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iRobot Reports Fourth-Quarter and Full-Year 2019 Financial Results
15% U.S. Revenue Growth and Prudent Cost Management Drive Better-than-Expected Operating Income and EPS

BEDFORD, Mass., Feb. 5, 2020 /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the fourth quarter and full year ended December 28, 2019.

iRobot logo. (PRNewsfoto/iRobot Corp.)

"We closed 2019 on a positive note by delivering fourth-quarter revenue, operating income and EPS that exceeded our October plans," said Colin Angle, chairman and chief executive officer of iRobot. "Our financial performance this quarter benefited from the combination of strong revenue growth in the United States and disciplined spending. Throughout 2019, we executed well on all major elements of our strategy while navigating increasingly challenging market conditions in the U.S. and intense price competition in EMEA. As a result, we maintained our Roomba leadership, took important steps to further broaden our product portfolio within and beyond RVCs, advanced our efforts to build out our Smart Home ecosystem, and made tangible progress diversifying our supply chain activities."

"Our newest pricing and promotional tactics played an important role in enabling us to defend our category leadership and hold share in the U.S. despite aggressive price competition," Angle continued. "We believe that consumer demand for RVCs remains fundamentally healthy, although we expect challenging U.S. market conditions to persist into 2020. As we move forward, we are focused on executing against our 2020 strategic priorities in ways that will enable us to drive near-term growth, fortify our leadership and set us up to capitalize on a broad range of exciting longer-term opportunities."

Commenting specifically on the company's 2020 financial outlook, Angle added, "2020 is shaping up to be a year of transition for iRobot. We anticipate 2020 revenue growth in the range of 9% to 11%, although our operating profitability and EPS are expected to be constrained primarily by pricing and promotional activity and tariff costs. While we plan to continue carefully managing our spending this year, it is imperative that we continue funding the investments that we believe will enable us to rebound in 2021 and beyond with accelerated revenue growth, meaningful improvements in operating income and robust operating cash flow generation."

Financial Performance Highlights

  • Revenue for the fourth quarter of 2019 grew 11% to $426.8 million over $384.7 million for the fourth quarter of 2018. Full-year 2019 revenue was $1,214.0 million, an increase of 11% over $1,092.6 million in 2018.
  • Q4 revenue growth of 11% reflected 15% growth in the U.S. and 6% international growth. Growth outside of the U.S. was led by 9% growth in EMEA, which was partially offset by a slight decline in Japan, as expected, and other smaller regions. Full-year 2019 international revenue grew 15% driven primarily by Japan at 21% and EMEA at 15%. Full-year 2019 revenue growth in the U.S. was 8%.
  • Q4 and full-year 2019 revenue growth was primarily driven by adoption of new products introduced since September 2018. The Roomba s9 Series, the Braava jet m6 Series and international sales of the Roomba i7 Series, generated 17% of 2019 total revenue. The company achieved its goal of surpassing $100 million in revenue for 2019 for the Braava family of robot mops.
  • Fourth-quarter 2019 operating income was $16.6 million, compared with $29.8 million in the fourth quarter of 2018. For 2019, operating income was $86.6 million versus $105.8 million for the full year 2018. Section 301 tariff costs significantly lowered fourth-quarter and full-year 2019 operating income by $21.9 million and $37.9 million, respectively.
  • Quarterly earnings per share were $0.70 for the fourth quarter of 2019, compared with $0.88 in the fourth quarter of 2018. Full-year 2019 earnings per share were $2.97, compared with $3.07 for full-year 2018. Full-year 2019 earnings per share included a $0.23 discrete tax benefit related to stock compensation versus a $0.23 discrete tax benefit related to stock compensation in 2018.
  • As of December 28, 2019, the company's cash, cash equivalents and short-term investments were $256.4 million, up from $91.1 million as of September 28, 2019, and $162.0 million as of December 29, 2018.

Q419 and Recent Business Highlights

  • In a separate announcement today, the company has appointed Julie Zeiler, vice president of finance, as its next executive vice president and chief financial officer, effective May 4, 2020. She will succeed Alison Dean, the company's CFO since 2013, who will be stepping down to spend more time with her family before pursuing other personal and professional interests.
  • Surpassed the 30 million robots sold milestone, which includes over nine million connected robots.
  • Delivered innovative, new digital features, such as Keep Out Zones and Smart Charge and Resume, for the Roomba s9 Series and i7 Series and the Braava jet m6 Series that leverage the spatial awareness of these robots to deliver more effective, efficient performance. In addition, Imprint Link compatibility was extended to the Roomba 900 Series, which enables these robots to pair with the Braava jet m6 robot and automatically trigger a mopping session to commence immediately after a 900 series Roomba robot completes its vacuuming mission.
  • Commenced Roomba production in Malaysia in late November, ahead of schedule.
  • Announced a partnership with IFTTT that is aimed at eventually enabling customers to more easily integrate devices and services, like smart thermostats, lighting and home security, directly within the iRobot HOME App.
  • Roomba s9+ was a 2020 CES Innovation Award honoree in the robotics category for its suite of groundbreaking technology built into a brand-new design. This award caps a highly productive year of award-winning innovation at iRobot.

Financial Expectations
Consistent with ongoing efforts to provide additional clarity into iRobot's operating performance and potential, iRobot is providing both GAAP and non-GAAP financial expectations for the fiscal year ending January 2, 2021. A detailed reconciliation between the company's GAAP and non-GAAP expectations is included in the attached financial tables.

Fiscal Year 2020:                                                                                          

Metric


GAAP


Adjustments


Non-GAAP

Revenue


$1.32 - $1.35 billion



$1.32 - $1.35 billion

Gross Profit


$507 - $520 million


~$3 million


$510 - $523 million

Operating Income


$15 - $35 million


~$40 million


$55 - $75 million

Earnings Per Share


$0.55 - $1.15


~$1.15


$1.70 - $2.30

Fourth-Quarter and Full-Year 2019 Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the fourth fiscal quarter 2019, major business developments and its outlook for fiscal year 2020 financial performance. Pertinent conference call details include:

Date:

Thursday, February 6

Time:

8:30 a.m. ET

Call-In Number:

213-358-0894

Conference ID:

1873658

A live webcast of the conference call, along with the conference call prepared remarks, will be accessible on the event section of the company's website at https://investor.irobot.com/events/event-details/q4-2019-irobot-corp-earnings-conference-call. 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 February 13, and can be accessed by dialing 404-537-3406, passcode 1873658.

About iRobot Corp.
iRobot®, the leading global consumer robot company, designs and builds robots that empower people to do more both inside and outside of the home. iRobot created the home robot cleaning category with the introduction of its Roomba® Robot Vacuum in 2002. Today, iRobot is a global enterprise that has sold more than 30 million robots worldwide. iRobot's product line, including the Roomba and the Braava® family of mopping robots, feature proprietary technologies and advanced concepts in cleaning, mapping and navigation. iRobot engineers are building an ecosystem of robots and technologies to enable the smart home. 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; future operating performance; growth and investment strategy; future expenditures; future market conditions; and anticipated revenue, gross profit, operating income, earnings per share and Section 301 tariff costs (and the financial impact thereof) for the fiscal year ending January 2, 2021. 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; the impact of tariffs on goods imported into the United States; general economic conditions; market acceptance of and adoption of our products; 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.

iRobot Corporation

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)


















 For the three months ended


For the twelve months ended


December 28,
2019


December 29,
2018


December 28,
2019


December 29,
2018

Revenue

$

426,778



$

384,665



$

1,214,010



$

1,092,584


Cost of revenue:








  Cost of product revenue

254,970



193,645



658,362



518,612


  Amortization of acquired intangible assets

2,438



4,509



11,721



18,544


Total cost of revenue

257,408



198,154



670,083



537,156


Gross profit

169,370



186,511



543,927



555,428


Operating expenses:








  Research and development

37,287



37,451



141,607



140,629


  Selling and marketing

94,046



94,142



231,548



210,411


  General and administrative

21,232



24,871



83,103



97,501


  Amortization of acquired intangible assets

255



260



1,051



1,065


      Total operating expenses

152,820



156,724



457,309



449,606


Operating income

16,550



29,787



86,618



105,822


Other income, net

8,502



437



12,215



2,800


Income before income taxes

25,052



30,224



98,833



108,622


Income tax expense

5,011



5,033



13,533



20,630


Net income

$

20,041



$

25,191



$

85,300



$

87,992










Net income per share:








   Basic

$

0.71



$

0.91



$

3.04



$

3.18


   Diluted

$

0.70



$

0.88



$

2.97



$

3.07










Number of shares used in per share calculations:








   Basic

28,300



27,714



28,097



27,692


   Diluted

28,563



28,579



28,735



28,640


















Stock-based compensation included in above figures:








        Cost of revenue

$

366



$

372



$

1,486



$

1,407


        Research and development

2,557



2,101



9,186



7,494


        Selling and marketing

857



810



3,323



2,842


        General and administrative

1,221



3,552



9,749



14,061


            Total

$

5,001



$

6,835



$

23,744



$

25,804


 

 iRobot Corporation

 Condensed Consolidated Balance Sheets

 (unaudited, in thousands)










December 28, 2019


December 29, 2018

 Assets




 Cash and cash equivalents

$

239,392



$

130,373


 Short term investments

17,032



31,605


 Accounts receivable, net

146,161



162,166


 Inventory

157,347



164,633


 Other current assets

34,285



25,660


Total current assets

594,217



514,437


 Property and equipment, net

75,988



57,026


 Operating lease right-of-use assets

47,478




 Deferred tax assets

41,791



36,979


 Goodwill

118,732



118,896


 Intangible assets, net

12,352



24,273


 Other assets

30,195



15,350


Total assets

$

920,753



$

766,961






 Liabilities and stockholders' equity




 Accounts payable

$

116,185



$

136,742


 Accrued expenses

81,768



71,259


 Deferred revenue and customer advances

4,549



5,756


Total current liabilities

202,502



213,757


 Operating lease liabilities

54,928




 Deferred tax liabilities

912



4,005


 Other long-term liabilities

10,342



13,877


Total long-term liabilities

66,182



17,882


Total liabilities

268,684



231,639


 Stockholders' equity

652,069



535,322


Total liabilities and stockholders' equity

$

920,753



$

766,961


 

 iRobot Corporation

Consolidated Statements of Cash Flows

 (unaudited, in thousands)










For the twelve months ended


December 28, 2019


December 29, 2018

Cash flows from operating activities:




Net income

$

85,300



$

87,992


Adjustments to reconcile net income to net cash provided by operating activities,
net of the effects of acquisition:




Depreciation and amortization

37,159



36,574


Gain on sale of equity investment

(8,439)




Stock-based compensation

23,744



25,804


Deferred income taxes, net

(11,118)



(10,848)


Other

7,267



1,837


Changes in operating assets and liabilities — (use) source




Accounts receivable

13,064



(23,920)


Inventory

7,307



(58,546)


Other current assets

(3,310)



(8,533)


Accounts payable

(20,536)



22,470


Accrued expenses and other liabilities

(386)



(1,145)


Net cash provided by operating activities

130,052



71,685






Cash flows from investing activities:




Additions of property and equipment

(35,337)



(32,422)


Change in other assets

(5,436)



(2,363)


Proceeds from sale of equity investment

9,787



856


Cash paid for business acquisition, net of cash acquired

(2,817)




Purchases of investments



(6,438)


Sales and maturities of investments

12,880



14,000


Net cash used in investing activities

(20,923)



(26,367)






Cash flows from financing activities:




Proceeds from employee stock plans

7,147



10,366


Income tax withholding payment associated with restricted stock vesting

(7,277)



(3,532)


Stock repurchases



(50,000)


Net cash used in financing activities

(130)



(43,166)






Effect of exchange rate changes on cash and cash equivalents

20



(414)


Net increase in cash and cash equivalents

109,019



1,738


Cash and cash equivalents, at beginning of period

130,373



128,635


Cash and cash equivalents, at end of period

$

239,392



$

130,373


 

 iRobot Corporation

Supplemental Information

(unaudited)






















For the three months ended


For the twelve
months ended


March 30,
2019


June 29,
2019


September 28,
2019


December 28,
2019


December 28,
2019

Revenue by Geography *










    Domestic

$

114,065



$

124,472



$

117,929



$

247,152



$

603,618


    International

123,596



135,700



171,470



179,626



610,392


     Total

$

237,661



$

260,172



$

289,399



$

426,778



$

1,214,010












Units shipped*










      Vacuum

764



935



975



1,730



4,403


      Mopping

112



139



156



179



586


     Total

876



1,074



1,131



1,909



4,989












Revenue by Product Category**










      Vacuum***

$

221



$

237



$

257



$

388



$

1,103


      Mopping***

17



23



32



39



111


     Total

$

238



$

260



$

289



$

427



$

1,214












Average gross selling prices for robot units

$

321



$

296



$

305



$

317



$

310












Section 301 tariff costs *

$

3,518



$

4,982



$

7,466



$

21,896



$

37,862


Section 301 tariff impact on gross and
operating margin

(1.5)

%


(1.9)

%


(2.6)

%


(5.1)

%


(3.1)

%











Days sales outstanding

21



32



53



31














Days in inventory

140



123



149



56














Headcount

1,072



1,120



1,132



1,128














* in thousands










** in millions










*** includes accessory revenue










Certain numbers may not total due to rounding









 

 iRobot Corporation

Supplemental Information

(unaudited)






















For the three months ended


For the twelve
months ended


March 31,
2018


June 30,
2018


September 29,
2018


December 29,
2018


December 29,
2018

Revenue by Geography *










    Domestic

$

106,862



$

111,526



$

127,240



$

215,368



$

560,995


    International

110,206



114,791



137,294



169,297



531,589


     Total

$

217,068



$

226,317



$

264,534



$

384,665



$

1,092,584












Units shipped*










      Vacuum

712



819



942



1,520



3,993


      Mopping

103



134



145



162



544


     Total

815



953



1,087



1,682



4,537












Revenue by Product Category**










      Vacuum***

$

201



$

204



$

242



$

361



$

1,008


      Mopping***

16



22



23



24



85


     Total

$

217



$

226



$

265



$

385



$

1,093












Average gross selling prices for robot units

$

309



$

285



$

276



$

304



$

294












Section 301 tariff costs *

$



$



$



$

2,155



2,155


Section 301 tariff impact on gross and
operating margin

%


%


%


(0.6)

%


(0.2)

%











Days sales outstanding

29



30



38



38














Days in inventory

101



97



113



76














Headcount

954



982



1,003



1,032














* in thousands










** in millions










*** includes accessory revenue










Certain numbers may not total due to rounding









iRobot Corporation
Explanation of Non-GAAP Measures

In addition to disclosing financial results in accordance with U.S. GAAP, this earnings release contains references to the non-GAAP financial measures described below. We use non-GAAP measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures.

Our non-GAAP financial measures reflect adjustments based on the following items. We also provide a non-GAAP financial measure of Adjusted EBITDA, as described below. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.

Amortization of acquired intangible assets: Amortization of acquired intangible assets consists of amortization of intangible assets including completed technology, customer relationships, and reacquired distribution rights acquired in connection with business combinations. Amortization charges for our acquisition-related intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.

Net Merger, Acquisition and Divestiture (Income) Expense: Net merger, acquisition and divestiture (income) expense primarily consists of transaction fees, professional fees, and transition and integration costs directly associated with mergers, acquisitions and divestitures. It also includes business combination adjustments including adjustments after the measurement period has ended. The occurrence and amount of these costs will vary depending on the timing and size of these transactions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.

Stock-Based Compensation: Stock-based compensation is a non-cash charge relating to stock-based awards. We exclude this expense as it is a non-cash expense, and we assess our internal operations excluding this expense and believe it facilitates comparisons to the performance of other companies.

IP Litigation Expense, Net: IP litigation expense, net relates to legal costs incurred to litigate patent, trademark, copyright and false advertising infringements, or to oppose or defend against interparty actions related to intellectual property. Any settlement payment or proceeds resulting from these infringements are included or netted against the costs. We exclude these costs from our non-GAAP measures as we do not believe these costs have a direct correlation to the operations of our business and may vary in size depending on the timing and results of such litigations and settlements.

Gain/Loss on Strategic Investments: Gain/loss on strategic investments includes fair value adjustments, realized gains and losses on the sales of these investments and losses on the impairment of these investments. We exclude these items from our non-GAAP measures because we do not believe they correlate to the performance of our core business and may vary in size based on market conditions and events. We believe that the exclusion of these gains or losses provides investors with a supplemental view of our operational performance.

Income tax adjustments: Income tax adjustments include the tax effect of the non-GAAP adjustments, calculated using the appropriate statutory tax rate for each adjustment. We reassess the need for any valuation allowance recorded based on the non-GAAP profitability and have eliminated the effect of the valuation allowance recorded in the U.S. jurisdiction. We also exclude certain tax items that are not reflective of income tax expense incurred as a result of current period earnings. These certain tax items include, among other non-recurring tax items, impacts from the Tax Cuts and Jobs Act of 2017 and stock-based compensation windfalls/shortfalls. We believe disclosure of the income tax provision before the effect of such tax items is important to permit investors' consistent earnings comparison between periods.

Adjusted EBITDA:  We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, net merger, acquisition and divestiture expense, gain on business acquisition, net intellectual property litigation expense, and restructuring expense. Management believes this non-GAAP measure is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.

iRobot Corporation

Supplemental Reconciliation of GAAP Net Income to Adjusted EBITDA

 (unaudited, in thousands)










For the three months ended


For the twelve months ended


December 28,
2019


December 29,
2018


December 28,
2019


December 29,
2018

 GAAP Net Income

$

20,041



$

25,191



$

85,300



$

87,992










 Interest income, net

(459)



(248)



(2,546)



(944)


 Income tax expense

5,011



5,033



13,533



20,630


 Depreciation

6,722



4,805



24,387



16,965


 Amortization of acquired intangible assets

2,693



4,769



12,772



19,609










 EBITDA

34,008



39,550



133,446



144,252










 Stock-based compensation

5,001



6,835



23,744



25,804


 Net merger, acquisition and divestiture (income)
expense

138



115



466



138


 IP litigation expense, net

2,582



39



2,218



3,556










 Adjusted EBITDA

$

41,729



$

46,539



$

159,874



$

173,750


 Adjusted EBITDA as a % of revenue

9.8

%


12.1

%


13.2

%


15.9

%

 

iRobot Corporation

Supplemental Reconciliation of 2019 GAAP Actuals to 2019 Non-GAAP Actuals

(in thousands, except per share amounts)

(unaudited)






















For the three months ended


For the twelve
months ended


March 30,
2019


June 29,
2019


September 28,
2019


December 28,
2019


December 28,
2019

 GAAP Revenue

$

237,661



$

260,172



$

289,399



$

426,778



$

1,214,010












 GAAP Gross Profit

$

119,546



$

118,170



$

136,841



$

169,370



$

543,927


Amortization of acquired intangible assets

3,077



3,111



3,095



2,438



11,721


Stock-based compensation

378



405



337



366



1,486


 Non-GAAP Gross Profit

$

123,001



$

121,686



$

140,273



$

172,174



$

557,134


 Non-GAAP Gross Margin

51.8

%


46.8

%


48.5

%


40.3

%


45.9

%











 GAAP Operating Income

$

22,263



$

5,250



$

42,555



$

16,550



$

86,618


Amortization of acquired intangible assets

3,348



3,380



3,351



2,693



12,772


Stock-based compensation

6,864



7,594



4,284



5,001



23,744


Net merger, acquisition and divestiture
(income) expense

152



143



32



138



466


IP litigation expense, net

469



(676)



(157)



2,582



2,218


 Non-GAAP Operating Income

$

33,096



$

15,691



$

50,065



$

26,964



$

125,818


 Non-GAAP Operating Income Margin

13.9

%


6.0

%


17.3

%


6.3

%


10.4

%











 GAAP Income Tax (Benefit) Expense

$

1,023



$

(424)



$

7,923



$

5,011



$

13,533


Tax effect of non-GAAP adjustments

1,824



1,797



(132)



1,159



4,648


Other tax adjustments

4,067



1,461



133



1,267



6,928


 Non-GAAP Income Tax Expense

$

6,914



$

2,834



$

7,924



$

7,437



$

25,109












 GAAP Net Income

$

22,520



$

7,207



$

35,532



$

20,041



$

85,300


Amortization of acquired intangible assets

3,348



3,380



3,351



2,693



12,772


Stock-based compensation

6,864



7,594



4,284



5,001



23,744


Net merger, acquisition and divestiture
(income) expense

152



143



32



138



466


IP litigation expense, net

469



(676)



(157)



2,582



2,218


(Gain)/loss on strategic investments

57



(629)





(8,332)



(8,904)


Income tax effect

(5,891)



(3,258)



(1)



(2,426)



(11,576)


 Non-GAAP Net Income

$

27,519



$

13,761



$

43,041



$

19,697



$

104,020
































iRobot Corporation

Supplemental Reconciliation of 2019 GAAP Actuals to 2019 Non-GAAP Actuals continued

(in thousands, except per share amounts)

(unaudited)






















For the three months ended


For the twelve
months ended


March 30,
2019


June 29,
2019


September 28,
2019


December 28,
2019


December 28,
2019

 GAAP Net Income Per Diluted Share

$

0.78



$

0.25



$

1.24



$

0.70



$

2.97


Amortization of acquired intangible assets

0.12



0.12



0.12



0.09



0.44


Stock-based compensation

0.24



0.26



0.15



0.18



0.83


Net merger, acquisition and divestiture
(income) expense









0.01


IP litigation expense, net

0.02



(0.02)



(0.01)



0.09



0.08


(Gain)/loss on strategic investments



(0.02)





(0.29)



(0.31)


Income tax effect

(0.20)



(0.11)





(0.08)



(0.40)


 Non-GAAP Net Income Per Diluted Share

$

0.96



$

0.48



$

1.50



$

0.69



$

3.62












Number of shares used in diluted per share
calculation

28,763



28,763



28,650



28,563



28,735












Section 301 Tariff Costs










Section 301 tariff costs

$

3,518



$

4,982



$

7,466



$

21,896



$

37,862


Impact of Section 301 tariff costs to gross and
operating margin (GAAP & non-GAAP)

(1.5)

%


(1.9)

%


(2.6)

%


(5.1)

%


(3.1)

%

Impact of Section 301 tariff costs to net
income per diluted share (GAAP & non-
GAAP)

$

(0.12)



$

(0.17)



$

(0.26)



$

(0.77)



$

(1.32)












Certain numbers may not total due to rounding









Net merger, acquisition and divestiture (income) expense and IP litigation, net are classified in General and Administrative

 

iRobot Corporation

Supplemental Reconciliation of 2018 GAAP Actuals to 2018 Non-GAAP Actuals

(in thousands, except per share amounts)

(unaudited)






















For the three months ended


For the twelve
months ended


March 31,
2018


June 30,
2018


September 29,
2018


December 29,
2018


December 29,
2018

 GAAP Revenue

$

217,068



$

226,317



$

264,534



$

384,665



$

1,092,584












 GAAP Gross Profit

$

115,785



$

117,926



$

135,206



$

186,511



$

555,428


Amortization of acquired intangible assets

4,782



4,679



4,574



4,509



18,544


Stock-based compensation

341



347



347



372



1,407


 Non-GAAP Gross Profit

$

120,908



$

122,952



$

140,127



$

191,392



$

575,379


 Non-GAAP Gross Margin

55.7

%


54.3

%


53.0

%


49.8

%


52.7

%











 GAAP Operating Income

$

25,405



$

13,355



$

37,275



$

29,787



$

105,822


Amortization of acquired intangible assets

5,055



4,948



4,837



4,769



19,609


Stock-based compensation

5,946



6,431



6,592



6,835



25,804


Net merger, acquisition and divestiture
(income) expense

(141)



164





115



138


IP litigation expense, net

2,571



759



187



39



3,556


 Non-GAAP Operating Income

$

38,836



$

25,657



$

48,891



$

41,545



$

154,929


 Non-GAAP Operating Income Margin

17.9

%


11.3

%


18.5

%


10.8

%


14.2

%











 GAAP Income Tax (Benefit) Expense

$

5,523



$

4,391



$

5,683



$

5,033



$

20,630


Tax effect of non-GAAP adjustments

3,340



2,830



2,835



2,849



11,854


Other tax adjustments

712



(2,440)



2,667



1,170



2,109


 Non-GAAP Income Tax Expense

$

9,575



$

4,781



$

11,185



$

9,052



$

34,593












 GAAP Net Income

$

20,401



$

10,471



$

31,929



$

25,191



$

87,992


Amortization of acquired intangible assets

5,055



4,948



4,837



4,769



19,609


Stock-based compensation

5,946



6,431



6,592



6,835



25,804


Net merger, acquisition and divestiture
(income) expense

(141)



164





115



138


IP litigation expense, net

2,571



759



187



39



3,556


(Gain)/loss on strategic investments

281



(682)



26



(61)



(436)


Income tax effect

(4,052)



(390)



(5,502)



(4,019)



(13,963)


 Non-GAAP Net Income

$

30,061



$

21,701



$

38,069



$

32,869



$

122,700
































iRobot Corporation

Supplemental Reconciliation of 2018 GAAP Actuals to 2018 Non-GAAP Actuals continued

(in thousands, except per share amounts)

(unaudited)






















For the three months ended


For the twelve
months ended


March 31,
2018


June 30,
2018


September 29,
2018


December 29,
2018


December 29,
2018

 GAAP Net Income Per Diluted Share

$

0.71



$

0.37



$

1.12



$

0.88



$

3.07


Amortization of acquired intangible assets

0.17



0.17



0.17



0.17



0.69


Stock-based compensation

0.20



0.23



0.23



0.24



0.90


Net merger, acquisition and divestiture
(income) expense










IP litigation expense, net

0.09



0.03



0.01





0.13


(Gain)/loss on strategic investments

0.01



(0.02)







(0.02)


Income tax effect

(0.14)



(0.01)



(0.19)



(0.14)



(0.49)


 Non-GAAP Net Income Per Diluted Share

$

1.04



$

0.77



$

1.34



$

1.15



$

4.28












Number of shares used in diluted per share
calculation

28,923



28,337



28,506



28,579



28,640












Section 301 Tariff Costs










Section 301 tariff costs

$



$



$



$

2,155



$

2,155


Impact of Section 301 tariff costs to gross and
operating margin (GAAP & non-GAAP)

%


%


%


(0.6)

%


(0.2)

%

Impact of Section 301 tariff costs to net
income per diluted share (GAAP & non-
GAAP)

$



$



$



$

(0.08)



$

(0.08)












Certain numbers may not total due to rounding









Net merger, acquisition and divestiture (income) expense and IP litigation, net are classified in General and Administrative

 

 iRobot Corporation

Supplemental Reconciliation of Fiscal Year 2020 GAAP to Non-GAAP Guidance

(unaudited)






FY-20

GAAP Gross Profit

$507 - $520 million

Amortization of acquired intangible assets

~$2 million

Stock-based compensation

~$1 million

Total adjustments

~$3 million

Non-GAAP Gross Profit

$510 - $523 million




FY-20

GAAP Operating Income

$15 - $35 million

Amortization of acquired intangible assets

~$2 million

Stock-based compensation

~$31 million

IP litigation expense, net

~$7 million

Total adjustments

~$40 million

Non-GAAP Operating Income

$55 - $75 million



Section 301 tariff costs

~$47 - ~$50 million

Impact of Section 301 tariff costs to gross and operating income margin

 (~4%)




FY-20

GAAP Net Income Per Diluted Share

$0.55 - $1.15

Amortization of acquired intangible assets

~$0.07

Stock-based compensation

~$1.08

IP litigation expense, net

~$0.24

Income tax effect

~($0.24)

Total adjustments

~$1.15

Non-GAAP Net Income Per Diluted Share

$1.70 - $2.30



Number of shares used in diluted per share calculations

~28.8 million

 

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SOURCE iRobot Corp.

Andrew Kramer, Investor Relations, iRobot Corp., (781) 430-3003, akramer@irobot.com; Charlie Vaida, Media Relations, iRobot Corp., (781) 430-3182, cvaida@irobot.com