Press Releases

iRobot Reports Fourth-Quarter and Full-Year Financial Results
Home Robot Business Expected to Grow More Than 20 Percent in 2013
BEDFORD, Mass. iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the fourth quarter and full year ended December 29, 2012.

“Our Home Robot business had a phenomenal year with revenue increasing 28 percent over 2011, but as expected, the decline in Defense & Security revenue resulted in lower total company revenue and profit for the year,” said Colin Angle, chairman and chief executive officer of iRobot.

“2012 was a transformational year for our business, and as we enter 2013, we are a different company than we were a year ago. Our business performance over the next few years will be driven by our rapidly growing home technology business. Home Robots is expected to grow roughly 20 percent this year and comprise 90 percent of total company revenue. In addition, we have an emerging remote presence business and have stabilized our defense business.”

  • Revenue for the fourth quarter of 2012 was $100.7 million, compared with $130.8 million for the same quarter one year ago. Revenue for the full year 2012 was $436.2 million, compared with $465.5 million for the full year 2011.
  • Net loss in the fourth quarter of 2012 was $5.9 million, compared with net income of $10.6 million in the fourth quarter of 2011. Net income for the full year 2012 was $17.3 million, compared with $40.2 million for the same period in 2011.
  • Quarterly loss per share was ($0.21), compared with earnings per share of $0.38 in the fourth quarter last year. Full-year earnings per share were $0.61, compared with $1.44 last year. The Q4 and full year results include the negative impact of $0.22 and $0.27, respectively, from restructuring the Defense & Security business and the inclusion of Evolution Robotics, acquired on October 1, 2012.
  • Adjusted EBITDA for the fourth quarter of 2012 was $1.0 million, compared with $21.3 million in the fourth quarter of 2011. Adjusted EBITDA for the full year 2012 was $52.5 million, compared with $73.0 million for the same period a year ago.

Business Highlights

  • Full-year domestic Home Robot revenue growth of more than 40 percent, coupled with international revenue growth of 22 percent, drove a 28 percent year-over-year increase in full-year Home Robot revenue. International Home Robot revenue of $239 million comprised 67 percent of total Home Robot 2012 revenue.
  • Closed the acquisition of Evolution Robotics (ER) on October 1, 2012. We are on schedule with our integration and ahead of schedule on our planned rollout of ER’s Mint® floor sweeping robot to our international distributors.
  • Received a $7 million order from a foreign government for PackBot® systems. International sales are expected to contribute roughly one-third of 2013 product revenue in our Defense & Security business unit.
  • Received FDA approval for RP-VITA, the first self-navigating communications robot for use in hospitals.
  • Our 2013 Home Robot expectations reflect continued strong growth domestically and continuing economic uncertainties in Europe.

Financial Expectations

Management provides the following expectations with respect to the year ending December 28, 2013 and first quarter ending March 30, 2013.

Fiscal Year 2013:

     
Revenue     $480 - $490 million
Earnings Per Share     $0.57 - $0.72
Adjusted EBITDA     $46 - $52 million
       

Full-Year 2013 BU Revenue:

     
Home Robots     $430 - $435 million
Defense & Security Robots     $45 - $55 million

 

     

Q1 2013:

     
Revenue     $98 - $102 million
Earnings Per Share     $0.00 - $0.07
Adjusted EBITDA     $4 - $6 million
       

Fourth-Quarter and Full-Year Conference Call

iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the fourth fiscal quarter and full year 2012, business outlook, and outlook for 2013 financial performance. Pertinent details include:

Date:     Thursday, February 7, 2013
Time:     8:30 a.m. ET
Call-In Number:     847-619-6818
Passcode:     34160560

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=4897481. 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 February 14, and can be accessed by dialing 630-652-3000, passcode 34160560#.

About iRobot Corp.

iRobot designs and builds robots that make a difference. The company’s home robots help people find smarter ways to clean, and its defense & security robots protect those in harm’s way. 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 of our Home Robots business and anticipated increase of Home Robots revenue as a percentage of total revenue, anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2013 and the first quarter ending March 30, 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, our dependence on the U.S. federal government and government contracts, the timing of government contracts and orders, market acceptance of our products, 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, Adjusted net income (loss) and Adjusted net income (loss) per share, each of 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. We define Adjusted net income (loss) and Adjusted net income (loss) per share as net income (loss) and net income (loss) per share, respectively, excluding the impact of a one-time tax benefit. Reconciliations between net income (loss) and Adjusted EBITDA, net income (loss) and Adjusted net income (loss), and net income (loss) per share and Adjusted net income (loss) per share are provided in the financial tables at the end of this press release.

iRobot Corporation
Consolidated Statement of Income
(in thousands, except per share amounts)
(unaudited)
                             
      For the three months ended         For the twelve months ended
      December 29,     December 31,         December 29,     December 31,
      2012     2011         2012     2011
Revenue                            
Product revenue     $ 97,874       $ 122,425           $ 418,550     $ 426,525
Contract revenue       2,820         8,343             17,694       38,975
Total       100,694         130,768             436,244       465,500
                             
Cost of Revenue                            
Product revenue       55,667         69,210             239,745       246,905
Contract revenue       3,673         5,473             16,783       26,477
Total       59,340         74,683             256,528       273,382
                             
Gross Margin       41,354         56,085             179,716       192,118
                             
Operating Expense                            
Research & development       10,418         10,675             37,215       36,498
Selling & marketing       26,503         18,243             71,631       58,544
General & administrative       13,308         12,094             45,698       43,753
Total       50,229         41,012             154,544       138,795
                             
Operating income (loss)       (8,875 )       15,073             25,172       53,323
                             
Other income (expense), net       (42 )       (40 )           435       218
                             
Pre-tax income (loss)       (8,917 )       15,033             25,607       53,541
Income tax expense (benefit)       (2,979 )       4,395             8,310       13,350
Net income (loss)     $ (5,938 )     $ 10,638           $ 17,297     $ 40,191
                             
Net income (loss) per common share:                            
Basic     $ (0.21 )     $ 0.39           $ 0.63     $ 1.50
Diluted     $ (0.21 )     $ 0.38           $ 0.61     $ 1.44
                             
Shares used in per common share calculations:                            
Basic       27,802         27,119             27,577       26,712
Diluted       27,802         28,147             28,301       27,924
                             
                             
Stock-based compensation included in above figures:                            
Cost of product revenue     $ 295       $ 281           $ 1,187     $ 1,197
Cost of contract revenue       90         113             410       478
Research & development       422         262             1,195       743
Selling & marketing       234         211             808       724
General & administrative       1,919         1,531             7,383       5,642
Total     $ 2,960       $ 2,398           $ 10,983     $ 8,784
                                         
iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)
             
      December 29,     December 31,
      2012     2011
             
Assets            
             
Cash and equivalents     $ 126,770     $ 166,308
Short term investments       12,430       17,811
Accounts receivable, net       29,413       43,338
Unbilled revenues       1,196       2,362
Inventory       36,965       31,089
Deferred tax assets       19,266       15,344
Other current assets       11,518       7,928
Total current assets       237,558       284,180
Property, plant and equipment, net       24,953       29,029
Deferred tax assets       8,610       6,127
Goodwill       48,951       7,910
Intangible assets, net       28,224       2,467
Other assets       8,500       2,500
Total assets     $ 356,796     $ 332,213
             
Liabilities and stockholders' equity            
             
Accounts payable     $ 42,515     $ 48,406
Accrued expenses       16,527       17,188
Accrued compensation       11,864       17,879
Deferred revenue and customer advances       6,257       1,527
Total current liabilities       77,163       85,000
Long term liabilities       3,816       4,255
Stockholders' equity       275,817       242,958
Total liabilities and stockholders' equity     $ 356,796     $ 332,213
                 
iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
                             
                             
      For the three months ended         For the twelve months ended
      December 29,     December 31,         December 29,     December 31,
      2012     2011         2012     2011
Cash flows from operating activities:                            
Net income (loss)     $ (5,938 )     $ 10,638           $ 17,297       $ 40,191  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:                            
Depreciation and amortization       3,491         3,075             11,672         10,312  
Loss on disposal of property and equipment       554         123             1,332         599  
Stock-based compensation       2,960         2,398             10,983         8,784  
Deferred income taxes, net       (908 )       (295 )           (3,763 )       6,154  
Tax benefit of excess stock based compensation deductions       16         (915 )           (1,445 )       (6,917 )
Non-cash director deferred compensation       23         36             87         162  
Changes in operating assets and liabilities — (use) source                            
Accounts receivable       25,601         (1,938 )           15,560         (9,282 )
Unbilled revenue       497         5,537             1,166         1,650  
Inventory       696         900             (807 )       (3,929 )
Other assets       (6,158 )       4,729             (2,892 )       (1,843 )
Accounts payable       1,405         7,884             (8,684 )       9,717  
Accrued expenses       (2,252 )       1,951             (656 )       1,421  
Accrued compensation       2,736         2,834             (6,106 )       52  
Deferred revenue       4,139         (831 )           4,730         (2,007 )
Change in long term liabilities       (298 )       528             (613 )       671  
Net cash provided by operating activities       26,564         36,654             37,861         55,735  
                             
Cash flows from investing activities:                            
Purchase of property and equipment       (2,703 )       (2,654 )           (6,770 )       (13,011 )
Change in other assets       -         -             (6,000 )       -  
Purchase of Evolution net of cash received       (74,530 )       -             (74,530 )       -  
Purchases of investments       -         (4,189 )           (5,086 )       (9,189 )
Sales of investments       7,500         -             10,000         5,000  
Net cash used in investing activities       (69,733 )       (6,843 )           (82,386 )       (17,200 )
                             
Cash flows from financing activities:                            
Proceeds from stock option exercises       304         4,003             4,326         13,401  
Income tax withholding payment associated with restricted stock vesting       (7 )       (83 )           (784 )       (928 )
Tax benefit of excess stock based compensation deductions       (16 )       915             1,445         6,917  
Net cash provided by financing activities       281         4,835             4,987         19,390  
                             
Net increase (decrease) in cash and cash equivalents       (42,888 )       34,646             (39,538 )       57,925  
Cash and cash equivalents, at beginning of period       169,658         131,662             166,308         108,383  
Cash and cash equivalents, at end of period     $ 126,770       $ 166,308           $ 126,770       $ 166,308  
                             

iRobot Corporation

Supplemental Information

(unaudited)

                 
                 
      For the three months ended         For the twelve months ended
      December 29,     December 31,         December 29,     December 31,
      2012     2011         2012     2011
                             
Revenue: *                            
                             
Home Robots     $ 82,918       $ 74,435           $ 356,805       $ 278,551  
                             
Domestic     $ 31,820       $ 24,371           $ 117,689       $ 82,787  
International     $ 51,098       $ 50,064           $ 239,116       $ 195,764  
                             
                             
Defense & Security     $ 17,776       $ 56,333           $ 79,439       $ 186,949  
                             
Domestic     $ 15,364       $ 51,458           $ 68,635       $ 170,968  
International     $ 2,412       $ 4,875           $ 10,804       $ 15,981  
                             
Product     $ 14,956       $ 47,990           $ 61,745       $ 147,974  
Contract     $ 2,820       $ 8,343           $ 17,694       $ 38,975  
                             
Product Life Cycle     $ 12,648       $ 10,974           $ 37,433       $ 42,579  
                             
                             
Gross Margin Percent:                            
Home Robots       49.6 %       45.8 %           49.5 %       45.2 %
Defense & Security       1.1 %       39.0 %           4.0 %       35.5 %
Total Company       41.1 %       42.9 %           41.2 %       41.3 %
                             
                             
Units shipped:                            
Home Robots *       387         358             1,621         1,371  
Defense & Security       34         273             289         773  
                             
                             
Average gross selling prices for robot units:                            
Home Robots     $ 227       $ 218           $ 222       $ 207  
Defense & Security *     $ 68       $ 132           $ 84       $ 136  
                             
                             
Defense & Security Funded Product Backlog *     $ 11,356       $ 7,600           $ 11,356       $ 7,600  
                             
                             
Days sales outstanding       28         32             28         32  
                             
Days in inventory       61         41             61         41  
                             
Headcount       534         619             534         619  
                             

* in thousands

                           
                             
iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
                             
                             
      For the three months ended         For the twelve months ended
      December 29,     December 31,         December 29,     December 31,
      2012     2011         2012     2011
                             
Net income (loss)     $ (5,938 )     $ 10,638           $ 17,297       $ 40,191  
                             
Interest income, net       (201 )       (212 )           (1,016 )       (967 )
Income tax expense (benefit)       (2,979 )       4,395             8,310         13,350  
Depreciation       2,418         2,387             9,898         9,002  
Amortization       1,073         688             1,774         1,310  
                             
EBITDA       (5,627 )       17,896             36,263         62,886  
                             
                             
Stock-based compensation expense       2,960         2,398             10,983         8,784  
Merger and acquisition expense       717         11             1,404         41  
Net intellectual property litigation expense       26         116             155         287  
Restructuring expense       2,905         914             3,679         1,015  
                             
Adjusted EBITDA     $ 981       $ 21,335           $ 52,484       $ 73,013  
                                             

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.

iRobot Corporation
Adjusted Net Income and Earnings Per Share Reconciliations to GAAP
(in thousands, except per share amounts)
(unaudited)
                             
                             
      For the three months ended         For the twelve months ended
      December 29,     December 31,         December 29,     December 31,
      2012     2011         2012     2011
                             
GAAP net income (loss)     $ (5,938 )     $ 10,638         $ 17,297     $ 40,191  
                             

Less one-time net income tax benefit
associated with Section 199 deductions
and R&D tax credit true-ups

      -         -           -       (3,455 )
                             
Adjusted net income (loss)     $ (5,938 )     $ 10,638         $ 17,297     $ 36,736  
                             
                             
GAAP net income (loss) per common share:                            
Basic     $ (0.21 )     $ 0.39         $ 0.63     $ 1.50  
Diluted     $ (0.21 )     $ 0.38         $ 0.61     $ 1.44  
                             

Less one-time net income tax benefit
associated with Section 199 deductions
and R&D tax credit true-ups:

                           
Basic     $ -       $ -         $ -     $ (0.12 )
Diluted     $ -       $ -         $ -     $ (0.12 )
                             
Adjusted net income (loss) per common share:                            
Basic     $ (0.21 )     $ 0.39         $ 0.63     $ 1.38  
Diluted     $ (0.21 )     $ 0.38         $ 0.61     $ 1.32  
                             
                             
Shares used in Per Common Share Calculations:                            
Basic       27,802         27,119           27,577       26,712  
Diluted       27,802         28,147           28,301       27,924  
                                         

In evaluating its business, iRobot also considers and uses Adjusted net income and Adjusted net income per common share as supplemental measures of its operating performance. The Company defines Adjusted net income and Adjusted net income per share as net income and net income per share, respectively, excluding the impact of a one-time tax benefit.

The terms Adjusted net income and Adjusted net income per common share are 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. When assessing the Company's operating performance, investors should not consider Adjusted net income, Adjusted net income per common share or both in isolation, or as a substitute for net income, net income per common share or other consolidated income statement data prepared in accordance with U.S. GAAP.

 

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