iRobot Reports Fourth-Quarter and Full-Year Financial Results

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iRobot Reports Fourth-Quarter and Full-Year Financial Results

Home Robot Business Expected to Grow More Than 20 Percent in 2013

BEDFORD, Mass.--(BUSINESS WIRE)-- iRobot Corp. (NAS: IRBT) , a leader in delivering robotic technology-based solutions, today announced its financial results for the fourth quarter and full year ended December 29, 2012.


"Our Home Robot business had a phenomenal year with revenue increasing 28 percent over 2011, but as expected, the decline in Defense & Security revenue resulted in lower total company revenue and profit for the year," said Colin Angle, chairman and chief executive officer of iRobot.

"2012 was a transformational year for our business, and as we enter 2013, we are a different company than we were a year ago. Our business performance over the next few years will be driven by our rapidly growing home technology business. Home Robots is expected to grow roughly 20 percent this year and comprise 90 percent of total company revenue. In addition, we have an emerging remote presence business and have stabilized our defense business."

  • Revenue for the fourth quarter of 2012 was $100.7 million, compared with $130.8 million for the same quarter one year ago. Revenue for the full year 2012 was $436.2 million, compared with $465.5 million for the full year 2011.
  • Net loss in the fourth quarter of 2012 was $5.9 million, compared with net income of $10.6 million in the fourth quarter of 2011. Net income for the full year 2012 was $17.3 million, compared with $40.2 million for the same period in 2011.
  • Quarterly loss per share was ($0.21), compared with earnings per share of $0.38 in the fourth quarter last year. Full-year earnings per share were $0.61, compared with $1.44 last year. The Q4 and full year results include the negative impact of $0.22 and $0.27, respectively, from restructuring the Defense & Security business and the inclusion of Evolution Robotics, acquired on October 1, 2012.
  • Adjusted EBITDA for the fourth quarter of 2012 was $1.0 million, compared with $21.3 million in the fourth quarter of 2011. Adjusted EBITDA for the full year 2012 was $52.5 million, compared with $73.0 million for the same period a year ago.

Business Highlights

  • Full-year domestic Home Robot revenue growth of more than 40 percent, coupled with international revenue growth of 22 percent, drovea28 percent year-over-year increase in full-year Home Robot revenue. International Home Robot revenue of $239 million comprised 67 percent of total Home Robot 2012 revenue.
  • Closed the acquisition of Evolution Robotics (ER) on October 1, 2012. We are on schedule with our integration and ahead of schedule on our planned rollout of ER's Mint® floor sweeping robot to our international distributors.
  • Received a $7 million order from a foreign government for PackBot® systems. International sales are expected to contribute roughly one-third of 2013 product revenue in our Defense & Security business unit.
  • Received FDA approval for RP-VITA, the first self-navigating communications robot for use in hospitals.
  • Our 2013 Home Robot expectations reflect continued strong growth domestically and continuing economic uncertainties in Europe.

Financial Expectations

Management provides the following expectations with respect to the year ending December 28, 2013 and first quarter ending March 30, 2013.

Fiscal Year 2013:

  
Revenue$480 - $490 million
Earnings Per Share$0.57 - $0.72
Adjusted EBITDA$46 - $52 million
 

Full-Year 2013 BU Revenue:

Home Robots$430 - $435 million
Defense & Security Robots$45 - $55 million

 

Q1 2013:

Revenue$98 - $102 million
Earnings Per Share$0.00 - $0.07
Adjusted EBITDA$4 - $6 million
 

Fourth-Quarter and Full-Year Conference Call

iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the fourth fiscal quarter and full year 2012, business outlook, and outlook for 2013 financial performance. Pertinent details include:

Date:  Thursday, February 7, 2013
Time:8:30 a.m. ET
Call-In Number:847-619-6818
Passcode:34160560

A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/phoenix.zhtml?c=193096&p=irol-eventDetails&EventId=4897481. 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 February 14, and can be accessed by dialing 630-652-3000, passcode 34160560#.

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 defense & security 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, operating performance and growth, demand for our robots, anticipated growth of our Home Robots business and anticipated increase of Home Robots revenue as a percentage of total revenue, anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2013 and the first quarter ending March 30, 2013, and anticipated business unit revenue for the fiscal year 2013. 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 press release includes Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income (loss) per share, each of which is 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, net intellectual property litigation expenses, restructuring expenses, and non-cash stock compensation. We define Adjusted net income (loss) and Adjusted net income (loss) per share as net income (loss) and net income (loss) per share, respectively, excluding the impact of a one-time tax benefit. Reconciliations between net income (loss) and Adjusted EBITDA, net income (loss) and Adjusted net income (loss), and net income (loss) per share and Adjusted net income (loss) per share are 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 endedFor the twelve months ended
December 29,December 31,December 29,December 31,
2012  20112012  2011
Revenue
Product revenue$97,874$122,425$418,550$426,525
Contract revenue 2,820    8,343  17,694   38,975
Total 100,694    130,768  436,244   465,500
 
Cost of Revenue
Product revenue55,66769,210239,745246,905
Contract revenue 3,673    5,473  16,783   26,477
Total 59,340    74,683  256,528   273,382
 
Gross Margin41,35456,085179,716192,118
 
Operating Expense
Research & development10,41810,67537,21536,498
Selling & marketing26,50318,24371,63158,544
General & administrative 13,308    12,094  45,698   43,753
Total 50,229    41,012  154,544   138,795
 
Operating income (loss)(8,875)15,07325,17253,323
 
Other income (expense), net (42)   (40) 435   218
 
Pre-tax income (loss)(8,917)15,03325,60753,541
Income tax expense (benefit) (2,979)   4,395  8,310   13,350
Net income (loss)$(5,938)  $10,638 $17,297  $40,191
 
Net income (loss) per common share:
Basic$(0.21)$0.39$0.63$1.50
Diluted$(0.21)$0.38$0.61$1.44
 
Shares used in per common share calculations:
Basic27,80227,11927,57726,712
Diluted27,80228,14728,30127,924
 
 
Stock-based compensation included in above figures:
Cost of product revenue$295$281$1,187$1,197
Cost of contract revenue90113410478
Research & development4222621,195743
Selling & marketing234211808724
General & administrative 1,919    1,531   7,383   5,642
Total$2,960   $2,398  $10,983  $8,784
 
iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)
    
December 29,December 31,
20122011
 
Assets
 
Cash and equivalents$126,770$166,308
Short term investments12,43017,811
Accounts receivable, net29,41343,338
Unbilled revenues1,1962,362
Inventory36,96531,089
Deferred tax assets19,26615,344
Other current assets 11,518 7,928
Total current assets237,558284,180
Property, plant and equipment, net24,95329,029
Deferred tax assets8,6106,127
Goodwill48,9517,910
Intangible assets, net28,2242,467
Other assets 8,500 2,500
Total assets$356,796$332,213
 
Liabilities and stockholders' equity
 
Accounts payable$42,515$48,406
Accrued expenses16,52717,188
Accrued compensation11,86417,879
Deferred revenue and customer advances 6,257 1,527
Total current liabilities 77,163 85,000
Long term liabilities 3,816 4,255
Stockholders' equity 275,817 242,958
Total liabilities and stockholders' equity$356,796$332,213
 
iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
          
 
For the three months endedFor the twelve months ended
December 29,December 31,December 29,December 31,
2012  20112012  2011
Cash flows from operating activities:
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