Company's Strong Results Exceed Revenue and Earnings Estimates
BEDFORD, Mass., July 22, 2009 – iRobot Corp. (NASDAQ: IRBT) today announced its financial results for the fiscal quarter ended June 27, 2009. Revenue for the second quarter of 2009 decreased 8.7 percent to $61.3 million, compared with $67.2 million for the same quarter one year ago. Revenue for the first half of 2009 decreased 5.0 percent to $118.3 million from $124.5 million for the first half of 2008.
Gross margin for the second quarter increased to 26.8 percent of revenue, compared with 24.5 percent of revenue in the second quarter of 2008. First-half 2009 gross margin increased to 27.6 percent of revenue, up from 25.6 percent of revenue in the first half of 2008.
Loss per share for the second quarter of 2009 improved to $0.10, compared with $0.18 for the same period a year ago. For the first half of 2009, loss per share improved to $0.18, compared with $0.35 for the same period in 2008.
Adjusted EBITDA improved to $0.1 million for the second quarter of 2009, compared with a loss of $5.8 million in the second quarter of 2008. For the first half of 2009, Adjusted EBITDA loss improved to $0.1 million from $10.2 million in the first half of 2008.
"We delivered revenue and profit results for the second quarter at the top end of expectations in a very challenging environment," said Colin Angle, chairman and chief executive officer of iRobot. "Adjusted EBITDA far exceeded expectations and represented nearly a $6 million improvement over last year’s results. The most profound change over the course of the last year has been our focus on driving operating cash flow. Over the past year we have generated operating cash flow of $31 million and improved our cash position by $21 million to nearly $51 million at the end of the second quarter.
“Based on our performance through the first half, we are narrowing the range of our expectations for full-year revenue and reaffirming our expectations for earnings per share and Adjusted EBITDA. Continuing uncertainty about retail demand during the second half of the year and the potential impact on defense spending of the government’s actions to fund the U.S. economic recovery makes us cautious,” Angle concluded.
Business Highlights
- International home robot revenue in the second quarter of 2009 increased 9 percent from the second quarter of 2008 and comprised more than half of total home robot revenue in the quarter.
- Government & Industrial revenue was generated primarily from the sale of the iRobot PackBot 510 with FasTac Kit. During the quarter, the first PackBot 510 EOD’s with advanced vision and surveillance capabilities were shipped. The first ten small unmanned ground vehicles, SUGV 310’s (mini-EOD), were also delivered to the Army.
- In the first half of 2009, operating cash flow was $11.9 million, compared with $0.2 million in the first half of 2008, as aggressive working capital management led to a $14.7 million reduction of inventory versus last year.
Financial Expectations
Management provides the following expectations with respect to the fiscal year ending January 2, 2010 and the third quarter ending September 26, 2009.
| Fiscal Year 2009: | |
| Revenue | $295-$305 million |
| Adjusted EBITDA |
$14-$17 million |
| Earnings Per Share |
$0.00 - $0.04 |
| Q3 2009: | |
| Revenue | $75-$80 million |
| Adjusted EBITDA |
$3 - $5 million |
| Earnings Per Share |
$0.00 - $0.03 |
Second-Quarter Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the fiscal quarter ended June 27, 2009, business outlook, and outlook for future financial performance. Pertinent details include:
Date: Thurs., July 23, 2009
Time: 8:30 a.m. ET
Call-In Number: 719-325-4811
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 2717744.
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 anticipated revenue, Adjusted EBITDA and earnings per share for fiscal year 2009 and for the third quarter ending September 26, 2009, 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, and non-cash stock compensation. A reconciliation between net loss 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 six months ended | ||||
|
June 27, 2009 |
June 28, 2008 |
June 27, 2009 |
June 28, 2008 | ||
| Revenue | |||||
| Product revenue |
$ 52,609 |
$ 60,676 |
$ 102,300 |
$ 111,251 | |
| Contract revenue |
8,731 |
6,526 |
15,976 |
13,253 | |
| Total |
61,340 |
67,202 |
118,276 |
124,504 | |
| Cost of Revenue | |||||
| Product revenue |
37,098 |
44,382 |
70,537 |
80,577 | |
| Contract revenue |
7,833 |
6,352 |
15,124 |
12,099 | |
| Total |
44,931 |
50,734 |
85,661 |
92,676 | |
| Gross Margin |
16,409 |
16,468 |
32,615 |
31,828 | |
| Operating Expense | |||||
| Research & development |
3,896 |
4,718 |
7,474 |
8,691 | |
| Selling & marketing |
8,940 |
13,471 |
17,906 |
24,929 | |
| General & administrative |
7,365 |
7,340 |
14,495 |
14,118 | |
| Total |
20,201 |
25,529 |
39,875 |
47,738 | |
| Operating loss |
(3,792) |
(9,061) |
(7,260) |
(15,910) | |
| Other income (expense), net |
91 |
242 |
(208) |
737 | |
| Pre-tax loss |
(3,701) |
(8,819) |
(7,468) |
(15,173) | |
| Income tax benefit |
(1,092) |
(4,306) |
(3,072) |
(6,655) | |
| Net loss |
$ (2,609) |
$ (4,513) |
$ (4,396) |
$ (8,518) | |
| Net loss per common share: | |||||
| Basic |
$ (0.10) |
$ (0.18) |
$ (0.18) |
$ (0.35) | |
| Diluted |
$ (0.10) |
$ (0.18) |
$ (0.18) |
$ (0.35) | |
| Shares used in Per Common Share Calculations: | |||||
| Basic |
24,967 |
24,610 |
24,946 |
24,561 | |
| Diluted |
24,967 |
24,610 |
24,946 |
24,561 | |
| Stock-based compensation included in above figures: | |||||
| Cost of product revenue |
$ 278 |
$ 216 |
$ 491 |
$ 370 | |
| Cost of contract revenue |
162 |
114 |
325 |
173 | |
| Research & development |
101 |
128 |
98 |
95 | |
| Selling & marketing |
338 |
267 |
655 |
428 | |
| General & administrative |
1,016 |
808 |
1,928 |
1,405 | |
| Total |
$ 1,895 |
$ 1,533 |
$ 3,497 |
$ 2,471 | |
|
iRobot Corporation Condensed Consolidated Balance Sheet (in thousands) | |||
|
June 27, 2009 (unaudited) |
December 27, 2008 (audited) | ||
| Assets | |||
| Cash and equivalents |
$ 50,989 |
$ 40,852 | |
| Accounts receivable, net |
31,291 |
35,930 | |
| Unbilled revenues |
3,459 |
2,014 | |
| Inventory, net |
28,638 |
34,560 | |
| Deferred tax assets |
7,565 |
7,299 | |
| Other current assets |
5,498 |
3,340 | |
| Total current assets |
127,440 |
123,995 | |
| Property, plant and equipment, net |
21,672 |
22,929 | |
| Deferred tax assets |
4,508 |
4,508 | |
| Other assets |
12,000 |
12,246 | |
| Total assets |
$ 165,620 |
$ 163,678 | |
| Liabilities and stockholders' equity | |||
| Accounts payable |
$21,108 |
$ 19,544 | |
| Accrued expenses |
10,966 |
10,989 | |
| Accrued compensation |
7,027 |
6,393 | |
| Deferred revenue and customer advances |
2,974 |
2,632 | |
| Total current liabilities |
42,075 |
39,558 | |
| Long term liabilities |
4,229 |
4,444 | |
| Stockholders' equity |
119,316 |
119,676 | |
| Total liabilities and stockholders' equity |
$ 165,620 |
$ 163,678 | |
|
iRobot Corporation Consolidated Statement of Cash Flows (unaudited, in thousands) | |||||
|
For the three months ended |
For the six months ended | ||||
|
June 27, 2009 |
June 28, 2008 |
June 27, 2009 |
June 28, 2008 | ||
| Cash flows from operating activities: | |||||
| Net loss |
$ (2,609) |
$ (4,513) |
$ (4,396) |
$ (8,518) | |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||
| Depreciation and amortization |
1,950 |
1,725 |
3,864 |
3,291 | |
| Loss on disposal of fixed assets |
87 |
23 |
102 |
68 | |
| Stock-based compensation |
1,895 |
1,533 |
3,497 |
2,471 | |
| Benefit from deferred tax assets |
(511) |
- |
(511) |
- | |
| Non-cash director deferred compensation |
33 |
23 |
66 |
47 | |
| Changes in working capital - (use) source | |||||
| Accounts receivable |
(8,099) |
(2,330) |
4,639 |
23,428 | |
| Unbilled revenue |
(326) |
419 |
(1,445) |
54 | |
| Inventory |
2,104 |
2,928 |
5,922 |
1,934 | |
| Other assets |
(1,001) |
(4,047) |
(2,163) |
(8,116) | |
| Accounts payable |
1,981 |
(4,001) |
1,564 |
(20,732) | |
| Accrued expenses |
225 |
2,240 |
(33) |
179 | |
| Accrued compensation |
1,656 |
1,501 |
634 |
2,022 | |
| Deferred revenue |
256 |
(180) |
342 |
(628) | |
| Change in long term liabilities |
(108) |
4,659 |
(215) |
4,659 | |
| Net cash provided by (used in) operating activities |
(2,467) |
(20) |
11,867 |
159 | |
| Cash flows from investing activities: | |||||
| Purchase of property and equipment |
(1,672) |
(8,340) |
(2,448) |
(12,277) | |
| Purchases of investments |
- |
- |
- |
(29,997) | |
| Sales of investments |
- |
- |
- |
29,050 | |
| Net cash used in investing activities |
(1,672) |
(8,340) |
(2,448) |
(13,224) | |
| Cash flows from financing activities: | |||||
| Proceeds from stock option exercises |
132 |
162 |
459 |
732 |
|
| Income tax withholding payment associated with restricted stock award vesting |
(9) |
- |
(9) |
- |
|
| Tax benefit of excess stock based compensation deductions |
268 |
97 |
268 |
358 | |
| Net cash provided by financing activities |
391 |
259 |
718 |
1,090 | |
| Net increase (decrease) in cash and cash equivalents |
(3,748) |
(8,101) |
10,137 |
(11,975) | |
| Cash and cash equivalents, at beginning of period |
54,737 |
22,861 |
40,852 |
26,735 | |
| Cash and cash equivalents, at end of period |
50,989 |
14,760 |
50,989 |
14,760 | |
|
iRobot Corporation Supplemental Information (unaudited) | |||||
|
For the three months ended |
For the six months ended | ||||
|
June 27, 2009 |
June 28,
2008 |
June 27, 2009 |
June 28, 2008 | ||
| Revenues by business unit (in thousands): | |||||
| Home Robots | |||||
| Product |
$ 34,099 |
$ 41,705 |
$ 66,922 |
$ 71,798 | |
| Contract |
- |
- |
- |
55 | |
| Government & Industrial | |||||
| Product |
18,510 |
18,971 |
35,378 |
39,453 | |
| Contract |
8,731 |
6,526 |
15,976 |
13,198 | |
|
$ 61,340 |
$ 67,202 |
$ 118,276 |
$ 124,504 | ||
| Direct Revenue - Home Robots (in thousands) |
$ 6,037 |
$ 7,884 |
$ 11,689 |
$ 15,745 | |
| Product Lifecycle Revenue - Government & Industrial (in thousands) |
$ 4,542 |
$ 2,172 |
$ 8,931 |
$ 5,374 | |
| International Revenue (in thousands): | |||||
| Home Robots |
$19,741 |
$ 18,175 |
$ 37,279 |
$ 28,581 | |
| Government & Industrial |
$ 1,640 |
$ 398 |
$ 4,455 |
$ 1,209 | |
| Average selling prices for robot units: | |||||
| Home Robots |
$159 |
$ 157 |
$ 160 |
$ 160 | |
| Government & Industrial (in thousands) |
$ 93 |
$ 99 |
$ 88 |
$ 104 | |
| Gross Margin by business unit (in thousands): | |||||
| Home Robots |
$ 10,109 |
$ 10,759 |
$ 20,261 |
$ 18,828 | |
| Government & Industrial |
$ 6,300 |
$ 5,709 |
$ 12,354 |
$ 13,000 | |
|
$ 16,409 |
$ 16,468 |
$ 32,615 |
$ 31,828 | ||
| Units shipped by business unit: | |||||
| Home Robots (in thousands) |
192 |
237 |
375 |
406 | |
| Government & Industrial |
151 |
170 |
301 |
326 | |
| Government & Industrial Funded Backlog (in thousands) |
$ 17,537 |
$ 22,355 |
$ 17,537 |
$ 22,355 | |
| Days sales outstanding |
52 |
36 |
52 |
36 | |
| Inventory turnover |
5.2 |
4.1 |
5.2 |
4.1 | |
| Net cash provided by (used in) operating activities (in thousands) |
$ (2,467) |
$ (20) |
$ 11,867 |
$ 159 | |
| Headcount |
508 |
482 |
508 |
482 | |
|
iRobot Corporation Adjusted EBITDA Reconciliation to GAAP (unaudited, in thousands) | |||||
|
For the three months ended |
For the six months ended | ||||
|
June 27, 2009 |
June 28, 2008 |
June 27, 2009 |
June 28, 2008 | ||
| Net loss |
$ (2,609) |
$ (4,513) |
$ (4,396) |
$ (8,518) | |
| Interest income, net |
(15) |
(260) |
(36) |
(829) |
|
| Income tax benefit |
(1,092) |
(4,306) |
(3,072) |
(6,655) | |
| Depreciation |
1,820 |
1,725 |
3,613 |
3,291 | |
| Amortization |
128 |
- |
251 |
- | |
| EBITDA |
(1,768) |
(7,354) |
(3,640) |
(12,711) | |
| Stock-based compensation expense |
1,895 |
1,533 |
3,497 |
2,471 | |
| Adjusted EBITDA |
$ 127 |
$ (5,821) |
$ (143) |
$ (10,240) | |
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.
| Contact: | |
| Elise Caffrey Investor Relations iRobot Corp. (781) 430-3003 ecaffrey@irobot.com |
Nancy Smith |