Press Releases

iRobot Reports Second-Quarter Financial Results
Strength in All Major Regions Drives 24% Year-Over-Year Revenue Growth
Increases Full-Year Financial Expectations

BEDFORD, Mass., July 24, 2018 /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the second quarter ended June 30, 2018.

iRobot logo. (PRNewsfoto/iRobot Corp.)

"We delivered strong second-quarter revenue growth of 24% in Q2 2018 over Q2 2017, driven by growth across all major regions. EMEA and Japan saw significant year-over-year growth of 51% and 31%, respectively. EMEA growth was driven in part by the revenue uplift from our acquisition of our largest European distributor, which was closed at the beginning of Q4 2017. Shipments to support Q2 holidays in the United States drove domestic revenue growth of 15% over last year," said Colin Angle, chairman and chief executive officer of iRobot.

"Given our Q2 results and our outlook for the rest of the year, including our anticipated product launches in the second half of the year, we are updating our 2018 full-year expectations. We now anticipate full-year 2018 revenue of 1.06 to 1.08 billion dollars, which is year-over-year growth of 20 – 22%, full-year 2018 operating income of 90 to 96 million dollars, and full-year 2018 EPS of $2.30 to $2.50.

"We are continuing to execute against the strategy underlying our 2018 expectations and three-year financial targets which we believe is the most effective way to drive sustainable growth and shareholder value."

Financial Results

  • Revenue for the second quarter of 2018 was $226.3 million, compared with $183.1 million for the second quarter of 2017. Revenue for the first half of 2018 was $443.4 million, compared with $351.6 million last year.
  • Operating income in the second quarter of 2018 was $13.4 million, compared with $4.1 million in the second quarter of 2017. For the first half of 2018, operating income was $38.8 million, compared with $25.7 million a year ago.
  • Quarterly earnings per share were $0.37 for the second quarter of 2018, compared with $0.27 in the second quarter of 2017. First-half earnings per share were $1.08, compared with $0.85 in the first half of 2017.

Business Highlights

  • Roomba® was selected for the fourth straight year as a featured product for U.S. Amazon Prime Day. Our robots sold out, doubling the Prime Day sales volume as they have each year since the event began in 2015. Roomba® was also featured on Prime Day in EMEA and Japan this year for the first time, and the results in those regions were great.
  • We announced a favorable initial determination from the International Trade Commission (ITC) regarding our patent infringement claims recommending an exclusion order barring the importation, into the United States, of certain robotic vacuum cleaners.
  • We completed the previously announced stock repurchase program authorizing the purchase of up to $50 million of our common stock.
  • We announced an increase in our revolving credit facility to $150 million and an extension of the term to 2023, giving the company additional flexibility to execute on the growth strategy.
  • We implemented a U.K. principal company to optimize our global operating structure.

Financial Expectations

Management provides the following expectations with respect to the fiscal year ending December 29, 2018.

Fiscal Year 2018:

Current

Previous

Revenue

$1.06 - $1.08 billion

$1.05 - $1.08 billion

Operating Income

$90 - $96 million

$86 - $96 million

Earnings Per Share

$2.30 - $2.50

$2.15 - $2.40

Second-Quarter Conference Call 
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the second fiscal quarter 2018, business outlook, and outlook for fiscal year 2018 financial performance. Pertinent details include:

Date:

Wednesday, July 25, 2018

Time:

8:30 a.m. ET

Call-In Number:

213-358-0894

Passcode:

8376338

A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/events/event-details/q2-2018-irobot-corp-earnings-conference-call. 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 August 1, and can be accessed by dialing 404-537-3406, passcode 8376338.

About iRobot Corp.
iRobot, the leading global consumer robot company, designs and builds robots that empower people to do more both inside and outside of the home. iRobot created the home robot cleaning category with the introduction of its Roomba® Vacuuming Robot in 2002. Today, iRobot is a global enterprise that has sold more than 20 million robots worldwide. iRobot's product line, including the Roomba and the Braava® family of mopping robots, feature proprietary technologies and advanced concepts in cleaning, mapping and navigation. iRobot's engineers are building an ecosystem of robots and technologies to enable the smart home. For more information about iRobot, please visit www.irobot.com.

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; revenue growth; demand for robotic vacuum cleaners; the introduction of new products and the timing and impact thereof; the impact on our financial results of our U.K. principal company; and anticipated revenue, operating income and earnings per share for the fiscal year ended December 29, 2018. 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 and adoption of our products; the imposition of tariffs on goods imported into the United States; 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, gain on business acquisition, net intellectual property litigation expense, and restructuring 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 six months ended 


June 30,

July 1,


June 30,

July 1,


2018

2017


2018

2017







Revenue

$       226,317

$       183,148


$     443,385

$     351,615

Cost of revenue:






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

108,391

93,257


209,674

174,381







Gross margin

117,926

89,891


233,711

177,234







Operating expenses:






Research and development

34,924

26,167


67,869

51,675

Selling and marketing

45,910

40,123


77,239

62,698

General and administrative

23,468

19,513


49,301

37,135

Amortization of intangible assets

269

-


542

-

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 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 included in above figures:






Cost of revenue

$             347

$             251


$            688

$           477

Research and development

1,794

1,147


3,483

2,246

Selling and marketing

750

571


1,488

1,141

General and administrative

3,540

2,735


6,718

5,171

Total

$           6,431

$           4,704


$       12,377

$        9,035

 

 

 iRobot Corporation 

 Condensed Consolidated Balance Sheets 

 (unaudited, in thousands) 






June 30,


 December 30, 


2018


2017





 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





 Liabilities and stockholders' equity 








 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

 Stockholders' equity 

458,041


470,327

 Total liabilities and stockholders' equity 

$          596,781


$        691,522

 

 

 iRobot Corporation 

 Consolidated Statements of Cash Flows 

 (unaudited, in thousands) 








 For the six months ended 


June 30,

July 1,


2018

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

-

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)

Cash paid for business acquisitions, net of cash acquired

-

(16,524)

Purchases of investments 

(6,438)

(7,034)

Sales and maturities of investments 

7,000

7,000

Proceeds from sale of business unit and cost method investment

629

1,056

Net cash used in investing activities 

(14,930)

(29,685)




Cash flows from financing activities:



Proceeds from stock option exercises 

2,605

5,365

Income tax withholding payment associated with restricted stock vesting

(3,532)

(2,974)

Stock repurchases

(50,000)

-

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

 

 

 iRobot Corporation 

Supplemental Information

(unaudited)














 For the three months ended 


 For the six months ended 


June 30,

July 1,


June 30,

July 1,


2018

2017


2018

2017







Revenue: *












Consumer

$             226,317

$        183,148


$           443,385

$             351,397







Domestic

$             111,526

$          97,315


$           218,388

$             182,104

International

$             114,791

$          85,833


$           224,997

$             169,293



















Gross Margin Percent

52.1%

49.1%


52.7%

50.4%













Consumer units shipped*

953

749


1,768

1,453

Vacuum

819

639


1,530

1,222

Mopping

134

110


237

231







Consumer revenue**

$                    226

$               183


$                 443

$                   351

Vacuum***

$                    204

$               165


$                 405

$                   317

Mopping***

$                      22

$                 18


$                   38

$                     34







Average gross selling prices for robot units - Consumer

$                    285

$               275


$                 296

$                   267







Days sales outstanding

30

21


30

21







Days in inventory

97

81


97

81







Headcount

982

760


982

760













* in thousands

** in millions

*** includes accessory revenue

 

 

 iRobot Corporation  

 Adjusted EBITDA Reconciliation to GAAP 

 (unaudited, in thousands) 














 For the three months ended 


 For the six months ended 


June 30,

July 1,


June 30,

July 1,


2018

2017


2018

2017







 Net income 

$          10,471

$            7,903


$          30,872

$          24,262







 Interest income, net 

(221)

(482)


(551)

(865)

 Income tax expense 

4,391

(2,129)


9,914

3,153

 Depreciation 

3,942

2,958


7,603

5,538

 Amortization 

4,973

2,280


10,059

3,186







 EBITDA 

23,556

10,530


57,897

35,274













 Stock-based compensation expense 

6,431

4,704


12,377

9,035

 Net merger, acquisition and divestiture expense 

164

931


23

1,771

 Net intellectual property litigation expense 

759

382


3,330

644







 Adjusted EBITDA 

$          30,910

$          16,547


$          73,627

$          46,724

 Adjusted EBITDA as a % of revenue 

13.7%

9.0%


16.6%

13.3%



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, gain on business acquisition, net intellectual property litigation 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.

 

 

 iRobot Corporation  

 Effective Tax Rate 

 (unaudited) 


















































 Fiscal Year 2018 


Fiscal Year 2017


 Three Months Ended 






March 31


 June 30 


 September 29 


 December 29 


 FY18 


 FY17 


Actual


Actual


 Expected 


 Expected 


 Expected 


Actual













Effective Tax Rate, before discrete items

27%


16%


24-26%


24-26%


24-26%


34%













Discrete Items

-6%


14%


Not Forecasted


-1%













Effective Tax Rate, including discrete items

21%


30%


Not Forecasted


33%

 

 

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