Document
false0001159167 0001159167 2020-07-21 2020-07-21


 
UNITED STATES
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): July 21, 2020


 iROBOT CORPORATION 

(Exact Name of Registrant as Specified in its Charter)
 
Delaware
 
 
(State or other jurisdiction of
incorporation or organization)
 
001-36414
 
77-0259335
(Commission File Number)
 
(I.R.S. Employer
Identification No.)

8 Crosby Drive
Bedford, MA 01730
(Address of principal executive offices, including 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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
IRBT
The Nasdaq Stock Market LLC

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 July 21, 2020, iRobot Corporation announced its financial results for the fiscal quarter ended June 27, 2020. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8‑K.
The information in this Current 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, as amended (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, as amended, 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 July 21, 2020, furnished herewith.
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document).











































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: July 21, 2020
 
iRobot Corporation
 
 
 
 
 
 
 
 
By: /s/ Glen D. Weinstein
 
 
Name: Glen D. Weinstein
 
 
Title: Chief Legal Officer and Secretary







































Exhibit


EX-99.1
Contacts:
 
 
 
 
Andrew Kramer
 
 
 
Charlie Vaida
Investor Relations
 
 
 
Media Relations
iRobot Corp.
 
 
 
iRobot Corp.
(781) 430-3003
 
 
 
(781) 430-3182
akramer@irobot.com
 
 
 
cvaida@irobot.com
 
 
 
 
 

iRobot Reports Second-Quarter 2020 Financial Results
Revenue of $280 Million Reflects Strong Growth in Premium Robots


BEDFORD, Mass., July 21, 2020 - iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the second quarter ended June 27, 2020.

Colin Angle, chairman and chief executive officer of iRobot, stated, “Consistent with our business update last month, iRobot delivered a stronger-than-expected second-quarter performance as demand strengthened meaningfully during the quarter. Our top-line results were highlighted by 43% growth in our premium robots. Quarterly revenue in each major geographic region surpassed our initial targets entering the quarter, led by 13% growth in the U.S. and 43% expansion in Japan. Our return to operating profitability reflected the combination of higher revenue, notable improvement in our gross margin and disciplined expense management.”

“We are making tangible progress in our strategy to differentiate our robots through their ability to deliver an exceptional cleaning experience as our product mix continued to shift toward our premium robots,” Angle noted. “Maintaining a clean home has taken on greater prominence during this pandemic. Consumers are increasingly realizing that our floor cleaning robots, particularly our premium products such as the Roomba i7 Series and s9 Series, along with the Braava jet m6, possess the cleaning efficacy, thoughtful intelligence and home understanding to become trusted cleaning companions. Related to this, our community of connected customers grew 13% sequentially from the end of March to approximately 6.9 million at the end of Q2.”

Angle concluded, “We move into the second half of 2020 with relatively low inventory levels at retailers and solid year-to-date sell-through momentum globally. Despite considerable macroeconomic uncertainty and limited visibility into the timing and magnitude of second-half orders, we are incrementally more optimistic about our second-half revenue growth prospects than we were in mid-June. Rather than an expected decline in annual revenue, we now anticipate 2020 revenue will be relatively unchanged to slightly higher than 2019. While our second-quarter profitability reflects the benefit of our tariff exclusion, we do not yet know whether this exclusion will be extended through the second half of the year. Nevertheless, we are focused on converting our second-half top-line results and prudent spending into a solid operating profitability and EPS performance.”

Financial Performance Highlights
Revenue for the second quarter of 2020 was $279.9 million, an increase of 8% from $260.2 million in the second quarter of 2019. The growth primarily reflected a 43% increase in premium robot (list price of $500 or higher) revenue. Revenue for the first half of 2020 was $472.4 million versus $497.8 million in the first half of 2019.





The second-quarter 2020 revenue performance was highlighted by 13% growth in the U.S. and 43% in Japan over the prior year period, which more than offset a 14% decline in EMEA.
Approximately 70% of the second-quarter 2020 revenue was estimated to be generated from e-commerce-related orders that span the company’s own website and app, dedicated e-commerce websites and the online arms of traditional retailers. Direct-to-consumer revenue of $33 million grew nearly 160% from the prior year’s second quarter.
Second-quarter 2020 GAAP operating income was $70.3 million, compared with GAAP operating income of $5.3 million in the second quarter of 2019. Second-quarter 2020 non-GAAP operating income of $40.5 million compared with non-GAAP operating income of $15.7 million in the same period one year ago. GAAP operating income for the first six months of 2020 was $50.1 million, compared with GAAP operating income of $27.5 million in the first half of 2019. First-half 2020 non-GAAP operating income was $26.1 million versus non-GAAP operating income of $48.8 million in the same period one year ago.
GAAP net income per share was $2.07 for the second quarter of 2020, compared with GAAP net income per share of $0.25 in the second quarter of 2019. Non-GAAP net income per share was $1.06 for the second quarter of 2020 versus non-GAAP second-quarter 2019 net income per share of $0.48. First-half GAAP 2020 net income per share was $1.42, compared with $1.03 in the first half of 2019. First-half 2020 non-GAAP net income per share was $0.73, compared with $1.43 in the first half of 2019. 
As of June 27, 2020, the company’s cash, cash equivalents and short-term investments were $242.3 million, compared with $263.5 million as of March 28, 2020 and $256.4 million as of December 28, 2019. The company, which has no debt, also has access to an unsecured revolving line of credit of $150 million, with an additional $75 million accordion feature.

Second-Quarter and Recent Business Highlights
On April 24, the United States Trade Representative granted iRobot an exclusion for its Roomba® robot vacuums from Section 301 tariffs through August 7, 2020. The company does not yet know whether an extension for its exclusion beyond the expiration date will be granted.
Completed all actions associated with the company’s April 2020 restructuring, recording a $1.9 million charge primarily associated with severance costs in the second quarter.
Continued progress in expanding the company’s community of engaged owners who have opted-in to its digital communications (in-app messaging, email or both) to approximately 6.9 million, up 13% since the end of the first quarter and nearly 110% from the same period one year ago.
Recognition for iRobot and its products continued to grow globally with awards and favorable reviews. iRobot was among the winners of the Robotics Business Review’s 2020 RBR50 Robotics Innovation Award while Roomba and Braava received accolades from Reviewed.com, Tom’s Guide, Popular Mechanics, Red Dot, Real Homes and LEE.

Second-Quarter 2020 Results Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to review its second-quarter 2020 financial results, and discuss its outlook going forward. Pertinent conference call details include:
 
Date:
Wednesday, July 22
Time:
8:30 a.m. ET
Call-In Number:
213-358-0894
Conference ID:
2875976






A live webcast of the conference call, along with the conference call prepared remarks, will be accessible on the event section of the company’s website at https://investor.irobot.com/events/event-details/q2-2020-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 July 29, and can be accessed by dialing 404-537-3406, passcode 2875976.

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 30 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: second-half 2020 revenue growth prospects; full-year 2020 revenue expectations ranging from relatively unchanged to slightly higher than 2019 revenue; converting our second-half top-line results and prudent spending into solid operating profitability and EPS performance; the potential extension of our tariff exclusion; and future market conditions. 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: the impact of COVID-19 on our business, the industry and markets in which we operate, and the global economy; our ability to operate in an emerging market; the financial strength of our customers and retailers; the impact of tariffs on goods imported into the United States; 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
 
For the six months ended
 
June 27, 2020
 
June 29, 2019
 
June 27, 2020
 
June 29, 2019
Revenue
$
279,883

 
$
260,172

 
$
472,418

 
$
497,833

Cost of revenue:
 
 
 
 
 
 
 
Cost of product revenue
100,686

 
138,891

 
214,981

 
253,929

Amortization of acquired intangible assets
1,185

 
3,111

 
1,470

 
6,188

Total cost of revenue
101,871

 
142,002

 
216,451

 
260,117

Gross profit
178,012

 
118,170

 
255,967

 
237,716

Operating expenses:
 
 
 
 
 
 
 
Research and development
36,557

 
35,650

 
73,316

 
70,919

Selling and marketing
49,062

 
56,409

 
85,656

 
95,245

General and administrative
21,856

 
20,592

 
46,429

 
43,499

Amortization of acquired intangible assets
254

 
269

 
508

 
540

Total operating expenses
107,729

 
112,920

 
205,909

 
210,203

Operating income
70,283

 
5,250

 
50,058

 
27,513

Other (expense) income, net
(384
)
 
1,533

 
(403
)
 
2,813

Income before income taxes
69,899

 
6,783

 
49,655

 
30,326

Income tax expense (benefit)
11,283

 
(424
)
 
9,174

 
599

Net income
$
58,616

 
$
7,207

 
$
40,481

 
$
29,727

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
Basic
$
2.10

 
$
0.26

 
$
1.44

 
$
1.06

Diluted
$
2.07

 
$
0.25

 
$
1.42

 
$
1.03

 
 
 
 
 
 
 
 
Number of shares used in per share calculations:
 
 
 
 
 
 
 
Basic
27,923

 
28,079

 
28,110

 
27,970

Diluted
28,280

 
28,763

 
28,414

 
28,779

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation included in above figures:
 
 
 
 
 
 
 
Cost of revenue
$
292

 
$
405

 
$
819

 
$
783

Research and development
2,167

 
2,547

 
4,645

 
4,925

Selling and marketing
700

 
916

 
1,466

 
1,719

General and administrative
2,711

 
3,726

 
4,131

 
7,031

Total
$
5,870

 
$
7,594

 
$
11,061

 
$
14,458

 
 
 
 
 
 
 
 









 iRobot Corporation
 Condensed Consolidated Balance Sheets
 (unaudited, in thousands)
 
 
 
 
 
 
 
 
 
June 27, 2020
 
December 28, 2019
 Assets
 
 
 
 Cash and cash equivalents
$
230,734

 
$
239,392

 Short term investments
11,560

 
17,032

 Accounts receivable, net
128,334

 
146,161

 Inventory
133,055

 
157,347

 Other current assets
92,555

 
34,285

Total current assets
596,238

 
594,217

 Property and equipment, net
78,432

 
75,988

 Operating lease right-of-use assets
45,978

 
47,478

 Deferred tax assets
39,237

 
41,791

 Goodwill
119,521

 
118,732

 Intangible assets, net
10,424

 
12,352

 Other assets
30,938

 
30,195

Total assets
$
920,768

 
$
920,753

 
 
 
 
 Liabilities and stockholders' equity
 
 
 
 Accounts payable
$
95,522

 
$
116,185

 Accrued expenses
73,745

 
81,768

 Deferred revenue and customer advances
3,512

 
4,549

Total current liabilities
172,779

 
202,502

 Operating lease liabilities
52,819

 
54,928

 Deferred tax liabilities
1,042

 
912

 Other long-term liabilities
12,066

 
10,342

Total long-term liabilities
65,927

 
66,182

Total liabilities
238,706

 
268,684

 Stockholders' equity
682,062

 
652,069

Total liabilities and stockholders' equity
$
920,768

 
$
920,753

 
 
 
 






 iRobot Corporation
Consolidated Statements of Cash Flows
 (unaudited, in thousands)
 
 
 
 
 
 
 
 
 
For the six months ended
 
June 27, 2020
 
June 29, 2019
Cash flows from operating activities:
 
 
 
Net income
$
40,481

 
$
29,727

Adjustments to reconcile net income to net cash provided by operating activities, net of the effects of acquisition:
 
 
 
Depreciation and amortization
17,784

 
17,905

Stock-based compensation
11,061

 
14,458

Deferred income taxes, net
2,579

 
535

Other
3,162

 
3,106

Changes in operating assets and liabilities — (use) source
 
 
 
Accounts receivable
17,891

 
67,808

Inventory
24,137

 
(27,112
)
Other current assets
(57,813
)
 
(14,246
)
Accounts payable
(20,576
)
 
(52,835
)
Accrued expenses and other liabilities
(10,549
)
 
(18,043
)
Net cash provided by operating activities
28,157

 
21,303

 
 
 
 
Cash flows from investing activities:
 
 
 
Additions of property and equipment
(18,968
)
 
(14,705
)
Change in other assets
(2,125
)
 
(4,541
)
Cash paid for business acquisition, net of cash acquired

 
(2,817
)
Sales and maturities of investments
7,000

 
5,880

Net cash used in investing activities
(14,093
)
 
(16,183
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from employee stock plans
3,690

 
4,680

Income tax withholding payment associated with restricted stock vesting
(1,816
)
 
(7,277
)
Stock repurchases
(25,000
)
 

Net cash used in financing activities
(23,126
)
 
(2,597
)
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
404

 
(101
)
Net (decrease) increase in cash and cash equivalents
(8,658
)
 
2,422

Cash and cash equivalents, at beginning of period
239,392

 
130,373

Cash and cash equivalents, at end of period
$
230,734

 
$
132,795

 
 
 
 





 iRobot Corporation
Supplemental Information
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 For the three months ended
 
For the six months ended
 
June 27, 2020
 
June 29, 2019
 
June 27, 2020
 
June 29, 2019
Revenue by Geography: *
 
 
 
 
 
 
 
Domestic
$
140,146

 
$
124,472

 
$
222,113

 
$
238,537

International
139,737

 
135,700

 
250,305

 
259,296

Total
$
279,883

 
$
260,172

 
$
472,418

 
$
497,833

 
 
 
 
 
 
 
 
Units Shipped *
 
 
 
 
 
 
 
Vacuum
930

 
935

 
1,553

 
1,699

Mopping
114

 
139

 
210

 
251

Total
1,044

 
1,074

 
1,763

 
1,950

 
 
 
 
 
 
 
 
Revenue by Product Category **
 
 
 
 
 
 
 
Vacuum***
$
251

 
$
237

 
$
420

 
$
458

Mopping***
29

 
23

 
52

 
40

 
$
280

 
$
260

 
$
472

 
$
498

 
 
 
 
 
 
 
 
Average gross selling prices for robot units
$
307

 
$
296

 
$
310

 
$
307

 
 
 
 
 
 
 
 
Section 301 tariff costs *
$
(6,609
)
 
$
4,982

 
$

 
$
8,500

Section 301 tariff impact on gross and operating margin
2.4
%
 
(1.9
)%
 
%
 
(1.7
)%
 
 
 
 
 
 
 
 
Headcount
1,120

 
1,120

 


 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* 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. 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.
Tariff Refunds: iRobot was granted a Section 301 List 3 Tariff Exclusion in April 2020, which temporarily eliminates tariffs on the Company’s products imported from China until August 7, 2020 and entitles the Company to a refund of all related tariffs previously paid since September 2018. We exclude the refunds for tariffs paid in 2018 and 2019 from our 2020 second-quarter and year-to-date non-GAAP measures because those tariff refunds associated with tariff costs incurred in the past have no impact to our current period earnings.
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. It also includes business combination adjustments including adjustments after the measurement period has ended. 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.
Restructuring and Other: Restructuring charges are related to one-time actions associated with workforce reductions, including severance costs, certain professional fees and other costs directly associated with resource realignments tied to strategic initiatives or changes in business conditions. We exclude this item from our non-GAAP measures when evaluating our recent and prospective business performance as such items vary significantly based on the magnitude of the action and do not reflect anticipated future operating costs. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of our business.
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 reassess the need for any valuation allowance recorded based on the non-GAAP profitability and have eliminated the effect of the valuation allowance recorded in the U.S. jurisdiction. 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 windfalls/shortfalls. 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.






iRobot Corporation
Supplemental Reconciliation of GAAP Actuals to Non-GAAP Actuals
(in thousands, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended
 
For the six months ended
 
June 27, 2020
 
June 29, 2019
 
June 27, 2020
 
June 29, 2019
 GAAP Revenue
$
279,883

 
$
260,172

 
$
472,418

 
$
497,833

 
 
 
 
 
 
 
 
 GAAP Gross Profit
$
178,012

 
$
118,170

 
$
255,967

 
$
237,716

Amortization of acquired intangible assets
1,185

 
3,111

 
1,470

 
6,188

Stock-based compensation
292

 
405

 
819

 
783

Tariff refunds
(40,017
)
 

 
(40,017
)
 

 Non-GAAP Gross Profit
$
139,472

 
$
121,686

 
$
218,239

 
$
244,687

 Non-GAAP Gross Profit Margin
49.8
%
 
46.8
 %
 
46.2
%
 
49.2
 %
 
 
 
 
 
 
 
 
 GAAP Operating Expenses
$
107,729

 
$
112,920

 
$
205,909

 
$
210,203

Amortization of acquired intangible assets
(254
)
 
(269
)
 
(508
)
 
(540
)
Stock-based compensation
(5,578
)
 
(7,189
)
 
(10,242
)
 
(13,675
)
Net merger, acquisition and divestiture income (expense)
66

 
(143
)
 
566

 
(295
)
IP litigation expense, net
(1,137
)
 
676

 
(1,753
)
 
207

Restructuring and other
(1,863
)
 

 
(1,863
)
 

 Non-GAAP Operating Expenses
$
98,963

 
$
105,995

 
$
192,109

 
$
195,900

 Non-GAAP Operating Expenses as a % of Non-GAAP Revenue
35.4
%
 
40.7
 %
 
40.7
%
 
39.4
 %
 
 
 
 
 
 
 
 
 GAAP Operating Income
$
70,283

 
$
5,250

 
$
50,058

 
$
27,513

Amortization of acquired intangible assets
1,439

 
3,380

 
1,978

 
6,728

Stock-based compensation
5,870

 
7,594

 
11,061

 
14,458

Tariff refunds
(40,017
)
 

 
(40,017
)
 

Net merger, acquisition and divestiture (income) expense
(66
)
 
143

 
(566
)
 
295

IP litigation expense, net
1,137

 
(676
)
 
1,753

 
(207
)
Restructuring and other
1,863

 

 
1,863

 

 Non-GAAP Operating Income
$
40,509

 
$
15,691

 
$
26,130

 
$
48,787

 Non-GAAP Operating Margin
14.5
%
 
6.0
 %
 
5.5
%
 
9.8
 %
 
 
 
 
 
 
 
 
 GAAP Income Tax Expense (Benefit)
$
11,283

 
$
(424
)
 
$
9,174

 
$
599

Tax effect of non-GAAP adjustments
(1,892
)
 
1,797

 
(3,723
)
 
3,622

Other tax adjustments
206

 
1,461

 
(1,178
)
 
5,527

 Non-GAAP Income Tax Expense
$
9,597

 
$
2,834

 
$
4,273

 
$
9,748

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





iRobot Corporation
Supplemental Reconciliation of GAAP Actuals to Non-GAAP Actuals continued
(in thousands, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended
 
For the six months ended
 
June 27, 2020
 
June 29, 2019
 
June 27, 2020
 
June 29, 2019
 GAAP Net Income
$
58,616

 
$
7,207

 
$
40,481

 
$
29,727

Amortization of acquired intangible assets
1,439

 
3,380

 
1,978

 
6,728

Stock-based compensation
5,870

 
7,594

 
11,061

 
14,458

Tariff refunds
(40,017
)
 

 
(40,017
)
 

Net merger, acquisition and divestiture (income) expense
(741
)
 
143

 
(1,241
)
 
295

IP litigation expense, net
1,137

 
(676
)
 
1,753

 
(207
)
Restructuring and other
1,863

 

 
1,863

 

(Gain) loss on strategic investments

 
(629
)
 
(87
)
 
(572
)
Income tax effect
1,686

 
(3,258
)
 
4,901

 
(9,149
)
 Non-GAAP Net Income
$
29,853

 
$
13,761

 
$
20,692

 
$
41,280

 
 
 
 
 
 
 
 
 GAAP Net Income Per Diluted Share
$
2.07

 
$
0.25

 
$
1.42

 
$
1.03

Amortization of acquired intangible assets
0.05

 
0.12

 
0.07

 
0.24

Stock-based compensation
0.21

 
0.26

 
0.39

 
0.50

Tariff refunds
(1.41
)
 

 
(1.41
)
 

Net merger, acquisition and divestiture (income) expense
(0.03
)
 

 
(0.04
)
 
0.01

IP litigation expense, net
0.04

 
(0.02
)
 
0.06

 
(0.01
)
Restructuring and other
0.07

 

 
0.07

 

(Gain) loss on strategic investments

 
(0.02
)
 

 
(0.02
)
Income tax effect
0.06

 
(0.11
)
 
0.17

 
(0.32
)
 Non-GAAP Net Income Per Diluted Share
$
1.06

 
$
0.48

 
$
0.73

 
$
1.43

 
 
 
 
 
 
 
 
Number of shares used in diluted per share calculation
28,280

 
28,763

 
28,414

 
28,779

 
 
 
 
 
 
 
 
Section 301 Tariff Costs
 
 
 
 
 
 
 
Section 301 tariff costs
$
(6,609
)
 
$
4,982

 
$

 
$
8,500

Impact of Section 301 tariff costs to gross and operating margin (GAAP & non-GAAP)
2.4
%
 
(1.9
)%
 
%
 
(1.7
)%
Impact of Section 301 tariff costs to net (loss) income per diluted share (GAAP & non-GAAP)
$
0.23

 
$
(0.17
)
 
$

 
$
(0.30
)
 
 
 
 
 
 
 
 
Supplemental Information
 
 
 
 
 
 
 
Days sales outstanding
42

 
32

 

 

Days in inventory
86

 
127