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

iROBOT CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware

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))

 

 

Item 2.02 Results of Operations and Financial Condition.

     On July 26, 2011, iRobot Corporation announced its financial results for the fiscal quarter ended July 2, 2011. 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 26, 2011, furnished herewith.

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.

EXHIBIT INDEX

Exhibit Number		Description
99.1		Press Release issued by the registrant on July 26, 2011, furnished herewith.

Exhibit 99.1

Contacts:
Elise Caffrey		Charlie Vaida
Investor Relations		Media Relations
iRobot Corp.		iRobot Corp.
(781) 430-3003		(781) 430-3182
ecaffrey@irobot.com		cvaida@irobot.com

iRobot Reports Second-Quarter Financial Results
Exceeds Expectations; Increases 2011 Outlook

BEDFORD, Mass., July 26, 2011 — iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the second quarter ended July 2, 2011.

	•		Revenue for the second quarter of 2011 increased 11 percent to $108.1 million, compared with $97.8 million for the same quarter one year ago. Revenue for the first half of 2011 also increased 11 percent to $214.4 million from $192.7 million last year.
	•		Net income in the second quarter of 2011 was $8.0 million, compared with $5.3 million in the second quarter of 2010. For the first half, net income was $15.5 million, up from $11.5 million a year ago.
	•		Quarterly earnings per share grew by 45 percent to $0.29, compared with $0.20 in the second quarter last year. First-half earnings per share were $0.56, up from $0.44 in 2010, an increase of 27 percent.
	•		Adjusted EBITDA for the second quarter of 2011 was $16.2 million, compared with $12.4 million in the second quarter of 2010. Adjusted EBITDA for the first half of 2011 was $31.3 million, compared with $26.1 million a year ago.

“Our performance in the second quarter and first half was outstanding, particularly given very challenging 2010 comps,” said Colin Angle, chairman and chief executive officer of iRobot. “Our second-quarter results exceeded our expectations for both divisions and reflect a positive trend in domestic consumer spending for our home robot products. Following strong performance by both divisions and our expectations for continuing profitable growth, we are increasing our full-year expectations.”

Business Highlights

•		Strong demand in both domestic and overseas markets drove a 21 percent year-over-year increase in second-quarter home robot revenue. In Q2, domestic home robot revenue grew 30 percent while international home robot revenue grew 16 percent and comprised 65 percent of total home robot revenue.
•		During the second quarter, the Government and Industrial Robots division received delivery orders totaling $41 million, primarily for delivery of PackBot and SUGV robots.
•		Cash and investments totaled $123 million at the end of the second quarter, up $24 million from Q2 2010. The company increased its revolving credit facility to $75 million, providing additional financial capacity.

iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

Financial Expectations

Management provides the following expectations with respect to the third quarter ending October 1, 2011.

Q3 2011:
Revenue		$115 — $120 million
Earnings Per Share		$0.22 — $0.26
Adjusted EBITDA		$14 — $16 million

Management raises its expectations for the full year ending December 31, 2011.

Fiscal Year 2011:		Current		Prior
Revenue		$460 — $470 million		$450 — $465 million
Earnings Per Share		$1.04 — $1.10		$0.90 — $1.00
Adjusted EBITDA		$62 — $64 million		$58 — $62 million

Second-Quarter Conference Call

iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the second fiscal quarter and outlook for the third quarter and full year 2011 financial performance. Pertinent details include:

Date:		Wednesday, July 27, 2011
Time:		8:30 a.m. ET
Call-In Number:		617-786-2964
Passcode:		20572285

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 August 3, and can be accessed by dialing 617-801-6888, passcode 35680683.

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.

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 2011 and the third quarter of 2011. 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

iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

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, merger and acquisition expenses, and non-cash stock compensation. A reconciliation between net income and Adjusted EBITDA is provided in the financial tables at the end of this press release.

iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

iRobot Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)

		For the three months ended								For the six months ended
		July 2,				July 3,				July 2,				July 3,
		2011				2010				2011				2010
Revenue
Product revenue		$	97,396			$	85,945			$	194,107			$	172,056
Contract revenue			10,686				11,859				20,252				20,678
Total			108,082				97,804				214,359				192,734
Cost of Revenue
Product revenue			57,835				55,825				114,025				111,425
Contract revenue			7,711				8,009				14,344				14,622
Total			65,546				63,834				128,369				126,047
Gross Margin			42,536				33,970				85,990				66,687
Operating Expense
Research & development			8,146				5,691				16,875				10,190
Selling & marketing			12,767				10,581				25,748				20,225
General & administrative			10,097				9,313				20,697				17,789
Total			31,010				25,585				63,320				48,204
Operating income			11,526				8,385				22,670				18,483
Other income, net			112				40				350				69
Pre-tax income			11,638				8,425				23,020				18,552
Income tax expense			3,614				3,111				7,519				7,070
Net income		$	8,024			$	5,314			$	15,501			$	11,482
Net income per common share:
Basic		$	0.30			$	0.21			$	0.59			$	0.46
Diluted		$	0.29			$	0.20			$	0.56			$	0.44
Shares used in per common share calculations:
Basic			26,667				25,294				26,388				25,217
Diluted			27,911				26,375				27,733				26,226
Stock-based compensation included in above figures:
Cost of product revenue		$	320			$	355			$	571			$	687
Cost of contract revenue			156				110				250				236
Research & development			239				245				320				277
Selling & marketing			158				289				339				645
General & administrative			1,538				1,202				2,710				2,246
Total		$	2,411			$	2,201			$	4,190			$	4,091

iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)

		July 2,				January 1,
		2011				2011
Assets
Cash and equivalents		$	108,725			$	108,383
Short term investments			13,816				13,928
Accounts receivable, net			34,529				34,056
Unbilled revenues			8,034				4,012
Inventory			34,202				27,160
Deferred tax assets			13,223				12,917
Other current assets			10,910				6,137
Total current assets			223,439				206,593
Property, plant and equipment, net			28,128				25,620
Deferred tax assets			8,733				8,338
Other assets			13,563				13,780
Total assets		$	273,863			$	254,331
Liabilities and stockholders’ equity
Accounts payable		$	33,273			$	38,689
Accrued expenses			13,854				15,790
Accrued compensation			13,094				17,827
Deferred revenue and customer advances			2,040				3,534
Total current liabilities			62,261				75,840
Long term liabilities			3,850				3,584
Stockholders’ equity			207,752				174,907
Total liabilities and stockholders’ equity		$	273,863			$	254,331

iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)

		For the three months ended								For the six months ended
		July 2,				July 3,				July 2,				July 3,
		2011				2010				2011				2010
Cash flows from operating activities:
Net income		$	8,024			$	5,314			$	15,501			$	11,482
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			2,457				1,917				4,640				3,755
Loss on disposal of property and equipment			3				2				473				47
Stock-based compensation			2,411				2,201				4,190				4,091
Benefit from deferred tax assets			(1,167	)			—				(1,167	)			—
Non-cash director deferred compensation			44				33				82				66
Changes in operating assets and liabilities — (use) source
Accounts receivable			(6,920	)			(1,054	)			(473	)			8,038
Unbilled revenue			(100	)			978				(4,022	)			(482	)
Inventory			869				(816	)			(7,042	)			1,722
Other assets			(2,880	)			44				(4,809	)			797
Accounts payable			(10,971	)			2,277				(5,416	)			1,209
Accrued expenses			(974	)			(990	)			(1,889	)			(1,031	)
Accrued compensation			4,945				4,850				(4,733	)			(2,372	)
Deferred revenue			(1,608	)			(7	)			(1,494	)			(1,939	)
Change in long term liabilities			(123	)			(107	)			266				(215	)
Net cash provided by (used in) operating activities			(5,990	)			14,642				(5,893	)			25,168
Cash flows from investing activities:
Purchase of property and equipment			(2,654	)			(3,629	)			(7,208	)			(5,668	)
Purchases of investments			—				(7,831	)			(5,000	)			(25,411	)
Sales of investments			2,500				7,500				5,000				7,500
Net cash used in investing activities			(154	)			(3,960	)			(7,208	)			(23,579	)
Cash flows from financing activities:
Proceeds from stock option exercises			4,013				1,823				8,597				1,927
Income tax withholding payment associated with restricted stock vesting			(356	)			(120	)			(809	)			(279	)
Tax benefit of excess stock based compensation deductions			3,213				568				5,655				717
Net cash provided by financing activities			6,870				2,271				13,443				2,365
Net increase in cash and cash equivalents			726				12,953				342				3,954
Cash and cash equivalents, at beginning of period			107,999				62,857				108,383				71,856
Cash and cash equivalents, at end of period		$	108,725			$	75,810			$	108,725			$	75,810

iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

iRobot Corporation
Supplemental Information
(unaudited)

		For the three months ended								For the six months ended
		July 2,				July 3,				July 2,				July 3,
		2011				2010				2011				2010
Revenue: *
Home Robots		$	63,892			$	52,904			$	131,774			$	105,450
Domestic		$	22,395			$	17,162			$	40,453			$	33,258
International		$	41,497			$	35,742			$	91,321			$	72,192
Government & Industrial		$	44,190			$	44,900			$	82,585			$	87,283
Domestic		$	43,378			$	41,365			$	73,580			$	76,605
International		$	812			$	3,535			$	9,005			$	10,678
Product		$	33,504			$	33,041			$	62,333			$	66,605
Contract		$	10,686			$	11,859			$	20,252			$	20,678
Product Life Cycle		$	6,617			$	9,582			$	19,320			$	17,561
Gross Margin Percent:
Home Robots			44.1	%			39.2	%			44.8	%			38.6	%
Government & Industrial			32.5	%			29.5	%			32.6	%			29.8	%
Total Company			39.4	%			34.7	%			40.1	%			34.6	%
Units shipped:
Home Robots *			328				294				677				581
Government & Industrial			192				250				306				516
Average gross selling prices for robot units:
Home Robots		$	195			$	188			$	194			$	189
Government & Industrial *		$	140			$	94			$	141			$	95
Government & Industrial Funded Product Backlog *		$	15,118			$	12,164			$	15,118			$	12,164
Days sales outstanding			36				27				36				27
Days in inventory			54				50				54				50
Headcount			687				613				687				613

iRobot Corporation
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com

iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)

		For the three months ended								For the six months ended
		July 2,				July 3,				July 2,				July 3,
		2011				2010				2011				2010
Net income		$	8,024			$	5,314			$	15,501			$	11,482
Interest income, net			(331	)			(197	)			(541	)			(367	)
Income tax expense			3,614				3,111				7,519				7,070
Depreciation			2,169				1,778				4,227				3,477
Amortization			288				139				413				278
EBITDA			13,764				10,145				27,119				21,940
Stock-based compensation expense			2,411				2,201				4,190				4,091
Merger and acquisition expense			—				61				—				71
Adjusted EBITDA		$	16,175			$	12,407			$	31,309			$	26,102

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
8 Crosby Drive, Bedford, MA 01730-1402 Ÿ 781.430.3000 Ÿ Fax 781.430.3001 Ÿ www.irobot.com