Company Delivers 24 Percent Annual Revenue Growth
BEDFORD, Mass., Feb. 11, 2009 – iRobot Corp. (NASDAQ: IRBT) today announced its financial results for the fiscal quarter and fiscal year ended December 27, 2008. Revenue for the fourth quarter of 2008 decreased 8.1 percent to $90.7 million, compared with $98.7 million for the same quarter one year ago. Revenue for the full year increased 23.5 percent to $307.6 million from $249.1 million for the full year 2007.
Gross margin for the fourth quarter decreased to 36.1 percent of revenue ($32.7 million), compared with 36.6 percent of revenue ($36.1 million) in the fourth quarter of 2007. For the full year, 2008 gross margin totaled 30.4 percent of revenue ($93.5 million), down from 33.2 percent of revenue ($82.6 million) for the full year 2007.
Pre-tax income in the fourth quarter of 2008 was $10.2 million compared with $12.1 million for the same period a year ago. For the full year, pre-tax income was $1.1 million compared with $0.5 million in 2007.
Net income in the fourth quarter of 2008 was $5.4 million compared with $20.7 million in the fourth quarter of 2007. Net income for the full year 2008 was $0.8 million compared with $9.1 million for the same period in 2007. The 2007 quarterly and annual results include an $8.6 million tax benefit, largely associated with the release of deferred federal tax allowances, while the 2008 quarterly and annual results include $4.8 million and $0.4 million of tax expense, respectively.
“In the fourth quarter, we took actions to put the company in a more financially sound position. We aggressively managed inventory levels and focused on improving liquidity in light of the current market environment,” said Colin Angle, chairman and chief executive officer of iRobot.
“Despite the difficult environment, we generated positive operating cash flow of more than $19 million in the fourth quarter. We entered 2009 with a strong cash position of $40.9 million and a more efficient operating model.
“2009 will continue to present challenges for domestic home robot sales but aggressive management of the company’s and our retailers’ inventory in the fourth quarter of 2008 has positioned us well in the current environment. We expect international demand for home robots to continue to be strong. Growth in our Government & Industrial division will be fueled by sales of PackBot FasTac in the beginning of the year and by the sale of new products later in the year,” Angle concluded.
Business Highlights:
- Government & Industrial division delivered record revenue of $42.6 million in the fourth quarter of 2008, a 69 percent increase over the fourth quarter of 2007.
- International home robot revenue in the fourth quarter of 2008 was more than double the level of the fourth quarter of 2007 and comprised almost half of total home robot revenue in the quarter. Overall home robot revenue grew 20 percent for the full year.
- In the fourth quarter, the company received commitments for $5.7 million in funding for its Warrior robot. In 2009 iRobot has announced orders totaling $13 million for robots and spare parts under its $286 million xBot contract bringing total orders to date to $80 million.
- The company completed the integration of Nekton Research, LLC, which was acquired on September 8, 2008.
Financial Expectations
Our outlook for future performance is based on current expectations. These statements are forward-looking and actual results may differ materially. Management provides the following expectations with respect to the year ending January 2, 2010 and the first quarter ending March 28, 2009.
| Fiscal Year 2009 | |
| Revenue | $290-$310 million |
| Adjusted EBITDA |
$14-$17 million |
| Earnings Per Share |
$0.00 - $0.04 |
| Q1 2009 | |
| Revenue | $50-$55 million |
| Adjusted EBITDA Loss |
($6) - ($4) million |
| Loss Per Share |
($0.18) - ($0.12) |
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 2008, business outlook, and outlook for future financial performance. Pertinent details include:
Date: Thurs., Feb. 12, 2009
Time: 8:30 a.m. EST
Call-In Number: 719-325-4835
A live, audio broadcast of the conference call also will be available at http://investors.irobot.com/events.cfm. 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 and can be accessed by dialing 719-457-0820, access code 4192943.
About iRobot Corp.
iRobot designs and builds robots that make a difference. The company’s home robots help people with smarter ways to clean, and our 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 concerning future financial performance, its revenue for the first quarter of 2009 and the full year 2009, its Adjusted EBITDA for the first quarter of 2009 and the full year 2009, its earnings/loss per share for the first quarter of 2009 and the full year 2009, inventory control, 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: general economic conditions, our ability to operate in an emerging market, fluctuations in our operating results and the seasonality of our business, our ability to enhance our current consumer robots or develop new consumer robots, our dependence on the U.S. federal government and government contracts, our ability to expand our product offering beyond our current markets, market acceptance of our products, our ability to manage our rapid growth, 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.
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, 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 Consolidated Statement of Operations (in thousands, except per share amounts) | |||||
|
For the three months ended |
For the twelve months ended | ||||
|
December 27, 2008 |
December 29, 2007 |
December 27, 2008 |
December 29, 2007 | ||
|
(unaudited) |
(audited) | ||||
| Revenue | |||||
| Product revenue |
$ 82,712 |
$ 93,308 |
$ 281,187 |
$ 227,457 | |
| Contract revenue |
7,990 |
5,432 |
26,434 |
21,624 | |
| Total |
90,702 |
98,740 |
307,621 |
249,081 | |
| Cost of Revenue | |||||
| Product revenue |
51,302 |
57,779 |
190,250 |
147,689 | |
| Contract revenue |
6,687 |
4,827 |
23,900 |
18,805 | |
| Total |
57,989 |
62,606 |
214,150 |
166,494 | |
| Gross Margin |
32,713 |
36,134 |
93,471 |
82,587 | |
| Operating Expense | |||||
| Research & development |
3,935 |
4,008 |
17,566 |
17,082 | |
| Selling & marketing |
11,415 |
14,786 |
46,866 |
44,894 | |
| General & administrative |
7,144 |
4,045 |
28,840 |
20,919 | |
| Litigation & related expenses |
- |
1,677 |
- |
2,341 | |
| Total |
22,494 |
24,516 |
93,272 |
85,236 | |
| Operating (loss) income |
10,219 |
11,618 |
199 |
(2,649) | |
| Other income, net |
9 |
488 |
926 |
3,151 | |
| Pre-tax income |
10,228 |
12,106 |
1,125 |
502 | |
| Income tax expense (benefit) |
4,806 |
(8,609) |
369 |
(8,558) | |
| Net income |
$ 5,422 |
$ 20,715 |
$ 756 |
$ 9,060 | |
|
|
|
|
|
| |
| Net income per common share: | |||||
| Basic |
$ 0.22 |
$ 0.85 |
$ 0.03 |
$ 0.37 | |
| Diluted |
$ 0.21 |
$ 0.81 |
$ 0.03 |
$ 0.36 | |
|
|
|||||
| Shares used in Per Common Share Calculations: | |||||
| Basic |
24,775 |
24,448 |
24,654 |
24,229 | |
| Diluted |
25,451 |
25,519 |
25,533 |
25,501 | |
| Stock-based compensation included in above figures: | |||||
| Cost of product revenue |
$ 199 |
$ 171 |
$ 753 |
$ 692 | |
| Cost of contract revenue |
162 |
94 |
462 |
386 | |
| Research & development |
133 |
125 |
359 |
377 | |
| Selling & marketing |
322 |
241 |
1,055 |
1,074 | |
| General & administrative |
815 |
665 |
3,310 |
2,182 | |
| Total |
$ 1,631 |
$ 1,296 |
$ 5,939 |
$ 4,711 | |
|
|
|
|
|
| |
|
iRobot Corporation Condensed Consolidated Balance Sheet (audited, in thousands) | |||
|
December 27, 2008 |
December 29, 2007 | ||
| Assets | |||
| Cash and equivalents |
$ 40,852 |
$ 26,735 | |
| Short term investments |
- |
16,550 | |
| Accounts receivable, net |
35,930 |
47,681 | |
| Unbilled revenues |
2,014 |
2,244 | |
| Inventory, net |
34,560 |
45,222 | |
| Deferred tax assets |
7,299 |
5,905 | |
| Other current assets |
3,340 |
2,268 | |
| Total current assets |
123,995 |
146,605 | |
| Property, plant and equipment, net |
22,929 |
15,694 | |
| Deferred tax assets |
4,508 |
4,293 | |
| Other assets |
12,246 |
2,500 | |
| Total assets |
$ 163,678 |
$ 169,092 | |
|
|
| ||
| Liabilities and stockholders' equity | |||
| Accounts payable |
$19,544 |
$ 44,697 | |
| Accrued expenses |
10,989 |
7,987 | |
| Accrued compensation |
6,393 |
4,603 | |
| Deferred revenue and customer advances |
2,632 |
1,578 | |
| Total current liabilities |
39,558 |
58,865 | |
| Long term liabilities |
4,444 |
- | |
| Stockholders' equity |
119,676 |
110,227 | |
| Total liabilities and stockholders' equity |
$ 163,678 |
$ 169,092 | |
|
iRobot Corporation Consolidated Statement of Cash Flows (in thousands) | |||||
|
For the three months ended |
For the twelve months ended | ||||
|
December 27, 2008 |
December 29, 2007 |
December 27, 2008 |
December 29, 2007 | ||
|
(unaudited) |
(audited) | ||||
| Cash flows from operating activities: | |||||
| Net income |
$ 5,422 |
$ 20,715 |
$ 756 |
$ 9,060 | |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
| Depreciation and amortization |
1,894 |
1,322 |
7,029 |
5,311 | |
| Loss on disposal of fixed assets |
151 |
- |
231 |
48 | |
| Stock-based compensation |
1,631 |
1,296 |
5,939 |
4,711 | |
| In-process research and development relating to acquisition of Nekton Research LLC |
- |
- |
200 |
- | |
| Benefit from deferred tax assets |
(1,967) |
(10,198) |
(1,967) |
(10,198) | |
| Non-cash director deferred compensation |
24 |
28 |
95 |
111 | |
| Changes in working capital - (use) source | |||||
| Accounts receivable |
10,391 |
(12,524) |
12,221 |
(19,171) | |
| Unbilled revenue |
258 |
513 |
230 |
(283) | |
| Inventory |
8,036 |
(1,511) |
10,662 |
(24,332) | |
| Other assets |
5,888 |
(229) |
(1,042) |
595 | |
| Accounts payable |
(11,810) |
(1,251) |
(25,350) |
17,012 | |
| Accrued expenses |
1,597 |
2,886 |
3,002 |
967 | |
| Accrued compensation |
(1,869) |
(2,985) |
1,634 |
(624) | |
| Deferred revenue |
(101) |
438 |
1,026 |
1,121 | |
| Change in long term liabilities |
(108) |
- |
4,444 |
- | |
| Net cash provided by (used in) operating activities |
19,437 |
(1,500) |
19,110 |
(15,672) | |
| Cash flows from investing activities: | |||||
| Purchase of property and equipment |
(1,228) |
(3,896) |
(14,817) |
(10,352) | |
| Purchase of Nekton Research LLC, net of cash received |
2 |
- |
(9,743) |
- | |
| Change in other assets |
- |
(2,500) |
- |
(2,500) | |
| Purchases of investments |
- |
(8,200) |
(29,997) |
(52,950) | |
| Sales of investments |
16,197 |
17,950 |
46,547 |
101,200 | |
| Net cash provided by (used in) investing activities |
14,971 |
3,354 |
(8,010) |
35,398 | |
| Cash flows from financing activities: | |||||
| Borrowings under revolving credit line |
- |
- |
5,500 |
- | |
| Repayment of borrowings under revolving credit line |
(5,500) |
- |
(5,500) |
- |
|
| Income tax withholding payment associated with stock option exercise |
- |
- |
- |
(1,588) |
|
| Proceeds from stock option exercises |
103 |
55 |
1,011 |
1,388 |
|
| Tax benefit of excess stock based compensation deductions |
1,326 |
1,626 |
2,006 |
1,626 | |
| Net cash provided by (used in) financing activities |
(4,071) |
1,681 |
3,017 |
1,426 | |
| Net increase in cash and cash equivalents |
30,337 |
3,535 |
14,117 |
21,152 | |
| Cash and cash equivalents, at beginning of period |
10,515 |
23,200 |
26,735 |
5,583 | |
| Cash and cash equivalents, at end of period |
40,852 |
26,735 |
40,852 |
26,735 | |
|
iRobot Corporation Supplemental Information (unaudited) | |||||
|
For the three months ended |
For the twelve months ended | ||||
|
December 27, 2008 |
December 29, 2007 |
December 27, 2008 |
December 29, 2007 | ||
| Revenue by business unit (in thousands): | |||||
| Home Robots | |||||
| Product |
$ 48,123 |
$ 73,481 |
$ 173,547 |
$ 144,413 | |
| Contract |
- |
45 |
55 |
70 | |
| Government & Industrial | |||||
| Product |
34,589 |
19,827 |
107,640 |
83,044 | |
| Contract |
7,990 |
5,387 |
26,379 |
21,554 | |
|
$ 90,702 |
$ 98,740 |
$ 307,621 |
$ 249,081 | ||
|
|
|
|
| ||
| Direct Revenue - Home Robots (in thousands) |
$ 8,183 |
$ 13,314 |
$ 30,697 |
$ 33,770 | |
| Product Lifecycle Revenue - Government & Industrial (in thousands) |
$ 8,652 |
$ 6,180 |
$ 20,004 |
$ 20,668 | |
| International Revenue (in thousands): | |||||
| Home Robots |
$23,159 |
$ 10,326 |
$ 65,942 |
$ 21,723 | |
| Government & Industrial |
$ 475 |
$ 3,057 |
$ 6,045 |
$ 10,923 | |
| Average selling prices for robot units: | |||||
| Home Robots |
$150 |
$ 158 |
$ 150 |
$ 148 | |
| Government & Industrial (in thousands) |
$ 85 |
$126 |
$ 92 |
$ 132 | |
| Gross Margin by business unit (in thousands): | |||||
| Home Robots |
$ 16,074 |
$ 26,636 |
$ 49,769 |
$ 46,605 | |
| Government & Industrial |
$ 16,639 |
$ 9,498 |
$ 43,702 |
$ 35,982 | |
| < |
$ 32,713 |
$ 36,134 |
$ 93,471 |
$ 82,587 | |
| Units shipped by business unit: | |||||
| Home Robots (in thousands) |
293 |
441 |
1,054 |
898 | |
| Government & Industrial |
306 |
108 |
951 |
471 | |
| Government & Industrial Funded Backlog (in thousands) |
$ 8,401 |
$ 26,095 |
$ 8,401 |
$ 26,095 | |
| Days sales outstanding |
38 |
46 |
38 |
46 | |
| Inventory turnover |
6.0 |
5.1 |
6.0 |
5.1 | |
| Net cash provided by (used in) operating activities (in thousands) |
$ 19,437 |
$ (1,500) |
$ 19,110 |
$ (15,672) | |
| Headcount |
479 |
423 |
479 |
423 | |
| Contact: | |
| Elise Caffrey Investor Relations iRobot Corp. (781) 430-3003 ecaffrey@irobot.com |
Nancy Smith |