View:
Download DOC
Download PDF
Download XLS
Document


 
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


Date of report (Date of earliest event reported): April 23, 2019


 iROBOT CORPORATION 

(Exact Name of Registrant as Specified in its Charter)

 
Delaware
 
 
(State or other jurisdiction of
incorporation or organization)
 
001-36414
 
77-0259 335
(Commission File Number)
 
(I.R.S. Employer
Identification No.)
 
 
 
8 Crosby Drive, Bedford, MA
 
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):

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 




Item 2.02 Results of Operations and Financial Condition.

On April 23, 2019, iRobot Corporation announced its financial results for the fiscal quarter ended March 30, 2019. 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:

Exhibit No.
 
Description
 
 
 
 
Press Release issued by the registrant on April 23, 2019, 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.


Date: April 23, 2019
 
iRobot Corporation
 
 
 
 
 
 
 
 
By: /s/ Glen D. Weinstein
 
 
Name: Glen D. Weinstein
 
 
Title: Chief Legal Officer and Secretary







































Exhibit


EX-99.1
Contacts:
 
 
 
 
Elise Caffrey
 
 
 
Matthew Lloyd
Investor Relations
 
 
 
Media Relations
iRobot Corp.
 
 
 
iRobot Corp.
(781) 430-3003
 
 
 
(781) 430-3720
ecaffrey@irobot.com
 
 
 
mlloyd@irobot.com
 
 
 
 
 

iRobot Reports First-Quarter Financial Results
Strong Global Demand for New Roomba i7/i7+ Robots Continues

BEDFORD, Mass., April 23, 2019 - iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the first quarter ended March 30, 2019.

“We are off to the strong start we expected in 2019. First-quarter revenue grew 9% over Q1 2018. Domestic sell-through was strong, and demand for i7/i7+ exceeded our expectations despite the price increase we implemented on January 1st in the United States. Overseas, the launches of Roomba i7/i7+ in EMEA, Japan and China were very successful. Strong global demand for these products, coupled with the launch of two new products in the second quarter, are expected to drive Q2 revenue growth in the high teens year-over-year,” said Colin Angle, chairman and chief executive officer of iRobot.

“Given our Q1 results and our outlook for the rest of the year, we are reaffirming our 2019 full-year revenue and operating income expectations. We are increasing our full-year expectations for earnings per share to reflect the $0.14 favorable tax impact we recorded in Q1 that was previously un-forecasted. We anticipate full-year 2019 revenue of $1.28 to $1.31 billion, which is year-over-year growth of 17-20%, operating income of $108 to $118 million, and EPS of $3.15 to $3.40.

“I am very excited about the year ahead. We expect our global business to deliver strong financial performance that will fund our ability to reinforce our core product leadership in the RVC category, expand and diversify our product portfolio, widen our competitive moat through technological differentiation protected by our IP portfolio, and broaden our manufacturing and supply chain outside China."


Financial Results

•
Revenue for the first quarter of 2019 was $237.7 million, compared with $217.1 million for the first quarter of 2018.
•
GAAP operating income in the first quarter of 2019 was $22.3 million, compared with $25.4 million in the first quarter of 2018. Non-GAAP operating income in the first quarter of 2019 was $33.1 million, compared with $38.8 million in the first quarter of 2018.
•
Quarterly GAAP earnings per share were $0.78, compared with earnings per share of $0.71 in the first quarter of 2018. In Q1 2019, earnings per share included $0.14 of tax benefit relating primarily to stock compensation accounting, compared with a $0.05 tax benefit in Q1 2018. Quarterly non-GAAP earnings per share were $0.96 in 2019, compared with $1.04 in the first quarter of 2018.

Business Highlights

•
We delivered year-over-year Q1 quarterly revenue growth across all major regions.




•
First-quarter revenue grew 7% in the U.S. and 12% internationally over Q1 2018.
•
Our investments in R&D continue as planned, and our two new product introductions are on schedule for launch in the second quarter.

Financial Expectations

Management provides the following expectations with respect to the fiscal year ending December 28, 2019.

Fiscal Year 2019:
Current
Previous
Revenue
$1.28 - $1.31 billion
$1.28 - $1.31 billion
Operating Income
$108 - $118 million
$108 - $118 million
Earnings Per Share (before discrete items)
$3.15 - $3.40
$3.00 - $3.25

First-Quarter Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the first fiscal quarter of 2019, business outlook, and outlook for fiscal year 2019 financial performance.
Pertinent details include:
Date:
Wednesday, April 24, 2019
Time:
8:30 a.m. ET
Call-In Number:
213-358-0894
Passcode:
9766025

A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/events/event-details/q1-2019-irobot-corp-earnings-conference-call. 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 May 1, and can be accessed by dialing 404-537-3406, passcode 9766025.
 

About iRobot Corp.
iRobot®, the leading global consumer robot company, designs and builds robots that empower people to do more both inside and outside of the home. iRobot created the home robot cleaning category with the introduction of its Roomba® Robot Vacuum in 2002. Today, iRobot is a global enterprise that has sold more than 25 million robots worldwide. iRobot's product line, including the Roomba and the Braava® family of mopping robots, feature proprietary technologies and advanced concepts in cleaning, mapping and navigation. iRobot engineers are building an ecosystem of robots and technologies to enable the smart home. 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; growth and investment strategy; demand for robots; new product introductions; broadening manufacturing and supply chain capabilities; and anticipated revenue, operating income and earnings per share for the fiscal year ending December 28, 2019. 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 and adoption of our products; 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.








iRobot Corporation
Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
 For the three months ended
 
March 30, 2019
 
March 31, 2018
Revenue
$
237,661

 
$
217,068

Cost of revenue:
 
 
 
  Cost of product revenue
115,038

 
96,501

  Amortization of acquired intangible assets
3,077

 
4,782

Total cost of revenue
118,115

 
101,283

Gross profit
119,546

 
115,785

Operating expenses:
 
 
 
  Research and development
35,269

 
32,945

  Selling and marketing
38,836

 
31,329

  General and administrative
22,907

 
25,833

  Amortization of acquired intangible assets
271

 
273

      Total operating expenses
97,283

 
90,380

Operating income
22,263

 
25,405

Other income, net
1,280

 
519

Income before income taxes
23,543

 
25,924

Income tax expense
1,023

 
5,523

Net income
$
22,520

 
$
20,401

 
 
 
 
Net income per share:
 
 
 
   Basic
$
0.81

 
$
0.73

   Diluted
$
0.78

 
$
0.71

 
 
 
 
Number of shares used in per share calculations:
 
 
 
   Basic
27,863

 
27,988

   Diluted
28,763

 
28,923

 
 
 
 
 
 
 
 
Stock-based compensation included in above figures:
 
 
 
        Cost of revenue
$
378

 
$
341

        Research and development
2,379

 
1,689

        Selling and marketing
802

 
738

        General and administrative
3,305

 
3,178

            Total
$
6,864

 
$
5,946

 
 
 
 








 iRobot Corporation
 Condensed Consolidated Balance Sheets
 (unaudited, in thousands)
 
 
 
 
 
 
 
 
 
March 30,
2019
 
December 29,
2018
 Assets
 
 
 
 Cash and cash equivalents
$
173,094

 
$
130,373

 Short term investments
27,363

 
31,605

 Accounts receivable, net
54,496

 
162,166

 Inventory
181,128

 
164,633

 Other current assets
30,526

 
25,660

Total current assets
466,607

 
514,437

 Property and equipment, net
66,616

 
57,026

 Operating lease right-of-use assets
51,418

 
—

 Deferred tax assets
32,921

 
36,979

 Goodwill
117,546

 
118,896

 Intangible assets, net
20,689

 
24,273

 Other assets
23,305

 
15,350

Total assets
$
779,102

 
$
766,961

 
 
 
 
 Liabilities and stockholders' equity
 
 
 
 Accounts payable
$
84,690

 
$
136,742

 Accrued expenses
54,869

 
71,259

 Deferred revenue and customer advances
5,267

 
5,756

Total current liabilities
144,826

 
213,757

 Operating lease liabilities
59,805

 
—

 Deferred tax liabilities
3,296

 
4,005

 Other long-term liabilities
8,552

 
13,877

Total long-term liabilities
71,653

 
17,882

Total liabilities
216,479

 
231,639

 Stockholders' equity
562,623

 
535,322

Total liabilities and stockholders' equity
$
779,102

 
$
766,961

 
 
 
 





 iRobot Corporation
Consolidated Statements of Cash Flows
 (unaudited, in thousands)
 
 
 
 
 
 
 
 
 
For the three months ended
 
March 30,
2019
 
March 31,
2018
Cash flows from operating activities:
 
 
 
Net income
$
22,520

 
$
20,401

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
8,724

 
8,716

Stock-based compensation
6,864

 
5,946

Deferred income taxes, net
1,739

 
(3,061
)
Other
1,542

 
1,514

Changes in operating assets and liabilities — (use) source
 
 
 
Accounts receivable
106,561

 
73,642

Inventory
(16,863
)
 
(4,223
)
Prepaid and other current assets
(2,913
)
 
(6,114
)
Accounts payable
(52,744
)
 
(46,461
)
Accrued expenses and other liabilities
(22,727
)
 
(20,570
)
Net cash provided by operating activities
52,703

 
29,790

 
 
 
 
Cash flows from investing activities:
 
 
 
Additions of property and equipment
(6,004
)
 
(8,717
)
Change in other assets
(1,977
)
 
379

Purchases of investments
—

 
(6,438
)
Sales and maturities of investments
2,380

 
3,500

Net cash used in investing activities
(5,601
)
 
(11,276
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from employee stock plans
2,563

 
399

Income tax withholding payment associated with restricted stock vesting
(7,212
)
 
(3,478
)
Net cash used in financing activities
(4,649
)
 
(3,079
)
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
268

 
431

Net increase in cash and cash equivalents
42,721

 
15,866

Cash and cash equivalents, at beginning of period
130,373

 
128,635

Cash and cash equivalents, at end of period
$
173,094

 
$
144,501

 
 
 
 




 iRobot Corporation
Supplemental Information
(unaudited)
 
 
 
 
 
 
 
 
 
For the three months ended
 
March 30,
2019
 
March 31,
2018
Revenue: *
 
 
 
Consumer
$
237,661

 
$
217,068

 
 
 
 
    Domestic
$
114,065

 
$
106,862

    International
$
123,596

 
$
110,206

 
 
 
 
Gross margin
50.3
%
 
53.3
%
 
 
 
 
Consumer units shipped*
876

 
815

      Vacuum
764

 
712

      Mopping
112

 
103

 
 
 
 
Consumer revenue**
$
238

 
$
217

      Vacuum***
$
221

 
$
201

      Mopping***
$
17

 
$
16

 
 
 
 
Average gross selling prices for robot units - Consumer
$
321

 
$
309

 
 
 
 
Days sales outstanding
21

 
29

 
 
 
 
Days in inventory
140

 
101

 
 
 
 
Headcount
1,072

 
954

 
 
 
 
 
 
 
 
* in thousands
 
 
 
** in millions
 
 
 
*** includes accessory revenue
 
 
 
 
 
 
 



















iRobot Corporation
Explanation of Non-GAAP Measures

In addition to disclosing financial results in accordance with U.S. GAAP, this earnings release contains references to the non-GAAP financial measures described below. We use non-GAAP measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures.
Our non-GAAP financial measures reflect adjustments based on the following items. We also provide a non-GAAP financial measure of Adjusted EBITDA, as described below. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
Amortization of acquired intangible assets: Amortization of acquired intangible assets consists of amortization of intangible assets including completed technology, customer relationships, and reacquired distribution rights acquired in connection with business combinations. Amortization charges for our acquisition-related intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
Net Merger, Acquisition and Divestiture (Income) Expense: Net merger, acquisition and divestiture (income) expense primarily consists of transaction fees, professional fees, and transition and integration costs directly associated with mergers, acquisitions and divestitures. The occurrence and amount of these costs will vary depending on the timing and size of these transactions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
Stock-Based Compensation: Stock-based compensation is a non-cash charge relating to stock-based awards. We exclude this expense as it is a non-cash expense, and we assess our internal operations excluding this expense and believe it facilitates comparisons to the performance of other companies.
IP Litigation Expense, Net: IP litigation expense, net relates to legal costs incurred to litigate patent, trademark, copyright and false advertising infringements, or to oppose or defend against interparty actions related to intellectual property. Any settlement payment or proceeds resulting from these infringements are included or netted against the costs. We exclude these costs from our non-GAAP measures as we do not believe these costs have a direct correlation to the operations of our business and may vary in size depending on the timing and results of such litigations and settlements.
Gain/Loss on Strategic Investments: Gain/loss on strategic investments includes fair value adjustments, realized gains and losses on the sales of these investments and losses on the impairment of these investments. We exclude these items from our non-GAAP measures because we do not believe they correlate to the performance of our core business and may vary in size based on market conditions and events. We believe that the exclusion of these gains or losses provides investors with a supplemental view of our operational performance.




Income tax adjustments: Income tax adjustments include the tax effect of the non-GAAP adjustments, calculated using the appropriate statutory tax rate for each adjustment. We also exclude certain tax items that are not reflective of income tax expense incurred as a result of current period earnings. These certain tax items include, among other non-recurring tax items, impacts from the Tax Cuts and Jobs Act of 2017 and stock-based compensation windfall benefits. We believe disclosure of the income tax provision before the effect of such tax items is important to permit investors’ consistent earnings comparison between periods.
Adjusted EBITDA:  We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, net merger, acquisition and divestiture expense, gain on business acquisition, net intellectual property litigation expense, and restructuring expense.  Management believes this non-GAAP measure is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.





















 iRobot Corporation
Supplemental Reconciliation of GAAP Net Income to Adjusted EBITDA
 (unaudited, in thousands)
 
 
 
 
 
 
 
 
 
For the three months ended
 
March 30,
2019
 
March 31,
2018
 GAAP Net Income
$
22,520

 
$
20,401

 
 
 
 
 Interest income, net
(848
)
 
(299
)
 Income tax expense
1,023

 
5,523

 Depreciation
5,376

 
3,661

 Amortization of acquired intangible assets
3,348

 
5,055

 
 
 
 
 EBITDA
31,419

 
34,341

 
 
 
 
 Stock-based compensation
6,864

 
5,946

 Net merger, acquisition and divestiture (income) expense
152

 
(141
)
 IP litigation expense, net
469

 
2,571

 
 
 
 
 Adjusted EBITDA
$
38,904

 
$
42,717

 Adjusted EBITDA as a % of revenue
16.4
%
 
19.7
%































iRobot Corporation
Supplemental Reconciliation of GAAP Actuals to Non-GAAP Actuals
(in thousands, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
For the three months ended
 
March 30, 2019
 
March 31, 2018
 GAAP Revenue
$
237,661

 
$
217,068

 
 
 
 
 GAAP Gross Profit
119,546

 
115,785

Amortization of acquired intangible assets
3,077

 
4,782

Stock-based compensation
378

 
341

 Non-GAAP Gross Profit
$
123,001

 
$
120,908

 
 
 
 
 GAAP Operating Income
$
22,263

 
$
25,405

Amortization of acquired intangible assets
3,348


5,055

Stock-based compensation
6,864


5,946

Net merger, acquisition and divestiture (income) expense
152


(141
)
IP litigation expense, net
469


2,571

 Non-GAAP Operating Income
$
33,096

 
$
38,836

 
 
 
 
 GAAP Income Tax Expense
$
1,023

 
$
5,523

Tax effect of non-GAAP adjustments
1,824

 
3,340

Other tax adjustments
4,067

 
712

 Non-GAAP Income Tax Expense
$
6,914

 
$
9,575

 
 
 
 
 GAAP Net Income
$
22,520

 
$
20,401

Amortization of acquired intangible assets
3,348

 
5,055

Stock-based compensation
6,864

 
5,946

Net merger, acquisition and divestiture (income) expense
152

 
(141
)
IP litigation expense, net
469

 
2,571

(Gain)/loss on strategic investments
57

 
281

Income tax effect
(5,891
)
 
(4,052
)
 Non-GAAP Net Income
$
27,519

 
$
30,061

 
 
 
 
 GAAP Net Income Per Diluted Share
$
0.78

 
$
0.71

Amortization of acquired intangible assets
0.12

 
0.17

Stock-based compensation
0.24

 
0.20

Net merger, acquisition and divestiture (income) expense
—

 
—

IP litigation expense, net
0.02

 
0.09

(Gain)/loss on strategic investments
—

 
0.01

Income tax effect
(0.20
)
 
(0.14
)
 Non-GAAP Net Income Per Diluted Share
$
0.96

 
$
1.04