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

Business Wire

BEDFORD, Mass. -- February 6, 2013

iRobot Corp. (NASDAQ: 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, drove  a  28
    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-navigatingcommunications 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        December            December      December
                   29,             31,                 29,           31,
                   2012          2011                2012        2011
Revenue
Product            $ 97,874        $ 122,425           $ 418,550     $ 426,525
revenue
Contract            2,820       8,343             17,694     38,975
revenue
Total               100,694     130,768           436,244    465,500
                                                                     
Cost of
Revenue
Product              55,667          69,210              239,745       246,905
revenue
Contract            3,673       5,473             16,783     26,477
revenue
Total               59,340      74,683            256,528    273,382
                                                                     
Gross Margin         41,354          56,085              179,716       192,118
                                                                     
Operating
Expense
Research &           10,418          10,675              37,215        36,498
development
Selling &            26,503          18,243              71,631        58,544
marketing
General &           13,308      12,094            45,698     43,753
administrative
Total               50,229      41,012            154,544    138,795
                                                                     
Operating            (8,875  )       15,073              25,172        53,323
income (loss)
                                                                     
Other income        (42     )    (40     )          435        218
(expense), net
                                                                     
Pre-tax income       (8,917  )       15,033              25,607        53,541
(loss)
Income tax
expense             (2,979  )    4,395             8,310      13,350
(benefit)
Net income         $ (5,938  )   $ 10,638           $ 17,297    $ 40,191
(loss)
                                                                     
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            $ 295           $ 281               $ 1,187       $ 1,197
revenue
Cost of
contract             90              113                 410           478
revenue
Research &           422             262                 1,195         743
development
Selling &            234             211                 808           724
marketing
General &           1,919       1,531            7,383      5,642
administrative
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        December            December        December
                 29,             31,                 29,             31,
                 2012          2011                2012          2011
Cash flows
from
operating
activities:
Net income       $ (5,938  )     $ 10,638            $ 17,297        $ 40,191
(loss)
Adjustments
to reconcile
net income
(loss) to
net cash
provided by
operating
activities:
Depreciation
and                3,491           3,075               11,672          10,312
amortization
Loss on
disposal of        554             123                 1,332           599
property and
equipment
Stock-based        2,960           2,398               10,983          8,784
compensation
Deferred
income             (908    )       (295    )           (3,763  )       6,154
taxes, net
Tax benefit
of excess
stock based        16              (915    )           (1,445  )       (6,917  )
compensation
deductions
Non-cash
director           23              36                  87              162
deferred
compensation
Changes in
operating
assets and
liabilities
— (use)
source
Accounts           25,601          (1,938  )           15,560          (9,282  )
receivable
Unbilled           497             5,537               1,166           1,650
revenue
Inventory          696             900                 (807    )       (3,929  )
Other assets       (6,158  )       4,729               (2,892  )       (1,843  )
Accounts           1,405           7,884               (8,684  )       9,717
payable
Accrued            (2,252  )       1,951               (656    )       1,421
expenses
Accrued            2,736           2,834               (6,106  )       52
compensation
Deferred           4,139           (831    )           4,730           (2,007  )
revenue
Change in
long term         (298    )    528           (613    )    671     
liabilities
Net cash
provided by       26,564      36,654        37,861      55,735  
operating
activities
                                                                     
Cash flows
from
investing
activities:
Purchase of
property and       (2,703  )       (2,654  )           (6,770  )       (13,011 )
equipment
Change in          -               -                   (6,000  )       -
other assets
Purchase of
Evolution          (74,530 )       -                   (74,530 )       -
net of cash
received
Purchases of       -               (4,189  )           (5,086  )       (9,189  )
investments
Sales of          7,500       -             10,000      5,000   
investments
Net cash
used in           (69,733 )    (6,843  )      (82,386 )    (17,200 )
investing
activities
                                                                     
Cash flows
from
financing
activities:
Proceeds
from stock         304             4,003               4,326           13,401
option
exercises
Income tax
withholding
payment
associated         (7      )       (83     )           (784    )       (928    )
with
restricted
stock
vesting
Tax benefit
of excess
stock based       (16     )    915           1,445       6,917   
compensation
deductions
Net cash
provided by       281         4,835         4,987       19,390  
financing
activities
                                                                     
Net increase
(decrease)
in cash and        (42,888 )       34,646              (39,538 )       57,925
cash
equivalents
Cash and
cash
equivalents,      169,658     131,662       166,308     108,383 
at beginning
of period
Cash and
cash
equivalents,     $ 126,770    $ 166,308      $ 126,770    $ 166,308 
at end of
period
                                                                     

iRobot Corporation
Supplemental Information
(unaudited)
                                             
                                                    
                  For the three months              For the twelve months ended
                  ended
                  December     December           December      December
                  29,            31,                29,             31,
                  2012         2011               2012          2011
                                                                    
Revenue: *
                                                                    
Home Robots       $ 82,918    $ 74,435          $ 356,805    $ 278,551 
                                                                    
Domestic          $ 31,820       $ 24,371           $ 117,689       $ 82,787
International     $ 51,098       $ 50,064           $ 239,116       $ 195,764
                                                                    
                                                                    
Defense &         $ 17,776    $ 56,333          $ 79,439     $ 186,949 
Security
                                                                    
Domestic          $ 15,364       $ 51,458           $ 68,635        $ 170,968
International     $ 2,412        $ 4,875            $ 10,804        $ 15,981
                                                                    
Product           $ 14,956       $ 47,990           $ 61,745        $ 147,974
Contract          $ 2,820        $ 8,343            $ 17,694        $ 38,975
                                                                    
Product Life      $ 12,648       $ 10,974           $ 37,433        $ 42,579
Cycle
                                                                    
                                                                    
Gross Margin
Percent:
Home Robots         49.6   %       45.8   %           49.5    %       45.2    %
Defense &           1.1    %       39.0   %           4.0     %       35.5    %
Security
Total Company       41.1   %       42.9   %           41.2    %       41.3    %
                                                                    
                                                                    
Units
shipped:
Home Robots *       387            358                1,621           1,371
Defense &           34             273                289             773
Security
                                                                    
                                                                    
Average gross
selling
prices for
robot units:
Home Robots       $ 227          $ 218              $ 222           $ 207
Defense &         $ 68           $ 132              $ 84            $ 136
Security *
                                                                    
                                                                    
Defense &
Security
Funded            $ 11,356       $ 7,600            $ 11,356        $ 7,600
Product
Backlog *
                                                                    
                                                                    
Days sales          28             32                 28              32
outstanding
                                                                    
Days in             61             41                 61              41
inventory
                                                                    
Headcount           534            619                534             619
                                                                    
* in
thousands
                                                                    

iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
                                                         
                                                                    
                   For the three months              For the twelve months
                   ended                             ended
                   December       December           December       December
                   29,            31,                29,            31,
                   2012         2011               2012         2011
                                                                    
Net income         $ (5,938 )     $ 10,638           $ 17,297       $ 40,191
(loss)
                                                                    
Interest             (201   )       (212   )           (1,016 )       (967   )
income, net
Income tax
expense              (2,979 )       4,395              8,310          13,350
(benefit)
Depreciation         2,418          2,387              9,898          9,002
Amortization        1,073      688              1,774      1,310  
                                                                    
EBITDA               (5,627 )       17,896             36,263         62,886
                                                                    
                                                                    
Stock-based
compensation         2,960          2,398              10,983         8,784
expense
Merger and
acquisition          717            11                 1,404          41
expense
Net
intellectual
property             26             116                155            287
litigation
expense
Restructuring       2,905      914              3,679      1,015  
expense
                                                                    
Adjusted           $ 981       $ 21,335          $ 52,484    $ 73,013 
EBITDA
                                                                             

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
Adjusted Net Income and Earnings Per Share Reconciliations to GAAP
(in thousands, except per share amounts)
(unaudited)
                                                         
                                                                    
                   For the three months ended          For the twelve months
                                                       ended
                   December 29,     December           December     December
                                    31,                29,          31,
                   2012           2011               2012       2011
                                                                    
GAAP net           $  (5,938  )     $  10,638          $ 17,297     $ 40,191
income (loss)
                                                                    
Less one-time
net income tax
benefit
associated
with Section         -            -                -         (3,455 )
199 deductions
and R&D tax
credit
true-ups
                                                                    
Adjusted net       $  (5,938  )   $  10,638          $ 17,297   $ 36,736 
income (loss)
                                                                    
                                                                    
GAAP net
income (loss)
per common
share:
Basic              $  (0.21   )     $  0.39            $ 0.63       $ 1.50
Diluted            $  (0.21   )     $  0.38            $ 0.61       $ 1.44
                                                                    
Less one-time
net income tax
benefit
associated
with Section
199 deductions
and R&D tax
credit
true-ups:
Basic              $  -             $  -               $ -          $ (0.12  )
Diluted            $  -             $  -               $ -          $ (0.12  )
                                                                    
Adjusted net
income (loss)
per common
share:
Basic              $  (0.21   )     $  0.39            $ 0.63       $ 1.38
Diluted            $  (0.21   )     $  0.38            $ 0.61       $ 1.32
                                                                    
                                                                    
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
                                                                             

In evaluating its business, iRobot also considers and uses Adjusted net income
and Adjusted net income per common share as supplemental measures of its
operating performance. The Company defines Adjusted net income and Adjusted
net income per share as net income and net income per share, respectively,
excluding the impact of a one-time tax benefit.

The terms Adjusted net income and Adjusted net income per common share are 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. When assessing the Company's operating
performance, investors should not consider Adjusted net income, Adjusted net
income per common share or both in isolation, or as a substitute for net
income, net income per common share or other consolidated income statement
data prepared in accordance with U.S. GAAP.

Contact:

iRobot Corp.
Elise Caffrey, 781-430-3003
Investor Relations
ecaffrey@irobot.com
or
iRobot Corp.
Matthew Lloyd, 781-430-3720
Media Relations
mlloyd@irobot.com