Press Releases

iRobot Reports Second-Quarter Financial Results
Home Robot business drives 17 percent year-over-year growth
BEDFORD, Mass. iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the second quarter ended June 29, 2013.

 

“I am very excited to report that we had an excellent quarter following an outstanding Q1. Our Home Robot business delivered strong results both domestically and overseas, and the outlook continues to be good. We announced our second remote presence market initiative, Enterprise Telepresence, in partnership with Cisco, and our Defense & Security business performed as expected,” said Colin Angle, chairman and chief executive officer of iRobot.

“Based on our view of the rest of the year, our expectations for revenue and Adjusted EBITDA remain unchanged, but we are increasing the low end of our EPS range due to a one-time tax benefit received in Q2. We expect to deliver fiscal 2013 revenue of $485 to $495 million, EPS between $0.88 and $1.00 and Adjusted EBITDA of $55 to $61 million. Our strong second-quarter results, driven by our Home Robot business, give us confidence that we will achieve our full-year expectations.”

  • Revenue for the second quarter of 2013 was $130.4 million, compared with $111.4 million for the same quarter one year ago. Revenue for the first half of 2013 was $236.6 million, compared with $209.3 million last year.
  • Net income in the second quarter of 2013 was $8.3 million, compared with $7.4 million in the second quarter of 2012. For the first half, net income was $16.6 million, compared with $8.0 million a year ago.
  • Quarterly earnings per share were $0.28, compared with $0.26 in the second quarter last year. First-half earnings per share were $0.57, compared with $0.28 in 2012. EPS in Q2 and first-half 2013 included a $0.07 one-time tax benefit associated with the prior period sale of government robots to the U.S. military, which were used outside of the U.S.
  • Adjusted EBITDA for the second quarter of 2013 was $17.0 million, compared with $16.2 million in the second quarter of 2012. For the first half, Adjusted EBITDA was $32.3 million, compared with $22.3 million a year ago.

Business Highlights

  • Domestic revenue growth of 26 percent, coupled with international growth of 18 percent, fueled a 20 percent year-over-year increase in Home Robot revenue.
  • Announced contracts from Brazil totaling $7.2 million and a $3.0 million order under a $30.0 million IDIQ from the U.S. Army during the quarter, which gives us confidence that we will achieve our full-year Defense & Security expectations.
  • Announced a joint marketing agreement with Cisco to bring the enterprise-grade Ava 500 video collaboration robot to market, the second initiative of our Remote Presence business.

Financial Expectations

Management provides the following expectations with respect to the third quarter ending September 28, 2013 and fiscal year ending December 28, 2013.

Q3 2013:

                       
Revenue           $124 - $128 million            
Earnings Per Share           $0.20 - $0.25            
Adjusted EBITDA           $14 - $17 million            
                         

Fiscal Year 2013:

         

Current

         

Prior

Revenue           $485 - $495 million           $485 - $495 million
Earnings Per Share           $0.88 - $1.00           $0.80 - $1.00
Adjusted EBITDA           $55 - $61 million           $55 - $61 million
                         

Full-Year 2013 BU Revenue:

                       
Home Robots           $435 - $440 million            
Defense & Security Robots           $45 - $55 million            
                         

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 2013, business outlook, and outlook for third-quarter and fiscal year 2013 financial performance. Pertinent details include:

Date:           Wednesday, July 24, 2013
Time:           8:30 a.m. ET
Call-In Number:           847-619-6818
Passcode:           34160570
             

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=4897483. 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 630-652-3000, passcode 34160570#.

About iRobot Corp.

iRobot designs and builds robots that make a difference. The company’s home robots help people find smarter ways to clean, its defense & security robots protect those in harm’s way, and its remote presence robots enable virtual presence from anywhere in the world. iRobot’s consumer and military robots feature iRobot Aware® robot intelligence systems, proprietary technology incorporating advanced concepts in navigation, mobility, manipulation 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, operating performance and growth, demand for our robots, anticipated growth and performance of our Home Robots business, anticipated performance of our Defense & Security business, anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2013 and the third quarter ending September 28, 2013, and anticipated business unit revenue for the fiscal year 2013. 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, our dependence on the U.S. federal government and government contracts, the timing of government contracts and orders, changes in government policies or spending priorities, 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 and amortization, merger and acquisition expenses, net intellectual property litigation expenses, restructuring expenses, and non-cash stock compensation. A reconciliation between net income (loss) 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 29,   June 30,     June 29,   June 30,
      2013       2012       2013       2012
Revenue                  
Product revenue   $ 127,966     $ 107,760     $ 229,371     $ 199,502
Contract revenue     2,396       3,685       7,186       9,750
Total     130,362       111,445       236,557       209,252
                   
Cost of Revenue                  
Product revenue     67,873       57,089       125,688       113,322
Contract revenue     884       1,540       2,737       4,562
Total     68,757       58,629       128,425       117,884
                   
Gross Margin     61,605       52,816       108,132       91,368
                   
Operating Expense                  
Research & development     15,997       14,182       30,405       28,682
Selling & marketing     22,309       17,976       33,006       30,309
General & administrative     15,395       10,022       27,853       21,064
Total     53,701       42,180       91,264       80,055
                   
Operating income     7,904       10,636       16,868       11,313
                   
Other income (expense), net     (105 )     60       (201 )     280
                   
Income before income taxes     7,799       10,696       16,667       11,593
Income tax expense (benefit)     (495 )     3,321       18       3,565
Net income   $ 8,294     $ 7,375     $ 16,649     $ 8,028
                   
Net income per common share:                  
Basic   $ 0.29     $ 0.27     $ 0.59     $ 0.29
Diluted   $ 0.28     $ 0.26     $ 0.57     $ 0.28
                   
Shares used in per common share calculations:                  
Basic     28,416       27,522       28,173       27,441
Diluted     29,226       28,182       28,972       28,259
                   
                   
Stock-based compensation included in above figures:                  
Cost of product revenue   $ 128     $ 218     $ 246     $ 426
Cost of contract revenue     -       -       -       -
Research & development     793       446       1,294       906
Selling & marketing     118       179       484       416
General & administrative     2,224       2,059       4,168       3,667
Total   $ 3,263     $ 2,902     $ 6,192     $ 5,415
                               
 
iRobot Corporation
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
           
    June 29,     December 29,
      2013       2012
           
Assets          
           
Cash and equivalents   $ 133,857     $ 126,770
Short term investments     19,014       12,430
Accounts receivable, net     51,104       29,413
Unbilled revenues     1,051       1,196
Inventory     41,560       36,965
Deferred tax assets     19,245       19,266
Other current assets     13,598       8,853
Total current assets     279,429       234,893
Property, plant and equipment, net     23,060       24,953
Deferred tax assets     10,438       8,792
Goodwill     48,751       48,951
Intangible assets, net     24,506       28,224
Other assets     10,501       8,500
Total assets   $ 396,685     $ 354,313
           
Liabilities and stockholders' equity          
           
Accounts payable   $ 53,905     $ 42,515
Accrued expenses     14,045       13,642
Accrued compensation     13,113       11,864
Deferred revenue and customer advances     3,274       6,257
Total current liabilities     84,337       74,278
Long term liabilities     4,138       4,218
Stockholders' equity     308,210       275,817
Total liabilities and stockholders' equity   $ 396,685     $ 354,313
           
 
iRobot Corporation
Consolidated Statements of Cash Flows
(unaudited, in thousands)
                   
                   
    For the three months ended     For the six months ended
    June 29,   June 30,     June 29,   June 30,
      2013       2012         2013       2012  
Cash flows from operating activities:                  
Net income   $ 8,294     $ 7,375       $ 16,649     $ 8,028  
Adjustments to reconcile net income to net cash (used in) provided by operating activities:                  
Depreciation and amortization     3,265       2,711         6,549       5,313  
Loss on disposal of property and equipment     99       97         281       166  
Goodwill and intangible assets impairment     1,988       -         1,988       -  
Stock-based compensation     3,263       2,902         6,192       5,415  
Deferred income taxes, net     (464 )     2,464         (913 )     (4,230 )
Tax benefit of excess stock based compensation deductions     (1,593 )     (330 )       (1,636 )     (1,035 )
Non-cash director deferred compensation     11       20         22       42  
Changes in operating assets and liabilities — (use) source                  
Accounts receivable     (23,824 )     (9,620 )       (21,691 )     3,811  
Unbilled revenue     1,201       (833 )       145       289  
Inventory     (9,400 )     (2,916 )       (4,595 )     (3,508 )
Other assets     (3,787 )     (3,210 )       (4,770 )     (378 )
Accounts payable     24,101       910         11,390       (3,194 )
Accrued expenses     21       (5,255 )       400       (3,252 )
Accrued compensation     6,116       2,008         1,249       (8,141 )
Deferred revenue and customer advances     (355 )     (540 )       (2,983 )     355  
Change in long term liabilities     (895 )     (120 )       (80 )     (186 )
Net cash (used in) provided by operating activities     8,041       (4,337 )       8,197       (505 )
                   
Cash flows from investing activities:                  
Purchase of property and equipment     (1,751 )     (1,313 )       (2,828 )     (2,956 )
Change in other assets     -       -         (2,000 )     (6,000 )
Purchases of investments     (7,850 )     (5,086 )       (10,397 )     (5,086 )
Sales of investments     2,500       -         3,500       2,500  
Net cash used in investing activities     (7,101 )     (6,399 )       (11,725 )     (11,542 )
                   
Cash flows from financing activities:                  
Proceeds from stock option exercises     8,099       699         9,843       2,022  
Income tax withholding payment associated with restricted stock vesting     (351 )     (548 )       (864 )     (775 )
Tax benefit of excess stock based compensation deductions     1,593       330         1,636       1,035  
Net cash provided by financing activities     9,341       481         10,615       2,282  
                   
Net increase (decrease) in cash and cash equivalents     10,281       (10,255 )       7,087       (9,765 )
Cash and cash equivalents, at beginning of period     123,576       166,798         126,770       166,308  
Cash and cash equivalents, at end of period   $ 133,857     $ 156,543       $ 133,857     $ 156,543  
                                   
 
iRobot Corporation
Supplemental Information
(unaudited)
                   
                   
    For the three months ended     For the six months ended
    June 29,   June 30,     June 29,   June 30,
      2013       2012         2013       2012  
                   
Revenue: *                  
                   
Home Robots   $ 115,528     $ 96,013       $ 208,227     $ 177,596  
                   
Domestic   $ 39,178     $ 31,126       $ 70,569     $ 52,944  
International   $ 76,350     $ 64,887       $ 137,658     $ 124,652  
                   
                   
Defense & Security   $ 12,470     $ 13,223       $ 23,570     $ 27,385  
                   
Domestic   $ 11,579     $ 11,013       $ 20,713     $ 21,128  
International   $ 891     $ 2,210       $ 2,857     $ 6,257  
                   
Product   $ 11,502     $ 10,403       $ 19,537     $ 19,407  
Contract   $ 968     $ 2,820       $ 4,033     $ 7,978  
                   
Product Life Cycle   $ 3,041     $ 4,524       $ 9,121     $ 9,108  
                   
                   
Gross Margin Percent:                  
Home Robots     51.5 %     53.0 %       50.0 %     50.3 %
Defense & Security     47.5 %     45.9 %       47.5 %     37.7 %
Total Company     47.3 %     47.4 %       45.7 %     43.7 %
                   
                   
Units shipped:                  
Home Robots *     492       426         913       818  
Defense & Security     424       42         442       174  
                   
                   
Average gross selling prices for robot units:                  
Home Robots   $ 225     $ 225       $ 233     $ 220  
Defense & Security *   $ 20     $ 140       $ 24     $ 59  
                   
                   
Defense & Security Funded Product Backlog *   $ 19,972     $ 18,300       $ 19,972     $ 18,300  
                   
                   
Days sales outstanding     37       34         37       34  
                   
Days in inventory     58       54         58       54  
                   
Headcount     517       604         517       604  
                   
                   
* in thousands                  
                   
 
iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
                   
                   
    For the three months ended     For the six months ended
    June 29,   June 30,     June 29,   June 30,
      2013       2012         2013       2012  
                   
Net income   $ 8,294     $ 7,375       $ 16,649     $ 8,028  
                   
Interest income, net     (153 )     (264 )       (317 )     (526 )
Income tax expense (benefit)     (495 )     3,321         18       3,565  
Depreciation     2,221       2,485         4,440       4,879  
Amortization     1,044       226         2,109       434  
                   
EBITDA     10,911       13,143         22,899       16,380  
                   
                   
Stock-based compensation expense     3,263       2,902         6,192       5,415  
Merger and acquisition expense     113       14         393       26  
Net intellectual property litigation expense     170       34         203       71  
Restructuring expense     2,575       129         2,575       407  
                   
Adjusted EBITDA   $ 17,032     $ 16,222       $ 32,262     $ 22,299  
                   
                   
                   
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 and amortization, merger and acquisition expenses, net intellectual property litigation expenses, restructuring expenses and non-cash stock compensation. 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.

 

Contact:

Elise Caffrey
Investor Relations
iRobot Corp.
(781) 430-3003
ecaffrey@irobot.com
Matt Lloyd
Media Relations
iRobot Corp.
(781) 430-3720
mlloyd@irobot.com