BEDFORD, Mass., Oct. 25, 2016 /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the third quarter ended October 1, 2016.
"Our third-quarter performance was outstanding. We delivered revenue and profitability exceeding our expectations. Based on our Q3 results and the excellent momentum we have going into the holiday season, created by our successful marketing programs, we are increasing our full-year financial expectations for the second quarter in a row. We now expect fiscal 2016 revenue of $650 to $655 million, Net Income of between $38 and $41 million, EPS of between $1.36 and $1.44, and Adjusted EBITDA of $88 to $92 million. These expectations reflect our increased confidence that 2016 growth in the United States, of more than 25%, will drive total consumer revenue growth of approximately 15% for the full year," said Colin Angle, chairman and chief executive officer of iRobot.
"As we have said previously, the revenue split between Q3 and Q4 is always difficult to predict due to the timing and shipment of consumer products for the holiday season. This year, our new partner in China requested Q3 delivery of some Braava jet and Roomba orders that we were expecting to ship in Q4. This resulted in higher than anticipated consumer revenue and profitability in Q3.
"We are very excited about our results year-to-date and the outlook for the fourth quarter as our successful marketing programs continue to drive demand generation in the U.S. and overseas. It is very satisfying that, in this transformative year, our current full-year expectations are well above those we provided in February."
Financial Results
- Note: Financial results for the third quarter of 2015 include the Defense & Security business which was sold on April 4, 2016. There are no results for the Defense & Security business included in our financial results for the third quarter of 2016, other than support services provided by iRobot, recorded as other income.
- Revenue for the third quarter of 2016 was $168.6 million, compared with $143.6 million for the third quarter of 2015.
- Net income in the third quarter of 2016 was $19.5 million, compared with $12.8 million in the third quarter of 2015.
- Quarterly earnings per share were $0.70 for the third quarter of 2016, compared with $0.42 in the third quarter of 2015.
- Adjusted EBITDA for the third quarter of 2016 was $35.5 million, compared with $25.9 million in the third quarter of 2015.
Business Highlights
- Year-over-year consumer quarterly revenue growth of 23% was driven by APAC following a very successful launch of Braava jet in that region.
- Domestic revenue grew 13% over Q3 last year, and orders-in-hand plus anticipated Q4 orders support our expectation of substantial year-over-year quarterly growth in Q4.
- We introduced the Roomba 960 and connectivity for Braava jet, expanding our suite of connected products for the home.
Financial Expectations
Management provides the following expectations with respect to the fourth quarter and fiscal year ending December 31, 2016.
|
Q4 2016: |
|
|
Revenue |
$202 - $207 million |
|
Net Income |
$10 - $13 million |
|
Earnings Per Share |
$0.36 - $0.44 |
|
Adjusted EBITDA |
$22 - $26 million |
|
Fiscal Year 2016: |
|
|
Revenue |
$650 - $655 million |
|
Net Income |
$38 - $41 million |
|
Earnings Per Share |
$1.36 - $1.44 |
|
Adjusted EBITDA |
$88 - $92 million |
Third-Quarter Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the third fiscal quarter 2016, business outlook, and outlook for fourth-quarter and fiscal year 2016 financial performance. Pertinent details include:
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Date: |
Wednesday, October 26, 2016 |
|
Time: |
8:30 a.m. ET |
|
Call-In Number: |
847-619-6396 |
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Passcode: |
40924300 |
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=5206143.
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 November 3, and can be accessed by dialing 630-652-3042, passcode 40924300#.
About iRobot Corp.
iRobot designs and builds robots that empower people to do more. The company's home robots help people find smarter ways to clean and accomplish more in their daily lives. iRobot's portfolio of solutions features proprietary technologies for the connected home and advanced concepts in navigation, mobility 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, the impact of our marketing programs, demand for our robots, revenue growth, and anticipated revenue, net income, earnings per share and Adjusted EBITDA for fiscal year 2016 and the fourth quarter ending December 31, 2016. 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, 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, amortization, stock-based compensation expense, net merger, acquisition and divestiture expense, net intellectual property litigation (income) expense, and restructuring (income) 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 nine months ended | ||||
|
October 1, |
September 26, |
October 1, |
September 26, | ||
|
2016 |
2015 |
2016 |
2015 | ||
|
Revenue |
$ 168,610 |
$ 143,609 |
$ 448,110 |
$ 410,358 | |
|
Cost of revenue |
87,550 |
73,751 |
235,437 |
216,759 | |
|
Gross margin |
81,060 |
69,858 |
212,673 |
193,599 | |
|
Operating expenses: |
|||||
|
Research and development |
19,672 |
18,122 |
57,944 |
55,886 | |
|
Selling and marketing |
17,925 |
19,379 |
66,972 |
60,896 | |
|
General and administrative |
16,012 |
13,701 |
48,919 |
39,195 | |
|
Total operating expenses |
53,609 |
51,202 |
173,835 |
155,977 | |
|
Operating income |
27,451 |
18,656 |
38,838 |
37,622 | |
|
Other income (expense), net |
523 |
(93) |
2,142 |
(948) | |
|
Income before income taxes |
27,974 |
18,563 |
40,980 |
36,674 | |
|
Income tax expense |
8,462 |
5,770 |
12,722 |
11,875 | |
|
Net income |
$ 19,512 |
$ 12,793 |
$ 28,258 |
$ 24,799 | |
|
Net income per share |
|||||
|
Basic |
$ 0.72 |
$ 0.43 |
$ 1.01 |
$ 0.84 | |
|
Diluted |
$ 0.70 |
$ 0.42 |
$ 0.99 |
$ 0.82 | |
|
Number of shares used in per share calculations |
|||||
|
Basic |
27,237 |
29,654 |
27,878 |
29,697 | |
|
Diluted |
27,778 |
30,117 |
28,423 |
30,253 | |
|
Stock-based compensation included in above figures: |
|||||
|
Cost of revenue |
$ 184 |
$ 270 |
$ 555 |
$ 662 | |
|
Research and development |
1,028 |
963 |
2,598 |
2,737 | |
|
Selling and marketing |
444 |
474 |
1,316 |
1,089 | |
|
General and administrative |
2,247 |
2,193 |
7,312 |
5,974 | |
|
Total |
$ 3,903 |
$ 3,900 |
$ 11,781 |
$ 10,462 | |
|
iRobot Corporation | |||
|
Condensed Consolidated Balance Sheets | |||
|
(unaudited, in thousands) | |||
|
October 1, |
January 2, | ||
|
2016 |
2016 | ||
|
Assets |
|||
|
Cash and cash equivalents |
$ 164,552 |
$ 179,915 | |
|
Short term investments |
38,179 |
33,124 | |
|
Accounts receivable, net |
67,612 |
104,679 | |
|
Unbilled revenue |
139 |
452 | |
|
Inventory |
61,069 |
61,678 | |
|
Other current assets |
10,357 |
9,501 | |
|
Total current assets |
341,908 |
389,349 | |
|
Property and equipment, net |
26,745 |
26,850 | |
|
Deferred tax assets |
26,018 |
31,721 | |
|
Goodwill |
41,041 |
48,751 | |
|
Intangible assets, net |
13,071 |
15,664 | |
|
Other assets |
9,843 |
9,408 | |
|
Total assets |
$ 458,626 |
$ 521,743 | |
|
Liabilities and stockholders' equity |
|||
|
Accounts payable |
$ 57,662 |
$ 61,655 | |
|
Accrued expenses |
13,662 |
15,954 | |
|
Accrued compensation |
17,257 |
15,752 | |
|
Deferred revenue and customer advances |
1,297 |
3,265 | |
|
Total current liabilities |
89,878 |
96,626 | |
|
Long term liabilities |
4,231 |
7,706 | |
|
Stockholders' equity |
364,517 |
417,411 | |
|
Total liabilities and stockholders' equity |
$ 458,626 |
$ 521,743 | |
|
iRobot Corporation | ||
|
Consolidated Statements of Cash Flows | ||
|
(unaudited, in thousands) | ||
|
For the nine months ended | ||
|
October 1, |
September 26, | |
|
2016 |
2015 | |
|
Cash flows from operating activities: |
||
|
Net income |
$ 28,258 |
$ 24,799 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||
|
Depreciation and amortization |
10,171 |
10,569 |
|
Loss on disposal of property and equipment |
205 |
201 |
|
Gain on sale of business unit |
(433) |
- |
|
Gain on sale of cost method investment |
(634) |
- |
|
Stock-based compensation |
11,781 |
10,462 |
|
Deferred income taxes, net |
6,314 |
2,289 |
|
Tax benefit of excess stock-based compensation deductions |
(1,115) |
(795) |
|
Non-cash director deferred compensation |
66 |
112 |
|
Changes in operating assets and liabilities — (use) source |
||
|
Accounts receivable |
30,781 |
(5,258) |
|
Unbilled revenue |
198 |
2,034 |
|
Inventory |
(11,472) |
(10,965) |
|
Other assets |
(1,579) |
1,296 |
|
Accounts payable |
(2,261) |
(1,285) |
|
Accrued expenses |
(2,046) |
(6,127) |
|
Accrued compensation |
1,990 |
(5,082) |
|
Deferred revenue and customer advances |
(193) |
(1,570) |
|
Long term liabilities |
(2,997) |
(703) |
|
Net cash provided by operating activities |
67,034 |
19,977 |
|
Cash flows from investing activities: |
||
|
Additions of property and equipment |
(8,352) |
(7,557) |
|
Change in other assets |
(435) |
(1,015) |
|
Proceeds from sale of business unit |
23,520 |
- |
|
Purchase of investments |
(16,556) |
(17,755) |
|
Sales of investments |
11,502 |
18,000 |
|
Proceeds from sale of cost method investment |
634 |
- |
|
Net cash provided by (used in) investing activities |
10,313 |
(8,327) |
|
Cash flows from financing activities: |
||
|
Proceeds from stock option exercises |
4,496 |
3,385 |
|
Income tax withholding payment associated with restricted stock vesting |
(1,300) |
(1,295) |
|
Stock repurchases |
(97,021) |
(24,062) |
|
Tax benefit of excess stock-based compensation deductions |
1,115 |
795 |
|
Net cash used in financing activities |
(92,710) |
(21,177) |
|
Net decrease in cash and cash equivalents |
(15,363) |
(9,527) |
|
Cash and cash equivalents, at beginning of period |
179,915 |
185,957 |
|
Cash and cash equivalents, at end of period |
$ 164,552 |
$ 176,430 |
|
iRobot Corporation | |||||
|
Supplemental Information | |||||
|
(unaudited) | |||||
|
For the three months ended |
For the nine months ended | ||||
|
October 1, |
September 26, |
October 1, |
September 26, | ||
|
2016 |
2015 |
2016 |
2015 | ||
|
Revenue: * |
|||||
|
Consumer |
$ 167,962 |
$ 136,513 |
$ 443,754 |
$ 384,422 | |
|
Domestic |
$ 65,466 |
$ 57,782 |
$ 195,109 |
$ 150,587 | |
|
International |
$ 102,496 |
$ 78,731 |
$ 248,645 |
$ 233,835 | |
|
Defense & Security |
$ - |
$ 6,184 |
$ 3,075 |
$ 24,500 | |
|
Gross Margin Percent: |
|||||
|
Consumer |
51.3% |
52.7% |
51.6% |
51.7% | |
|
Defense & Security |
0.0% |
42.9% |
16.6% |
40.0% | |
|
Total Company |
48.1% |
48.6% |
47.5% |
47.2% | |
|
Units shipped - Consumer * |
779 |
582 |
2,002 |
1,665 | |
|
Average gross selling prices for robot units - Consumer |
$ 229 |
$ 252 |
$ 240 |
$ 246 | |
|
Days sales outstanding |
37 |
49 |
37 |
49 | |
|
Days in inventory |
64 |
73 |
64 |
73 | |
|
Headcount |
572 |
606 |
572 |
606 | |
|
* in thousands |
|||||
|
iRobot Corporation | |||||
|
Adjusted EBITDA Reconciliation to GAAP | |||||
|
(unaudited, in thousands) | |||||
|
For the three months ended |
For the nine months ended | ||||
|
October 1, |
September 26, |
October 1, |
September 26, | ||
|
2016 |
2015 |
2016 |
2015 | ||
|
Net income |
$ 19,512 |
$ 12,793 |
$ 28,258 |
$ 24,799 | |
|
Interest income, net |
(217) |
(152) |
(687) |
(482) | |
|
Income tax expense |
8,462 |
5,770 |
12,722 |
11,875 | |
|
Depreciation |
2,533 |
2,626 |
7,446 |
7,776 | |
|
Amortization |
909 |
932 |
2,725 |
2,793 | |
|
EBITDA |
31,199 |
21,969 |
50,464 |
46,761 | |
|
Stock-based compensation expense |
3,903 |
3,900 |
11,781 |
10,462 | |
|
Net merger, acquisition and divestiture expense |
376 |
- |
1,229 |
- | |
|
Net intellectual property litigation (income) expense |
103 |
(13) |
464 |
(493) | |
|
Restructuring (income) expense |
(37) |
- |
1,665 |
- | |
|
Adjusted EBITDA |
$ 35,544 |
$ 25,856 |
$ 65,603 |
$ 56,730 | |
|
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, amortization, stock-based compensation expense, net merger, acquisition and divestiture expense, net intellectual property litigation (income) expense, and restructuring (income) expense. 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 | |||
|
Reconciliation of GAAP to Non-GAAP Expectations | |||
|
(unaudited, in millions) | |||
|
Fourth Quarter Ending |
Full Year Ending | ||
|
December 31, 2016 |
December 31, 2016 | ||
|
Net income |
$10.0 - $13.0 |
$38.0 - $41.0 | |
|
Interest income, net |
($0.2) |
($0.9) | |
|
Income tax expense |
$4.7 - $5.8 |
$17.4 - $18.6 | |
|
Depreciation |
$2.3 - $2.4 |
$9.7 - $9.8 | |
|
Amortization |
$0.9 |
$3.6 | |
|
EBITDA |
$17.8 - $21.8 |
$68.0 - $72.0 | |
|
Stock-based compensation expense |
$3.6 - $3.8 |
$15.4 - $15.6 | |
|
Net merger, acquisition and divestiture (income) expense |
$0.4 - $0.5 |
$1.7 - $1.8 | |
|
Net intellectual property litigation (income) expense |
$0.0 - $0.1 |
$0.5 - $0.6 | |
|
Restructuring expense |
$0 |
$1.8 | |
|
Adjusted EBITDA |
$22.0 - $26.0 |
$88.0 - $92.0 | |
|
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, amortization, stock-based compensation expense, net merger, acquisition and divestiture (income) expense, net intellectual property litigation (income) expense, and restructuring expense. 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.
