BEDFORD, Mass., Oct 27, 2010 (BUSINESS WIRE) --
iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the third quarter ended October 2, 2010.
Revenue for the third quarter of 2010 increased 20 percent to $94.2 million, compared with $78.6 million for the same quarter one year ago. Net income in the third quarter of 2010 was $7.0 million, compared with $2.6 million in the third quarter of 2009. Quarterly earnings per share were $0.27, compared with $0.10 in the third quarter last year. The third-quarter results include a $2.3 million one-time tax benefit associated with the release of state deferred tax allowances. Excluding the impact of this one-time benefit, net income in the third quarter of 2010 would have been $4.8 million and earnings per share for the quarter would have been $0.18.
"Our financial performance in the third quarter was exceptionally strong following record first-half results. Adjusted EBITDA of $11 million for the quarter increased by 37 percent to more than 12 percent of revenue, far exceeding our expectations," said Colin Angle, chairman and chief executive officer of iRobot. "Quarterly earnings per share increased by 80 percent year-over-year, excluding the one-time tax benefit. As a result of outstanding performance by both divisions in the third quarter and good visibility for the rest of 2010, we are once again increasing our full-year financial expectations."
Business Highlights
- Strong demand in overseas markets drove a 58 percent increase in Q3 2010 international home robot revenue year-over-year. In the third quarter, international home robot revenue of $35 million comprised 64 percent of total home robot revenue.
- Driven by shipments of Small Unmanned Ground Vehicles and spare parts, government & industrial robot revenue grew 15 percent in the third quarter over the third quarter of 2009.
- Gross margin for the third quarter increased to 35 percent of revenue, compared with 31 percent of revenue in the third quarter of 2009.
- Year-to-date operating cash flow was $35 million, compared with $25 million in the first nine months of 2009, driving quarter-end cash position to $107 million.
Financial Expectations
Management provides the following expectations with respect to the fourth quarter and year ending January 1, 2011.
|
Fiscal Year 2010: |
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| Revenue | $395 - $400 million | |||
| Earnings Per Share | $0.80 - $0.82 | |||
| Adjusted EBITDA | $46 - $48 million | |||
|
Q4 2010: |
||||
| Revenue | $108 - $113 million | |||
| Earnings Per Share | $0.10 - $0.12 | |||
| Adjusted EBITDA | $8 - $10 million | |||
Third-Quarter Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the third fiscal quarter 2010, business outlook, and outlook for future financial performance. Pertinent details include:
| Date: | Thursday, October 28, 2010 | |||
| Time: | 8:30 a.m. ET | |||
| Call-In Number: |
617-597-5307 |
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| Passcode: | 16836933 | |||
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 November 4 and can be accessed by dialing 617-801-6888, passcode 35724357.
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 government and industrial 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, anticipated revenue, Adjusted EBITDA and earnings per share for fiscal year 2010 and the fourth quarter of 2010. 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. 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 net income excluding the impact of one-time tax benefit, earnings per share excluding the impact of one-time tax benefit and Adjusted EBITDA, each 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. Reconciliations between net income excluding the impact of one-time tax benefit and net income, earnings per share excluding the impact of one-time tax benefit and earnings per share, and net income and Adjusted EBITDA are 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 | ||||||||||||
| October 2, | September 26, | October 2, | September 26, | ||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||
| Revenue | |||||||||||||
| Product revenue | $ | 85,051 | $ | 69,080 |
$ |
257,107 |
$ |
171,380 | |||||
| Contract revenue | 9,172 | 9,539 | 29,850 | 25,515 | |||||||||
| Total | 94,223 | 78,619 | 286,957 | 196,895 | |||||||||
| Cost of Revenue | |||||||||||||
| Product revenue | 54,472 | 46,415 | 165,897 | 116,952 | |||||||||
| Contract revenue | 6,494 | 8,009 | 21,116 | 23,133 | |||||||||
| Total | 60,966 | 54,424 | 187,013 | 140,085 | |||||||||
| Gross Margin | 33,257 | 24,195 | 99,944 | 56,810 | |||||||||
| Operating Expense | |||||||||||||
| Research & development | 6,185 | 3,159 | 16,375 | 10,633 | |||||||||
| Selling & marketing | 10,734 | 9,514 | 30,959 | 27,420 | |||||||||
| General & administrative | 8,904 | 7,420 | 26,693 | 21,915 | |||||||||
| Total | 25,823 | 20,093 | 74,027 | 59,968 | |||||||||
| Operating income (loss) | 7,434 | 4,102 | 25,917 | (3,158 | ) | ||||||||
| Other income (expense), net | 299 | 112 | 368 | (96 | ) | ||||||||
| Pre-tax income (loss) | 7,733 | 4,214 | 26,285 | (3,254 | ) | ||||||||
| Income tax expense (benefit) | 701 | 1,620 | 7,771 | (1,452 | ) | ||||||||
| Net income (loss) | $ | 7,032 | $ | 2,594 | $ | 18,514 | $ | (1,802 | ) | ||||
| Net income (loss) per common share: | |||||||||||||
| Basic | $ | 0.28 | $ | 0.10 | $ | 0.73 | $ | (0.07 | ) | ||||
| Diluted | $ | 0.27 | $ | 0.10 | $ | 0.70 | $ | (0.07 | ) | ||||
| Shares used in Per Common Share Calculations: | |||||||||||||
| Basic | 25,428 | 25,025 | 25,293 | 24,974 | |||||||||
| Diluted | 26,480 | 25,670 | 26,319 | 24,974 | |||||||||
| Stock-based compensation included in above figures: | |||||||||||||
| Cost of product revenue | $ | 310 | $ | 267 |
$ |
997 |
$ |
758 | |||||
| Cost of contract revenue | 101 | 139 | 337 | 464 | |||||||||
| Research & development | 211 | 89 | 488 | 187 | |||||||||
| Selling & marketing | 240 | 351 | 885 | 1,006 | |||||||||
| General & administrative | 1,079 | 1,016 | 3,325 | 2,944 | |||||||||
| Total | $ | 1,941 | $ | 1,862 | $ | 6,032 | $ | 5,359 | |||||
| iRobot Corporation | ||||||
| Condensed Consolidated Balance Sheet | ||||||
| (unaudited, in thousands) | ||||||
| October 2, | January 2, | |||||
| 2010 | 2010 | |||||
| Assets | ||||||
| Cash and equivalents | $ | 90,603 | $ | 71,856 | ||
| Short term investments | 16,576 | 4,959 | ||||
| Accounts receivable, net | 27,794 | 35,171 | ||||
| Unbilled revenues | 2,534 | 1,831 | ||||
| Inventory | 33,969 | 32,406 | ||||
| Deferred tax assets | 9,922 | 8,669 | ||||
| Other current assets | 3,062 | 4,119 | ||||
| Total current assets | 184,460 | 159,011 | ||||
| Property, plant and equipment, net | 22,389 | 20,230 | ||||
| Deferred tax assets | 8,183 | 6,089 | ||||
| Other assets | 13,889 | 14,254 | ||||
| Total assets | $ | 228,921 | $ | 199,584 | ||
| Liabilities and stockholders' equity | ||||||
| Accounts payable | $ | 35,677 | $ | 30,559 | ||
| Accrued expenses | 14,061 | 14,384 | ||||
| Accrued compensation | 13,117 | 13,525 | ||||
| Deferred revenue and customer advances | 2,023 | 3,908 | ||||
| Total current liabilities | 64,878 | 62,376 | ||||
| Long term liabilities | 3,692 | 4,014 | ||||
| Stockholders' equity | 160,351 | 133,194 | ||||
| Total liabilities and stockholders' equity | $ | 228,921 | $ | 199,584 | ||
| iRobot Corporation | ||||||||||||||||
| Consolidated Statement of Cash Flows | ||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||
| October 2, | September 26, | October 2, | September 26, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income (loss) | $ | 7,032 | $ | 2,594 | $ | 18,514 | $ | (1,802 | ) | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 1,918 | 2,289 | 5,673 | 6,153 | ||||||||||||
| Loss on disposal of property and equipment | 70 | 74 | 117 | 176 | ||||||||||||
| Stock-based compensation | 1,941 | 1,862 | 6,032 | 5,359 | ||||||||||||
| Benefit from deferred tax assets | (3,867 | ) | 164 | (3,867 | ) | (347 | ) | |||||||||
| Non-cash director deferred compensation | 33 | 33 | 99 | 99 | ||||||||||||
| Changes in operating assets and liabilities -- (use) source | ||||||||||||||||
| Accounts receivable | (661 | ) | (12,643 | ) | 7,377 | (8,004 | ) | |||||||||
| Unbilled revenue | (221 | ) | 922 | (703 | ) | (523 | ) | |||||||||
| Inventory | (3,285 | ) | 3,985 | (1,563 | ) | 9,907 | ||||||||||
| Other assets | 213 | 1,052 | 1,010 | (1,111 | ) | |||||||||||
| Accounts payable | 3,909 | 6,679 | 5,118 | 8,243 | ||||||||||||
| Accrued expenses | 716 | 706 | (315 | ) | 673 | |||||||||||
| Accrued compensation | 1,964 | 3,819 | (408 | ) | 4,453 | |||||||||||
| Deferred revenue | 54 | 1,270 | (1,885 | ) | 1,612 | |||||||||||
| Change in long term liabilities | (107 | ) | (107 | ) | (322 | ) | (322 | ) | ||||||||
| Net cash provided by operating activities | 9,709 | 12,699 | 34,877 | 24,566 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Purchase of property and equipment | (1,869 | ) | (953 | ) | (7,537 | ) | (3,401 | ) | ||||||||
| Purchases of investments | (5,050 | ) | - | (30,461 | ) | - | ||||||||||
| Sales of investments | 11,500 | - | 19,000 | - | ||||||||||||
| Net cash provided by (used in) investing activities | 4,581 | (953 | ) | (18,998 | ) | (3,401 | ) | |||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Proceeds from stock option exercises | 370 | 36 | 2,297 | 495 | ||||||||||||
| Income tax withholding payment associated with restricted stock vesting | (5 | ) | (67 | ) | (284 | ) | (76 | ) | ||||||||
| Tax benefit of excess stock based compensation deductions | 138 | 43 | 855 | 311 | ||||||||||||
| Net cash provided by financing activities | 503 | 12 | 2,868 | 730 | ||||||||||||
| Net increase in cash and cash equivalents | 14,793 | 11,758 | 18,747 | 21,895 | ||||||||||||
| Cash and cash equivalents, at beginning of period | 75,810 | 50,989 | $ | 71,856 | 40,852 | |||||||||||
| Cash and cash equivalents, at end of period | $ | 90,603 | $ | 62,747 | $ | 90,603 | $ | 62,747 | ||||||||
| iRobot Corporation | ||||||||||||||||
| Supplemental Information | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||
| October 2, | September 26, | October 2, | September 26, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenue: * | ||||||||||||||||
| Home Robots | $ | 54,650 | $ | 44,331 | $ | 160,101 | $ | 111,253 | ||||||||
| Domestic | $ | 19,814 | $ | 22,314 | $ | 53,061 | $ | 51,958 | ||||||||
| International | $ | 34,836 | $ | 22,017 | $ | 107,040 | $ | 59,295 | ||||||||
| Retail | $ | 48,633 | $ | 38,151 | $ | 142,426 | $ | 92,230 | ||||||||
| Direct | $ | 6,017 | $ | 6,180 | $ | 17,675 | $ | 19,023 | ||||||||
| Government & Industrial | $ | 39,573 | $ | 34,288 | $ | 126,856 | $ | 85,642 | ||||||||
| Domestic | $ | 36,013 | $ | 29,854 | $ | 116,486 | $ | 76,549 | ||||||||
| International | $ | 3,560 | $ | 4,434 | $ | 10,370 | $ | 9,093 | ||||||||
| Product | $ | 30,401 | $ | 24,749 | $ | 97,006 | $ | 60,127 | ||||||||
| Contract | $ | 9,172 | $ | 9,539 | $ | 29,850 | $ | 25,515 | ||||||||
| Product Life Cycle | $ | 9,060 | $ | 5,368 | $ | 26,621 | $ | 14,299 | ||||||||
| Gross Margin Percent: | ||||||||||||||||
| Home Robots | 39.7 | % | 30.3 | % | 39.0 | % | 30.3 | % | ||||||||
| Government & Industrial | 29.2 | % | 31.3 | % | 29.6 | % | 27.0 | % | ||||||||
| Total Company | 35.3 | % | 30.8 | % | 34.8 | % | 28.9 | % | ||||||||
| Units shipped: | ||||||||||||||||
| Home Robots * | 308 | 289 | 889 | 664 | ||||||||||||
| Government & Industrial | 186 | 159 | 702 | 460 | ||||||||||||
| Average gross selling prices for robot units: | ||||||||||||||||
| Home Robots | $ | 185 | $ | 167 | $ | 187 | $ | 177 | ||||||||
| Government & Industrial * | $ | 115 | $ | 122 | $ | 100 | $ | 100 | ||||||||
| Government & Industrial Funded Product Backlog * | $ | 34,003 | $ | 71,038 | $ | 34,003 | $ | 71,038 | ||||||||
| Days sales outstanding | 29 | 54 | 29 | 54 | ||||||||||||
| Days in inventory | 57 | 48 | 57 | 48 | ||||||||||||
| Headcount | 643 | 514 | 643 | 514 | ||||||||||||
| * in thousands | ||||||||||||||||
| iRobot Corporation | ||||||||||||||||
| Adjusted EBITDA Reconciliation to GAAP | ||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||
| October 2, | September 26, | October 2, | September 26, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net income (loss) | $ | 7,032 | $ | 2,594 | $ | 18,514 | $ | (1,802 | ) | |||||||
| Interest income, net | (206 | ) | (5 | ) | (572 | ) | (41 | ) | ||||||||
| Income tax expense (benefit) | 701 | 1,620 | 7,771 | (1,452 | ) | |||||||||||
| Depreciation | 1,784 | 2,150 | 5,261 | 5,763 | ||||||||||||
| Amortization | 134 | 139 | 412 | 390 | ||||||||||||
| EBITDA | 9,445 | 6,498 | 31,386 | 2,858 | ||||||||||||
| Stock-based compensation expense | 1,941 | 1,862 | 6,032 | 5,359 | ||||||||||||
| Merger and acquisition expense | 61 | - | 132 | - | ||||||||||||
| Adjusted EBITDA | $ | 11,447 | $ | 8,360 | $ | 37,550 | $ | 8,217 | ||||||||
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.
| iRobot Corporation | |||||||||||||||
| Non-GAAP Net Income and Earnings Per Share Reconciliations to GAAP | |||||||||||||||
|
(in thousands, except per share amounts) |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||||
| October 2, | September 26, | October 2, | September 26, | ||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||
| GAAP net income (loss) | $ | 7,032 | $ | 2,594 | $ | 18,514 | $ | (1,802 | ) | ||||||
| Less one-time net income tax benefit associated with release of state deferred tax asset valuation allowance | (2,259 | ) | - | (2,259 | ) | - | |||||||||
| Non-GAAP net income (loss) | $ | 4,773 | $ | 2,594 | $ | 16,255 | $ | (1,802 | ) | ||||||
| GAAP net income (loss) per common share: | |||||||||||||||
| Basic | $ | 0.28 | $ | 0.10 | $ | 0.73 | $ | (0.07 | ) | ||||||
| Diluted | $ | 0.27 | $ | 0.10 | $ | 0.70 | $ | (0.07 | ) | ||||||
| Less one-time net income tax benefit associated with release of state deferred tax asset valuation allowance: | |||||||||||||||
| Basic | $ | (0.09 | ) | $ | - | $ | (0.09 | ) | $ | - | |||||
| Diluted | $ | (0.09 | ) | $ | - | $ | (0.08 | ) | $ | - | |||||
| Non-GAAP net income (loss) per common share: | |||||||||||||||
| Basic | $ | 0.19 | $ | 0.10 | $ | 0.64 | $ | (0.07 | ) | ||||||
| Diluted | $ | 0.18 | $ | 0.10 | $ | 0.62 | $ | (0.07 | ) | ||||||
| Shares used in Per Common Share Calculations: | |||||||||||||||
| Basic | 25,428 | 25,025 | 25,293 | 24,974 | |||||||||||
| Diluted | 26,480 | 25,670 | 26,319 | 24,974 | |||||||||||
SOURCE: iRobot Corp.
iRobot Corp.
Investor Relations:
Elise Caffrey, 781-430-3003
ecaffrey@irobot.com
or
Media Relations:
Charlie Vaida, 781-430-3182
cvaida@irobot.com