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iRobot Reports First-Quarter 2012 Financial Results

BEDFORD, Mass., Apr 24, 2012 (BUSINESS WIRE) --iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the first quarter ended March 31, 2012.

  • Revenue for the first quarter of 2012 was $97.8 million, compared with $106.3 million for the same quarter one year ago.
  • Net income in the first quarter of 2012 was $0.7 million, compared with $7.5 million in the first quarter of 2011.
  • Quarterly earnings per share were $0.02, compared with $0.27 in the first quarter last year.
  • Adjusted EBITDA for the first quarter of 2012 was $6.1 million, compared with $15.2 million in the first quarter of 2011.

"We kicked off 2012 with a better than anticipated quarter, and therefore we are reaffirming our full-year fiscal 2012 financial expectations. The results and outlook for our Home Robot business are excellent while the near-term visibility in our Defense & Security business continues to be limited," said Colin Angle, chairman and chief executive officer of iRobot.

"The improvement in domestic sales, expanded distribution of new products and further penetration into long-term international markets will drive growth in the Home Robot business. Orders for FirstLook and SUGV robots from the U.S. military and sales to foreign countries will support our Defense & Security business in the second half of 2012."

Business Highlights

  • Strong growth in both domestic and international markets fueled a 20 percent year-over-year Q1 increase in Home Robot revenue. For the full year, we have increased our expectations for the Home Robot business and now expect revenue in this business unit to comprise 75 percent of total company revenue.
  • Defense & Security Q1 results were below our expectations. We continue to experience funding delays that will impact Q2 revenue as well. We have reflected that impact in our lower full-year expectations for this business unit.
  • In mid-April, we launched one of the largest domestic marketing campaigns in our history. The multifaceted media blitz, based on the concept "iRobot, Do You?", includes an extensive integrated presence on television, online and print publications.

Financial Expectations

Management provides the following expectations with respect to the second quarter ending June 30, 2012 and full year ending December 29, 2012.

Q2 2012:

Revenue $102 - $112 million
Earnings Per Share $0.05 - $0.13
Adjusted EBITDA $7 - $10 million

Fiscal Year 2012:

Revenue $465 - $485 million
Earnings Per Share $0.75 - $0.95
Adjusted EBITDA $56 - $63 million

Full-Year 2012 Business Unit Revenue

Home Robots $345 - $355 million
Defense & Security Robots $120 - $130 million

First-Quarter Conference Call

iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its results for the first fiscal quarter 2012, business outlook, and outlook for 2012 financial performance. Pertinent details include:

Date: Wednesday, April 25, 2012
Time: 8:30 a.m. ET
Call-In Number: 847-413-3362
Passcode: 32231617

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 May 2, and can be accessed by dialing 630-652-3042, passcode 32231617#.

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 defense & security 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 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, demand for our robots, and operating performance, anticipated mix of revenue for the year ending December 29, 2012 and the second quarter ending June 30, 2012, and anticipated revenue, earnings per share and Adjusted EBITDA for the year ending December 29, 2012 and the second quarter ending June 30, 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 expenses, restructuring expenses, 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
March 31, April 2,
2012 2011
Revenue
Product revenue $ 91,742 $ 96,711
Contract revenue 6,065 9,566
Total 97,807 106,277
Cost of Revenue
Product revenue 58,275 56,190
Contract revenue 5,519 6,633
Total 63,794 62,823
Gross Margin 34,013 43,454
Operating Expense
Research & development 8,724 8,729
Selling & marketing 13,570 12,981
General & administrative 11,042 10,600
Total 33,336 32,310
Operating income 677 11,144
Other income (expense), net 220 238
Pre-tax income 897 11,382
Income tax expense 244 3,905
Net income $ 653 $ 7,477
Net income per common share:
Basic $ 0.02 $ 0.29
Diluted $ 0.02 $ 0.27
Shares used in per common share calculations:
Basic 27,352 26,089
Diluted 28,283 27,485
Stock-based compensation included in above figures:
Cost of product revenue $ 291 $ 250
Cost of contract revenue 118 95
Research & development 259 81
Selling & marketing 237 181
General & administrative 1,608 1,172
Total $ 2,513 $ 1,779
iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)
March 31, December 31,
2012 2011
Assets
Cash and equivalents $ 166,798 $ 166,308
Short term investments 15,277 17,811
Accounts receivable, net 29,907 43,338
Unbilled revenues 1,240 2,362
Inventory 31,681 31,089
Deferred tax assets 16,222 15,344
Other current assets 5,078 7,928
Total current assets 266,203 284,180
Property, plant and equipment, net 28,209 29,029
Deferred tax assets 12,640 6,127
Other assets 18,784 12,877
Total assets $ 325,836 $ 332,213
Liabilities and stockholders' equity
Accounts payable $ 44,302 $ 48,406
Accrued expenses 19,108 17,188
Accrued compensation 7,730 17,879
Deferred revenue and customer advances 2,422 1,527
Total current liabilities 73,562 85,000
Long term liabilities 4,189 4,255
Stockholders' equity 248,085 242,958
Total liabilities and stockholders' equity $ 325,836 $ 332,213
iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
For the three months ended
March 31, April 2,
2012 2011
Cash flows from operating activities:
Net income $ 653 $ 7,477
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 2,602 2,183
Loss on disposal of property and equipment 69 470
Stock-based compensation 2,513 1,779
Deferred income taxes, net (6,694 ) 2,442
Tax benefit of excess stock based compensation deductions (705 ) (2,442 )
Non-cash director deferred compensation 22 38
Changes in operating assets and liabilities -- (use) source
Accounts receivable 13,431 6,447
Unbilled revenue 1,122 (3,922 )
Inventory (592 ) (7,911 )
Other assets 2,832 (1,929 )
Accounts payable (4,104 ) 5,555
Accrued expenses 2,003 (915 )
Accrued compensation (10,149 ) (9,678 )
Deferred revenue 895 114
Change in long term liabilities (66 ) 389
Net cash provided by operating activities 3,832 97
Cash flows from investing activities:
Purchase of property and equipment (1,643 ) (4,554 )
Change in other assets (6,000 ) -
Purchases of investments - (5,000 )
Sales of investments 2,500 2,500
Net cash used in investing activities (5,143 ) (7,054 )
Cash flows from financing activities:
Proceeds from stock option exercises 1,323 4,584
Income tax withholding payment associated with restricted stock vesting (227 ) (453 )
Tax benefit of excess stock based compensation deductions 705 2,442
Net cash provided by financing activities 1,801 6,573
Net increase (decrease) in cash and cash equivalents 490 (384 )
Cash and cash equivalents, at beginning of period 166,308 108,383
Cash and cash equivalents, at end of period $ 166,798 $ 107,999
iRobot Corporation
Supplemental Information
(unaudited)
For the three months ended
March 31, April 2,
2012 2011
Revenue: *
Home Robots $ 81,583 $ 67,882
Domestic $ 21,815 $ 18,058
International $ 59,768 $ 49,824
Defense & Security $ 16,224 $ 38,395
Domestic $ 12,177 $ 30,202
International $ 4,047 $ 8,193
Product $ 10,159 $ 28,829
Contract $ 6,065 $ 9,566
Product Life Cycle $ 4,890 $ 12,702
Gross Margin Percent:
Home Robots 45.3% 45.5%
Defense & Security -18.1% 32.7%
Total Company 34.8% 40.9%
Units shipped:
Home Robots * 392 349
Defense & Security 138 114
Average gross selling prices for robot units:
Home Robots $ 214 $ 193
Defense & Security * $ 38 $ 141
Defense & Security Funded Product Backlog * $ 6,000 $ 8,302
Days sales outstanding 29 31
Days in inventory 50 55
Headcount 620 692
* in thousands
iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
For the three months ended
March 31, April 2,
2012 2011
Net income $ 653 $ 7,477
Interest income, net (262 ) (210 )
Income tax expense 244 3,905
Depreciation 2,394 2,058
Amortization 208 125
EBITDA 3,237 13,355
Stock-based compensation expense 2,513 1,779
Merger and acquisition expense 12 -
Net intellectual property litigation expense 37 94
Restructuring expense 278 -
Adjusted EBITDA $ 6,077 $ 15,228
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.

SOURCE: iRobot Corp.

iRobot Corp.
Elise Caffrey, 781-430-3003
Investor Relations
ecaffrey@irobot.com
or
Charlie Vaida, 781-430-3182
Media Relations
cvaida@irobot.com