iRobot Reports Fourth-Quarter and Full-Year Financial Results

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 ended

For the twelve months ended

December 29,

December 31,

December 29,

December 31,

2012

2011

2012

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 revenue

55,667

69,210

239,745

246,905

Contract revenue

3,673

5,473

16,783

26,477

Total

59,340

74,683

256,528

273,382

Gross Margin

41,354

56,085

179,716

192,118

Operating Expense

Research & development

10,418

10,675

37,215

36,498

Selling & marketing

26,503

18,243

71,631

58,544

General & administrative

13,308

12,094

45,698

43,753

Total

50,229

41,012

154,544

138,795

Operating income (loss)

(8,875

)

15,073

25,172

53,323

Other income (expense), net

(42

)

(40

)

435

218

Pre-tax income (loss)

(8,917

)

15,033

25,607

53,541

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:

Basic

27,802

27,119

27,577

26,712

Diluted

27,802

28,147

28,301

27,924

Stock-based compensation included in above figures:

Cost of product revenue

$

295

$

281

$

1,187

$

1,197

Cost of contract revenue

90

113

410

478

Research & development

422

262

1,195

743

Selling & marketing

234

211

808

724

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,

2012

2011

Assets

Cash and equivalents

$

126,770

$

166,308

Short term investments

12,430

17,811

Accounts receivable, net

29,413

43,338

Unbilled revenues

1,196

2,362

Inventory

36,965

31,089

Deferred tax assets

19,266

15,344

Other current assets

11,518

7,928

Total current assets

237,558

284,180

Property, plant and equipment, net

24,953

29,029

Deferred tax assets

8,610

6,127

Goodwill

48,951

7,910

Intangible assets, net

28,224

2,467

Other assets

8,500

2,500

Total assets

$

356,796

$

332,213

Liabilities and stockholders' equity

Accounts payable

$

42,515

$

48,406

Accrued expenses

16,527

17,188

Accrued compensation

11,864

17,879

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 ended

For the twelve months ended

December 29,

December 31,

December 29,

December 31,

2012

2011

2012

2011

Cash flows from operating activities: