Press Releases

iRobot Reports Strong Fourth-Quarter and Full-Year 2009 Results

BEDFORD, Mass., Feb 17, 2010 (BUSINESS WIRE) -- iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the fourth quarter and fiscal year ended January 2, 2010.

"We delivered record quarterly revenue of more than $100 million in the fourth quarter and full-year revenue of nearly $300 million. Earnings per share and Adjusted EBITDA significantly exceeded expectations for the fourth quarter and full year," said Colin Angle, chairman and chief executive officer of iRobot. "Adjusted EBITDA was $21 million,up 61 percent from 2008. We generated $41 million of operating cash flow in 2009, compared with $19 million in 2008, and improved our cash and investments position year-over-year by $36 million to nearly $77 million at year end.

"We began 2010 with $42 million in backlog in our G&I business, the highest level in our company's history. This positions us well to deliver another year of solid financial performance, with significant top- and bottom-line growth, while continuing to invest in the future of our business."

Revenue for the fourth quarter of 2009 increased 12.1 percent to $101.7 million, compared with $90.7 million for the same quarter one year ago. Revenue for the full year 2009 decreased 2.9 percent to $298.6 million from $307.6 million for the full year 2008.

Gross margin for the fourth quarter decreased to 33.8 percent of revenue, compared with 36.1 percent of revenue in the fourth quarter of 2008. For the full year, 2009 gross margin totaled 30.5 percent of revenue, up from 30.4 percent of revenue for the full year 2008.

Net income in the fourth quarter of 2009 was $5.1 million, compared with $5.4 million in the fourth quarter of 2008. Net income for the full year 2009 was $3.3 million, compared with $0.8 million for the same period in 2008.

Business Highlights

 

  • International home robot revenue in 2009 increased 35.2 percent from 2008 and comprised more than half of total home robot revenue for the year.
  • Government & Industrial Robots revenue increased 10.7 percent in the fourth quarter over last year and ended the year with a record $42 million in product backlog.
  • In 2009, operating cash flow was $40.6 million, compared with $19.1 million in 2008, as a result of improved Adjusted EBITDA and aggressive working capital management.

 

 

Financial Expectations

Management provides the following expectations with respect to the year ending January 1, 2011 and the first quarter ending April 3, 2010.

 

 

Fiscal Year 2010:

 

Revenue     $345 - $360 million
Adjusted EBITDA     $24 - $28 million
Earnings Per Share     $0.20 - $0.25
 

 

Q1 2010:

 

Revenue     $82 - $87 million
Adjusted EBITDA     $4 - $6 million
Earnings Per Share     $0.01 - $0.04

 

Fourth-Quarter and Full-Year Conference Call

iRobot will host a conference call tomorrow at 8:30 a.m. EST to discuss its financial results for the fourth fiscal quarter and full year 2009, business outlook, and outlook for future financial performance. Pertinent details include:

 

                Date:     Thursday, Feb. 18, 2010
                Time:     8:30 a.m. EST
                Call-In Number:     617-213-8857
                Passcode:     17983347

 

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 Web site shortly after the conclusion of the live event. A replay of the telephone conference call will be available through Feb. 25, and can be accessed by dialing 617-801-6888, passcode 31678547.

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 2010 and the first 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 twelve months ended  
    January 2,   December 27,       January 2,   December 27,  
      2010     2008         2010       2008  
Revenue                      
Product revenue   $ 90,819   $ 82,712       $ 262,199     $ 281,187  
Contract revenue     10,903     7,990         36,418       26,434  
Total     101,722     90,702         298,617       307,621  
                       
Cost of Revenue                      
Product revenue     59,679     51,302         176,631       190,250  
Contract revenue     7,657     6,687         30,790       23,900  
Total     67,336     57,989         207,421       214,150  
                       
Gross Margin     34,386     32,713         91,196       93,471  
                       
Operating Expense                      
Research & development     4,114     3,935         14,747       17,566  
Selling & marketing     13,482     11,415         40,902       46,866  
General & administrative     8,195     7,144         30,110       28,840  
Total     25,791     22,494         85,759       93,272  
                       
Operating income     8,595     10,219         5,437       199  
                       
Other income (expense), net     15     9         (81 )     926  
                       
Pre-tax income     8,610     10,228         5,356       1,125  
Income tax expense     3,478     4,806         2,026       369  
Net income   $ 5,132   $ 5,422       $ 3,330     $ 756  
                       
Net income per common share:                      
Basic   $ 0.20   $ 0.22       $ 0.13     $ 0.03  
Diluted   $ 0.20   $ 0.21       $ 0.13     $ 0.03  
                       
Shares used in Per Common Share Calculations:                      
Basic     25,059     24,775         24,998       24,654  
Diluted     25,837     25,451         25,640       25,533  
                       
                       
Stock-based compensation included in above figures:                      
Cost of product revenue   $ 369   $ 199       $ 1,127     $ 753  
Cost of contract revenue     111     162         575       462  
Research & development     164     133         351       359  
Selling & marketing     404     322         1,410       1,055  
General & administrative     1,155     815         4,099       3,310  
Total   $ 2,203   $ 1,631       $ 7,562     $ 5,939  
                                 
                                 
                                 
                                 
iRobot Corporation  
Condensed Consolidated Balance Sheet  
(unaudited, in thousands)  
               
    January 2,       December 27,  
      2010         2008  
               
Assets              
               
Cash and equivalents   $ 71,856       $ 40,852  
Short term investments     4,959         -  
Accounts receivable, net     35,171         35,930  
Unbilled revenues     1,831         2,014  
Inventory     32,406         34,560  
Deferred tax assets     8,669         7,299  
Other current assets     4,119         3,340  
Total current assets     159,011         123,995  
Property, plant and equipment, net     20,230         22,929  
Deferred tax assets     6,089         4,508  
Other assets     14,254         12,246  
Total assets   $ 199,584       $ 163,678  
               
Liabilities and stockholders' equity              
               
Accounts payable   $ 30,559       $ 19,544  
Accrued expenses     14,384         10,989  
Accrued compensation     13,525         6,393  
Deferred revenue and customer advances     3,908         2,632  
Total current liabilities     62,376         39,558  
Long term liabilities     4,014         4,444  
Stockholders' equity     133,194         119,676  
Total liabilities and stockholders' equity   $ 199,584       $ 163,678  
                   
                   
                   
                   
iRobot Corporation  
Consolidated Statement of Cash Flows  
(unaudited, in thousands)  
                       
                       
    For the three months ended       For the twelve months ended  
    January 2,   December 27,       January 2,   December 27,  
      2010       2008           2010       2008    
Cash flows from operating activities:                      
Net income   $ 5,132     $ 5,422         $ 3,330     $ 756    
Adjustments to reconcile net income to net cash provided by operating activities:                      
Depreciation and amortization     1,921       1,894           8,074       7,029    
Loss on disposal of property and equipment     26       151           202       231    
Stock-based compensation     2,203       1,631           7,562       5,939    
In-process research and development relating to acquisition of Nekton Research LLC     -       -           -       200    
Benefit from deferred tax assets     (2,970 )     (1,967 )         (3,317 )     (1,967 )  
Non-cash director deferred compensation     33       24           132       95    
Changes in operating assets and liabilities -- (use) source                      
Accounts receivable     8,763       10,391           759       12,221    
Unbilled revenue     706       258           183       230    
Inventory     (7,753 )     8,036           2,154       10,662    
Other assets     295       5,888           (816 )     (1,042 )  
Accounts payable     2,772       (11,810 )         11,015       (25,350 )  
Accrued expenses     2,712       1,597           3,385       3,002    
Accrued compensation     2,679       (1,869 )         7,132       1,634    
Deferred revenue     (336 )     (101 )         1,276       1,026    
Long term liabilities     (108 )     (108 )         (430 )     4,444    
Net cash provided by operating activities     16,075       19,437           40,641       19,110    
                       
Cash flows from investing activities:                      
Additions of property and equipment     (1,637 )     (1,228 )         (5,038 )     (14,817 )  
Purchase of Nekton Research LLC, net of cash received     (2,500 )     2           (2,500 )     (9,743 )  
Purchases of investments     (5,000 )     -           (5,000 )     (29,997 )  
Sales of investments     -       16,197           -       46,547    
Net cash provided by (used in) investing activities     (9,137 )     14,971           (12,538 )     (8,010 )  
                       
Cash flows from financing activities:                      
Proceeds from stock option exercises     243       103           738       1,011    
Income tax withholding payment associated with restricted stock vesting     -       -           (76 )     -    
Borrowings under revolving line of credit     -       -           -       5,500    
Repayment of borrowings under revolving line of credit     -       (5,500 )         -       (5,500 )  
Tax benefit of excess stock based compensation deductions     1,928       1,326           2,239       2,006    
Net cash provided by (used in) financing activities     2,171       (4,071 )         2,901       3,017    
                       
Net increase in cash and cash equivalents     9,109       30,337           31,004       14,117    
Cash and cash equivalents, at beginning of period     62,747       10,515           40,852       26,735    
Cash and cash equivalents, at end of period   $ 71,856     $ 40,852         $ 71,856     $ 40,852    
                                       
                                       
                                       
                                       
iRobot Corporation  
Supplemental Information  
(unaudited)  
                       
                       
    For the three months ended       For the twelve months ended  
    January 2,   December 27,       January 2,   December 27,  
      2010     2008         2010     2008  
                       
Revenue by business unit (in thousands):                      
Home Robots                      
Product   $ 54,607   $ 48,123       $ 165,860   $ 173,547  
Contract     -     -         -     55  
Government & Industrial                      
Product     36,212     34,589         96,339     107,640  
Contract     10,903     7,990         36,418     26,379  
    $ 101,722   $ 90,702       $ 298,617   $ 307,621  
                       
Direct Revenue - Home Robots (in thousands)   $ 8,377   $ 8,183       $ 25,555   $ 30,697  
Product Lifecycle Revenue - Government & Industrial (in thousands)   $ 9,356   $ 8,652       $ 23,655   $ 20,004  
                       
International Revenue (in thousands):                      
Home Robots   $ 29,870   $ 23,159       $ 89,166   $ 65,942  
Government & Industrial   $ 1,129   $ 475       $ 10,222   $ 6,045  
                       
Average selling prices for robot units:                      
Home Robots   $ 156   $ 150       $ 154   $ 150  
Government & Industrial (in thousands)   $ 82   $ 85       $ 92   $ 92  
                       
Gross Margin by business unit (in thousands):                      
Home Robots   $ 19,720   $ 16,074       $ 53,431   $ 49,769  
Government & Industrial     14,666     16,639         37,765     43,702  
    $ 34,386   $ 32,713       $ 91,196   $ 93,471  
                       
Units shipped by business unit:                      
Home Robots (in thousands)     324     293         988     1,054  
Government & Industrial     329     306         789     951  
                       
Government & Industrial Funded Backlog (in thousands)   $ 42,160   $ 8,401       $ 42,160   $ 8,401  
                       
Days sales outstanding     33     38         33     38  
Inventory turnover     7.4     6.0         7.4     6.0  
Net cash provided by operating activities (in thousands)   $ 16,075   $ 19,437       $ 40,641   $ 19,110  
Headcount     538     479         538     479  
                               
                               
                               
                               
iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
               
               
  For the three months ended   For the twelve months ended
  January 2,   December 27,   January 2,   December 27,
    2010       2008       2010       2008  
               
Net income $ 5,132     $ 5,422     $ 3,330     $ 756  
               
Interest income, net   (47 )     (77 )     (88 )     (1,111 )
Income tax expense   3,478       4,806       2,026       369  
Depreciation   1,782       1,771       7,545       6,865  
Amortization   139       123       529       164  
               
EBITDA   10,484       12,045       13,342       7,043  
               
Stock-based compensation expense   2,203       1,631       7,562       5,939  
               
Adjusted EBITDA $ 12,687     $ 13,676     $ 20,904     $ 12,982  
               
               
               
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.

Contact:

Elise Caffrey
Investor Relations
iRobot Corp.
(781) 430-3003
ecaffrey@irobot.com
Nancy Smith
Media Relations
iRobot Corp.
(781) 430-3323
nsmith@irobot.com