Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 22, 2009
iROBOT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 000-51598 | 77-0259335 | |
| (Commission File Number) | (IRS Employer Identification No.) | |
| 8 Crosby Drive, Bedford, Massachusetts | 01730 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (781) 430-3000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
| Item 2.02 Results of Operations and Financial Condition | ||||||||
| Item 9.01 Financial Statements and Exhibits | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| Ex-99.1 Press Release issued by the registrant on July 22, 2009 | ||||||||
Table of Contents
Item 2.02 Results of Operations and Financial Condition.
On July 22, 2009, iRobot Corporation announced its financial results for the fiscal quarter
ended June 27, 2009. A copy of the press release is being furnished as Exhibit 99.1 to this Report
on Form 8-K.
The information in this Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be
furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it
be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange
Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
| 99.1 | Press Release issued by the registrant on July 22, 2009, furnished herewith. |
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| iRobot Corporation |
||||
| July 22, 2009 | By: | /s/ Glen D. Weinstein | ||
| Name: | Glen D. Weinstein | |||
| Title: | General Counsel and Secretary | |||
Table of Contents
EXHIBIT INDEX
| Exhibit Number | Description | |
99.1
|
Press Release issued by the registrant on July 22, 2009, furnished herewith. |
Exhibit 99.1
Contacts: |
||
Elise Caffrey
|
Nancy Smith | |
Investor Relations
|
Media Relations | |
iRobot Corp.
|
iRobot Corp. | |
(781) 430-3003
|
(781) 430-3323 | |
ecaffrey@irobot.com
|
nsmith@irobot.com |
iRobot Reports Second-Quarter 2009 Results
Company’s Strong Results Exceed Revenue and Earnings Estimates
BEDFORD, Mass., July 22, 2009 — iRobot Corp. (NASDAQ: IRBT) today announced its financial results
for the fiscal quarter ended June 27, 2009. Revenue for the second quarter of 2009 decreased 8.7
percent to $61.3 million, compared with $67.2 million for the same quarter one year ago. Revenue
for the first half of 2009 decreased 5.0 percent to $118.3 million from $124.5 million for the
first half of 2008.
Gross margin for the second quarter increased to 26.8 percent of revenue, compared with 24.5
percent of revenue in the second quarter of 2008. First-half 2009 gross margin increased to 27.6
percent of revenue, up from 25.6 percent of revenue in the first half of 2008.
Loss per share for the second quarter of 2009 improved to $0.10, compared with $0.18 for the same
period a year ago. For the first half of 2009, loss per share improved to $0.18, compared with
$0.35 for the same period in 2008.
Adjusted EBITDA improved to $0.1 million for the second quarter of 2009, compared with a loss of
$5.8 million in the second quarter of 2008. For the first half of 2009, Adjusted EBITDA loss
improved to $0.1 million from $10.2 million in the first half of 2008.
“We delivered revenue and profit results for the second quarter at the top end of expectations in a
very challenging environment,” said Colin Angle, chairman and chief executive officer of iRobot.
“Adjusted EBITDA far exceeded expectations and represented nearly a $6 million improvement over
last year’s results. The most profound change over the course of the last year has been our focus
on driving operating cash flow. Over the past year we have generated operating cash flow of $31
million and improved our cash position by $21 million to nearly $51 million at the end of the
second quarter.
“Based on our performance through the first half, we are narrowing the range of our expectations
for full-year revenue and reaffirming our expectations for earnings per share and Adjusted EBITDA.
Continuing uncertainty about retail demand during the second half of the year and the potential
impact on defense spending of the government’s actions to fund the U.S. economic recovery makes us
cautious,” Angle concluded.
Business Highlights
iRobot Corporation
8 Crosby
Drive, Bedford, MA 01730, Phone: 781-430-3000, Fax: 781-430-3001, www.irobot.com
| • | International home robot revenue in the second quarter of 2009 increased 9 percent from the second quarter of 2008 and comprised more than half of total home robot revenue in the quarter. |
| • | Government & Industrial revenue was generated primarily from the sale of the iRobot PackBot 510 with FasTac Kit. During the quarter, the first PackBot 510 EOD’s with advanced vision and surveillance capabilities were shipped. The first ten small unmanned ground vehicles, SUGV 310’s (mini-EOD), were also delivered to the Army. |
| • | In the first half of 2009, operating cash flow was $11.9 million, compared with $0.2 million in the first half of 2008, as aggressive working capital management led to a $14.7 million reduction of inventory versus last year. |
Financial Expectations
Management provides the following expectations with respect to the fiscal year ending January 2,
2010 and the third quarter ending September 26, 2009.
Fiscal Year 2009:
Revenue
|
$295-$305 million | |
Adjusted EBITDA
|
$14-$17 million | |
Earnings Per Share
|
$0.00 — $0.04 |
Q3 2009:
Revenue
|
$75-$80 million | |
Adjusted EBITDA
|
$3 — $5 million | |
Earnings Per Share
|
$0.00 — $0.03 |
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 27, 2009, business outlook, and outlook for future financial
performance. Pertinent details include:
Date: Thurs., July 23, 2009
Time: 8:30 a.m. ET
Call-In Number: 719-325-4811
Time: 8:30 a.m. ET
Call-In Number: 719-325-4811
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 2717744.
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® 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.
iRobot Corporation
8 Crosby
Drive, Bedford, MA 01730, Phone: 781-430-3000, Fax: 781-430-3001, 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 and for the third
quarter ending September 26, 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. 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 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, and
non-cash stock compensation. A reconciliation between net loss and Adjusted EBITDA is provided
in the financial tables at the end of this press release.
iRobot Corporation
8 Crosby
Drive, Bedford, MA 01730, Phone: 781-430-3000, Fax: 781-430-3001, www.irobot.com
iRobot Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
| For the three months ended | For the six months ended | |||||||||||||||
| June 27, | June 28, | June 27, | June 28, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue |
||||||||||||||||
Product revenue |
$ | 52,609 | $ | 60,676 | $ | 102,300 | $ | 111,251 | ||||||||
Contract revenue |
8,731 | 6,526 | 15,976 | 13,253 | ||||||||||||
Total |
61,340 | 67,202 | 118,276 | 124,504 | ||||||||||||
Cost of Revenue |
||||||||||||||||
Product revenue |
37,098 | 44,382 | 70,537 | 80,577 | ||||||||||||
Contract revenue |
7,833 | 6,352 | 15,124 | 12,099 | ||||||||||||
Total |
44,931 | 50,734 | 85,661 | 92,676 | ||||||||||||
Gross Margin |
16,409 | 16,468 | 32,615 | 31,828 | ||||||||||||
Operating Expense |
||||||||||||||||
Research & development |
3,896 | 4,718 | 7,474 | 8,691 | ||||||||||||
Selling & marketing |
8,940 | 13,471 | 17,906 | 24,929 | ||||||||||||
General & administrative |
7,365 | 7,340 | 14,495 | 14,118 | ||||||||||||
Total |
20,201 | 25,529 | 39,875 | 47,738 | ||||||||||||
Operating loss |
(3,792 | ) | (9,061 | ) | (7,260 | ) | (15,910 | ) | ||||||||
Other income (expense), net |
91 | 242 | (208 | ) | 737 | |||||||||||
Pre-tax loss |
(3,701 | ) | (8,819 | ) | (7,468 | ) | (15,173 | ) | ||||||||
Income tax benefit |
(1,092 | ) | (4,306 | ) | (3,072 | ) | (6,655 | ) | ||||||||
Net loss |
$ | (2,609 | ) | $ | (4,513 | ) | $ | (4,396 | ) | $ | (8,518 | ) | ||||
Net loss per common share: |
||||||||||||||||
Basic |
$ | (0.10 | ) | $ | (0.18 | ) | $ | (0.18 | ) | $ | (0.35 | ) | ||||
Diluted |
$ | (0.10 | ) | $ | (0.18 | ) | $ | (0.18 | ) | $ | (0.35 | ) | ||||
Shares used in Per Common Share Calculations: |
||||||||||||||||
Basic |
24,967 | 24,610 | 24,946 | 24,561 | ||||||||||||
Diluted |
24,967 | 24,610 | 24,946 | 24,561 | ||||||||||||
Stock-based compensation included in above figures: |
||||||||||||||||
Cost of product revenue |
$ | 278 | $ | 216 | $ | 491 | $ | 370 | ||||||||
Cost of contract revenue |
162 | 114 | 325 | 173 | ||||||||||||
Research & development |
101 | 128 | 98 | 95 | ||||||||||||
Selling & marketing |
338 | 267 | 655 | 428 | ||||||||||||
General & administrative |
1,016 | 808 | 1,928 | 1,405 | ||||||||||||
Total |
$ | 1,895 | $ | 1,533 | $ | 3,497 | $ | 2,471 | ||||||||
iRobot Corporation
Condensed Consolidated Balance Sheet
(in thousands)
Condensed Consolidated Balance Sheet
(in thousands)
| June 27, | December 27, | |||||||
| 2009 | 2008 | |||||||
| (unaudited) | (audited) | |||||||
Assets |
||||||||
Cash and equivalents |
$ | 50,989 | $ | 40,852 | ||||
Accounts receivable, net |
31,291 | 35,930 | ||||||
Unbilled revenues |
3,459 | 2,014 | ||||||
Inventory, net |
28,638 | 34,560 | ||||||
Deferred tax assets |
7,565 | 7,299 | ||||||
Other current assets |
5,498 | 3,340 | ||||||
Total current assets |
127,440 | 123,995 | ||||||
Property, plant and equipment, net |
21,672 | 22,929 | ||||||
Deferred tax assets |
4,508 | 4,508 | ||||||
Other assets |
12,000 | 12,246 | ||||||
Total assets |
$ | 165,620 | $ | 163,678 | ||||
Liabilities and stockholders’ equity |
||||||||
Accounts payable |
$ | 21,108 | $ | 19,544 | ||||
Accrued expenses |
10,966 | 10,989 | ||||||
Accrued compensation |
7,027 | 6,393 | ||||||
Deferred revenue and customer advances |
2,974 | 2,632 | ||||||
Total current liabilities |
42,075 | 39,558 | ||||||
Long term liabilities |
4,229 | 4,444 | ||||||
Stockholders’ equity |
119,316 | 119,676 | ||||||
Total liabilities and stockholders’ equity |
$ | 165,620 | $ | 163,678 | ||||
iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
Consolidated Statement of Cash Flows
(unaudited, in thousands)
| For the three months ended | For the six months ended | |||||||||||||||
| June 27, | June 28, | June 27, | June 28, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net loss |
$ | (2,609 | ) | $ | (4,513 | ) | $ | (4,396 | ) | $ | (8,518 | ) | ||||
Adjustments
to reconcile net loss to net
cash provided by (used in) operating
activities: |
||||||||||||||||
Depreciation and amortization |
1,950 | 1,725 | 3,864 | 3,291 | ||||||||||||
Loss on disposal of fixed assets |
87 | 23 | 102 | 68 | ||||||||||||
Stock-based compensation |
1,895 | 1,533 | 3,497 | 2,471 | ||||||||||||
Benefit from deferred tax assets |
(511 | ) | — | (511 | ) | — | ||||||||||
Non-cash director deferred compensation |
33 | 23 | 66 | 47 | ||||||||||||
Changes in working capital — (use) source |
||||||||||||||||
Accounts receivable |
(8,099 | ) | (2,330 | ) | 4,639 | 23,428 | ||||||||||
Unbilled revenue |
(326 | ) | 419 | (1,445 | ) | 54 | ||||||||||
Inventory |
2,104 | 2,928 | 5,922 | 1,934 | ||||||||||||
Other assets |
(1,001 | ) | (4,047 | ) | (2,163 | ) | (8,116 | ) | ||||||||
Accounts payable |
1,981 | (4,001 | ) | 1,564 | (20,732 | ) | ||||||||||
Accrued expenses |
225 | 2,240 | (33 | ) | 179 | |||||||||||
Accrued compensation |
1,656 | 1,501 | 634 | 2,022 | ||||||||||||
Deferred revenue |
256 | (180 | ) | 342 | (628 | ) | ||||||||||
Change in long term liabilities |
(108 | ) | 4,659 | (215 | ) | 4,659 | ||||||||||
Net cash provided by (used in) operating
activities |
(2,467 | ) | (20 | ) | 11,867 | 159 | ||||||||||
Cash flows from investing activities: |
||||||||||||||||
Purchase of property and equipment |
(1,672 | ) | (8,340 | ) | (2,448 | ) | (12,277 | ) | ||||||||
Purchases of investments |
— | — | — | (29,997 | ) | |||||||||||
Sales of investments |
— | — | — | 29,050 | ||||||||||||
Net cash used in investing activities |
(1,672 | ) | (8,340 | ) | (2,448 | ) | (13,224 | ) | ||||||||
Cash flows from financing activities: |
||||||||||||||||
Proceeds from stock option exercises |
132 | 162 | 459 | 732 | ||||||||||||
Income tax withholding payment associated
with restricted stock award vesting |
(9 | ) | — | (9 | ) | — | ||||||||||
Tax benefit of excess stock based
compensation deductions |
268 | 97 | 268 | 358 | ||||||||||||
Net cash provided by financing activities |
391 | 259 | 718 | 1,090 | ||||||||||||
Net increase (decrease) in cash and cash
equivalents |
(3,748 | ) | (8,101 | ) | 10,137 | (11,975 | ) | |||||||||
Cash and cash equivalents, at beginning of
period |
54,737 | 22,861 | 40,852 | 26,735 | ||||||||||||
Cash and cash equivalents, at end of period |
$ | 50,989 | $ | 14,760 | $ | 50,989 | $ | 14,760 | ||||||||
iRobot Corporation
Supplemental Information
(unaudited)
Supplemental Information
(unaudited)
| For the three months ended | For the six months ended | |||||||||||||||
| June 27, | June 28, | June 27, | June 28, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue by business unit (in thousands): |
||||||||||||||||
Home Robots |
||||||||||||||||
Product |
$ | 34,099 | $ | 41,705 | $ | 66,922 | $ | 71,798 | ||||||||
Contract |
— | — | — | 55 | ||||||||||||
Government & Industrial |
||||||||||||||||
Product |
18,510 | 18,971 | 35,378 | 39,453 | ||||||||||||
Contract |
8,731 | 6,526 | 15,976 | 13,198 | ||||||||||||
| $ | 61,340 | $ | 67,202 | $ | 118,276 | $ | 124,504 | |||||||||
Direct Revenue — Home Robots (in
thousands) |
$ | 6,037 | $ | 7,884 | $ | 11,689 | $ | 15,745 | ||||||||
Product Lifecycle Revenue — Government &
Industrial (in thousands) |
$ | 4,542 | $ | 2,172 | $ | 8,931 | $ | 5,374 | ||||||||
International Revenue (in thousands): |
||||||||||||||||
Home Robots |
$ | 19,741 | $ | 18,175 | $ | 37,279 | $ | 28,581 | ||||||||
Government & Industrial |
$ | 1,640 | $ | 398 | $ | 4,455 | $ | 1,209 | ||||||||
Average selling prices for robot units: |
||||||||||||||||
Home Robots |
$ | 159 | $ | 157 | $ | 160 | $ | 160 | ||||||||
Government & Industrial (in thousands) |
$ | 93 | $ | 99 | $ | 88 | $ | 104 | ||||||||
Gross Margin by business unit (in
thousands): |
||||||||||||||||
Home Robots |
$ | 10,109 | $ | 10,759 | $ | 20,261 | $ | 18,828 | ||||||||
Government & Industrial |
6,300 | 5,709 | 12,354 | 13,000 | ||||||||||||
| $ | 16,409 | $ | 16,468 | $ | 32,615 | $ | 31,828 | |||||||||
Units shipped by business unit: |
||||||||||||||||
Home Robots (in thousands) |
192 | 237 | 375 | 406 | ||||||||||||
Government & Industrial |
151 | 170 | 301 | 326 | ||||||||||||
Government & Industrial Funded Backlog
(in thousands) |
$ | 17,537 | $ | 22,355 | $ | 17,537 | $ | 22,355 | ||||||||
Days sales outstanding |
52 | 36 | 52 | 36 | ||||||||||||
Inventory turnover |
5.2 | 4.1 | 5.2 | 4.1 | ||||||||||||
Net cash provided by (used in) operating
activities (in thousands) |
$ | (2,467 | ) | $ | (20 | ) | $ | 11,867 | $ | 159 | ||||||
Headcount |
508 | 482 | 508 | 482 | ||||||||||||
iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
| For the three months ended | For the six months ended | |||||||||||||||
| June 27, | June 28, | June 27, | June 28, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Net loss |
$ | (2,609 | ) | $ | (4,513 | ) | $ | (4,396 | ) | $ | (8,518 | ) | ||||
Interest income, net |
(15 | ) | (260 | ) | (36 | ) | (829 | ) | ||||||||
Income tax benefit |
(1,092 | ) | (4,306 | ) | (3,072 | ) | (6,655 | ) | ||||||||
Depreciation |
1,820 | 1,725 | 3,613 | 3,291 | ||||||||||||
Amortization |
128 | — | 251 | — | ||||||||||||
EBITDA |
(1,768 | ) | (7,354 | ) | (3,640 | ) | (12,711 | ) | ||||||||
Stock-based compensation expense |
1,895 | 1,533 | 3,497 | 2,471 | ||||||||||||
Adjusted EBITDA |
$ | 127 | $ | (5,821 | ) | $ | (143 | ) | $ | (10,240 | ) | |||||
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, 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.