BEDFORD, Mass., Oct 25, 2011 (BUSINESS WIRE) --
iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the third quarter ended October 1, 2011.
- Revenue for the third quarter of 2011 increased 28 percent to $120.4 million, compared with $94.2 million for the same quarter one year ago. Revenue for the first nine months of 2011 increased 17 percent to $334.7 million from $287.0 million last year.
- Net income in the third quarter of 2011 was $14.1 million, compared with $7.0 million in the third quarter of 2010. For the first nine months, net income was $29.6 million, up from $18.5 million a year ago. Net income included a one-time tax benefit of $3.5 million in the third-quarter and nine-month periods in 2011. Net income for the third-quarter and nine-month periods in 2010 included a one-time tax benefit of $2.3 million.
- Quarterly earnings per share grew by 85 percent to $0.50, compared with $0.27 in the third quarter last year. Nine-month earnings per share grew to $1.06, up from $0.70 in 2010. EPS included a one-time tax benefit of $0.12 in 2011 and $0.09 in 2010.
- Adjusted EBITDA for the third quarter of 2011 was $20.2 million, or 17 percent of revenue, compared with $11.5 million, or 12 percent of revenue, in the third quarter of 2010. Adjusted EBITDA for the first nine months of 2011 was $51.7 million, compared with $37.6 million for the same period a year ago.
"Our third quarter and year-to-date results were excellent across all measures and far exceeded our expectations," said Colin Angle, chairman and chief executive officer of iRobot. "Due to strong performance by both divisions and our expectations for the fourth quarter, we are increasing our full-year 2011 expectations for the second time this year."
Business Highlights
- International home robot business continued to perform well in long-term markets as it lays the groundwork to enter new markets. In Q3, international home robot revenue grew 56 percent over Q3 2010 and comprised 75 percent of total home robot revenue.
- During the third quarter, Government and Industrial Robots division revenue grew 21 percent, and it received delivery orders totaling $51 million, primarily for delivery of PackBot and SUGV robots.
- Operating cash flow was $25 million in Q3 2011, due to record net income and reduced inventory levels, compared with $10 million in the third quarter last year. Cash and investments totaled $145 million, up $38 million from Q3 last year.
- Research and development expense increased 45 percent in Q3 2011 and 58 percent in the first nine months year over year.
- Driven by expectations for a reduction in government-funded research in 2012, iRobot implemented a reduction in force in the Government and Industrial Robots division in the fourth quarter.
Financial Expectations
Management provides the following expectations with respect to the fourth quarter ending December 31, 2011.
|
Q4 2011: |
|||||||||||
| Revenue | $130 - $135 million | ||||||||||
|
Earnings Per Share |
$0.26 - $0.30 |
||||||||||
| Adjusted EBITDA | $16 - $18 million | ||||||||||
Management raises its expectations for the full year ending December 31, 2011.
|
Fiscal Year 2011: |
Current |
Prior |
||||||||||||||||||||
| Revenue | $465 - $470 million | $460 - $470 million | ||||||||||||||||||||
| Earnings Per Share | $1.32 - $1.36 | $1.04 - $1.10 | ||||||||||||||||||||
| Adjusted EBITDA | $67 - $69 million | $62 - $64 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 and outlook for 2011 financial performance. Pertinent details include:
| Date: | Wednesday, October 26, 2011 | ||||||||||
| Time: | 8:30 a.m. ET | ||||||||||
| Call-In Number: | 617-597-5394 | ||||||||||
| Passcode: | 14810709 | ||||||||||
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 November 2, and can be accessed by dialing 617-801-6888, passcode 71428742.
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(R) 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 fourth 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 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, the timing of government contracts and orders, 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, restructuring expenses, net intellectual property litigation 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 | |||||||||||||
| Consolidated Statement of Income | |||||||||||||
| (in thousands, except per share amounts) | |||||||||||||
| (unaudited) | |||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||
| October 1, | October 2, | October 1, | October 2, | ||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||
| Revenue | |||||||||||||
| Product revenue | $ | 109,993 | $ | 85,051 | $ | 304,100 | $ | 257,107 | |||||
| Contract revenue | 10,380 | 9,172 | 30,632 | 29,850 | |||||||||
| Total | 120,373 | 94,223 | 334,732 | 286,957 | |||||||||
| Cost of Revenue | |||||||||||||
| Product revenue | 63,670 | 54,472 | 177,695 | 165,897 | |||||||||
| Contract revenue | 6,660 | 6,494 | 21,004 | 21,116 | |||||||||
| Total | 70,330 | 60,966 | 198,699 | 187,013 | |||||||||
| Gross Margin | 50,043 | 33,257 | 136,033 | 99,944 | |||||||||
| Operating Expense | |||||||||||||
| Research & development | 8,948 | 6,185 | 25,823 | 16,375 | |||||||||
| Selling & marketing | 14,553 | 10,734 | 40,301 | 30,959 | |||||||||
| General & administrative | 10,962 | 8,904 | 31,659 | 26,693 | |||||||||
| Total | 34,463 | 25,823 | 97,783 | 74,027 | |||||||||
| Operating income | 15,580 | 7,434 | 38,250 | 25,917 | |||||||||
| Other income (expense), net | (92 | ) | 299 | 258 | 368 | ||||||||
| Pre-tax income | 15,488 | 7,733 | 38,508 | 26,285 | |||||||||
| Income tax expense | 1,436 | 701 | 8,955 | 7,771 | |||||||||
| Net income | $ | 14,052 | $ | 7,032 | $ | 29,553 | $ | 18,514 | |||||
| Net income per common share: | |||||||||||||
| Basic | $ | 0.52 | $ | 0.28 | $ | 1.11 | $ | 0.73 | |||||
| Diluted | $ | 0.50 | $ | 0.27 | $ | 1.06 | $ | 0.70 | |||||
| Shares used in per common share calculations: | |||||||||||||
| Basic | 26,902 | 25,428 | 26,568 | 25,293 | |||||||||
| Diluted | 27,940 | 26,480 | 27,823 | 26,319 | |||||||||
| Stock-based compensation included in above figures: | |||||||||||||
| Cost of product revenue | $ | 344 | $ | 310 | $ | 915 | $ | 997 | |||||
| Cost of contract revenue | 115 | 101 | 365 | 337 | |||||||||
| Research & development | 162 | 211 | 481 | 488 | |||||||||
| Selling & marketing | 174 | 240 | 513 | 885 | |||||||||
| General & administrative | 1,401 | 1,079 | 4,112 | 3,325 | |||||||||
| Total | $ | 2,196 | $ | 1,941 | $ | 6,386 | $ | 6,032 | |||||
| iRobot Corporation | ||||||
| Condensed Consolidated Balance Sheet | ||||||
| (unaudited, in thousands) | ||||||
| October 1, | January 1, | |||||
| 2011 | 2011 | |||||
| Assets | ||||||
| Cash and equivalents | $ | 131,662 | $ | 108,383 | ||
| Short term investments | 13,662 | 13,928 | ||||
| Accounts receivable, net | 41,400 | 34,056 | ||||
| Unbilled revenues | 7,899 | 4,012 | ||||
| Inventory | 31,989 | 27,160 | ||||
| Deferred tax assets | 14,013 | 12,917 | ||||
| Other current assets | 12,655 | 6,137 | ||||
| Total current assets | 253,280 | 206,593 | ||||
| Property, plant and equipment, net | 28,886 | 25,620 | ||||
| Deferred tax assets | 6,307 | 8,338 | ||||
| Other assets | 13,453 | 13,780 | ||||
| Total assets | $ | 301,926 | $ | 254,331 | ||
| Liabilities and stockholders' equity | ||||||
| Accounts payable | $ | 40,522 | $ | 38,689 | ||
| Accrued expenses | 15,237 | 15,790 | ||||
| Accrued compensation | 15,045 | 17,827 | ||||
| Deferred revenue and customer advances | 2,358 | 3,534 | ||||
| Total current liabilities | 73,162 | 75,840 | ||||
| Long term liabilities | 3,727 | 3,584 | ||||
| Stockholders' equity | 225,037 | 174,907 | ||||
| Total liabilities and stockholders' equity | $ | 301,926 | $ | 254,331 | ||
| iRobot Corporation | ||||||||||||||||
| Consolidated Statement of Cash Flows | ||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||
| October 1, | October 2, | October 1, | October 2, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income | $ | 14,052 | $ | 7,032 | $ | 29,553 | $ | 18,514 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 2,597 | 1,918 | 7,237 | 5,673 | ||||||||||||
| Loss on disposal of property and equipment | 3 | 70 | 476 | 117 | ||||||||||||
| Stock-based compensation | 2,196 | 1,941 | 6,386 | 6,032 | ||||||||||||
| Deferred income taxes, net | 1,614 | (3,867 | ) | 447 | (3,867 | ) | ||||||||||
| Non-cash director deferred compensation | 44 | 33 | 126 | 99 | ||||||||||||
| Changes in operating assets and liabilities -- (use) source | ||||||||||||||||
| Accounts receivable | (6,871 | ) | (661 | ) | (7,344 | ) | 7,377 | |||||||||
| Unbilled revenue | 135 | (221 | ) | (3,887 | ) | (703 | ) | |||||||||
| Inventory | 2,213 | (3,285 | ) | (4,829 | ) | (1,563 | ) | |||||||||
| Other assets | (1,763 | ) | 213 | (6,572 | ) | 1,010 | ||||||||||
| Accounts payable | 7,249 | 3,909 | 1,833 | 5,118 | ||||||||||||
| Accrued expenses | 1,359 | 716 | (530 | ) | (315 | ) | ||||||||||
| Accrued compensation | 1,951 | 1,964 | (2,782 | ) | (408 | ) | ||||||||||
| Deferred revenue | 318 | 54 | (1,176 | ) | (1,885 | ) | ||||||||||
| Change in long term liabilities | (123 | ) | (107 | ) | 143 | (322 | ) | |||||||||
| Net cash provided by operating activities | 24,974 | 9,709 | 19,081 | 34,877 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Purchase of property and equipment | (3,149 | ) | (1,869 | ) | (10,357 | ) | (7,537 | ) | ||||||||
| Purchases of investments | - | (5,050 | ) | (5,000 | ) | (30,461 | ) | |||||||||
| Sales of investments | - | 11,500 | 5,000 | 19,000 | ||||||||||||
| Net cash provided by (used in) investing activities | (3,149 | ) | 4,581 | (10,357 | ) | (18,998 | ) | |||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Proceeds from stock option exercises | 801 | 370 | 9,398 | 2,297 | ||||||||||||
| Income tax withholding payment associated with restricted stock vesting | (36 | ) | (5 | ) | (845 | ) | (284 | ) | ||||||||
| Tax benefit of excess stock based compensation deductions | 347 | 138 | 6,002 | 855 | ||||||||||||
| Net cash provided by financing activities | 1,112 | 503 | 14,555 | 2,868 | ||||||||||||
| Net increase in cash and cash equivalents | 22,937 | 14,793 | 23,279 | 18,747 | ||||||||||||
| Cash and cash equivalents, at beginning of period | 108,725 | 75,810 | 108,383 | 71,856 | ||||||||||||
| Cash and cash equivalents, at end of period | $ | 131,662 | $ | 90,603 | $ | 131,662 | $ | 90,603 | ||||||||
| Supplemental Information | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||
| October 1, | October 2, | October 1, | October 2, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue: * | ||||||||||||||||
| Home Robots | $ | 72,341 | $ | 54,650 | $ | 204,116 | $ | 160,101 | ||||||||
| Domestic | $ | 17,961 | $ | 19,818 | $ | 58,415 | $ | 53,077 | ||||||||
| International | $ | 54,380 | $ | 34,832 | $ | 145,701 | $ | 107,024 | ||||||||
| Government & Industrial | $ | 48,032 | $ | 39,573 | $ | 130,616 | $ | 126,856 | ||||||||
| Domestic | $ | 45,930 | $ | 36,013 | $ | 119,509 | $ | 112,624 | ||||||||
| International | $ | 2,102 | $ | 3,560 | $ | 11,107 | $ | 14,232 | ||||||||
| Product | $ | 37,652 | $ | 30,401 | $ | 99,984 | $ | 97,006 | ||||||||
| Contract | $ | 10,380 | $ | 9,172 | $ | 30,632 | $ | 29,850 | ||||||||
| Product Life Cycle | $ | 12,286 | $ | 9,060 | $ | 31,606 | $ | 26,649 | ||||||||
| Gross Margin Percent: | ||||||||||||||||
| Home Robots | 45.1 | % | 39.7 | % | 44.9 | % | 39.0 | % | ||||||||
| Government & Industrial | 36.2 | % | 29.2 | % | 33.9 | % | 29.6 | % | ||||||||
| Total Company | 41.6 | % | 35.3 | % | 40.6 | % | 34.8 | % | ||||||||
| Units shipped: | ||||||||||||||||
| Home Robots * | 337 | 308 | 1,014 | 889 | ||||||||||||
| Government & Industrial | 194 | 186 | 500 | 702 | ||||||||||||
| Average gross selling prices for robot units: | ||||||||||||||||
| Home Robots | $ | 222 | $ | 185 | $ | 203 | $ | 187 | ||||||||
| Government & Industrial * | $ | 131 | $ | 115 | $ | 137 | $ | 100 | ||||||||
| Government & Industrial Funded Product Backlog * | $ | 28,036 | $ | 34,003 | $ | 28,036 | $ | 34,003 | ||||||||
| Days sales outstanding | 37 | 29 | 37 | 29 | ||||||||||||
| Days in inventory | 46 | 57 | 46 | 57 | ||||||||||||
| Headcount | 689 | 643 | 689 | 643 | ||||||||||||
| * in thousands | ||||||||||||||||
| iRobot Corporation | ||||||||||||||||
| Adjusted EBITDA Reconciliation to GAAP | ||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||
| October 1, | October 2, | October 1, | October 2, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net income | $ | 14,052 | $ | 7,032 | $ | 29,553 | $ | 18,514 | ||||||||
| Interest income, net | (214 | ) | (206 | ) | (755 | ) | (572 | ) | ||||||||
| Income tax expense | 1,436 | 701 | 8,955 | 7,771 | ||||||||||||
| Depreciation | 2,388 | 1,784 | 6,615 | 5,261 | ||||||||||||
| Amortization | 209 | 134 | 622 | 412 | ||||||||||||
| EBITDA | 17,871 | 9,445 | 44,990 | 31,386 | ||||||||||||
| Stock-based compensation expense | 2,196 | 1,941 | 6,386 | 6,032 | ||||||||||||
| Merger and acquisition expense | 30 | 61 | 30 | 132 | ||||||||||||
| Net intellectual property litigation expense | (11 | ) | 31 | 171 | 71 | |||||||||||
| Restructuring expense | 101 | - | 101 | - | ||||||||||||
| Adjusted EBITDA | $ | 20,187 | $ | 11,478 | $ | 51,678 | $ | 37,621 | ||||||||
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.
| iRobot Corporation | ||||||||||||||||
| Non-GAAP Net Income and Earnings Per Share Reconciliations to GAAP | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||
| October 1, | October 2, | October 1, | October 2, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| GAAP net income | $ | 14,052 | $ | 7,032 | $ | 29,553 | $ | 18,514 | ||||||||
| Less one-time net income tax benefit associated with release of state deferred tax asset valuation allowance | - | (2,259 | ) | - | (2,259 | ) | ||||||||||
| Less one-time net income tax benefit associated with Section 199 deductions and R&D tax credit true-ups | (3,455 | ) | - | (3,455 | ) | - | ||||||||||
| Non-GAAP net income | $ | 10,597 | $ | 4,773 | $ | 26,098 | $ | 16,255 | ||||||||
| GAAP net income per common share: | ||||||||||||||||
| Basic | $ | 0.52 | $ | 0.28 | $ | 1.11 | $ | 0.73 | ||||||||
| Diluted | $ | 0.50 | $ | 0.27 | $ | 1.06 | $ | 0.70 | ||||||||
| Less one-time net income tax benefit associated with release of state deferred tax asset valuation allowance | ||||||||||||||||
| Basic | $ | - | $ | (0.09 | ) | $ | - | $ | (0.09 | ) | ||||||
| Diluted | $ | - | $ | (0.09 | ) | $ | - | $ | (0.08 | ) | ||||||
| Less one-time net income tax benefit associated with Section 199 deductions and R&D tax credit true-ups | ||||||||||||||||
| Basic | $ | (0.13 | ) | $ | - | $ | (0.13 | ) | $ | - | ||||||
| Diluted | $ | (0.12 | ) | $ | - | $ | (0.12 | ) | $ | - | ||||||
| Non-GAAP net income per common share: | ||||||||||||||||
| Basic | $ | 0.39 | $ | 0.19 | $ | 0.98 | $ | 0.64 | ||||||||
| Diluted | $ | 0.38 | $ | 0.18 | $ | 0.94 | $ | 0.62 | ||||||||
| Shares used in Per Common Share Calculations: | ||||||||||||||||
| Basic | 26,902 | 25,428 | 26,568 | 25,293 | ||||||||||||
| Diluted | 27,940 | 26,480 | 27,823 | 26,319 | ||||||||||||
SOURCE: iRobot Corp.
iRobot Corp.
Elise Caffrey, 781-430-3003
Investor Relations
ecaffrey@irobot.com
or
Matt Lloyd, 781-430-3720
Media Relations
mlloyd@irobot.com