Press Releases

iRobot Reports Record Second-Quarter Revenue and Earnings
Company Increases 2010 Outlook

BEDFORD, Mass., Jul 28, 2010 (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 3, 2010.

"Revenue, earnings per share and Adjusted EBITDA significantly exceeded expectations for the quarter," said Colin Angle, chairman and chief executive officer of iRobot. "Adjusted EBITDA was more than $12 million,or 13 percent of revenue, and we generated $15 million of operating cash flow. Cash and investments increased $48 million year-over-year to more than $98 million at quarter end.

"As a result of outstanding performance by both divisions in the second quarter and good visibility for the rest of 2010, we are increasing our full-year financial expectations."

Revenue for the second quarter of 2010 increased 59 percent to $98 million, compared with $61 million for the same quarter one year ago. Revenue for the first half of 2010 increased 63 percent to $193 million, compared with $118 million a year ago. Gross margin for the second quarter increased to 35 percent of revenue, compared with 27 percent of revenue in the second quarter of 2009. For the first half of 2010, gross margin was 35 percent, up from 28 percent for the first half of 2009. Net income in the second quarter of 2010 was $5 million, compared with a net loss of $3 million in the second quarter of 2009. Net income for the first half of 2010 was $11 million, compared with a loss of $4 million for the first half of 2009.

Business Highlights

 

  • International home robot revenue in Q2 2010 was up more than 80 percent year-over-year to $36 million and comprised 67 percent of total home robot revenue for the quarter. Domestic home robot revenue increased 20 percent to $17 million from $14 million in the second quarter of 2009.
  • Government & Industrial robot revenue increased 65 percent in the second quarter over the second quarter of 2009, driven by shipments of 138 PackBot robots and 100 Small Unmanned Ground Vehicles during the quarter.
  • Year-to-date operating cash flow was $25 million, compared with $12 million in the first half of 2009.

 

Financial Expectations

Management provides the following expectations with respect to the year ending January 1, 2011 and the third quarter ending October 2, 2010.

Fiscal Year 2010:

           
Revenue           $385 - $390 million
Earnings Per Share           $0.51 - $0.54
Adjusted EBITDA           $36 - $38 million
             

Q3 2010:

           
Revenue           $91 - $94 million
Earnings Per Share           $0.05 - $0.06
Adjusted EBITDA           $5 - $6 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 2010, business outlook, and outlook for future financial performance. Pertinent details include:

Date:         Thursday, July 29, 2010
Time:         8:30 a.m. ET
Call-In Number:         617-847-8705
Passcode:         90382275
           

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 5 and can be accessed by dialing 617-801-6888, passcode 69265770.

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 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 regarding future financial performance and growth, anticipated revenue, Adjusted EBITDA and earnings per share for fiscal year 2010 and the third quarter of 2010, and demand for and market acceptance of its products. 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 3,   June 27,   July 3,   June 27,
    2010   2009   2010   2009
Revenue                
Product revenue   $ 85,945   $ 52,609     $ 172,056   $ 102,300  
Contract revenue     11,859     8,731       20,678     15,976  
Total     97,804     61,340       192,734     118,276  
                 
Cost of Revenue                
Product revenue     55,825     37,098       111,425     70,537  
Contract revenue     8,009     7,833       14,622     15,124  
Total     63,834     44,931       126,047     85,661  
                 
Gross Margin     33,970     16,409       66,687     32,615  
                 
Operating Expense                
Research & development     5,691     3,896       10,190     7,474  
Selling & marketing     10,581     8,940       20,225     17,906  
General & administrative     9,313     7,365       17,789     14,495  
Total     25,585     20,201       48,204     39,875  
                 
Operating income (loss)     8,385     (3,792 )     18,483     (7,260 )
                 
Other income (expense), net     40     91       69     (208 )
                 
Pre-tax income (loss)     8,425     (3,701 )     18,552     (7,468 )
Income tax expense (benefit)     3,111     (1,092 )     7,070     (3,072 )
Net income (loss)   $ 5,314   $ (2,609 )   $ 11,482   $ (4,396 )
                 
Net income (loss) per common share:                
Basic   $ 0.21   $ (0.10 )   $ 0.46   $ (0.18 )
Diluted   $ 0.20   $ (0.10 )   $ 0.44   $ (0.18 )
                 
Shares used in Per Common Share Calculations:                
Basic     25,294     24,967       25,217     24,946  
Diluted     26,375     24,967       26,226     24,946  
                 
                 
Stock-based compensation included in above figures:                
Cost of product revenue   $ 355   $ 278     $ 687   $ 491  
Cost of contract revenue     110     162       236     325  
Research & development     245     101       277     98  
Selling & marketing     289     338       645     655  
General & administrative     1,202     1,016       2,246     1,928  
Total   $ 2,201   $ 1,895     $ 4,091   $ 3,497  
 
 
 
 
 
iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)
         
    July 3,   January 2,
    2010   2010
         
Assets        
         
Cash and equivalents   $ 75,810   $ 71,856
Short term investments     22,957     4,959
Accounts receivable, net     27,133     35,171
Unbilled revenues     2,313     1,831
Inventory     30,684     32,406
Deferred tax assets     8,669     8,669
Other current assets     3,290     4,119
Total current assets     170,856     159,011
Property, plant and equipment, net     22,374     20,230
Deferred tax assets     5,623     6,089
Other assets     14,008     14,254
Total assets   $ 212,861   $ 199,584
         
Liabilities and stockholders' equity        
         
Accounts payable   $ 31,768   $ 30,559
Accrued expenses     13,363     14,384
Accrued compensation     11,153     13,525
Deferred revenue and customer advances     1,969     3,908
Total current liabilities     58,253     62,376
Long term liabilities     3,799     4,014
Stockholders' equity     150,809     133,194
Total liabilities and stockholders' equity   $ 212,861   $ 199,584
 
 
 
 
 
iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
                 
                 
    For the three months ended   For the six months ended
    July 3,   June 27,   July 3,   June 27,
    2010   2009   2010   2009
Cash flows from operating activities:                
Net income (loss)   $ 5,314     $ (2,609 )   $ 11,482     $ (4,396 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                
Depreciation and amortization     1,917       1,950       3,755       3,864  
Loss on disposal of property and equipment     2       87       47       102  
Stock-based compensation     2,201       1,895       4,091       3,497  
Benefit from deferred tax assets     -       (511 )     -       (511 )
Non-cash director deferred compensation     33       33       66       66  
Changes in operating assets and liabilities -- (use) source                
Accounts receivable     (1,054 )     (8,099 )     8,038       4,639  
Unbilled revenue     978       (326 )     (482 )     (1,445 )
Inventory     (816 )     2,104       1,722       5,922  
Other assets     44       (1,001 )     797       (2,163 )
Accounts payable     2,277       1,981       1,209       1,564  
Accrued expenses     (990 )     225       (1,031 )     (33 )
Accrued compensation     4,850       1,656       (2,372 )     634  
Deferred revenue     (7 )     256       (1,939 )     342  
Change in long term liabilities     (107 )     (108 )     (215 )     (215 )
Net cash provided by (used in) operating activities     14,642       (2,467 )     25,168       11,867  
                 
Cash flows from investing activities:                
Purchase of property and equipment     (3,629 )     (1,672 )     (5,668 )     (2,448 )
Purchases of investments     (7,831 )     -       (25,411 )     -  
Sales of investments     7,500       -       7,500       -  
Net cash used in investing activities     (3,960 )     (1,672 )     (23,579 )     (2,448 )
                 
Cash flows from financing activities:                
Proceeds from stock option exercises     1,823       132       1,927       459  
Income tax withholding payment associated with restricted stock vesting     (120 )     (9 )     (279 )     (9 )
Tax benefit of excess stock based compensation deductions     568       268       717       268  
Net cash provided by financing activities     2,271       391       2,365       718  
                 
Net increase (decrease) in cash and cash equivalents     12,953       (3,748 )     3,954       10,137  
Cash and cash equivalents, at beginning of period     62,857       54,737       71,856       40,852  
Cash and cash equivalents, at end of period   $ 75,810     $ 50,989     $ 75,810     $ 50,989  
 
 
 
 
 
iRobot Corporation
Supplemental Information
(unaudited)
                 
                 
    For the three months ended   For the six months ended
    July 3,   June 27,   July 3,   June 27,
    2010   2009   2010   2009
                 
Revenue: *                
                 
Home Robots   $ 52,904     $ 34,099     $ 105,451     $ 66,922  
                 
Domestic   $ 17,160     $ 14,358     $ 33,247     $ 29,643  
International   $ 35,744     $ 19,741     $ 72,204     $ 37,279  
                 
Retail   $ 47,525     $ 27,263     $ 93,792     $ 54,079  
Direct   $ 5,379     $ 6,836     $ 11,659     $ 12,843  
                 
Government & Industrial   $ 44,900     $ 27,241     $ 87,283     $ 51,354  
                 
Domestic   $ 43,406     $ 25,404     $ 80,473     $ 46,695  
International   $ 1,494     $ 1,837     $ 6,810     $ 4,659  
                 
Product   $ 33,041     $ 18,510     $ 66,605     $ 35,378  
Contract   $ 11,859     $ 8,731     $ 20,678     $ 15,976  
                 
Product Life Cycle   $ 9,581     $ 4,542     $ 17,561     $ 8,931  
                 
                 
Gross Margin Percent:                
Home Robots     39.2 %     29.6 %     38.6 %     30.3 %
Government & Industrial     29.5 %     23.1 %     29.8 %     24.1 %
Total Company     34.7 %     26.8 %     34.6 %     27.6 %
                 
                 
Units shipped:                
Home Robots *     294       192       581       375  
Government & Industrial     250       151       516       301  
                 
                 
Average gross selling prices for robot units:                
Home Robots   $ 188     $ 189     $ 189     $ 185  
Government & Industrial *   $ 94     $ 93     $ 95     $ 88  
                 
                 
Government & Industrial Funded Product Backlog *   $ 12,164     $ 17,537     $ 12,164     $ 17,537  
                 
                 
Days sales outstanding     27       52       27       52  
                 
Days in inventory     50       70       50       70  
                 
Headcount     613       508       613       508  
                 
                 
* in thousands
 
 
 
 
 
iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
                 
                 
    For the three months ended   For the six months ended
    July 3,   June 27,   July 3,   June 27,
    2010   2009   2010   2009
                 
Net income (loss)   $ 5,314     $ (2,609 )   $ 11,482     $ (4,396 )
                 
Interest income, net     (197 )     (15 )     (367 )     (36 )
Income tax expense (benefit)     3,111       (1,092 )     7,070       (3,072 )
Depreciation     1,778       1,820       3,477       3,613  
Amortization     139       128       278       251  
                 
EBITDA     10,145       (1,768 )     21,940       (3,640 )
                 
                 
Stock-based compensation expense     2,201       1,895       4,091       3,497  
Merger and acquisition expense     61       -       71       -  
                 
Adjusted EBITDA   $ 12,407     $ 127     $ 26,102     $ (143 )
                 
                 
                 
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