BEDFORD, Mass. iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the fourth quarter and full year ended December 29, 2012.

“Our Home Robot business had a phenomenal year with revenue increasing 28 percent over 2011, but as expected, the decline in Defense & Security revenue resulted in lower total company revenue and profit for the year,” said Colin Angle, chairman and chief executive officer of iRobot.

“2012 was a transformational year for our business, and as we enter 2013, we are a different company than we were a year ago. Our business performance over the next few years will be driven by our rapidly growing home technology business. Home Robots is expected to grow roughly 20 percent this year and comprise 90 percent of total company revenue. In addition, we have an emerging remote presence business and have stabilized our defense business.”

• Revenue for the fourth quarter of 2012 was $100.7 million, compared with $130.8 million for the same quarter one year ago. Revenue for the full year 2012 was $436.2 million, compared with $465.5 million for the full year 2011.
• Net loss in the fourth quarter of 2012 was $5.9 million, compared with net income of $10.6 million in the fourth quarter of 2011. Net income for the full year 2012 was $17.3 million, compared with $40.2 million for the same period in 2011.
• Quarterly loss per share was ($0.21), compared with earnings per share of $0.38 in the fourth quarter last year. Full-year earnings per share were $0.61, compared with $1.44 last year. The Q4 and full year results include the negative impact of $0.22 and $0.27, respectively, from restructuring the Defense & Security business and the inclusion of Evolution Robotics, acquired on October 1, 2012.
• Adjusted EBITDA for the fourth quarter of 2012 was $1.0 million, compared with $21.3 million in the fourth quarter of 2011. Adjusted EBITDA for the full year 2012 was $52.5 million, compared with $73.0 million for the same period a year ago.

Business Highlights

• Full-year domestic Home Robot revenue growth of more than 40 percent, coupled with international revenue growth of 22 percent, drove a 28 percent year-over-year increase in full-year Home Robot revenue. International Home Robot revenue of $239 million comprised 67 percent of total Home Robot 2012 revenue.
• Closed the acquisition of Evolution Robotics (ER) on October 1, 2012. We are on schedule with our integration and ahead of schedule on our planned rollout of ER’s Mint^® floor sweeping robot to our international distributors.
• Received a $7 million order from a foreign government for PackBot^® systems. International sales are expected to contribute roughly one-third of 2013 product revenue in our Defense & Security business unit.
• Received FDA approval for RP-VITA, the first self-navigating communications robot for use in hospitals.
• Our 2013 Home Robot expectations reflect continued strong growth domestically and continuing economic uncertainties in Europe.

Financial Expectations

Management provides the following expectations with respect to the year ending December 28, 2013 and first quarter ending March 30, 2013.

Fiscal Year 2013:
Revenue			$480 - $490 million
Earnings Per Share			$0.57 - $0.72
Adjusted EBITDA			$46 - $52 million
Full-Year 2013 BU Revenue:
Home Robots			$430 - $435 million
Defense & Security Robots			$45 - $55 million
Q1 2013:
Revenue			$98 - $102 million
Earnings Per Share			$0.00 - $0.07
Adjusted EBITDA			$4 - $6 million

Fourth-Quarter and Full-Year Conference Call

iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the fourth fiscal quarter and full year 2012, business outlook, and outlook for 2013 financial performance. Pertinent details include:

Date:			Thursday, February 7, 2013
Time:			8:30 a.m. ET
Call-In Number:			847-619-6818
Passcode:			34160560

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=4897481. 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 February 14, and can be accessed by dialing 630-652-3000, passcode 34160560#.

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 defense & security 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 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, operating performance and growth, demand for our robots, anticipated growth of our Home Robots business and anticipated increase of Home Robots revenue as a percentage of total revenue, anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2013 and the first quarter ending March 30, 2013, and anticipated business unit revenue for the fiscal year 2013. 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, the timing of government contracts and orders, 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 press release includes Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income (loss) per share, each of 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 expenses, net intellectual property litigation expenses, restructuring expenses, and non-cash stock compensation. We define Adjusted net income (loss) and Adjusted net income (loss) per share as net income (loss) and net income (loss) per share, respectively, excluding the impact of a one-time tax benefit. Reconciliations between net income (loss) and Adjusted EBITDA, net income (loss) and Adjusted net income (loss), and net income (loss) per share and Adjusted net income (loss) per share are provided in the financial tables at the end of this press release.

iRobot Corporation
Consolidated Statement of Income
(in thousands, except per share amounts)
(unaudited)
			For the three months ended												For the twelve months ended
			December 29,					December 31,							December 29,				December 31,
			2012					2011							2012				2011
Revenue
Product revenue			$	97,874				$	122,425						$	418,550			$	426,525
Contract revenue				2,820					8,343							17,694				38,975
Total				100,694					130,768							436,244				465,500
Cost of Revenue
Product revenue				55,667					69,210							239,745				246,905
Contract revenue				3,673					5,473							16,783				26,477
Total				59,340					74,683							256,528				273,382
Gross Margin				41,354					56,085							179,716				192,118
Operating Expense
Research & development				10,418					10,675							37,215				36,498
Selling & marketing				26,503					18,243							71,631				58,544
General & administrative				13,308					12,094							45,698				43,753
Total				50,229					41,012							154,544				138,795
Operating income (loss)				(8,875	)				15,073							25,172				53,323
Other income (expense), net				(42	)				(40	)						435				218
Pre-tax income (loss)				(8,917	)				15,033							25,607				53,541
Income tax expense (benefit)				(2,979	)				4,395							8,310				13,350
Net income (loss)			$	(5,938	)			$	10,638						$	17,297			$	40,191
Net income (loss) per common share:
Basic			$	(0.21	)			$	0.39						$	0.63			$	1.50
Diluted			$	(0.21	)			$	0.38						$	0.61			$	1.44
Shares used in per common share calculations:
Basic				27,802					27,119							27,577				26,712
Diluted				27,802					28,147							28,301				27,924
Stock-based compensation included in above figures:
Cost of product revenue			$	295				$	281						$	1,187			$	1,197
Cost of contract revenue				90					113							410				478
Research & development				422					262							1,195				743
Selling & marketing				234					211							808				724
General & administrative				1,919					1,531							7,383				5,642
Total			$	2,960				$	2,398						$	10,983			$	8,784

iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)
			December 29,				December 31,
			2012				2011
Assets
Cash and equivalents			$	126,770			$	166,308
Short term investments				12,430				17,811
Accounts receivable, net				29,413				43,338
Unbilled revenues				1,196				2,362
Inventory				36,965				31,089
Deferred tax assets				19,266				15,344
Other current assets				11,518				7,928
Total current assets				237,558				284,180
Property, plant and equipment, net				24,953				29,029
Deferred tax assets				8,610				6,127
Goodwill				48,951				7,910
Intangible assets, net				28,224				2,467
Other assets				8,500				2,500
Total assets			$	356,796			$	332,213
Liabilities and stockholders' equity
Accounts payable			$	42,515			$	48,406
Accrued expenses				16,527				17,188
Accrued compensation				11,864				17,879
Deferred revenue and customer advances				6,257				1,527
Total current liabilities				77,163				85,000
Long term liabilities				3,816				4,255
Stockholders' equity				275,817				242,958
Total liabilities and stockholders' equity			$	356,796			$	332,213

iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
			For the three months ended												For the twelve months ended
			December 29,					December 31,							December 29,					December 31,
			2012					2011							2012					2011
Cash flows from operating activities:
Net income (loss)			$	(5,938	)			$	10,638						$	17,297				$	40,191
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization				3,491					3,075							11,672					10,312
Loss on disposal of property and equipment				554					123							1,332					599
Stock-based compensation				2,960					2,398							10,983					8,784
Deferred income taxes, net				(908	)				(295	)						(3,763	)				6,154
Tax benefit of excess stock based compensation deductions				16					(915	)						(1,445	)				(6,917	)
Non-cash director deferred compensation				23					36							87					162
Changes in operating assets and liabilities — (use) source
Accounts receivable				25,601					(1,938	)						15,560					(9,282	)
Unbilled revenue				497					5,537							1,166					1,650
Inventory				696					900							(807	)				(3,929	)
Other assets				(6,158	)				4,729							(2,892	)				(1,843	)
Accounts payable				1,405					7,884							(8,684	)				9,717
Accrued expenses				(2,252	)				1,951							(656	)				1,421
Accrued compensation				2,736					2,834							(6,106	)				52
Deferred revenue				4,139					(831	)						4,730					(2,007	)
Change in long term liabilities				(298	)				528							(613	)				671
Net cash provided by operating activities				26,564					36,654							37,861					55,735
Cash flows from investing activities:
Purchase of property and equipment				(2,703	)				(2,654	)						(6,770	)				(13,011	)
Change in other assets				-					-							(6,000	)				-
Purchase of Evolution net of cash received				(74,530	)				-							(74,530	)				-
Purchases of investments				-					(4,189	)						(5,086	)				(9,189	)
Sales of investments				7,500					-							10,000					5,000
Net cash used in investing activities				(69,733	)				(6,843	)						(82,386	)				(17,200	)
Cash flows from financing activities:
Proceeds from stock option exercises				304					4,003							4,326					13,401
Income tax withholding payment associated with restricted stock vesting				(7	)				(83	)						(784	)				(928	)
Tax benefit of excess stock based compensation deductions				(16	)				915							1,445					6,917
Net cash provided by financing activities				281					4,835							4,987					19,390
Net increase (decrease) in cash and cash equivalents				(42,888	)				34,646							(39,538	)				57,925
Cash and cash equivalents, at beginning of period				169,658					131,662							166,308					108,383
Cash and cash equivalents, at end of period			$	126,770				$	166,308						$	126,770				$	166,308

iRobot Corporation
Supplemental Information
(unaudited)
			For the three months ended												For the twelve months ended
			December 29,					December 31,							December 29,					December 31,
			2012					2011							2012					2011
Revenue: *
Home Robots			$	82,918				$	74,435						$	356,805				$	278,551
Domestic			$	31,820				$	24,371						$	117,689				$	82,787
International			$	51,098				$	50,064						$	239,116				$	195,764
Defense & Security			$	17,776				$	56,333						$	79,439				$	186,949
Domestic			$	15,364				$	51,458						$	68,635				$	170,968
International			$	2,412				$	4,875						$	10,804				$	15,981
Product			$	14,956				$	47,990						$	61,745				$	147,974
Contract			$	2,820				$	8,343						$	17,694				$	38,975
Product Life Cycle			$	12,648				$	10,974						$	37,433				$	42,579
Gross Margin Percent:
Home Robots				49.6	%				45.8	%						49.5	%				45.2	%
Defense & Security				1.1	%				39.0	%						4.0	%				35.5	%
Total Company				41.1	%				42.9	%						41.2	%				41.3	%
Units shipped:
Home Robots *				387					358							1,621					1,371
Defense & Security				34					273							289					773
Average gross selling prices for robot units:
Home Robots			$	227				$	218						$	222				$	207
Defense & Security *			$	68				$	132						$	84				$	136
Defense & Security Funded Product Backlog *			$	11,356				$	7,600						$	11,356				$	7,600
Days sales outstanding				28					32							28					32
Days in inventory				61					41							61					41
Headcount				534					619							534					619
* in thousands

iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
			For the three months ended												For the twelve months ended
			December 29,					December 31,							December 29,					December 31,
			2012					2011							2012					2011
Net income (loss)			$	(5,938	)			$	10,638						$	17,297				$	40,191
Interest income, net				(201	)				(212	)						(1,016	)				(967	)
Income tax expense (benefit)				(2,979	)				4,395							8,310					13,350
Depreciation				2,418					2,387							9,898					9,002
Amortization				1,073					688							1,774					1,310
EBITDA				(5,627	)				17,896							36,263					62,886
Stock-based compensation expense				2,960					2,398							10,983					8,784
Merger and acquisition expense				717					11							1,404					41
Net intellectual property litigation expense				26					116							155					287
Restructuring expense				2,905					914							3,679					1,015
Adjusted EBITDA			$	981				$	21,335						$	52,484				$	73,013

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.

iRobot Corporation
Adjusted Net Income and Earnings Per Share Reconciliations to GAAP
(in thousands, except per share amounts)
(unaudited)
			For the three months ended											For the twelve months ended
			December 29,					December 31,						December 29,				December 31,
			2012					2011						2012				2011
GAAP net income (loss)			$	(5,938	)			$	10,638					$	17,297			$	40,191
Less one-time net income tax benefit associated with Section 199 deductions and R&D tax credit true-ups				-					-						-				(3,455	)
Adjusted net income (loss)			$	(5,938	)			$	10,638					$	17,297			$	36,736
GAAP net income (loss) per common share:
Basic			$	(0.21	)			$	0.39					$	0.63			$	1.50
Diluted			$	(0.21	)			$	0.38					$	0.61			$	1.44
Less one-time net income tax benefit associated with Section 199 deductions and R&D tax credit true-ups:
Basic			$	-				$	-					$	-			$	(0.12	)
Diluted			$	-				$	-					$	-			$	(0.12	)
Adjusted net income (loss) per common share:
Basic			$	(0.21	)			$	0.39					$	0.63			$	1.38
Diluted			$	(0.21	)			$	0.38					$	0.61			$	1.32
Shares used in Per Common Share Calculations:
Basic				27,802					27,119						27,577				26,712
Diluted				27,802					28,147						28,301				27,924

In evaluating its business, iRobot also considers and uses Adjusted net income and Adjusted net income per common share as supplemental measures of its operating performance. The Company defines Adjusted net income and Adjusted net income per share as net income and net income per share, respectively, excluding the impact of a one-time tax benefit.

The terms Adjusted net income and Adjusted net income per common share are 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. When assessing the Company's operating performance, investors should not consider Adjusted net income, Adjusted net income per common share or both in isolation, or as a substitute for net income, net income per common share or other consolidated income statement data prepared in accordance with U.S. GAAP.