iRobot Reports First-Quarter Financial Results Exceeds Expectations; Increases Full-Year Outlook Business Wire BEDFORD, Mass. -- April 23, 2013 iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the first quarter ended March 30, 2013. “We kicked off 2013 with an outstanding quarter. The results and outlook for our Home Robot business are excellent. We are very excited to have begun shipping our RP-VITA telemedicine robot in Q1 and our Defense & Security business delivered solid results,” said Colin Angle, chairman and chief executive officer of iRobot. “Based on our view of the rest of the year, we are increasing our full-year financial expectations for both revenue and profit. The revenue increase is being driven by better than anticipated Home Robot demand in the United States. Improvements in gross margin due to favorable product mix, successful integration of Evolution Robotics (ER) and tighter operating expense control will each contribute to increased profitability and enable us to deliver on our commitment to profitable growth.” *Revenue for the first quarter of 2013 was $106.2 million, compared with $97.8 million for the same quarter one year ago. *Net income in the first quarter of 2013 was $8.4 million, compared with net income of $0.7 million in the first quarter of 2012. *Quarterly earnings per share were $0.29, compared with earnings per share of $0.02 in the first quarter last year. Q1 EPS this year includes a $0.08 benefit from investment tax credits. *Adjusted EBITDA for the first quarter of 2013 was $15.2 million, compared with $6.1 million in the first quarter of 2012. Business Highlights *Domestic Home Robot revenue growth of 44 percent drove a 14 percent year-over-year increase in quarterly Home Robot revenue. International Home Robot revenue of $61.3 million comprised 66 percent of total Home Robot Q1 2013 revenue. *We launched Braava^™, our iRobot-branded version of the Mint^® robot to select European distributors. *Due to the timing of Defense Department orders for spares, service and training (PLR) to support the fleet of 5,000 iRobot unmanned ground vehicles, D&S Q1 revenue was higher than anticipated. In addition, the government announced a $14.4 million order for FirstLook robots during the quarter which gives us confidence in achieving our full year expectations. *We began shipping the RP-VITA to InTouch Health during the quarter. Roughly one dozen of the robots are currently in use in hospitals. Financial Expectations Management provides the following expectations with respect to the second quarter ending June 29, 2013 and fiscal year ending December 28, 2013. Q2 2013: Revenue $128 - $133 million Earnings Per Share $0.15 - $0.20 Adjusted EBITDA $13 - $16 million Fiscal Year 2013: Current Prior Revenue $485 - $495 million $480 - $490 million Earnings Per Share $0.80 - $1.00 $0.57 - $0.72 Adjusted EBITDA $55 - $61 million $46 - $52 million Full-Year 2013 BU Revenue: Current Prior Home Robots $435 - $440 million $430 - $435 million Defense & Security Robots $45 - $55 million $45 - $55 million First-Quarter Conference Call iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the first fiscal quarter 2013, business outlook, and outlook for second quarter and fiscal year 2013 financial performance. Pertinent details include: Date: Wednesday, April 24, 2013 Time: 8:30 a.m. ET Call-In Number: 847-619-6818 Passcode: 34160563 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=4897482. 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 May 1, and can be accessed by dialing 630-652-3000, passcode 34160563#. 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, anticipated improvement in gross margin due to product mix, anticipated levels of operating expenses, anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2013 and the second quarter ending June 29, 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. Areconciliation between net income (loss) 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 March 30, March 31, 2013 2012 Revenue Product revenue $ 101,405 $ 91,742 Contract revenue 4,790 6,065 Total 106,195 97,807 Cost of Revenue Product revenue 57,815 56,297 Contract revenue 1,853 3,936 Total 59,668 60,233 Gross Margin 46,527 37,574 Operating Expense Research & development 14,408 13,522 Selling & marketing 10,697 12,333 General & administrative 12,458 11,042 Total 37,563 36,897 Operating income 8,964 677 Other income (expense), net (96 ) 220 Income before income taxes 8,868 897 Income tax expense 513 244 Net income $ 8,355 $ 653 Net income per common share: Basic $ 0.30 $ 0.02 Diluted $ 0.29 $ 0.02 Shares used in per common share calculations: Basic 27,930 27,352 Diluted 28,558 28,283 Stock-based compensation included in above figures: Cost of product revenue $ 118 $ 214 Cost of contract revenue - - Research & development 501 454 Selling & marketing 366 237 General & administrative 1,944 1,608 Total $ 2,929 $ 2,513 iRobot Corporation Condensed Consolidated Balance Sheet (unaudited, in thousands) March 30, December 29, 2013 2012 Assets Cash and equivalents $ 123,576 $ 126,770 Short term investments 13,869 12,430 Accounts receivable, net 27,280 29,413 Unbilled revenues 2,252 1,196 Inventory 32,160 36,965 Deferred tax assets 19,340 19,266 Other current assets 9,811 8,853 Total current assets 228,288 234,893 Property, plant and equipment, net 23,629 24,953 Deferred tax assets 8,623 8,792 Goodwill 48,951 48,951 Intangible assets, net 27,259 28,224 Other assets 10,501 8,500 Total assets $ 347,251 $ 354,313 Liabilities and stockholders' equity Accounts payable $ 29,804 $ 42,515 Accrued expenses 13,977 13,642 Accrued compensation 6,997 11,864 Deferred revenue and customer advances 3,629 6,257 Total current liabilities 54,407 74,278 Long term liabilities 5,033 4,218 Stockholders' equity 287,811 275,817 Total liabilities and stockholders' equity $ 347,251 $ 354,313 iRobot Corporation Consolidated Statement of Cash Flows (unaudited, in thousands) For the three months ended March 30, March 31, 2013 2012 Cash flows from operating activities: Net income $ 8,355 $ 653 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,284 2,602 Loss on disposal of property and equipment 182 69 Stock-based compensation 2,929 2,513 Deferred income taxes, net (449 ) (6,694 ) Tax benefit of excess stock based (43 ) (705 ) compensation deductions Non-cash director deferred compensation 11 22 Changes in operating assets and liabilities — (use) source Accounts receivable 2,133 13,431 Unbilled revenue (1,056 ) 1,122 Inventory 4,805 (592 ) Other assets (983 ) 2,832 Accounts payable (12,711 ) (4,104 ) Accrued expenses 379 2,003 Accrued compensation (4,867 ) (10,149 ) Deferred revenue and customer advances (2,628 ) 895 Change in long term liabilities 815 (66 ) Net cash provided by operating activities 156 3,832 Cash flows from investing activities: Purchase of property and equipment (1,077 ) (1,643 ) Change in other assets (2,000 ) (6,000 ) Purchases of investments (2,547 ) - Sales of investments 1,000 2,500 Net cash used in investing activities (4,624 ) (5,143 ) Cash flows from financing activities: Proceeds from stock option exercises 1,744 1,323 Income tax withholding payment associated (513 ) (227 ) with restricted stock vesting Tax benefit of excess stock based 43 705 compensation deductions Net cash provided by financing activities 1,274 1,801 Net increase (decrease) in cash and cash (3,194 ) 490 equivalents Cash and cash equivalents, at beginning of 126,770 166,308 period Cash and cash equivalents, at end of $ 123,576 $ 166,798 period iRobot Corporation Supplemental Information (unaudited) For the three months ended March 30, March 31, 2013 2012 Revenue: * Home Robots $ 92,699 $ 81,583 Domestic $ 31,391 $ 21,815 International $ 61,308 $ 59,768 Defense & Security $ 11,100 $ 14,162 Domestic $ 9,134 $ 10,115 International $ 1,966 $ 4,047 Product $ 8,035 $ 9,004 Contract $ 3,065 $ 5,158 Product Life Cycle $ 6,131 $ 4,584 Gross Margin Percent: Home Robots 48.2 % 47.0 % Defense & Security 47.5 % 37.9 % Total Company 43.8 % 38.4 % Units shipped: Home Robots * 421 392 Defense & Security 16 132 Average gross selling prices for robot units: Home Robots $ 230 $ 214 Defense & Security * $ 119 $ 33 Defense & Security Funded Product Backlog * $ 30,110 $ 6,000 Days sales outstanding 25 29 Days in inventory 51 50 Headcount 531 620 * in thousands iRobot Corporation Adjusted EBITDA Reconciliation to GAAP (unaudited, in thousands) For the three months ended March 30, March 31, 2013 2012 Net income $ 8,355 $ 653 Interest income, net (164 ) (262 ) Income tax expense 513 244 Depreciation 2,219 2,394 Amortization 1,065 208 EBITDA 11,988 3,237 Stock-based compensation expense 2,929 2,513 Merger and acquisition expense 280 12 Net intellectual property litigation expense 33 37 Restructuring expense - 278 Adjusted EBITDA $ 15,230 $ 6,077 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. Contact: iRobot Corp. Investor Relations Elise Caffrey, 781-430-3003 firstname.lastname@example.org or Media Relations Matthew Lloyd, 781-430-3720 email@example.com
iRobot Reports First-Quarter Financial Results
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