EX-99.1 2 b81911exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     
Contacts:
   
Elise Caffrey
  Charlie Vaida
Investor Relations
  Media Relations
iRobot Corp.
  iRobot Corp.
(781) 430-3003
  (781) 430-3182
ecaffrey@irobot.com
  cvaida@irobot.com
iRobot Reports Record Second-Quarter Revenue and Earnings
Company Increases 2010 Outlook
BEDFORD, Mass., July 28, 2010 — iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the second quarter ended July 3, 2010.
“Revenue, earnings per share and Adjusted EBITDA significantly exceeded expectations for the quarter,” said Colin Angle, chairman and chief executive officer of iRobot. “Adjusted EBITDA was more than $12 million, or 13 percent of revenue, and we generated $15 million of operating cash flow. Cash and investments increased $48 million year-over-year to more than $98 million at quarter end.
“As a result of outstanding performance by both divisions in the second quarter and good visibility for the rest of 2010, we are increasing our full-year financial expectations.”
Revenue for the second quarter of 2010 increased 59 percent to $98 million, compared with $61 million for the same quarter one year ago. Revenue for the first half of 2010 increased 63 percent to $193 million, compared with $118 million a year ago. Gross margin for the second quarter increased to 35 percent of revenue, compared with 27 percent of revenue in the second quarter of 2009. For the first half of 2010, gross margin was 35 percent, up from 28 percent for the first half of 2009. Net income in the second quarter of 2010 was $5 million, compared with a net loss of $3 million in the second quarter of 2009. Net income for the first half of 2010 was $11 million, compared with a loss of $4 million for the first half of 2009.
Business Highlights
  International home robot revenue in Q2 2010 was up more than 80 percent year-over-year to $36 million and comprised 67 percent of total home robot revenue for the quarter. Domestic home robot revenue increased 20 percent to $17 million from $14 million in the second quarter of 2009.
 
  Government & Industrial robot revenue increased 65 percent in the second quarter over the second quarter of 2009, driven by shipments of 138 PackBot robots and 100 Small Unmanned Ground Vehicles during the quarter.
 
  Year-to-date operating cash flow was $25 million, compared with $12 million in the first half of 2009.
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

 


 

Financial Expectations
Management provides the following expectations with respect to the year ending January 1, 2011 and the third quarter ending October 2, 2010.
Fiscal Year 2010:
     
Revenue
  $385 — $390 million
Earnings Per Share
  $0.51 — $0.54
Adjusted EBITDA
  $36 — $38 million
Q3 2010:
     
Revenue
  $91 — $94 million
Earnings Per Share
  $0.05 — $0.06
Adjusted EBITDA
  $5 — $6 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 2010, business outlook, and outlook for future financial performance. Pertinent details include:
         
Date:
  Thursday, July 29, 2010
Time:
  8:30 a.m. ET
Call-In Number:
    617-847-8705  
Passcode:
    90382275  
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 August 5 and can be accessed by dialing 617-801-6888, passcode 69265770.
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 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 and growth, anticipated revenue, Adjusted EBITDA and earnings per share for fiscal year 2010 and the third quarter of 2010, and demand for and market acceptance of its
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

 


 

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
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

 


 

iRobot Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
                                 
    For the three months ended   For the six months ended
    July 3,   June 27,   July 3,   June 27,
    2010   2009   2010   2009
         
Revenue
                               
Product revenue
  $ 85,945     $ 52,609     $ 172,056     $ 102,300  
Contract revenue
    11,859       8,731       20,678       15,976  
         
Total
    97,804       61,340       192,734       118,276  
         
Cost of Revenue
                               
Product revenue
    55,825       37,098       111,425       70,537  
Contract revenue
    8,009       7,833       14,622       15,124  
         
Total
    63,834       44,931       126,047       85,661  
         
Gross Margin
    33,970       16,409       66,687       32,615  
Operating Expense
                               
Research & development
    5,691       3,896       10,190       7,474  
Selling & marketing
    10,581       8,940       20,225       17,906  
General & administrative
    9,313       7,365       17,789       14,495  
         
Total
    25,585       20,201       48,204       39,875  
         
Operating income (loss)
    8,385       (3,792 )     18,483       (7,260 )
Other income (expense), net
    40       91       69       (208 )
         
Pre-tax income (loss)
    8,425       (3,701 )     18,552       (7,468 )
Income tax expense (benefit)
    3,111       (1,092 )     7,070       (3,072 )
         
Net income (loss)
  $ 5,314     $ (2,609 )   $ 11,482     $ (4,396 )
         
 
                               
Net income (loss) per common share:
                               
Basic
  $ 0.21     $ (0.10 )   $ 0.46     $ (0.18 )
Diluted
  $ 0.20     $ (0.10 )   $ 0.44     $ (0.18 )
 
                               
Shares used in Per Common Share Calculations:
                               
Basic
    25,294       24,967       25,217       24,946  
Diluted
    26,375       24,967       26,226       24,946  
 
                               
Stock-based compensation included in above figures:
                               
Cost of product revenue
  $ 355     $ 278     $ 687     $ 491  
Cost of contract revenue
    110       162       236       325  
Research & development
    245       101       277       98  
Selling & marketing
    289       338       645       655  
General & administrative
    1,202       1,016       2,246       1,928  
         
Total
  $ 2,201     $ 1,895     $ 4,091     $ 3,497  
         
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

 


 

iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)
                 
    July 3,     January 2,  
    2010     2010  
 
               
Assets
               
 
               
Cash and equivalents
  $ 75,810     $ 71,856  
Short term investments
    22,957       4,959  
Accounts receivable, net
    27,133       35,171  
Unbilled revenues
    2,313       1,831  
Inventory
    30,684       32,406  
Deferred tax assets
    8,669       8,669  
Other current assets
    3,290       4,119  
 
           
Total current assets
    170,856       159,011  
Property, plant and equipment, net
    22,374       20,230  
Deferred tax assets
    5,623       6,089  
Other assets
    14,008       14,254  
 
           
Total assets
  $ 212,861     $ 199,584  
 
           
 
               
Liabilities and stockholders’ equity
               
 
               
Accounts payable
  $ 31,768     $ 30,559  
Accrued expenses
    13,363       14,384  
Accrued compensation
    11,153       13,525  
Deferred revenue and customer advances
    1,969       3,908  
 
           
Total current liabilities
    58,253       62,376  
 
           
Long term liabilities
    3,799       4,014  
 
           
Stockholders’ equity
    150,809       133,194  
 
           
Total liabilities and stockholders’ equity
  $ 212,861     $ 199,584  
 
           
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

 


 

iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
                                 
    For the three months ended   For the six months ended
    July 3,   June 27,   July 3,   June 27,
    2010   2009   2010   2009
         
Cash flows from operating activities:
                               
Net income (loss)
  $ 5,314     $ (2,609 )   $ 11,482     $ (4,396 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
                               
Depreciation and amortization
    1,917       1,950       3,755       3,864  
Loss on disposal of property and equipment
    2       87       47       102  
Stock-based compensation
    2,201       1,895       4,091       3,497  
Benefit from deferred tax assets
          (511 )           (511 )
Non-cash director deferred compensation
    33       33       66       66  
Changes in operating assets and liabilities — (use) source
                               
Accounts receivable
    (1,054 )     (8,099 )     8,038       4,639  
Unbilled revenue
    978       (326 )     (482 )     (1,445 )
Inventory
    (816 )     2,104       1,722       5,922  
Other assets
    44       (1,001 )     797       (2,163 )
Accounts payable
    2,277       1,981       1,209       1,564  
Accrued expenses
    (990 )     225       (1,031 )     (33 )
Accrued compensation
    4,850       1,656       (2,372 )     634  
Deferred revenue
    (7 )     256       (1,939 )     342  
Change in long term liabilities
    (107 )     (108 )     (215 )     (215 )
         
Net cash provided by (used in) operating activities
    14,642       (2,467 )     25,168       11,867  
         
 
                               
Cash flows from investing activities:
                               
Purchase of property and equipment
    (3,629 )     (1,672 )     (5,668 )     (2,448 )
Purchases of investments
    (7,831 )           (25,411 )      
Sales of investments
    7,500             7,500        
         
Net cash used in investing activities
    (3,960 )     (1,672 )     (23,579 )     (2,448 )
         
 
                               
Cash flows from financing activities:
                               
Proceeds from stock option exercises
    1,823       132       1,927       459  
Income tax withholding payment associated with restricted stock vesting
    (120 )     (9 )     (279 )     (9 )
Tax benefit of excess stock based compensation deductions
    568       268       717       268  
         
Net cash provided by financing activities
    2,271       391       2,365       718  
         
 
                               
Net increase (decrease) in cash and cash equivalents
    12,953       (3,748 )     3,954       10,137  
Cash and cash equivalents, at beginning of period
    62,857       54,737       71,856       40,852  
         
Cash and cash equivalents, at end of period
  $  75,810     $  50,989     $  75,810     $  50,989  
         
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

 


 

iRobot Corporation
Supplemental Information
(unaudited)
                                 
    For the three months ended   For the six months ended
    July 3,   June 27,   July 3,   June 27,
    2010   2009   2010   2009
         
Revenue: *
                               
 
                               
Home Robots
  $ 52,904     $ 34,099     $ 105,451     $ 66,922  
         
 
                               
Domestic
  $ 17,160     $ 14,358     $ 33,247     $ 29,643  
International
  $ 35,744     $ 19,741     $ 72,204     $ 37,279  
 
                               
Retail
  $ 47,525     $ 27,263     $ 93,792     $ 54,079  
Direct
  $ 5,379     $ 6,836     $ 11,659     $ 12,843  
 
                               
Government & Industrial
  $ 44,900     $ 27,241     $ 87,283     $ 51,354  
         
 
                               
Domestic
  $ 43,406     $ 25,404     $ 80,473     $ 46,695  
International
  $ 1,494     $ 1,837     $ 6,810     $ 4,659  
 
                               
Product
  $ 33,041     $ 18,510     $ 66,605     $ 35,378  
Contract
  $ 11,859     $ 8,731     $ 20,678     $ 15,976  
 
                               
Product Life Cycle
  $ 9,581     $ 4,542     $ 17,561     $ 8,931  
 
                               
Gross Margin Percent:
                               
Home Robots
    39.2 %     29.6 %     38.6 %     30.3 %
Government & Industrial
    29.5 %     23.1 %     29.8 %     24.1 %
Total Company
    34.7 %     26.8 %     34.6 %     27.6 %
 
                               
Units shipped:
                               
Home Robots *
    294       192       581       375  
Government & Industrial
    250       151       516       301  
 
                               
Average gross selling prices for robot units:
                               
Home Robots
  $ 188     $ 189     $ 189     $ 185  
Government & Industrial *
  $ 94     $ 93     $ 95     $ 88  
 
                               
Government & Industrial Funded Product Backlog *
  $ 12,164     $ 17,537     $ 12,164     $ 17,537  
 
                               
Days sales outstanding
    27       52       27       52  
 
                               
Days in inventory
    50       70       50       70  
 
                               
Headcount
    613       508       613       508  
 
*   in thousands
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

 


 

iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
                                 
    For the three months ended   For the six months ended
    July 3,   June 27,   July 3,   June 27,
    2010   2009   2010   2009
         
 
                               
Net income (loss)
  $ 5,314     $ (2,609 )   $ 11,482     $ (4,396 )
 
                               
Interest income, net
    (197 )     (15 )     (367 )     (36 )
Income tax expense (benefit)
    3,111       (1,092 )     7,070       (3,072 )
Depreciation
    1,778       1,820       3,477       3,613  
Amortization
    139       128       278       251  
         
 
                               
EBITDA
    10,145       (1,768 )     21,940       (3,640 )
 
                               
Stock-based compensation expense
    2,201       1,895       4,091       3,497  
Merger and acquisition expense
    61             71        
         
 
                               
Adjusted EBITDA
  $ 12,407     $ 127     $ 26,102     $ (143 )
         
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.
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com