Press Releases

iRobot Reports Second-Quarter Financial Results
Exceeds Expectations; Increases 2011 Outlook

BEDFORD, Mass., Jul 26, 2011 (BUSINESS WIRE) -- iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the second quarter ended July 2, 2011.

 

  • Revenue for the second quarter of 2011 increased 11 percent to $108.1 million, compared with $97.8 million for the same quarter one year ago. Revenue for the first half of 2011 also increased 11 percent to $214.4 million from $192.7 million last year.
  • Net income in the second quarter of 2011 was $8.0 million, compared with $5.3 million in the second quarter of 2010. For the first half, net income was $15.5 million, up from $11.5 million a year ago.
  • Quarterly earnings per share grew by 45 percent to $0.29, compared with $0.20 in the second quarter last year. First-half earnings per share were $0.56, up from $0.44 in 2010, an increase of 27 percent.
  • Adjusted EBITDA for the second quarter of 2011 was $16.2 million, compared with $12.4 million in the second quarter of 2010. Adjusted EBITDA for the first half of 2011 was $31.3 million, compared with $26.1 million a year ago.

 

"Our performance in the second quarter and first half was outstanding, particularly given very challenging 2010 comps," said Colin Angle, chairman and chief executive officer of iRobot. "Our second-quarter results exceeded our expectations for both divisions and reflect a positive trend in domestic consumer spending for our home robot products. Following strong performance by both divisions and our expectations for continuing profitable growth, we are increasing our full-year expectations."

Business Highlights

 

  • Strong demand in both domestic and overseas markets drove a 21 percent year-over-year increase in second-quarter home robot revenue. In Q2, domestic home robot revenue grew 30 percent while international home robot revenue grew 16 percent and comprised 65 percent of total home robot revenue.
  • During the second quarter, the Government and Industrial Robots division received delivery orders totaling $41 million, primarily for delivery of PackBot and SUGV robots.
  • Cash and investments totaled $123 million at the end of the second quarter, up $24 million from Q2 2010. The company increased its revolving credit facility to $75 million, providing additional financial capacity.

 

Financial Expectations

Management provides the following expectations with respect to the third quarter ending October 1, 2011.

 

         

 

Q3 2011:

 

       
Revenue       $115 - $120 million
Earnings Per Share       $0.22 - $0.26
Adjusted EBITDA       $14 - $16 million
         

 

Management raises its expectations for the full year ending December 31, 2011.

 

             

 

Fiscal Year 2011:

 

   

 

Current

 

   

 

Prior

 

Revenue     $460 - $470 million     $450 - $465 million
Earnings Per Share     $1.04 - $1.10     $0.90 - $1.00
Adjusted EBITDA     $62 - $64 million     $58 - $62 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 and outlook for the third quarter and full year 2011 financial performance. Pertinent details include:

 

               
        Date:     Wednesday, July 27, 2011
        Time:     8:30 a.m. ET
        Call-In Number:     617-786-2964
        Passcode:     20572285
               

 

A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/phoenix.zhtml?c=193096&p=irol-irhome. 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 3, and can be accessed by dialing 617-801-6888, passcode 35680683.

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 government and industrial robots protect those in harm's way. iRobot's consumer and military robots feature iRobot Aware(R) robot intelligence systems, proprietary technology incorporating advanced concepts in navigation, mobility, manipulation and artificial intelligence. For more information about iRobot, please visithttp://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 and growth, anticipated revenue, Adjusted EBITDA and earnings per share for fiscal year 2011 and the third quarter of 2011. 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, 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 release includes Adjusted EBITDA, 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, and non-cash stock compensation. A reconciliation between net income and Adjusted EBITDA is provided in the financial tables at the end of this press release.

 

 
iRobot Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
                     
                     
      For the three months ended     For the six months ended
      July 2,   July 3,     July 2,   July 3,
      2011   2010     2011   2010
Revenue                    
Product revenue     $ 97,396   $ 85,945     $ 194,107   $ 172,056
Contract revenue       10,686     11,859       20,252     20,678
Total       108,082     97,804       214,359     192,734
                     
Cost of Revenue                    
Product revenue       57,835     55,825       114,025     111,425
Contract revenue       7,711     8,009       14,344     14,622
Total       65,546     63,834       128,369     126,047
                     
Gross Margin       42,536     33,970       85,990     66,687
                     
Operating Expense                    
Research & development       8,146     5,691       16,875     10,190
Selling & marketing       12,767     10,581       25,748     20,225
General & administrative       10,097     9,313       20,697     17,789
Total       31,010     25,585       63,320     48,204
                     
Operating income       11,526     8,385       22,670     18,483
                     
Other income, net       112     40       350     69
                     
Pre-tax income       11,638     8,425       23,020     18,552
Income tax expense       3,614     3,111       7,519     7,070
Net income     $ 8,024   $ 5,314     $ 15,501   $ 11,482
                     
Net income per common share:                    
Basic     $ 0.30   $ 0.21     $ 0.59   $ 0.46
Diluted     $ 0.29   $ 0.20     $ 0.56   $ 0.44
                     
Shares used in per common share calculations:                    
Basic       26,667     25,294       26,388     25,217
Diluted       27,911     26,375       27,733     26,226
                     
                     
Stock-based compensation included in above figures:                
Cost of product revenue     $ 320   $ 355     $ 571   $ 687
Cost of contract revenue       156     110       250     236
Research & development       239     245       320     277
Selling & marketing       158     289       339     645
General & administrative       1,538     1,202       2,710     2,246
Total     $ 2,411   $ 2,201     $ 4,190   $ 4,091
 
 
iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)
             
      July 2,     January 1,
      2011     2011
             
Assets            
             
Cash and equivalents     $ 108,725     $ 108,383
Short term investments       13,816       13,928
Accounts receivable, net       34,529       34,056
Unbilled revenues       8,034       4,012
Inventory       34,202       27,160
Deferred tax assets       13,223       12,917
Other current assets       10,910       6,137
Total current assets       223,439       206,593
Property, plant and equipment, net       28,128       25,620
Deferred tax assets       8,733       8,338
Other assets       13,563       13,780
Total assets     $ 273,863     $ 254,331
             
Liabilities and stockholders' equity            
             
Accounts payable     $ 33,273     $ 38,689
Accrued expenses       13,854       15,790
Accrued compensation       13,094       17,827
Deferred revenue and customer advances       2,040       3,534
Total current liabilities       62,261       75,840
Long term liabilities       3,850       3,584
Stockholders' equity       207,752       174,907
Total liabilities and stockholders' equity     $ 273,863     $ 254,331
                 
                     
iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
                     
                     
      For the three months ended     For the six months ended
      July 2,   July 3,     July 2,   July 3,
      2011   2010     2011   2010
Cash flows from operating activities:                    
Net income     $ 8,024     $ 5,314       $ 15,501     $ 11,482  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                    
Depreciation and amortization       2,457       1,917         4,640       3,755  
Loss on disposal of property and equipment       3       2         473       47  
Stock-based compensation       2,411       2,201         4,190       4,091  
Benefit from deferred tax assets       (1,167 )     -         (1,167 )     -  
Non-cash director deferred compensation       44       33         82       66  
Changes in operating assets and liabilities -- (use) source                    
Accounts receivable       (6,920 )     (1,054 )       (473 )     8,038  
Unbilled revenue       (100 )     978         (4,022 )     (482 )
Inventory       869       (816 )       (7,042 )     1,722  
Other assets       (2,880 )     44         (4,809 )     797  
Accounts payable       (10,971 )     2,277         (5,416 )     1,209  
Accrued expenses       (974 )     (990 )       (1,889 )     (1,031 )
Accrued compensation       4,945       4,850         (4,733 )     (2,372 )
Deferred revenue       (1,608 )     (7 )       (1,494 )     (1,939 )
Change in long term liabilities       (123 )     (107 )       266       (215 )
Net cash provided by (used in) operating activities       (5,990 )     14,642         (5,893 )     25,168  
                     
Cash flows from investing activities:                    
Purchase of property and equipment       (2,654 )     (3,629 )       (7,208 )     (5,668 )
Purchases of investments       -       (7,831 )       (5,000 )     (25,411 )
Sales of investments       2,500       7,500         5,000       7,500  
Net cash used in investing activities       (154 )     (3,960 )       (7,208 )     (23,579 )
                     
Cash flows from financing activities:                    
Proceeds from stock option exercises       4,013       1,823         8,597       1,927  
Income tax withholding payment associated with restricted stock vesting       (356 )     (120 )       (809 )     (279 )
Tax benefit of excess stock based compensation deductions       3,213       568         5,655       717  
Net cash provided by financing activities       6,870       2,271         13,443       2,365  
                     
Net increase in cash and cash equivalents       726       12,953         342       3,954  
Cash and cash equivalents, at beginning of period       107,999       62,857         108,383       71,856  
Cash and cash equivalents, at end of period     $ 108,725     $ 75,810       $ 108,725     $ 75,810  
                     
 
iRobot Corporation
Supplemental Information
(unaudited)
                     
                     
      For the three months ended     For the six months ended
      July 2,   July 3,     July 2,   July 3,
      2011   2010     2011   2010
                     
Revenue: *                    
                     
Home Robots     $ 63,892   $ 52,904     $ 131,774   $ 105,450
                     
Domestic     $ 22,395   $ 17,162     $ 40,453   $ 33,258
International     $ 41,497   $ 35,742     $ 91,321   $ 72,192
                     
                     
Government & Industrial     $ 44,190   $ 44,900     $ 82,585   $ 87,283
                     
Domestic     $ 43,378   $ 41,365     $ 73,580   $ 76,605
International     $ 812   $ 3,535     $ 9,005   $ 10,678
                     
Product     $ 33,504   $ 33,041     $ 62,333   $ 66,605
Contract     $ 10,686   $ 11,859     $ 20,252   $ 20,678
                     
Product Life Cycle     $ 6,617   $ 9,582     $ 19,320   $ 17,561
                     
                     
Gross Margin Percent:                    
Home Robots       44.1%     39.2%       44.8%     38.6%
Government & Industrial       32.5%     29.5%       32.6%     29.8%
Total Company       39.4%     34.7%       40.1%     34.6%
                     
                     
Units shipped:                    
Home Robots *       328     294       677     581
Government & Industrial       192     250       306     516
                     
                     
Average gross selling prices for robot units:                    
Home Robots     $ 195   $ 188     $ 194   $ 189
Government & Industrial *     $ 140   $ 94     $ 141   $ 95
                     
                     
Government & Industrial Funded Product Backlog *     $ 15,118   $ 12,164     $ 15,118   $ 12,164
                     
                     
Days sales outstanding       36     27       36     27
                     
Days in inventory       54     50       54     50
                     
Headcount       687     613       687     613
                     
                     
* in thousands
                     
 

 

iRobot Corporation

 

Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
                     
                     
      For the three months ended     For the six months ended
      July 2,   July 3,     July 2,   July 3,
      2011   2010     2011   2010
                     
Net income     $ 8,024     $ 5,314       $ 15,501     $ 11,482  
                     
Interest income, net       (331 )     (197 )       (541 )     (367 )
Income tax expense       3,614       3,111         7,519       7,070  
Depreciation       2,169       1,778         4,227       3,477  
Amortization       288       139         413       278  
                     
EBITDA       13,764       10,145         27,119       21,940  
                     
                     
Stock-based compensation expense       2,411       2,201         4,190       4,091  
Merger and acquisition expense       -       61         -       71  
                     
Adjusted EBITDA     $ 16,175     $ 12,407       $ 31,309     $ 26,102  
                     

 

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, 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.

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 government and industrial 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 visitwww.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 concerning management's plans, objectives and strategies. 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. 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 including, without limitation, our most recent Annual Report on Form 10-K.

Contact:

Elise Caffrey
Investor Relations
iRobot Corp.
(781) 430-3003
ecaffrey@irobot.com
Charlie Vaida
Media Relations
iRobot Corp.
(781) 430-3182
cvaida@irobot.com