Company Increases Full-Year Profit Expectations
“We delivered third-quarter revenue near the top end of our
expectations, and earnings per share and Adjusted EBITDA that
significantly exceeded our expectations,” said
“Based on our performance through the first nine months, we are reaffirming our expectations for full-year revenue and increasing our expectations for earnings per share and Adjusted EBITDA,” Angle concluded.
Revenue for the third quarter of 2009 decreased 14.9 percent to
Gross margin for the third quarter decreased to 30.8 percent of revenue, compared with 31.3 percent of revenue in the third quarter of 2008. In the first nine months of 2009, gross margin increased to 28.9 percent of revenue, up from 28.0 percent of revenue in the first nine months of 2008.
Earnings per share for the third quarter of 2009 were
Adjusted EBITDA was
Business Highlights
- International home robot revenue in the third quarter of 2009 increased 55 percent from the third quarter of 2008 and comprised half of total home robot revenue in the quarter.
-
Government & Industrial Robots division received more than
$55 million in orders from theU.S. Government during the quarter and has 100 percent visibility on its full-year revenue expectations. -
In the first nine months of 2009, operating cash flow was
$24.6 million , compared with cash used in operations of$0.3 million in the first nine months of 2008, as continued aggressive management led to a$17.9 million reduction of inventory at quarter end versus last year.
Financial Expectations
Management provides the following expectations with respect to the
fiscal year and fourth quarter ending
|
Fiscal Year 2009: |
||||
| Revenue | $295 – $305 million | |||
| Adjusted EBITDA | $15 – $18 million | |||
| Earnings Per Share |
$0.02 – $0.06 |
|||
|
Q4 2009: |
||||
| Revenue | $98 – $108 million | |||
| Adjusted EBITDA | $7 – $10 million | |||
| Earnings Per Share |
$0.09 – $0.13 |
|||
Third-Quarter Conference Call
iRobot will host a conference call tomorrow at
| Date: Thursday, October 22, 2009 |
| Time: 8:30 a.m. ET |
| Call-In Number: 719-325-4776 |
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 An archived version of the broadcast will be available on the same Web site shortly after the conclusion of the live event.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 7344142.
About
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, operations for the
fourth quarter of 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.
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, and non-cash stock compensation. A reconciliation between net income (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 nine months ended | ||||||||||||||||||
| September 26, | September 27, | September 26, | September 27, | ||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
| Revenue | |||||||||||||||||||
| Product revenue | $ | 69,080 | $ | 87,224 | $ | 171,380 | $ | 198,475 | |||||||||||
| Contract revenue | 9,539 | 5,191 | 25,515 | 18,444 | |||||||||||||||
| Total | 78,619 | 92,415 | 196,895 | 216,919 | |||||||||||||||
| Cost of Revenue | |||||||||||||||||||
| Product revenue | 46,415 | 58,371 | 116,952 | 138,948 | |||||||||||||||
| Contract revenue | 8,009 | 5,114 | 23,133 | 17,213 | |||||||||||||||
| Total | 54,424 | 63,485 | 140,085 | 156,161 | |||||||||||||||
| Gross Margin | 24,195 | 28,930 | 56,810 | 60,758 | |||||||||||||||
| Operating Expense | |||||||||||||||||||
| Research & development | 3,159 | 4,940 | 10,633 | 13,631 | |||||||||||||||
| Selling & marketing | 9,514 | 10,522 | 27,420 | 35,451 | |||||||||||||||
| General & administrative | 7,420 | 7,578 | 21,915 | 21,696 | |||||||||||||||
| Total | 20,093 | 23,040 | 59,968 | 70,778 | |||||||||||||||
| Operating income (loss) | 4,102 | 5,890 | (3,158 | ) | (10,020 | ) | |||||||||||||
| Other income (expense), net | 112 | 180 | (96 | ) | 917 | ||||||||||||||
| Pre-tax income (loss) | 4,214 | 6,070 | (3,254 | ) | (9,103 | ) | |||||||||||||
| Income tax expense (benefit) | 1,620 | 2,218 | (1,452 | ) | (4,437 | ) | |||||||||||||
| Net income (loss) | $ | 2,594 | $ | 3,852 | $ | (1,802 | ) | $ | (4,666 | ) | |||||||||
| Net income (loss) per common share: | |||||||||||||||||||
| Basic | $ | 0.10 | $ | 0.16 | $ | (0.07 | ) | $ | (0.19 | ) | |||||||||
| Diluted | $ | 0.10 | $ | 0.15 | $ | (0.07 | ) | $ | (0.19 | ) | |||||||||
| Shares used in Per Common Share Calculations: | |||||||||||||||||||
| Basic | 25,025 | 24,712 | 24,974 | 24,614 | |||||||||||||||
| Diluted | 25,670 | 25,536 | 24,974 | 24,614 | |||||||||||||||
| Stock-based compensation included in above figures: | |||||||||||||||||||
| Cost of product revenue | $ | 267 | $ | 184 | $ | 758 | $ | 554 | |||||||||||
| Cost of contract revenue | 139 | 127 | 464 | 300 | |||||||||||||||
| Research & development | 89 | 131 | 187 | 226 | |||||||||||||||
| Selling & marketing | 351 | 305 | 1,006 | 733 | |||||||||||||||
| General & administrative | 1,016 | 1,090 | 2,944 | 2,495 | |||||||||||||||
| Total | $ | 1,862 | $ | 1,837 | $ | 5,359 | $ | 4,308 | |||||||||||
| iRobot Corporation | ||||||||
| Condensed Consolidated Balance Sheet | ||||||||
| (unaudited, in thousands) | ||||||||
| September 26, | December 27, | |||||||
| 2009 | 2008 | |||||||
| Assets | ||||||||
| Cash and equivalents | $ | 62,747 | $ | 40,852 | ||||
| Accounts receivable, net | 43,934 | 35,930 | ||||||
| Unbilled revenues | 2,537 | 2,014 | ||||||
| Inventory | 24,653 | 34,560 | ||||||
| Deferred tax assets | 7,295 | 7,299 | ||||||
| Other current assets | 4,430 | 3,340 | ||||||
| Total current assets | 145,596 | 123,995 | ||||||
| Property, plant and equipment, net | 20,401 | 22,929 | ||||||
| Deferred tax assets | 4,508 | 4,508 | ||||||
| Other assets | 11,877 | 12,246 | ||||||
| Total assets | $ | 182,382 | $ | 163,678 | ||||
| Liabilities and stockholders' equity | ||||||||
| Accounts payable | $ | 27,787 | $ | 19,544 | ||||
| Accrued expenses | 11,672 | 10,989 | ||||||
| Accrued compensation | 10,846 | 6,393 | ||||||
| Deferred revenue and customer advances | 4,244 | 2,632 | ||||||
| Total current liabilities | 54,549 | 39,558 | ||||||
| Long term liabilities | 4,122 | 4,444 | ||||||
| Stockholders' equity | 123,711 | 119,676 | ||||||
| Total liabilities and stockholders' equity | $ | 182,382 | $ | 163,678 | ||||
| iRobot Corporation | |||||||||||||||||||||
| Consolidated Statement of Cash Flows | |||||||||||||||||||||
| (unaudited, in thousands) | |||||||||||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||||||||||
| September 26, | September 27, | September 26, | September 27, | ||||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||
| Net income (loss) | $ | 2,594 | $ | 3,852 | $ | (1,802 | ) | $ | (4,666 | ) | |||||||||||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|||||||||||||||||||||
| Depreciation and amortization | 2,289 | 1,844 | 6,153 | 5,135 | |||||||||||||||||
| Loss on disposal of property and equipment | 74 | 12 | 176 | 80 | |||||||||||||||||
| Stock-based compensation | 1,862 | 1,837 | 5,359 | 4,308 | |||||||||||||||||
| In-process research and development relating to acquisition of Nekton Research LLC | - | 200 | - | 200 | |||||||||||||||||
| Benefit from deferred tax assets | 164 | - | (347 | ) | - | ||||||||||||||||
| Non-cash director deferred compensation | 33 | 24 | 99 | 71 | |||||||||||||||||
| Changes in operating assets and liabilities — (use) source | |||||||||||||||||||||
| Accounts receivable | (12,643 | ) | (21,598 | ) | (8,004 | ) | 1,830 | ||||||||||||||
| Unbilled revenue | 922 | (82 | ) | (523 | ) | (28 | ) | ||||||||||||||
| Inventory | 3,985 | 692 | 9,907 | 2,626 | |||||||||||||||||
| Other assets | 1,052 | 1,186 | (1,111 | ) | (6,930 | ) | |||||||||||||||
| Accounts payable | 6,679 | 7,192 | 8,243 | (13,540 | ) | ||||||||||||||||
| Accrued expenses | 706 | 1,226 | 673 | 1,405 | |||||||||||||||||
| Accrued compensation | 3,819 | 1,481 | 4,453 | 3,503 | |||||||||||||||||
| Deferred revenue | 1,270 | 1,755 | 1,612 | 1,127 | |||||||||||||||||
| Change in long term liabilities | (107 | ) | (107 | ) | (322 | ) | 4,552 | ||||||||||||||
| Net cash provided by (used in) operating activities | 12,699 | (486 | ) | 24,566 | (327 | ) | |||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||
| Purchase of property and equipment | (953 | ) | (1,312 | ) | (3,401 | ) | (13,589 | ) | |||||||||||||
| Purchase of Nekton Research LLC, net of cash received | - | (9,745 | ) | - | (9,745 | ) | |||||||||||||||
| Purchases of investments | - | - | - | (29,997 | ) | ||||||||||||||||
| Sales of investments | - | 1,300 | - | 30,350 | |||||||||||||||||
| Net cash used in investing activities | (953 | ) | (9,757 | ) | (3,401 | ) | (22,981 | ) | |||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||
| Proceeds from stock option exercises | 36 | 176 | 495 | 908 | |||||||||||||||||
| Income tax withholding payment associated with restricted stock vesting | (67 | ) | - | (76 | ) | - | |||||||||||||||
| Borrowings under revolving line of credit | - | 5,500 | - | 5,500 | |||||||||||||||||
| Tax benefit of excess stock based compensation deductions | 43 | 322 | 311 | 680 | |||||||||||||||||
| Net cash provided by financing activities | 12 | 5,998 | 730 | 7,088 | |||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 11,758 | (4,245 | ) | 21,895 | (16,220 | ) | |||||||||||||||
| Cash and cash equivalents, at beginning of period | 50,989 | 14,760 | 40,852 | 26,735 | |||||||||||||||||
| Cash and cash equivalents, at end of period | $ | 62,747 | $ | 10,515 | $ | 62,747 | $ | 10,515 | |||||||||||||
| iRobot Corporation | |||||||||||||||||||
| Supplemental Information | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||||||||
| September 26, | September 27, | September 26, | September 27, | ||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
| Revenue by business unit (in thousands): | |||||||||||||||||||
| Home Robots | |||||||||||||||||||
| Product | $ | 44,331 | $ | 53,626 | $ | 111,253 | $ | 125,424 | |||||||||||
| Contract | - | - | - | 55 | |||||||||||||||
| Government & Industrial | |||||||||||||||||||
| Product | 24,749 | 33,598 | 60,127 | 73,051 | |||||||||||||||
| Contract | 9,539 | 5,191 | 25,515 | 18,389 | |||||||||||||||
| $ | 78,619 | $ | 92,415 | $ | 196,895 | $ | 216,919 | ||||||||||||
| Direct Revenue - Home Robots (in thousands) | $ | 5,489 | $ | 6,777 | $ | 17,178 | $ | 22,514 | |||||||||||
| Product Lifecycle Revenue - Government & Industrial (in thousands) | $ | 5,368 | $ | 5,977 | $ | 14,299 | $ | 11,351 | |||||||||||
| International Revenue (in thousands): | |||||||||||||||||||
| Home Robots | $ | 22,017 | $ | 14,203 | $ | 59,296 | $ | 42,784 | |||||||||||
| Government & Industrial | $ | 4,435 | $ | 4,360 | $ | 8,907 | $ | 5,570 | |||||||||||
| Average selling prices for robot units: | |||||||||||||||||||
| Home Robots | $ | 143 | $ | 138 | $ | 153 | $ | 150 | |||||||||||
| Government & Industrial (in thousands) | $ | 122 | $ | 87 | $ | 100 | $ | 96 | |||||||||||
| Gross Margin by business unit (in thousands): | |||||||||||||||||||
| Home Robots | $ | 13,450 | $ | 14,867 | $ | 33,711 | $ | 33,695 | |||||||||||
| Government & Industrial | 10,745 | 14,063 | 23,099 | 27,063 | |||||||||||||||
| $ | 24,195 | $ | 28,930 | $ | 56,810 | $ | 60,758 | ||||||||||||
| Units shipped by business unit: | |||||||||||||||||||
| Home Robots (in thousands) | 289 | 355 | 664 | 761 | |||||||||||||||
| Government & Industrial | 159 | 319 | 460 | 645 | |||||||||||||||
| Government & Industrial Funded Backlog (in thousands) | $ | 71,038 | $ | 36,621 | $ | 71,038 | $ | 36,621 | |||||||||||
| Days sales outstanding | 54 | 48 | 54 | 48 | |||||||||||||||
| Inventory turnover | 7.5 | 5.5 | 7.5 | 5.5 | |||||||||||||||
| Net cash provided by (used in) operating activities (in thousands) | $ | 12,699 | $ | (486 | ) | $ | 24,566 | $ | (327 | ) | |||||||||
| Headcount | 514 | 505 | 514 | 505 | |||||||||||||||
| iRobot Corporation | |||||||||||||||||||||
| Adjusted EBITDA Reconciliation to GAAP | |||||||||||||||||||||
| (unaudited, in thousands) | |||||||||||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||||||||||
| September 26, | September 27, | September 26, | September 27, | ||||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||
| Net income (loss) | $ | 2,594 | $ | 3,852 | $ | (1,802 | ) | $ | (4,666 | ) | |||||||||||
| Interest income, net | (5 | ) | (205 | ) | (41 | ) | (1,034 | ) | |||||||||||||
| Income tax expense (benefit) | 1,620 | 2,218 | (1,452 | ) | (4,437 | ) | |||||||||||||||
| Depreciation | 2,150 | 1,803 | 5,763 | 5,094 | |||||||||||||||||
| Amortization | 139 | 41 | 390 | 41 | |||||||||||||||||
| EBITDA | 6,498 | 7,709 | 2,858 | (5,002 | ) | ||||||||||||||||
| Stock-based compensation expense | 1,862 | 1,837 | 5,359 | 4,308 | |||||||||||||||||
| Adjusted EBITDA | $ | 8,360 | $ | 9,546 | $ | 8,217 | $ | (694 | ) | ||||||||||||
| 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, 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.
Investor Relations:
Elise Caffrey, 781-430-3003
ecaffrey@irobot.com
or
Media
Relations:
Nancy Smith, 781-430-3323
nsmith@irobot.com