BEDFORD, Mass., Oct 22, 2013 (BUSINESS WIRE) --iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the third quarter ended September 28, 2013.
“I am pleased to report that we delivered Q3 results in line with our expectations. We saw strong growth in our Home Robot business, and are excited to announce a next generation home robot for the fourth quarter. Overseas, strong demand in Asia continued and we are seeing signs of recovery in Europe. We shipped additional RP-VITA robots to InTouch Health, while our Remote Presence unit gained further traction in the video collaboration market. And, our Defense & Security business performed as expected,” said Colin Angle, chairman and chief executive officer of iRobot.
“Our businesses continue to perform in line with the expectations we laid out in Q1. Accordingly we are narrowing our full year 2013 expectation ranges to: revenue of between $485 and $490 million, EPS of $0.90 to $0.95 and Adjusted EBITDA of $58 to $61 million.
“Based on our robust product pipeline and expectations over the next three years, we continue to expect to achieve by 2016:
- Mid-high teen revenue CAGR;
- High teen Adjusted EBITDA margin; and,
- High single digit Operating Cash Flow margin.
For 2014, our preliminary revenue expectations are for mid-high teen growth, consistent with the financial targets.”
Financial Results
- Revenue for the third quarter of 2013 was $124.5 million, compared with $126.3 million for the same quarter one year ago. Revenue for the first nine months of 2013 was $361.1 million compared with $335.6 million for the first nine months one year ago.
- Net income in the third quarter of 2013 was $7.8 million, compared with $15.2 million in the third quarter of 2012. For the first nine months, net income was $24.5 million, compared with $23.2 million a year ago.
- Quarterly earnings per share were $0.26, compared with $0.54 in the third quarter last year. Nine-month earnings per share were $0.84 in 2013, compared with $0.82 for the first nine months of 2012.
- Adjusted EBITDA for the third quarter of 2013 was $17.2 million, compared with $29.2 million in the third quarter of 2012. For the first nine months of 2013 Adjusted EBITDA was $49.4 million, compared with $51.5 million for the same period a year ago.
- During the third quarter of 2012, there were a number of items recorded, one of which resulted in a $7.7 million revenue increase. The positive net impact of all these items was $0.10 in earnings per share and $5.2 million in Adjusted EBITDA.
Business Highlights
- Home Robot revenue increased 16 percent in Q3 2013, over last year, driven by strong growth in Japan.
- Defense & Security results met our Q3 expectations. While the U.S. government shutdown hampered our efforts in both the domestic and international markets we continue to expect to deliver full year Defense & Security revenue of roughly $50 million.
- We are in discussions to sign our first Cisco distributor for the AVA 500 video collaboration robot and plan to be in full beta with three external users for the product by early December.
Financial Expectations
Management provides the following expectations with respect to the fourth quarter and fiscal year ending December 28, 2013.
|
Q4 2013: |
||||||||||||||
| Revenue | $124 - $129 million | |||||||||||||
| Earnings Per Share | $0.06 - $0.11 | |||||||||||||
| Adjusted EBITDA | $9 - $12 million | |||||||||||||
|
Fiscal Year 2013: |
Current |
Prior |
||||||||||||
| Revenue | $485 - $490 million | $485 - $495 million | ||||||||||||
| Earnings Per Share | $0.90 - $0.95 | $0.88 - $1.00 | ||||||||||||
| Adjusted EBITDA | $58 - $61 million | $55 - $61 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 2013, business outlook, and outlook for fourth-quarter and fiscal year 2013 financial performance. Pertinent details include:
| Date: | Wednesday, October 23, 2013 | ||||||||||
| Time: | 8:30 a.m. ET | ||||||||||
| Call-In Number: | 847-619-6818 | ||||||||||
| Passcode: | 34160574 |
A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/phoenix.zhtml?c=193096&p=irol-EventDetails&EventId=4897484. 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 October 30, and can be accessed by dialing 630-652-3000, passcode 34160574#.
About iRobot Corp.
iRobot designs and builds robots that make a difference. The company’s home robots help people find smarter ways to clean, its defense & security robots protect those in harm’s way, and its remote presence robots enable virtual presence from anywhere in the world. 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 future financial performance, future operating performance and growth, fiscal year 2014 revenue growth, the timing of new product introductions, the timing of our achievement of product development milestones, demand for our robots, anticipated growth and performance of our businesses, Defense & Security revenue for fiscal year 2013, and anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2013 and the fourth quarter ending December 28, 2013. 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, market acceptance of our products, our dependence on the U.S. federal government and government contracts, the timing of government contracts and orders, 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 press release includes Adjusted EBITDA, which is 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, net intellectual property litigation expenses, restructuring 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 Statements of Income | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||||
| September 28, | September 29, | September 28, | September 29, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Revenue | ||||||||||||||||||
| Product revenue | $ | 122,647 | $ | 121,174 | $ | 352,018 | $ | 320,676 | ||||||||||
| Contract revenue | 1,854 | 5,124 | 9,040 | 14,874 | ||||||||||||||
| Total | 124,501 | 126,298 | 361,058 | 335,550 | ||||||||||||||
| Cost of Revenue | ||||||||||||||||||
| Product revenue | 69,628 | 65,852 | 195,316 | 179,174 | ||||||||||||||
| Contract revenue | 812 | 1,970 | 3,549 | 6,532 | ||||||||||||||
| Total | 70,440 | 67,822 | 198,865 | 185,706 | ||||||||||||||
| Gross Margin | 54,061 | 58,476 | 162,193 | 149,844 | ||||||||||||||
| Operating Expense | ||||||||||||||||||
| Research & development | 15,212 | 13,040 | 45,617 | 41,722 | ||||||||||||||
| Selling & marketing | 16,317 | 11,376 | 49,323 | 41,685 | ||||||||||||||
| General & administrative | 11,495 | 11,326 | 39,348 | 32,390 | ||||||||||||||
| Total | 43,024 | 35,742 | 134,288 | 115,797 | ||||||||||||||
| Operating income | 11,037 | 22,734 | 27,905 | 34,047 | ||||||||||||||
| Other income (expense), net | 152 | 197 | (49 | ) | 477 | |||||||||||||
| Income before income taxes | 11,189 | 22,931 | 27,856 | 34,524 | ||||||||||||||
| Income tax expense | 3,385 | 7,724 | 3,403 | 11,289 | ||||||||||||||
| Net income | $ | 7,804 | $ | 15,207 | $ | 24,453 | $ | 23,235 | ||||||||||
| Net income per common share: | ||||||||||||||||||
| Basic | $ | 0.27 | $ | 0.55 | $ | 0.86 | $ | 0.84 | ||||||||||
| Diluted | $ | 0.26 | $ | 0.54 | $ | 0.84 | $ | 0.82 | ||||||||||
| Shares used in per common share calculations: | ||||||||||||||||||
| Basic | 28,733 | 27,650 | 28,359 | 27,520 | ||||||||||||||
| Diluted | 29,582 | 28,321 | 29,207 | 28,323 | ||||||||||||||
| Stock-based compensation included in above figures: | ||||||||||||||||||
| Cost of product revenue | $ | 250 | $ | 289 | $ | 496 | $ | 715 | ||||||||||
| Cost of contract revenue | - | - | - | - | ||||||||||||||
| Research & development | 669 | 365 | 1,963 | 1,271 | ||||||||||||||
| Selling & marketing | 348 | 158 | 832 | 574 | ||||||||||||||
| General & administrative | 2,210 | 1,796 | 6,378 | 5,463 | ||||||||||||||
| Total | $ | 3,477 | $ | 2,608 | $ | 9,669 | $ | 8,023 | ||||||||||
| iRobot Corporation | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||
| (unaudited, in thousands) | |||||||||||
| September 28, | December 29, | ||||||||||
| 2013 | 2012 | ||||||||||
| Assets | |||||||||||
| Cash and equivalents | $ | 139,731 | $ | 126,770 | |||||||
| Short term investments | 16,948 | 12,430 | |||||||||
| Accounts receivable, net | 54,027 | 29,413 | |||||||||
| Unbilled revenues | 1,556 | 1,196 | |||||||||
| Inventory | 48,853 | 36,965 | |||||||||
| Deferred tax assets | 19,517 | 19,266 | |||||||||
| Other current assets | 6,131 | 8,853 | |||||||||
| Total current assets | 286,763 | 234,893 | |||||||||
| Property, plant and equipment, net | 24,039 | 24,953 | |||||||||
| Deferred tax assets | 10,464 | 8,792 | |||||||||
| Goodwill | 48,751 | 48,951 | |||||||||
| Intangible assets, net | 23,587 | 28,224 | |||||||||
| Other assets | 10,501 | 8,500 | |||||||||
| Total assets | $ | 404,105 | $ | 354,313 | |||||||
| Liabilities and stockholders' equity | |||||||||||
| Accounts payable | $ | 46,644 | $ | 42,515 | |||||||
| Accrued expenses | 13,409 | 13,642 | |||||||||
| Accrued compensation | 14,868 | 11,864 | |||||||||
| Deferred revenue and customer advances | 2,026 | 6,257 | |||||||||
| Total current liabilities | 76,947 | 74,278 | |||||||||
| Long term liabilities | 4,556 | 4,218 | |||||||||
| Stockholders' equity | 322,602 | 275,817 | |||||||||
| Total liabilities and stockholders' equity | $ | 404,105 | $ | 354,313 | |||||||
| iRobot Corporation | |||||||||||||||||||||
| Consolidated Statements of Cash Flows | |||||||||||||||||||||
| (unaudited, in thousands) | |||||||||||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||||||||||
| September 28, | September 29, | September 28, | September 29, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||
| Net income | $ | 7,804 | $ | 15,207 | $ | 24,453 | $ | 23,235 | |||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||
| Depreciation and amortization | 2,480 | 2,868 | 9,029 | 8,181 | |||||||||||||||||
| (Gain)/loss on disposal of assets | (632 | ) | 612 | (351 | ) | 778 | |||||||||||||||
| Goodwill and intangible assets impairment | - | - | 1,988 | - | |||||||||||||||||
| Stock-based compensation | 3,477 | 2,608 | 9,669 | 8,023 | |||||||||||||||||
| Deferred income taxes, net | 251 | 1,375 | (662 | ) | (2,855 | ) | |||||||||||||||
| Tax benefit of excess stock based compensation deductions | (602 | ) | (426 | ) | (2,238 | ) | (1,461 | ) | |||||||||||||
| Non-cash director deferred compensation | 11 | 22 | 33 | 64 | |||||||||||||||||
| Changes in operating assets and liabilities — (use) source | |||||||||||||||||||||
| Accounts receivable | (2,923 | ) | (13,852 | ) | (24,614 | ) | (10,041 | ) | |||||||||||||
| Unbilled revenue | (505 | ) | 380 | (360 | ) | 669 | |||||||||||||||
| Inventory | (7,293 | ) | 2,005 | (11,888 | ) | (1,503 | ) | ||||||||||||||
| Other assets | 7,467 | 3,644 | 2,697 | 3,266 | |||||||||||||||||
| Accounts payable | (7,261 | ) | (6,895 | ) | 4,129 | (10,089 | ) | ||||||||||||||
| Accrued expenses | (616 | ) | 4,848 | (216 | ) | 1,596 | |||||||||||||||
| Accrued compensation | 1,755 | (701 | ) | 3,004 | (8,842 | ) | |||||||||||||||
| Deferred revenue and customer advances | (1,248 | ) | 236 | (4,231 | ) | 591 | |||||||||||||||
| Change in long term liabilities | 418 | (129 | ) | 338 | (315 | ) | |||||||||||||||
| Net cash provided by operating activities | 2,583 | 11,802 | 10,780 | 11,297 | |||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||
| Purchase of property and equipment | (2,481 | ) | (1,111 | ) | (5,309 | ) | (4,067 | ) | |||||||||||||
| Change in other assets | - | - | (2,000 | ) | (6,000 | ) | |||||||||||||||
| Purchases of investments | (2,500 | ) | - | (12,897 | ) | (5,086 | ) | ||||||||||||||
| Sales of investments | 4,544 | - | 8,044 | 2,500 | |||||||||||||||||
| Proceeds from sale of assets | 650 | - | 650 | - | |||||||||||||||||
| Net cash (used in)/provided by investing activities | 213 | (1,111 | ) | (11,512 | ) | (12,653 | ) | ||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||
| Proceeds from stock option exercises | 2,521 | 2,000 | 12,364 | 4,022 | |||||||||||||||||
| Income tax withholding payment associated with restricted stock vesting | (45 | ) | (2 | ) | (909 | ) | (777 | ) | |||||||||||||
| Tax benefit of excess stock based compensation deductions | 602 | 426 | 2,238 | 1,461 | |||||||||||||||||
| Net cash provided by financing activities | 3,078 | 2,424 | 13,693 | 4,706 | |||||||||||||||||
| Net increase in cash and cash equivalents | 5,874 | 13,115 | 12,961 | 3,350 | |||||||||||||||||
| Cash and cash equivalents, at beginning of period | 133,857 | 156,543 | 126,770 | 166,308 | |||||||||||||||||
| Cash and cash equivalents, at end of period | $ | 139,731 | $ | 169,658 | $ | 139,731 | $ | 169,658 | |||||||||||||
| iRobot Corporation | |||||||||||||||||||||
| Supplemental Information | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||||||||||
| September 28, | September 29, | September 28, | September 29, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
| Revenue: * | |||||||||||||||||||||
| Home Robots | $ | 111,363 | $ | 96,291 | $ | 319,590 | $ | 273,887 | |||||||||||||
| Domestic | $ | 35,700 | $ | 32,925 | $ | 106,269 | $ | 85,869 | |||||||||||||
| International | $ | 75,663 | $ | 63,366 | $ | 213,321 | $ | 188,018 | |||||||||||||
| Defense & Security | $ | 10,094 | $ | 27,832 | $ | 33,664 | $ | 55,217 | |||||||||||||
| Domestic | $ | 3,467 | $ | 26,667 | $ | 24,158 | $ | 49,957 | |||||||||||||
| International | $ | 6,627 | $ | 1,165 | $ | 9,506 | $ | 5,260 | |||||||||||||
| Product | $ | 9,754 | $ | 23,912 | $ | 29,291 | $ | 43,319 | |||||||||||||
| Contract | $ | 340 | $ | 3,920 | $ | 4,373 | $ | 11,898 | |||||||||||||
| Product Life Cycle | $ | 5,347 | $ | 14,910 | $ | 14,468 | $ | 24,018 | |||||||||||||
| Gross Margin Percent: | |||||||||||||||||||||
| Home Robots | 47.6 | % | 52.2 | % | 49.2 | % | 51.0 | % | |||||||||||||
| Defense & Security | 40.7 | % | 46.8 | % | 45.5 | % | 42.3 | % | |||||||||||||
| Total Company | 43.4 | % | 46.3 | % | 44.9 | % | 44.7 | % | |||||||||||||
| Units shipped: | |||||||||||||||||||||
| Home Robots * | 526 | 416 | 1,439 | 1,234 | |||||||||||||||||
| Defense & Security | 43 | 71 | 485 | 245 | |||||||||||||||||
| Average gross selling prices for robot units: | |||||||||||||||||||||
| Home Robots | $ | 225 | $ | 223 | $ | 230 | $ | 221 | |||||||||||||
| Defense & Security * | $ | 103 | $ | 127 | $ | 31 | $ | 79 | |||||||||||||
| Defense & Security Funded Product Backlog * | $ | 13,318 | $ | 11,944 | $ | 13,318 | $ | 11,944 | |||||||||||||
| Days sales outstanding | 41 | 40 | 41 | 40 | |||||||||||||||||
| Days in inventory | 64 | 44 | 64 | 44 | |||||||||||||||||
| Headcount | 525 | 590 | 525 | 590 | |||||||||||||||||
| * in thousands | |||||||||||||||||||||
| iRobot Corporation | ||||||||||||||||||
| Adjusted EBITDA Reconciliation to GAAP | ||||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||||
| September 28, | September 29, | September 28, | September 29, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Net income | $ | 7,804 | $ | 15,207 | $ | 24,453 | $ | 23,235 | ||||||||||
| Interest income, net | (212 | ) | (289 | ) | (529 | ) | (815 | ) | ||||||||||
| Income tax expense | 3,385 | 7,724 | 3,403 | 11,289 | ||||||||||||||
| Depreciation | 1,484 | 2,601 | 5,924 | 7,480 | ||||||||||||||
| Amortization | 996 | 267 | 3,105 | 701 | ||||||||||||||
| EBITDA | 13,457 | 25,510 | 36,356 | 41,890 | ||||||||||||||
| Stock-based compensation expense | 3,477 | 2,608 | 9,669 | 8,023 | ||||||||||||||
| Merger and acquisition expense | - | 661 | 393 | 687 | ||||||||||||||
| Net intellectual property litigation expense | 241 | 58 | 444 | 129 | ||||||||||||||
| Restructuring expense | - | 367 | 2,575 | 774 | ||||||||||||||
| Adjusted EBITDA | $ | 17,175 | $ | 29,204 | $ | 49,437 | $ | 51,503 | ||||||||||
| 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, net intellectual property litigation expenses, restructuring 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.
iRobot Corp.
Investor Relations
Elise Caffrey, 781-430-3003
ecaffrey@irobot.com
or
iRobot
Corp.
Media Relations
Matthew Lloyd, 781-430-3720
mlloyd@irobot.com