iRobot Reports Second-Quarter Financial Results

iRobot Reports Second-Quarter Financial Results

Home Robot business drives 17 percent year-over-year growth

BEDFORD, Mass.--(BUSINESS WIRE)-- iRobot Corp. (NAS: IRBT) , a leader in delivering robotic technology-based solutions, today announced its financial results for the second quarter ended June 29, 2013.


"I am very excited to report that we had an excellent quarter following an outstanding Q1. Our Home Robot business delivered strong results both domestically and overseas, and the outlook continues to be good. We announced our second remote presence market initiative, Enterprise Telepresence, in partnership with Cisco, and our Defense & Security business performed as expected," said Colin Angle, chairman and chief executive officer of iRobot.

"Based on our view of the rest of the year, our expectations for revenue and Adjusted EBITDA remain unchanged, but we are increasing the low end of our EPS range due to a one-time tax benefit received in Q2. We expect to deliver fiscal 2013 revenue of $485 to $495 million, EPS between $0.88 and $1.00 and Adjusted EBITDA of $55 to $61 million. Our strong second-quarter results, driven by our Home Robot business, give us confidence that we will achieve our full-year expectations."

  • Revenue for the second quarter of 2013 was $130.4 million, compared with $111.4 million for the same quarter one year ago. Revenue for the first half of 2013 was $236.6 million, compared with $209.3 million last year.

  • Net income in the second quarter of 2013 was $8.3 million, compared with $7.4 million in the second quarter of 2012. For the first half, net income was $16.6 million, compared with $8.0 million a year ago.

  • Quarterly earnings per share were $0.28, compared with $0.26 in the second quarter last year. First-half earnings per share were $0.57, compared with $0.28 in 2012. EPS in Q2 and first-half 2013 included a $0.07 one-time tax benefit associated with the prior period sale of government robots to the U.S. military, which were used outside of the U.S.

  • Adjusted EBITDA for the second quarter of 2013 was $17.0 million, compared with $16.2 million in the second quarter of 2012. For the first half, Adjusted EBITDA was $32.3 million, compared with $22.3 million a year ago.

Business Highlights

  • Domestic revenue growth of 26 percent, coupled with international growth of 18 percent, fueled a 20 percent year-over-year increase in Home Robot revenue.

  • Announced contracts from Brazil totaling $7.2 million and a $3.0 million order under a $30.0 million IDIQ from the U.S. Army during the quarter, which gives us confidence that we will achieve our full-year Defense & Security expectations.

  • Announced a joint marketing agreement with Cisco to bring the enterprise-grade Ava 500 video collaboration robot to market, the second initiative of our Remote Presence business.

Financial Expectations

Management provides the following expectations with respect to the third quarter ending September 28, 2013 and fiscal year ending December 28, 2013.

Q3 2013:

Revenue

$124 - $128 million

Earnings Per Share

$0.20 - $0.25

Adjusted EBITDA

$14 - $17 million

Fiscal Year 2013:

Current

Prior

Revenue

$485 - $495 million

$485 - $495 million

Earnings Per Share

$0.88 - $1.00

$0.80 - $1.00

Adjusted EBITDA

$55 - $61 million

$55 - $61 million

Full-Year 2013 BU Revenue:

Home Robots

$435 - $440 million

Defense & Security Robots

$45 - $55 million

Second-Quarter Conference Call

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

Date:

Wednesday, July 24, 2013

Time:

8:30 a.m. ET

Call-In Number:

847-619-6818

Passcode:

34160570

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=4897483. 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 August 1, and can be accessed by dialing 630-652-3000, passcode 34160570#.

About iRobot Corp.

iRobot designs and builds robots that make a difference. The company's home robots help people find smarter ways to clean, its defense & security robots protect those in harm's way, and its remote presence robots enable virtual presence from anywhere in the world. 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 and performance of our Home Robots business, anticipated performance of our Defense & Security business, anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2013 and the third quarter ending September 28, 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, market acceptance of our products, our dependence on the U.S. federal government and government contracts, the timing of government contracts and orders, 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, 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. A reconciliation between net income (loss) and Adjusted EBITDA is provided in the financial tables at the end of this press release.

iRobot Corporation

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

For the three months ended

For the six months ended

June 29,

June 30,

June 29,

June 30,

2013

2012

2013

2012

Revenue

Product revenue

$

127,966

$

107,760

$

229,371

$

199,502

Contract revenue

2,396

3,685

7,186

9,750

Total

130,362

111,445

236,557

209,252

Cost of Revenue

Product revenue

67,873

57,089

125,688

113,322

Contract revenue

884

1,540

2,737

4,562

Total

68,757

58,629

128,425

117,884

Gross Margin

61,605

52,816

108,132

91,368

Operating Expense

Research & development

15,997

14,182

30,405

28,682

Selling & marketing

22,309

17,976

33,006

30,309

General & administrative

15,395

10,022

27,853

21,064

Total

53,701

42,180

91,264

80,055

Operating income

7,904

10,636

16,868

11,313

Other income (expense), net

(105

)

60

(201

)

280

Income before income taxes

7,799

10,696

16,667

11,593

Income tax expense (benefit)

(495

)

3,321

18

3,565

Net income

$

8,294

$

7,375

$

16,649

$

8,028

Net income per common share:

Basic

$

0.29

$

0.27

$

0.59

$

0.29

Diluted

$

0.28

$

0.26

$

0.57

$

0.28

Shares used in per common share calculations:

Basic

28,416

27,522

28,173

27,441

Diluted

29,226

28,182

28,972

28,259

Stock-based compensation included in above figures:

Cost of product revenue

$

128

$

218

$

246

$

426

Cost of contract revenue

-

-

-

-

Research & development

793

446

1,294

906

Selling & marketing

118

179

484

416

General & administrative

2,224

2,059

4,168

3,667

Total

$

3,263

$

2,902

$

6,192

$

5,415

iRobot Corporation

Condensed Consolidated Balance Sheets

(unaudited, in thousands)

June 29,

December 29,

2013

2012

Assets

Cash and equivalents

$

133,857

$

126,770

Short term investments

19,014

12,430

Accounts receivable, net

51,104

29,413

Unbilled revenues

1,051

1,196

Inventory

41,560

36,965

Deferred tax assets

19,245

19,266

Other current assets

13,598

8,853

Total current assets

279,429

234,893

Property, plant and equipment, net

23,060

24,953

Deferred tax assets

10,438

8,792

Goodwill

48,751

48,951

Intangible assets, net

24,506

28,224

Other assets

10,501

8,500

Total assets

$

396,685

$

354,313

Liabilities and stockholders' equity

Accounts payable

$

53,905

$

42,515

Accrued expenses

14,045

13,642

Accrued compensation

13,113

11,864

Deferred revenue and customer advances

3,274

6,257

Total current liabilities

84,337

74,278

Long term liabilities

4,138

4,218

Stockholders' equity

308,210

275,817

Total liabilities and stockholders' equity

$

396,685

$

354,313

iRobot Corporation

Consolidated Statements of Cash Flows

(unaudited, in thousands)

For the three months ended

For the six months ended

June 29,

June 30,

June 29,

June 30,

2013

2012

2013

2012

Cash flows from operating activities:

Net income

$

8,294

$

7,375

$

16,649

$

8,028

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization

3,265

2,711

6,549

5,313

Loss on disposal of property and equipment

99

97

281

166

Goodwill and intangible assets impairment

1,988