43 Percent Year-Over-Year Revenue Growth Driven By Home Robot Division Management Reaffirms Full Year Financial Expectations
BEDFORD, Mass., July 23, 2008 – iRobot Corp. (NASDAQ: IRBT) today announced its financial results for the fiscal quarter ended June 28, 2008. Revenue for the second quarter of 2008 grew 42.9 percent to $67.2 million, compared with $47.0 million for the same quarter one year ago. Revenue for the first half increased 43.9 percent to $124.5 million from $86.5 million for the first half of 2007.
Gross profit for the second quarter increased to $16.5 million (24.5 percent of revenue), compared with $15.2 million (32.4 percent of revenue) in the second quarter of 2007. During the quarter, gross profit was negatively impacted primarily by revenue mix. First half 2008 gross profit totaled $31.8 million (25.6 percent of revenue) up from $26.3 million (30.5 percent of revenue) in the first half of 2007.
Net loss in the second quarter of 2008 was $4.5 million compared with a net loss in the second quarter of 2007 of $4.8 million. Net loss in the first half of 2008 was $8.5 million compared with a 2007 first half net loss of $10.3 million. Net loss per share for the second quarter of 2008 was $0.18 compared with $0.20 for the second quarter of 2007. For the first half of 2008, net loss per share was $0.35 compared with $0.43 for the same period in 2007. Net loss per share results for the second quarter and first half 2008 were both favorably impacted by $0.04 due to a cumulative tax rate change booked in the second quarter.
“In the second quarter we achieved our 16th consecutive quarter of year-over-year revenue growth despite increasing economic headwinds. Our strong revenue performance drove first half results that were substantially better than the guidance we provided for the period,” said Colin Angle, chief executive officer of iRobot. “The company performed well in a difficult environment. The second quarter and first half results demonstrate the resiliency of our business in an unstable economic market,” he added.
Business Highlights:
- In the second quarter, total home robot revenue increased 143 percent year-over-year. International home robot revenue was up more than five times the level of Q2 2007 and comprised approximately 40 percent of total home robot revenue in the quarter.
- iRobot received orders from PEO STRI totaling $39.5 million for its PackBot robots under the company’s xBot contract, as well as for robots to be used for explosive ordnance disposal missions.
- U.S. Army announced acceleration of its Future Combat Systems (FCS) Program and inclusion of iRobot in SpinOut 1, under which the first FCS products will be delivered.
- iRobot announced a sole licensing agreement with UW TechTransfer at the University of Washington to commercialize Autonomous Underwater Vehicle Seaglider technology.
Financial Expectations
Based on its financial results for the first half of 2008 and the outlook for the remainder of the year, management today is reaffirming its outlook for revenue and pre-tax income for the full year 2008. Management currently expects revenues to be between $295 million and $305 million and pre-tax income to be between $5 million and $7 million. Estimated effective tax rate is expected to be 43.9% for the full year, consistent with the first half rate.
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 28, 2008, business outlook and outlook for future financial performance. To access the call, investors should dial 719-325-4867 approximately 10 minutes prior to the initiation of the teleconference and reference iRobot. 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 through midnight on August 7, and can be accessed by dialing 719-457-0820, access code 4007782.
About iRobot Corp.
iRobot is a provider of robots that perform dull, dirty or dangerous missions in a better way. The company's proprietary technology, iRobot AWARE Robot Intelligence Systems, incorporates advanced concepts in navigation, mobility, manipulation and artificial intelligence. This proprietary system enables iRobot to build behavior-based robots, including its family of consumer and military robots. For additional 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 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.
|
iRobot Corporation Consolidated Statement of Operations (in thousands, except per share amounts) (unaudited) | |||||
|
For the three months ended |
For the six months ended | ||||
|
June 28, 2008 |
June 30, 2007 |
June 28, 2008 |
June 30, 2007 | ||
| Revenue | |||||
| Product revenue |
$ 60,676 |
$ 41,361 |
$ 111,251 |
$ 75,482 | |
| Contract revenue |
6,526 |
5,653 |
13,253 |
11,019 | |
| Total |
67,202 |
47,014 |
124,504 |
86,501 | |
| Cost of Revenue | |||||
| Product revenue |
44,382 |
27,238 |
80,577 |
50,724 | |
| Contract revenue |
6,352 |
4,552 |
12,099 |
9,436 | |
| Total |
50,734 |
31,790 |
92,676 |
60,160 | |
| Gross Profit |
16,468 |
15,224 |
31,828 |
26,341 | |
| Operating Expense | |||||
| Research & development |
4,718 |
4,179 |
8,691 |
8,335 | |
| Selling & marketing |
13,471 |
10,944 |
24,929 |
18,993 | |
| General & administrative |
7,340 |
5,752 |
14,118 |
11,079 | |
| Total |
25,529 |
20,875 |
47,738 |
38,407 | |
| Operating loss |
(9,061) |
(5,651) |
(15,910) |
(12,066) | |
| Other income, net |
242 |
887 |
737 |
1,818 | |
| Pre-tax loss |
(8,819) |
(4,764) |
(15,173) |
(10,248) | |
| Income tax expense (benefit) |
(4,306) |
12 |
(6,655) |
29 | |
| Net loss |
$ (4,513) |
$ (4,776) |
$ (8,518) |
$ (10,277) | |
|
|
|
|
|
| |
| Net loss per common share: | |||||
| Basic and diluted |
$ (0.18) |
$ (0.20) |
$ (0.35) |
$ (0.43) | |
| Shares used in Per Common Share Calculations: | |||||
| Basic and diluted |
24,610 |
24,226 |
24,561 |
24,064 | |
| Stock-based compensation included in above figures: (1) | |||||
| Cost of product revenue |
$ 216 |
$ 239 |
$ 370 |
$ 359 | |
| Cost of contract revenue |
114 |
134 |
173 |
211 | |
| Research & development |
128 |
127 |
95 |
118 | |
| Selling & marketing |
267 |
450 |
428 |
607 | |
| General & administrative |
808 |
578 |
1,405 |
890 | |
| Total |
$ 1,533 |
$ 1,528 |
$ 2,471 |
$ 2,185 | |
|
|
|
|
|
| |
|
iRobot Corporation Condensed Consolidated Balance Sheet (in thousands) | |||
|
June 28, 2008 (unaudited) |
December 29, 2007 (audited) | ||
| Assets | |||
| Cash and equivalents |
$ 14,760 |
$ 26,735 | |
| Short term investments |
1,200 |
16,550 | |
| Accounts receivable, net |
24,253 |
47,681 | |
| Unbilled revenues |
2,190 |
2,244 | |
| Inventory, net |
43,288 |
45,222 | |
| Deferred tax assets |
5,905 |
5,905 | |
| Other current assets |
10,384 |
2,268 | |
| Total current assets |
101,980 |
146,605 | |
| Property, plant and equipment, net |
24,612 |
15,694 | |
| Deferred tax assets |
4,293 |
4,293 | |
| Long term investments |
13,639 |
- | |
| Other assets |
2,500 |
2,500 | |
| Total assets |
$ 147,024 |
$ 169,092 | |
|
|
| ||
| Liabilities and stockholders' equity | |||
| Accounts payable |
$23,965 |
$ 44,697 | |
| Accrued expenses |
8,166 |
7,987 | |
| Accrued compensation |
6,625 |
4,603 | |
| Deferred revenue |
950 |
1,578 | |
| Total current liabilities |
39,706 |
58,865 | |
| Long term liabilities |
4,659 |
- | |
| Stockholders' equity |
102,659 |
110,227 | |
| Total liabilities and stockholders' equity |
$ 147,024 |
$ 169,092 | |
iRobot
Corporation Consolidated Statement of Cash Flows (in thousands) |
|||||
For the
three months ended |
For the
six months ended |
||||
June 28, 2008 |
June 30, 2007 |
June 28, 2008 |
June 30, 2007 |
||
(unaudited) |
(unaudited) |
||||
| Cash flows from operating activities: | |||||
| Net loss | $ (4,513) |
$ (4,776) |
$ (8,518) |
$ (10,277) |
|
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
| Depreciation and amortization | 1,725 |
1,253 |
3,291 |
2,459 |
|
| Loss on disposal of fixed assets | 23 |
- |
68 |
35 |
|
| Stock-based compensation | 1,533 |
1,528 |
2,471 |
2,185 |
|
| Non-cash director deferred compensation | 23 |
27 |
47 |
55 |
|
| Changes in working capital - (use) source | |||||
| Accounts receivable | (2,330) |
(1,442) |
23,428 |
10,831 |
|
| Unbilled revenue | 419 |
54 |
54 |
472 |
|
| Inventory | 2,928 |
(5,809) |
1,934 |
(1,118) |
|
| Other assets | (4,047) |
(147) |
(8,116) |
883 |
|
| Accounts payable | (4,001) |
9,291 |
(20,732) |
(579) |
|
| Accrued expenses | 2,240 |
114 |
179 |
(2,021) |
|
| Accrued Compensation | 1,501 |
968 |
2,022 |
286 |
|
| Deferred revenue | (180) |
1,388 |
(628) |
1,457 |
|
| Change in long term liabilities | 4,659 |
- |
4,659 |
- |
|
| Net cash provided by operating activities | (20) |
2,221 |
159 |
4,668 |
|
| Cash flows from investing activities: | |||||
| Purchase of property and equipment | (3,937) |
(2,123) |
(12,277) |
(3,921) |
|
| Purchases of investments | (29,997) |
(6,600) |
(29,997) |
(22,000) |
|
| Sales of investments | 29,050 |
7,000 |
29,050 |
26,800 |
|
| Net cash provided by (used in) investing activities | (4,884) |
(1,723) |
(13,224) |
879 |
|
| Cash flows from financing activities: | |||||
| Income tax withholding payment associating with stock option exercise | - |
- |
- |
(1,588) |
|
| Proceeds from stock option exercises | 162 |
366 |
732 |
719 |
|
| Tax benefit from disqualifying dispositions | 97 |
- |
358 |
- |
|
| Net cash provided by (used in) financing activities | 259 |
366 |
1,090 |
(869) |
|
| Net increase (decrease) in cash and cash equivalents | (8,101) |
864 |
(11,975) |
4,678 |
|
| Cash and cash equivalents, at beginning of period | 22,861 |
9,397 |
26,735 |
5,583 |
|
| Cash and cash equivalents, at end of period | 14,760 |
10,261 |
14,760 |
10,261 |
|
|
iRobot Corporation Supplemental Information (unaudited) | |||||
|
For the three months ended |
For the six months ended | ||||
|
June 28, 2008 |
June 30, 2007 |
June 28, 2008 |
June 30, 2007 | ||
| Revenues by business unit (in thousands): | |||||
| Home Robots | |||||
| Product |
$ 41,705 |
$ 17,197 |
$ 71,798 |
$ 36,638 | |
| Contract |
- |
- |
55 |
- | |
| Government & Industrial | |||||
| Product |
18,971 |
24,165 |
39,453 |
38,844 | |
| Contract |
6,526 |
5,652 |
13,198 |
11,019 | |
|
$ 67,202 |
$ 47,014 |
$ 124,504 |
$ 86,501 | ||
|
|
|
|
| ||
| Direct Revenue - Home Robots | |||||
| (in thousands) |
$7,884 |
$7,509 |
$15,745 |
$12,724 | |
| Product Lifecycle Revenue - | |||||
| Government & Industrial (in thousands) |
$2,172 |
$1,855 |
$5,374 |
$4,857 | |
| International Revenue (in thousands): | |||||
| Home Robots |
$18,175 |
$3,454 |
$28,581 |
$5,301 | |
| Government & Industrial |
$398 |
$4,319 |
$1,209 |
$4,869 | |
| Average selling prices for robot units: | |||||
| Home Robots |
$157 |
$147 |
$160 |
$139 | |
| Government & Industrial |
$99 |
$146 |
$104 |
$136 | |
| Gross Profit by business Unit: | |||||
| (in thousands) | |||||
| Home Robots |
$10,759 |
$5,392 |
$18,828 |
$11,269 | |
| Government & Industrial |
$5,709 |
$9,832 |
$13,000 |
$15,072 | |
|
$16,468 |
$15,224 |
$31,828 |
$26,341 | ||
| Units shipped by business unit: | |||||
| Home Robots (in thousands) |
237 |
99 |
406 |
227 | |
| Government & Industrial |
170 |
152 |
326 |
249 | |