iRobot Reports First-Quarter Financial Results

  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
ecaffrey@irobot.com
or
Media Relations
Matthew Lloyd, 781-430-3720
mlloyd@irobot.com
 
Press spacebar to pause and continue. Press esc to stop.