BEDFORD, Mass., July 22, 2014 /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the second quarter ended June 28, 2014.
"I am pleased to report a successful second quarter, with results that met our expectations," said Colin Angle, chairman and chief executive officer of iRobot. "Our Home Robot business continues to deliver strong growth on an ever-increasing base in all three geographic regions while our Defense & Security business built a substantial order backlog for delivery in the second half of 2014.
"Additionally, based on increased confidence in Home Robots, we are raising the low end of our full-year revenue expectations for our Home Robot business to $505 million from $500 million. Further, strong backlog growth during the quarter in Defense & Security, coupled with several expected near-term orders, and the overall growth of high probability pipeline has significantly improved visibility for 2014. The increased visibility has clarified that certain order deliveries are being requested by the customers for early 2015, resulting in a decrease of the 2014 revenue expectation for Defense & Security by $5 million to $45 million.
"For the company, we now expect revenue of $555 to $565 million, driven by Home Robot growth of 18-20 percent; EPS of between $1.10 and $1.20 and Adjusted EBITDA of $74 to $78 million, or roughly 14 percent of revenue."
Financial Results
- Revenue for the second quarter of 2014 was $139.8 million, compared with $130.4 million for the same quarter one year ago. Revenue for the first half of 2014 was $254.0 million, compared with $236.6 million last year.
- Net income in the second quarter of 2014 was $8.5 million, compared with $8.3 million in the second quarter of 2013. For the first half of 2014, net income was $13.8 million, compared with $16.6 million a year ago.
- Quarterly earnings per share were $0.28 for the second quarter of 2014, compared with $0.28 in the second quarter last year. First-half earnings per share were $0.46, compared with $0.57 in 2013. Q2 EPS and first-half 2014 EPS were ahead of our expectations due to a $0.07 benefit resulting from the release of a valuation allowance relating to certain tax attributes associated with our acquisition of Evolution Robotics. 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 United States.
- Adjusted EBITDA for the second quarter of 2014 was $16.2 million, compared with $17.0 million in the second quarter of 2013. For the first half, Adjusted EBITDA was $30.4 million, compared with $32.3 million a year ago.
Business Highlights
- International revenue growth of 19 percent, coupled with domestic growth of 7 percent, fueled a 15 percent year-over-year increase in Home Robot revenue.
- Defense & Security backlog totaling $21 million at the end of Q2 2014 gives us confidence in delivering our full-year Defense & Security expectations.
- Remote Presence business began shipping our Ava 500 Video Collaboration Robot to customers.
Financial Expectations
Management provides the following expectations with respect to the third quarter ending September 27, 2014 and fiscal year ending December 27, 2014.
|
Q3 2014: |
||
|
Revenue |
$133 - $136 million |
|
|
Earnings Per Share |
$0.32 - $0.35 |
|
|
Adjusted EBITDA |
$21 - $23 million |
|
|
Fiscal Year 2014: |
Current |
Prior |
|
Revenue |
$555 - $565 million |
$560 - $570 million |
|
Earnings Per Share |
$1.10 - $1.20 |
$1.00 - $1.15 |
|
Adjusted EBITDA |
$74 - $78 million |
$74 - $78 million |
|
Full-Year 2014 BU Revenue: |
||
|
Home Robots |
$505 - $515 million |
$500 - $515 million |
|
Defense & Security Robots |
$45 million |
$50 million |
|
Remote Presence |
$5 million |
$5 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 2014, business outlook, and outlook for third-quarter and fiscal year 2014 financial performance. Pertinent details include:
|
Date: |
Wednesday, July 23, 2014 |
|
Time: |
8:30 a.m. ET |
|
Call-In Number: |
847-619-6396 |
|
Passcode: |
35939092 |
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=5041608. 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 630-652-3042, passcode 35939092#.
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 proprietary technologies 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, future operating performance and growth, outlook for our businesses, the timing of delivery of orders for our Defense & Security robots, and anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2014 and the third quarter ending September 27, 2014. 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 expense, net intellectual property litigation expense, restructuring expense, and stock-based compensation expense. A reconciliation between net income 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 28, |
June 29, |
June 28, |
June 29, | ||
|
2014 |
2013 |
2014 |
2013 | ||
|
Revenue |
139,803 |
130,362 |
254,007 |
236,557 | |
|
Cost of Revenue |
77,682 |
68,757 |
140,176 |
128,425 | |
|
Gross Margin |
62,121 |
61,605 |
113,831 |
108,132 | |
|
Operating Expense |
|||||
|
Research & development |
17,245 |
15,997 |
34,179 |
30,405 | |
|
Selling & marketing |
23,535 |
22,309 |
38,067 |
33,006 | |
|
General & administrative |
11,666 |
15,395 |
23,930 |
27,853 | |
|
Total |
52,446 |
53,701 |
96,176 |
91,264 | |
|
Operating income |
9,675 |
7,904 |
17,655 |
16,868 | |
|
Other income (expense), net |
92 |
(105) |
(95) |
(201) | |
|
Income before income taxes |
9,767 |
7,799 |
17,560 |
16,667 | |
|
Income tax expense (benefit) |
1,237 |
(495) |
3,750 |
18 | |
|
Net income |
$ 8,530 |
$ 8,294 |
$ 13,810 |
$ 16,649 | |
|
Net income per common share: |
|||||
|
Basic |
$ 0.29 |
$ 0.29 |
$ 0.47 |
$ 0.59 | |
|
Diluted |
$ 0.28 |
$ 0.28 |
$ 0.46 |
$ 0.57 | |
|
Shares used in per common share calculations: |
|||||
|
Basic |
29,533 |
28,416 |
29,361 |
28,173 | |
|
Diluted |
30,129 |
29,226 |
30,122 |
28,972 | |
|
Stock-based compensation included in above figures: |
|||||
|
Cost of revenue |
$ 166 |
$ 128 |
$ 335 |
$ 246 | |
|
Research & development |
828 |
793 |
1,559 |
1,294 | |
|
Selling & marketing |
203 |
118 |
541 |
484 | |
|
General & administrative |
1,950 |
2,224 |
3,790 |
4,168 | |
|
Total |
$ 3,147 |
$ 3,263 |
$ 6,225 |
$ 6,192 | |
|
iRobot Corporation | |||
|
Condensed Consolidated Balance Sheets | |||
|
(unaudited, in thousands) | |||
|
June 28, |
December 28, | ||
|
2014 |
2013 | ||
|
Assets |
|||
|
Cash and equivalents |
$ 147,718 |
$ 165,404 | |
|
Short term investments |
34,986 |
21,954 | |
|
Accounts receivable, net |
53,880 |
39,348 | |
|
Unbilled revenues |
862 |
856 | |
|
Inventory |
50,796 |
46,107 | |
|
Deferred tax assets |
21,054 |
20,144 | |
|
Other current assets |
16,701 |
6,848 | |
|
Total current assets |
325,997 |
300,661 | |
|
Property, plant and equipment, net |
25,808 |
23,661 | |
|
Deferred tax assets |
11,192 |
10,095 | |
|
Goodwill |
48,751 |
48,751 | |
|
Intangible assets, net |
20,891 |
22,668 | |
|
Other assets |
10,501 |
10,501 | |
|
Total assets |
$ 443,140 |
$ 416,337 | |
|
Liabilities and stockholders' equity |
|||
|
Accounts payable |
$ 48,668 |
$ 41,344 | |
|
Accrued expenses |
17,083 |
14,880 | |
|
Accrued compensation |
10,706 |
19,606 | |
|
Deferred revenue and customer advances |
3,051 |
5,085 | |
|
Total current liabilities |
79,508 |
80,915 | |
|
Long term liabilities |
4,349 |
4,733 | |
|
Stockholders' equity |
359,283 |
330,689 | |
|
Total liabilities and stockholders' equity |
$ 443,140 |
$ 416,337 | |
|
iRobot Corporation | ||
|
Consolidated Statements of Cash Flows | ||
|
(unaudited, in thousands) | ||
|
For the six months ended | ||
|
June 28, |
June 29, | |
|
2014 |
2013 | |
|
Cash flows from operating activities: |
||
|
Net income |
$ 13,810 |
$ 16,649 |
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
||
|
Depreciation and amortization |
6,320 |
6,549 |
|
(Gain)/Loss on disposal of property and equipment |
(10) |
281 |
|
Goodwill and intangible assets impairment |
- |
1,988 |
|
Stock-based compensation |
6,225 |
6,192 |
|
Deferred income taxes, net |
464 |
(913) |
|
Tax benefit of excess stock based compensation deductions |
(2,692) |
(1,636) |
|
Non-cash director deferred compensation |
22 |
22 |
|
Changes in operating assets and liabilities — (use) source |
||
|
Accounts receivable |
(14,532) |
(21,691) |
|
Unbilled revenue |
(6) |
145 |
|
Inventory |
(5,326) |
(4,595) |
|
Other assets |
(9,853) |
(4,770) |
|
Accounts payable |
6,966 |
11,390 |
|
Accrued expenses |
2,133 |
400 |
|
Accrued compensation |
(8,900) |
1,249 |
|
Deferred revenue and customer advances |
(2,034) |
(2,983) |
|
Change in long term liabilities |
(384) |
(80) |
|
Net cash (used in) provided by operating activities |
(7,797) |
8,197 |
|
Cash flows from investing activities: |
||
|
Purchase of property and equipment |
(5,524) |
(2,828) |
|
Change in other assets |
- |
(2,000) |
|
Purchases of investments |
(20,714) |
(10,397) |
|
Sales of investments |
7,500 |
3,500 |
|
Net cash used in investing activities |
(18,738) |
(11,725) |
|
Cash flows from financing activities: |
||
|
Proceeds from stock option exercises |
7,651 |
9,843 |
|
Income tax withholding payment associated with restricted stock vesting |
(1,494) |
(864) |
|
Tax benefit of excess stock based compensation deductions |
2,692 |
1,636 |
|
Net cash provided by financing activities |
8,849 |
10,615 |
|
Net increase (decrease) in cash and cash equivalents |
(17,686) |
7,087 |
|
Cash and cash equivalents, at beginning of period |
165,404 |
126,770 |
|
Cash and cash equivalents, at end of period |
$ 147,718 |
$ 133,857 |
|
iRobot Corporation | |||||
|
Supplemental Information | |||||
|
(unaudited) | |||||
|
For the three months ended |
For the six months ended | ||||
|
June 28, |
June 29, |
June 28, |
June 29, | ||
|
2014 |
2013 |
2014 |
2013 | ||
|
Revenue: * |
|||||
|
Home Robots |
$ 133,235 |
$ 115,528 |
$ 241,270 |
$ 208,227 | |
|
Domestic |
$ 42,029 |
$ 39,178 |
$ 83,059 |
$ 70,569 | |
|
International |
$ 91,206 |
$ 76,350 |
$ 158,211 |
$ 137,658 | |
|
Defense & Security |
$ 5,100 |
$ 12,470 |
$ 10,702 |
$ 23,570 | |
|
Domestic |
$ 1,338 |
$ 11,579 |
$ 4,529 |
$ 20,713 | |
|
International |
$ 3,762 |
$ 891 |
$ 6,173 |
$ 2,857 | |
|
Product |
$ 5,097 |
$ 11,502 |
$ 10,689 |
$ 19,537 | |
|
Contract |
$ 3 |
$ 968 |
$ 13 |
$ 4,033 | |
|
Product Life Cycle |
$ 1,873 |
$ 3,041 |
$ 5,406 |
$ 9,121 | |
|
Gross Margin Percent: |
|||||
|
Home Robots |
48.8% |
51.5% |
49.5% |
50.0% | |
|
Defense & Security |
36.7% |
47.5% |
36.9% |
47.5% | |
|
Total Company |
44.4% |
47.3% |
44.8% |
45.7% | |
|
Units shipped: |
|||||
|
Home Robots * |
565 |
492 |
1,030 |
913 | |
|
Defense & Security |
40 |
424 |
78 |
442 | |
|
Average gross selling prices for robot units: |
|||||
|
Home Robots |
$ 238 |
$ 225 |
$ 240 |
$ 233 | |
|
Defense & Security * |
$ 80 |
$ 20 |
$ 67 |
$ 24 | |
|
Defense & Security Funded Product Backlog * |
$ 20,882 |
$ 19,972 |
$ 20,882 |
$ 19,972 | |
|
Days sales outstanding |
36 |
37 |
36 |
37 | |
|
Days in inventory |
60 |
58 |
60 |
58 | |
|
Headcount |
548 |
517 |
548 |
517 | |
|
* in thousands |
|||||
|
iRobot Corporation | |||||
|
Adjusted EBITDA Reconciliation to GAAP | |||||
|
(unaudited, in thousands) | |||||
|
For the three months ended |
For the six months ended | ||||
|
June 28, |
June 29, |
June 28, |
June 29, | ||
|
2014 |
2013 |
2014 |
2013 | ||
|
Net income |
$ 8,530 |
$ 8,294 |
$ 13,810 |
$ 16,649 | |
|
Interest income, net |
(170) |
(153) |
(315) |
(317) | |
|
Income tax expense (benefit) |
1,237 |
(495) |
3,750 |
18 | |
|
Depreciation |
2,215 |
2,221 |
4,382 |
4,440 | |
|
Amortization |
963 |
1,044 |
1,938 |
2,109 | |
|
EBITDA |
12,775 |
10,911 |
23,565 |
22,899 | |
|
Stock-based compensation expense |
3,147 |
3,263 |
6,225 |
6,192 | |
|
Merger and acquisition expense |
- |
113 |
- |
393 | |
|
Net intellectual property litigation expense |
276 |
170 |
645 |
203 | |
|
Restructuring expense |
- |
2,575 |
- |
2,575 | |
|
Adjusted EBITDA |
$ 16,198 |
$ 17,032 |
$ 30,435 |
$ 32,262 | |
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.
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SOURCE iRobot Corp.
