,622







Other income (expense), net

523

(93)


2,142

(948)







Income before income taxes

27,974

18,563


40,980

36,674

Income tax expense

8,462

5,770


12,722

11,875

Net income

$         19,512

$         12,793


$         28,258

$         24,799







Net income per share






   Basic

$            0.72

$            0.43


$            1.01

$            0.84

   Diluted

$            0.70

$            0.42


$            0.99

$            0.82







Number of shares used in per share calculations






   Basic

27,237

29,654


27,878

29,697

   Diluted

27,778

30,117


28,423

30,253













Stock-based compensation included in above figures:






        Cost of revenue

$             184

$             270


$             555

$             662

        Research and development

1,028

963


2,598

2,737

        Selling and marketing

444

474


1,316

1,089

        General and administrative

2,247

2,193


7,312

5,974

            Total

$           3,903

$           3,900


$         11,781

$         10,462

 

 

 iRobot Corporation 

 Condensed Consolidated Balance Sheets 

 (unaudited, in thousands) 






October 1,


 January 2, 


2016


2016





 Assets 








 Cash and cash equivalents 

$          164,552


$        179,915

 Short term investments 

38,179


33,124

 Accounts receivable, net 

67,612


104,679

 Unbilled revenue 

139


452

 Inventory 

61,069


61,678

 Other current assets 

10,357


9,501

   Total current assets 

341,908


389,349

 Property and equipment, net 

26,745


26,850

 Deferred tax assets 

26,018


31,721

 Goodwill 

41,041


48,751

 Intangible assets, net 

13,071


15,664

 Other assets 

9,843


9,408

 Total assets 

$          458,626


$        521,743





 Liabilities and stockholders' equity 








 Accounts payable 

$           57,662


$          61,655

 Accrued expenses 

13,662


15,954

 Accrued compensation 

17,257


15,752

 Deferred revenue and customer advances 

1,297


3,265

   Total current liabilities 

89,878


96,626

 Long term liabilities 

4,231


7,706

 Stockholders' equity 

364,517


417,411

 Total liabilities and stockholders' equity 

$          458,626


$        521,743

 

 

 iRobot Corporation 

  Consolidated Statements of Cash Flows 

 (unaudited, in thousands) 








 For the nine months ended 


October 1,

 September 26, 


2016

2015

Cash flows from operating activities:



Net income

$          28,258

$          24,799

Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation and amortization 

10,171

10,569

Loss on disposal of property and equipment

205

201

Gain on sale of business unit

(433)

-

Gain on sale of cost method investment

(634)

-

Stock-based compensation 

11,781

10,462

Deferred income taxes, net

6,314

2,289

Tax benefit of excess stock-based compensation deductions

(1,115)

(795)

Non-cash director deferred compensation 

66

112

Changes in operating assets and liabilities — (use) source



Accounts receivable 

30,781

(5,258)

Unbilled revenue 

198

2,034

Inventory 

(11,472)

(10,965)

Other assets 

(1,579)

1,296

Accounts payable 

(2,261)

(1,285)

Accrued expenses 

(2,046)

(6,127)

Accrued compensation 

1,990

(5,082)

Deferred revenue and customer advances

(193)

(1,570)

Long term liabilities

(2,997)

(703)

Net cash provided by operating activities 

67,034

19,977




Cash flows from investing activities:



Additions of property and equipment 

(8,352)

(7,557)

Change in other assets

(435)

(1,015)

Proceeds from sale of business unit

23,520

-

Purchase of investments 

(16,556)

(17,755)

Sales of investments 

11,502

18,000

Proceeds from sale of cost method investment

634

-

Net cash provided by (used in) investing activities 

10,313

(8,327)




Cash flows from financing activities:



Proceeds from stock option exercises 

4,496

3,385

Income tax withholding payment associated with restricted stock vesting

(1,300)

(1,295)

Stock repurchases

(97,021)

(24,062)

Tax benefit of excess stock-based compensation deductions

1,115

795

Net cash used in financing activities 

(92,710)

(21,177)




Net decrease in cash and cash equivalents 

(15,363)

(9,527)

Cash and cash equivalents, at beginning of period 

179,915

185,957

Cash and cash equivalents, at end of period 

$        164,552

$        176,430

 

 

 iRobot Corporation 

Supplemental Information

(unaudited)














 For the three months ended 


 For the nine months ended 


October 1,

September 26,


October 1,

September 26,


2016

2015


2016

2015







Revenue: *












Consumer

$        167,962

$        136,513


$           443,754

$             384,422







    Domestic

$          65,466

$          57,782


$           195,109

$             150,587

    International

$        102,496

$          78,731


$           248,645

$             233,835













Defense & Security

$                 -

$            6,184


$              3,075

$               24,500













Gross Margin Percent:






    Consumer

51.3%

52.7%


51.6%

51.7%

    Defense & Security

0.0%

42.9%


16.6%

40.0%

    Total Company

48.1%

48.6%


47.5%

47.2%



















Units shipped - Consumer *

779

582


2,002

1,665







Average gross selling prices for robot units - Consumer

$               229

$               252


$                 240

$                   246







Days sales outstanding

37

49


37

49







Days in inventory

64

73


64

73







Headcount

572

606


572

606













* in thousands






 

 

 iRobot Corporation  

 Adjusted EBITDA Reconciliation to GAAP 

 (unaudited, in thousands) 














 For the three months ended 


 For the nine months ended 


October 1,

September 26,


October 1,

September 26,


2016

2015


2016

2015







 Net income 

$          19,512

$          12,793


$          28,258

$          24,799







 Interest income, net 

(217)

(152)


(687)

(482)

 Income tax expense 

8,462

5,770


12,722

11,875

 Depreciation 

2,533

2,626


7,446

7,776

 Amortization 

909

932


2,725

2,793







 EBITDA 

31,199

21,969


50,464

46,761













 Stock-based compensation expense 

3,903

3,900


11,781

10,462

 Net merger, acquisition and divestiture expense 

376

-


1,229

-

 Net intellectual property litigation (income) expense 

103

(13)


464

(493)

 Restructuring (income) expense 

(37)

-


1,665

-







 Adjusted EBITDA 

$          35,544

$          25,856


$          65,603

$          56,730


 

Use of Non-GAAP Financial Measures


In evaluating its business, iRobot considers and uses Adjusted EBITDA as a supplemental measure of its operating performance. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, net merger, acquisition and divestiture expense, net intellectual property litigation (income) expense, and restructuring (income) expense. The Company also presents Adjusted EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.


The term Adjusted EBITDA is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company's operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP.  Among other things, Adjusted EBITDA does not reflect the Company's actual cash expenditures.  Other companies may calculate similar measures differently than iRobot, limiting their usefulness as comparative tools.  iRobot compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally.

 

 

 iRobot Corporation  

 Reconciliation of GAAP to Non-GAAP Expectations 

 (unaudited, in millions) 










 Fourth Quarter Ending 

 Full Year Ending 


  December 31, 2016 


  December 31, 2016 





 Net income 

 $10.0 - $13.0 


 $38.0 - $41.0 





 Interest income, net 

($0.2)


($0.9)

 Income tax expense 

 $4.7 - $5.8 


 $17.4 - $18.6 

 Depreciation 

 $2.3 - $2.4 


 $9.7 - $9.8 

 Amortization 

$0.9


$3.6





 EBITDA 

 $17.8 - $21.8 


 $68.0 - $72.0 









 Stock-based compensation expense 

 $3.6 - $3.8 


 $15.4 - $15.6 

 Net merger, acquisition and divestiture (income) expense 

 $0.4 - $0.5 


 $1.7 - $1.8 

 Net intellectual property litigation (income) expense 

 $0.0 - $0.1 


 $0.5 - $0.6 

 Restructuring expense 

$0


$1.8





 Adjusted EBITDA 

 $22.0 - $26.0 


 $88.0 - $92.0 

 

 

Use of Non-GAAP Financial Measures


In evaluating its business, iRobot considers and uses Adjusted EBITDA as a supplemental measure of its operating performance. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, net merger, acquisition and divestiture (income) expense, net intellectual property litigation (income) expense, and restructuring expense. The Company also presents Adjusted EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.


The term Adjusted EBITDA is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company's operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP.  Among other things, Adjusted EBITDA does not reflect the Company's actual cash expenditures.  Other companies may calculate similar measures differently than iRobot, limiting their usefulness as comparative tools.  iRobot compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally.

 

Logo - http://photos.prnewswire.com/prnh/20131104/NE10106LOGO

 

SOURCE iRobot Corp.

For further information: Elise Caffrey, Investor Relations, iRobot Corp., (781) 430-3003, ecaffrey@irobot.com; Matthew Lloyd, Media Relations, iRobot Corp., (781) 430-3720, mlloyd@irobot.com