News Release

Q2 2015:

Revenue

$143 - $146 million

Earnings Per Share

$0.02 - $0.06         

Adjusted EBITDA

$8 - $10 million

Fiscal Year 2015:

Current                    

Prior

Revenue

$625 - $635 million    

$625 - $635 million

Earnings Per Share

$1.25 - $1.35     

$1.25 - $1.45

Adjusted EBITDA

$85 - $90 million        

$85 - $95 million

Date:

Wednesday, April 22, 2015  

Time:

8:30 a.m. ET

Call-In Number:

847-619-6396

Passcode:

38036249

iRobot Corporation 

Consolidated Statement of Income

(in thousands, except per share amounts)

(unaudited)

For the three months ended

March 28,

March 29,

2015

2014

Revenue

$       117,961

$       114,204

Cost of revenue

64,253

62,494

Gross margin

53,708

51,710

Operating expenses:

  Research and development

19,032

16,934

  Selling and marketing

14,188

14,532

  General and administrative

12,589

12,264

      Total operating expenses

45,809

43,730

Operating income

7,899

7,980

Other income (expense), net

(794)

(187)

Income before income taxes

7,105

7,793

Income tax expense

2,351

2,513

Net income

$           4,754

$           5,280

Net income per share

   Basic

$            0.16

$            0.18

   Diluted

$            0.16

$            0.18

Number of shares used in calculations per share

   Basic

29,653

29,189

   Diluted

30,230

30,033

Stock-based compensation included in above figures:

        Cost of revenue

$             215

$             169

        Research and development

832

731

        Selling and marketing

309

338

        General and administrative

1,751

1,840

            Total

$           3,107

$           3,078

 iRobot Corporation 

 Condensed Consolidated Balance Sheet 

 (unaudited, in thousands) 

March 28,

December 27,

2015

2014

 Assets 

 Cash and cash equivalents 

$          183,661

$        185,957

 Short term investments 

37,256

36,166

 Accounts receivable, net 

37,705

71,056

 Unbilled revenue 

633

2,614

 Inventory 

49,698

47,857

 Deferred tax assets 

22,030

21,505

 Other current assets 

9,501

9,704

   Total current assets 

340,484

374,859

 Property and equipment, net 

30,501

31,297

 Deferred tax assets 

8,393

8,409

 Goodwill 

48,751

48,751

 Intangible assets, net 

18,274

19,146

 Other assets 

11,265

10,751

 Total assets 

$          457,668

$        493,213

 Liabilities and stockholders' equity 

 Accounts payable 

$           35,666

$          60,256

 Accrued expenses 

14,322

18,701

 Accrued compensation 

7,805

16,235

 Deferred revenue and customer advances 

1,769

3,849

   Total current liabilities 

59,562

99,041

 Long term liabilities 

3,819

3,736

 Stockholders' equity 

394,287

390,436

 Total liabilities and stockholders' equity 

$          457,668

$        493,213

 iRobot Corporation 

  Consolidated Statement of Cash Flows 

 (unaudited, in thousands) 

For the three months ended

March 28,

March 29,

2015

2014

Cash flows from operating activities:

Net income

$            4,754

$            5,280

Adjustments to reconcile net income to net cash provided by (used in)
operating activities:

Depreciation and amortization 

3,561

3,142

(Gain)/Loss on disposal of property and equipment

22

(10)

Stock-based compensation 

3,107

3,078

Deferred income taxes, net

(102)

1,912

Tax benefit of excess stock based compensation deductions

(560)

(2,231)

Non-cash director deferred compensation 

38

11

Changes in operating assets and liabilities — (use) source

Accounts receivable 

33,351

2,808

Unbilled revenue 

1,981

(75)

Inventory 

(1,998)

4,080

Other assets 

203

(3,588)

Accounts payable 

(21,835)

(7,924)

Accrued expenses 

(4,374)

(1,399)

Accrued compensation 

(8,430)

(11,862)

Deferred revenue and customer advances

(2,080)

(665)

Long term liabilities

83

(319)

Net cash provided by (used in) operating activities 

7,721

(7,762)

Cash flows from investing activities:

Additions of property and equipment 

(4,445)

(2,177)

Change in other assets

(515)

-

Purchases of investments 

(3,541)

(11,211)

Sales of investments 

2,500

2,500

Net cash used in investing activities 

(6,001)

(10,888)

Cash flows from financing activities:

Proceeds from stock option exercises 

1,466

6,957

Income tax withholding payment associated with restricted stock vesting

(1,118)

(1,118)

Stock repurchases

(4,924)

-

Tax benefit of excess stock based compensation deductions

560

2,231

Net cash provided by (used in) financing activities 

(4,016)

8,070

Net decrease in cash and cash equivalents 

(2,296)

(10,580)

Cash and cash equivalents, at beginning of period 

185,957

165,404

Cash and cash equivalents, at end of period 

$        183,661

$        154,824

 iRobot Corporation 

Supplemental Information

(unaudited)

For the three months ended

March 28,

March 29,

2015

2014

Revenue: *

Home Robots

$        111,085

$        108,035

    Domestic

$          40,627

$          41,030

    International

$          70,458

$          67,005

Defense & Security

$            6,526

$            5,602

    Domestic

$            3,853

$            3,135

    International

$            2,673

$            2,467

    Product

$            6,372

$            5,592

    Contract

$               154

$                 10

    Product Life Cycle

$            4,728

$            3,533

Gross Margin Percent:

    Home Robots

51.1%

50.4%

    Defense & Security

33.2%

37.2%

    Total Company

45.5%

45.3%

Units shipped:

    Home Robots *

491

465

    Defense & Security

28

38

Average gross selling prices for robot units:

    Home Robots

$               238

$               243

    Defense & Security *

$                 59

$                 54

Defense & Security Funded Product Backlog *

$          13,655

$          12,444

Days sales outstanding

30

30

Days in inventory

71

61

Headcount

589

539

* in thousands

 iRobot Corporation  

 Adjusted EBITDA Reconciliation to GAAP 

 (unaudited, in thousands) 

For the three months ended

March 28,

March 29,

2015

2014

 Net income 

$            4,754

$            5,280

 Interest income, net 

(154)

(145)

 Income tax expense 

2,351

2,513

 Depreciation 

2,621

2,167

 Amortization 

940

975

 EBITDA 

10,512

10,790

 Stock-based compensation expense 

3,107

3,078

 Merger and acquisition expense 

-

-

 Net intellectual property litigation expense 

(510)

369

 Restructuring expense 

-

-

 Adjusted EBITDA 

$          13,109

$          14,237

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, amortization, stock-based compensation expense, merger and acquisition expense, net intellectual property litigation expense, and restructuring expense. 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.