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