• Revenue for the fourth quarter of 2011 increased 15 percent to $130.8 million, compared with $114.0 million for the same quarter one year ago. Revenue for the full year 2011 increased 16 percent to $465.5 million from $401.0 million for the full year 2010.


• Net income in the fourth quarter of 2011 was $10.6 million, compared with $7.0 million in the fourth quarter of 2010. Net income for the full year 2011 was $40.2 million, compared with $25.5 million for the same period in 2010.


• Quarterly earnings per share were $0.38, compared with $0.26 in the fourth quarter last year. Full-year earnings per share were $1.44, compared with $0.96 last year. The full-year results include the impact of a $3.5 million, or $0.12 per share, tax benefit in Q3 2011 and a $2.3 million, or $0.08 per share, tax benefit in Q3 2010. Excluding the impact of these tax benefits, earnings per share for the full year 2011 would have been $1.32, compared with $0.88 for the full year 2010.


• Adjusted EBITDA for the fourth quarter of 2011 was $21.3 million, or 16 percent of revenue, compared with $11.7 million, or 10 percent of revenue, in the fourth quarter of 2010. Adjusted EBITDA for the full year 2011 was $73.0 million, compared with $49.3 million for the same period a year ago.


• Raising Adjusted EBITDA margin target to high-teens by 2014.

“Our record financial results in 2011 were exceptional on all fronts, driven by especially strong performance in our Home Robots division. Revenue increased 16 percent to $465 million for the full year, while Adjusted EBITDA increased nearly 50 percent to $73 million or 16 percent of revenue,” said Colin Angle, chairman and chief executive officer of iRobot. “EPS of $1.44 for the year was up 50 percent from 2010.

“As we look at 2012, we feel very good about the growth opportunity for our home robot business in 2012 and beyond. However, we expect a decline in top and bottom line in our G&I division this year due to our current limited visibility in our defense business. We anticipate continued demand from the warfighters and support from military leadership for our products will drive higher revenue in the second half of 2012.

“To capitalize on our growing home robot business, intermediate and longer term opportunities in the defense business and exciting emerging opportunities, we will continue to make investments in marketing and iR&D that extend our leadership position.

"Given the underlying strength of our business model, I am confident that we will achieve our updated 3-year targets of:

• Mid-to-high-teen revenue CAGR
• High-teen Adjusted EBITDA margin and
• High single digit OCF margin."

Business Highlights

• Surpassed each of our 3 key long-term financial goals, including achievement of mid-teen Adjusted EBITDA margin target, a year ahead of schedule.
• Strong demand in overseas markets drove a 21 percent year-over-year increase in full-year home robot revenue. International home robot revenue of $196 million comprised 70 percent of total home robot 2011 revenue.
• Government & industrial robot revenue grew 9 percent in 2011, driven by shipments of Small Unmanned Ground Vehicles and spares.
• In 2011, operating cash flow was $55.7 million, compared with $49.2 million in 2010. As a result of improved net income, our year-end cash and investment position was $184 million.

Financial Expectations

Management provides the following expectations with respect to the year ending December 29, 2012 and first quarter ending March 31, 2012.

Fiscal Year 2012:
Revenue	$465 - $485 million
Earnings Per Share	$0.75 - $0.95
Adjusted EBITDA	$56 - $63 million

 

Q1 2012:
Revenue	$90 - $100 million
Earnings Per Share	($0.08) - $0.00
Adjusted EBITDA	$2 - $5 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 2011, business outlook, and outlook for 2012 financial performance. Pertinent details include:
 
Date:  Thursday, February 9, 2012
Time:  8:30 a.m. ET
Call-In Number:  847-413-3362
Passcode:  31615791

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 February 16, and can be accessed by dialing 630-652-3042, passcode 31615791#.

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 regarding future financial performance and growth, demand for our robots, longer-term profitability and operating performance, and anticipated revenue, earnings per share and Adjusted EBITDA for the full year ending December 29, 2012 and the first quarter ending March 31, 2012. 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 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, net intellectual property litigation related activity, restructuring related expense, and non-cash stock compensation. A reconciliation between net income and Adjusted EBITDA 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 31, 2011	January 1, 2011		December 31, 2011	January 1, 2011
Revenue
Product revenue	$122,425	$103,287		$426,525	$360,394
Contract revenue	8,343	10,708		38,975	40,558
Total	130,768	113,995		465,500	400,952
Cost of Revenue
Product revenue	69,210	62,506		246,905	228,403
Contract revenue	5,473	6,001		26,477	27,117
Total	74,683	68,507		273,382	255,520
Gross Margin	56,085	45,488		192,118	145,432
Operating Expense
Research & development	10,675	8,434		36,498	24,809
Selling & marketing	18,243	19,576		58,544	50,535
General & administrative	12,094	9,925		43,753	36,618
Total	41,012	37,935		138,795	111,962
Operating income	15,073	7,553		53,323	33,470
Other income (expense), net	(40)	136		218	504
Pre-tax income	15,033	7,689		53,541	33,974
Income tax expense	4,395	689		13,350	8,460
Net income	$ 10,638	$ 7,000		$ 40,191	$ 25,514
Net income per common share:
Basic	$ 0.39	$ 0.27		$ 1.50	$ 1.00
Diluted	$ 0.38	$ 0.26		$ 1.44	$ 0.96
Shares used in per common share calculations:
Basic	27,119	25,604		26,712	25,394
Diluted	28,147	26,798		27,924	26,468
Stock-based compensation included in above figures:
Cost of product revenue	$ 281	$ 314		$ 1,197	$ 1,311
Cost of contract revenue	113	109		478	446
Research & development	262	237		743	725
Selling & marketing	211	276		724	1,161
General & administrative	1,531	1,197		5,642	4,522
Total	$ 2,398	$ 2,133		$ 8,784	$ 8,165

 

iRobot Corporation Condensed Consolidated Balance Sheet (unaudited, in thousands)
	December 31, 2011		January 1, 2011
Assets
Cash and equivalents	$ 166,308		$ 108,383
Short term investments	17,811		13,928
Accounts receivable, net	43,338		34,056
Unbilled revenues	2,362		4,012
Inventory	31,089		27,160
Deferred tax assets	15,344		12,917
Other current assets	7,928		6,137
Total current assets	284,180		206,593
Property, plant and equipment, net	29,029		25,620
Deferred tax assets	6,127		8,338
Other assets	12,877		13,780
Total assets	$ 332,213		$ 254,331
Liabilities and stockholders' equity
Accounts payable	$ 48,406		$ 38,689
Accrued expenses	17,188		15,790
Accrued compensation	17,879		17,827
Deferred revenue and customer advances	1,527		3,534
Total current liabilities	85,000		75,840
Long term liabilities	4,255		3,584
Stockholders' equity	242,958		174,907
Total liabilities and stockholders' equity	$ 332,213		$ 254,331

 

 

iRobot Corporation Consolidated Statement of Cash Flows (unaudited, in thousands)
	For the three months ended			For the twelve months ended
	December 31, 2011	January 1, 2011		December 31, 2011	January 1, 2011
Cash flows from operating activities:
Net income	$ 10,638	$ 7,000		$ 40,191	$ 25,514
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,075	1,868		10,312	7,541
Loss on disposal of property and equipment	123	87		599	204
Stock-based compensation	2,398	2,133		8,784	8,165
Deferred income taxes, net	(295)	(1,986)		6,154	(4,998)
Tax benefit of excess stock based compensation      deductions	(915)	(1,767)		(6,917)	(2,622)
Non-cash director deferred compensation	36	33		162	132
Changes in operating assets and liabilities - (use) source
Accounts receivable	(1,938)	(6,262)		(9,282)	1,115
Unbilled revenue	5,537	(1,478)		1,650	(2,181)
Inventory	900	6,809		(3,929)	5,246
Other assets	4,729	(3,092)		(1,843)	(2,082)
Accounts payable	7,884	3,012		9,717	8,130
Accrued expenses	1,951	1,810		1,421	1,495
Accrued compensation	2,834	4,710		52	4,302
Deferred revenue	(831)	1,511		(2,007)	(374)
Change in long term liabilities	528	(108)		671	(430)
Net cash provided by operating activities	36,654	14,280		55,735	49,157
Cash flows from investing activities:
Purchase of property and equipment	(2,654)	(5,060)		(13,011)	(12,597)
Purchases of investments	(4,189)	-		(9,189)	(30,461)
Sales of investments	-	2,500		5,000	21,500
Net cash used in investing activities	(6,843)	(2,560)		(17,200)	(21,558)
Cash flows from financing activities:
Proceeds from stock option exercises	4,003	4,293		13,401	6,590
Income tax withholding payment associated with restricted stock vesting	(83)	-		(928)	(284)
Tax benefit of excess stock based compensation deductions	915	1,767		6,917	2,622
Net cash provided by financing activities	4,835	6,060		19,390	8,928
Net increase in cash and cash equivalents	34,646	17,780		57,925	36,527
Cash and cash equivalents, at beginning of period	131,662	90,603		108,383	71,856
Cash and cash equivalents, at end of period	$ 166,308	$ 108,383		$ 166,308	$ 108,383

 

 

<><><>  <><><> 

iRobot Corporation Supplemental Information (unaudited)
	For the three months ended			For the twelve months ended
	December 31, 2011	January 1, 2011		December 31, 2011	January 1, 2011
Revenue: *
Home Robots	$ 74,435	$ 69,247		$ 278,551	$ 229,348
Domestic	$ 24,371	$ 24,841		$ 82,787	$ 77,918
International	$ 50,064	$ 44,406		$ 195,764	$ 151,430
Government & Industrial	$ 56,333	$ 44,748		$ 186,949	$ 171,604
Domestic	$ 51,458	$ 41,779		$ 170,968	$ 154,404
International	$ 4,875	$ 2,969		$ 15,981	$ 17,200
Product	$ 47,990	$ 34,040		$ 147,974	$ 131,046
Contract	$ 8,343	$ 10,708		$ 38,975	$ 40,558
Product Life Cycle	$ 10,974	$ 11,490		$ 42,579	$ 38,101
Gross Margin Percent:
Home Robots	45.8%	42.4%		45.2%	40.0%
Government & Industrial	39.0%	36.0%		35.5%	31.3%
Total Company	42.9%	39.9%		41.3%	36.3%
Units shipped:
Home Robots *	358	380		1,371	1,269
Government & Industrial	273	169		773	871
Average gross selling prices for robot units:
Home Robots	$ 218	$ 194		$ 207	$ 189
Government & Industrial *	$ 132	$ 133		$ 136	$ 107
Government & Industrial Funded Product Backlog *	$ 7,600	$ 23,869		$ 7,600	$ 23,869
Days sales outstanding	32	30		32	30
Days in inventory	41	40		41	40
Headcount	619	657		619	657
* in thousands

 

iRobot Corporation Adjusted EBITDA Reconciliation to GAAP (unaudited, in thousands)
	For the three months ended			For the twelve months ended
	December 31, 2011	January 1, 2011		December 31, 2011	January 1, 2011
Net income	$ 10,638	$ 7,000		$ 40,191	$ 25,514
Interest income, net	(212)	(193)		(967)	(765)
Income tax expense	4,395	689		13,350	8,460
Depreciation	2,387	1,741		9,002	7,002
Amortization	688	127		1,310	539
EBITDA	17,896	9,364		62,886	40,750
Stock-based compensation expense	2,398	2,133		8,784	8,165
Merger & acquisition expense	11	73		41	205
Net intellectual property litigation expense	116	110		287	181
Restructuring expense	914	-		1,015	-
Adjusted EBITDA	$ 21,335	$ 11,680		$ 73,013	$ 49,301

 

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 Non-GAAP 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 31, 2011	January 1, 2011		December 31, 2011	January 1, 2011
GAAP net income	$ 10,638	$ 7,000		$ 40,191	$ 25,514
Less one-time net income tax benefit associated with release of state deferred tax asset valuation allowance	-	-		-	(2,259)
Less one-time net income tax benefit associated with Section 199 deductions and R&D tax credit true-ups	-	-		(3,455)	-
Non-GAAP net income	$ 10,638	$ 7,000		$ 36,736	$ 23,255
GAAP net income per common share:
Basic	$ 0.39	$ 0.27		$ 1.50	$ 1.00
Diluted	$ 0.38	$ 0.26		$ 1.44	$ 0.96
Less one-time net income tax benefit associated with release of state deferred tax asset valuation allowance
Basic	$ -	$ -		$ -	$ (0.08)
Diluted	$ -	$ -		$ -	$ (0.08)
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)	$ -
Non-GAAP net income per common share:
Basic	$ 0.39	$ 0.27		$ 1.38	$ 0.92
Diluted	$ 0.38	$ 0.26		$ 1.32	$ 0.88
Shares used in per common share calculations:
Basic	27,119	25,604		26,712	25,394
Diluted	28,147	26,798		27,924	26,468

<><><>