iRobot Reports Fourth-Quarter and Full-Year Financial Results

        iRobot Reports Fourth-Quarter and Full-Year Financial Results

Home Robot Business Grew 20 Percent in 2013, Expected to Drive Continued
Growth in 2014

PR Newswire

BEDFORD, Mass., Feb. 5, 2014

BEDFORD, Mass., Feb. 5, 2014 /PRNewswire/ --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 28,
2013.

(Logo: http://photos.prnewswire.com/prnh/20131104/NE10106LOGO )

"2013 was a great year for iRobot. Our Home Robot business increased 20
percent over 2012, driven by growth in both domestic and overseas markets,"
said Colin Angle, chairman and chief executive officer of iRobot. "All three
of our businesses met our expectations and made significant progress against
their strategic plans, setting us up well for 2014.

"In 2014, our financial performance will continue to be driven by our Home
Robot business. Home Robot revenue is expected to grow in the mid-to-high
teens in 2014 and comprise 90 percent of total company revenue. Our Defense &
Security business is expected to perform at 2013 levels, and our Remote
Presence business will be shipping product into two markets.

"For 2014, we expect revenue of $560  to  $570 million, EPS of between $1.00
and $1.15 and Adjusted EBITDA of $74 to $78 million, or roughly 14 percent of
revenue. These expectations are a strong next step in progressing towards our
three-year targets of:

  oMid-high teen revenue CAGR,
  oHigh teen Adjusted EBITDA margin and,
  oHigh single digit Operating Cash Flow margin"

Financial Results

  oRevenue for the fourth quarter of 2013 was $126.3 million, compared with
    $100.7 million for the fourth quarter of 2012. Revenue for the full year
    2013 was $487.4 million, compared with $436.2 million for the full year
    2012.
  oNet income for the fourth quarter of 2013 was $3.2 million, compared with
    a net loss of ($5.9) million for the fourth quarter of 2012. Net income
    for the full year 2013 was $27.6 million, compared with $17.3 million for
    full-year 2012.
  oQuarterly earnings per share were $0.11, compared with a quarterly loss
    per share of ($0.21) in the fourth quarter last year. Full-year earnings
    per share were $0.94, compared with $0.61 last year.
  oAdjusted EBITDA for the fourth quarter of 2013 was $12.8 million, compared
    with $1.0 million in the fourth quarter of 2012. Adjusted EBITDA for the
    full year 2013 was $62.2 million, compared with $52.5 million for
    full-year 2012.

Business Highlights

  oFull-year domestic Home Robot revenue growth of more than 30 percent,
    coupled with international Home Robot revenue growth of 14 percent, drove
    a 20 percent year-over-year increase in full-year Home Robot revenue. We
    continued to increase our investment in marketing programs in our Home
    Robot business, which resulted in greater brand awareness and revenue
    growth in that business.
  oWe introduced and began shipping the Roomba 800 Series in late 2013. This
    next-generation floor vacuuming robot incorporates new dirt extractor
    technology which amplifies suction for superior performance over
    traditional bristle brushes. The Scooba 450, our newest wet floor
    scrubbing robot, was introduced and began shipping in January 2014.
  oOur Defense & Security business delivered results consistent with our
    expectations while continuing to reduce reliance on the U.S. Department of
    Defense.
  oWe began shipping RP-VITA through InTouch Health into the healthcare
    market and announced the Ava 500 Video Collaboration Robot which blends
    together our autonomous navigation capabilities with Cisco's TelePresence.
    The Ava 500 is targeted for availability from certified Cisco partners in
    the first half of 2014.

Financial Expectations

Management provides the following expectations with respect to the year ending
December 27, 2014 and first quarter ending March 29, 2014.

Fiscal Year 2014:
Revenue      $560 - $570 million
Earnings Per Share           $1.00 - $1.15
Adjusted EBITDA              $74 - $78 million
Full-Year 2014 BU Revenue:
Home                                         $500 - $515
 million
Defense & Security   $50 million
Remote Presence    $5 million
Q1 2014:
Revenue         $110 - $113 million
Earnings Per Share               $0.13 -
                                               $0.17
Adjusted EBITDA                     $13 - $15 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 2013, business
outlook, and outlook for 2014 financial performance. Pertinent details
include:

Date:  Thursday, February 6, 2014
Time:  8:30 a.m. ET
Call-In Number:         847-619-6396
Passcode:     35939059

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=5041606.
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 13, and can be accessed by
dialing 630-652-3042, passcode 35939059#.

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, future operating performance and
growth, anticipated growth and performance of our businesses, demand for our
robots, Home Robot revenue for fiscal year 2014, the timing of new product
introductions, the timing of entry into new product markets, the availability
of new products, and anticipated revenue, earnings per share and Adjusted
EBITDA for fiscal year 2014 and the first quarter ending March 29, 2014.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 Statements of Income
(in thousands, except per share amounts)
(unaudited)
                        For the three months        For the twelve months
                        ended                       ended
                        December     December      December     December
                        28,          29,           28,          29,
                        2013          2012           2013          2012
 Product revenue       $          $          $          $   
                        125,426       97,874         477,444       418,550
 Contract revenue      917           2,820          9,957         17,694
Revenue                 126,343       100,694        487,401       436,244
 Product revenue       66,939        54,928         262,224       234,102
 Contract revenue      474           1,262          4,023         7,794
Cost of Revenue         67,413        56,190         266,247       241,896
Gross Margin            58,930        44,504         221,154       194,348
Operating Expense
 Research &            18,008        15,344         63,649        57,066
development
 Selling & marketing   22,199        24,727         71,529        66,412
 General &             14,010        13,308         53,358        45,698
administrative
 Total             54,217        53,379         188,536       169,176
Operating income (loss) 4,713         (8,875)        32,618        25,172
Other income (expense), (154)         (42)           (203)         435
net
Income (loss) before    4,559         (8,917)        32,415        25,607
income taxes
Income tax expense      1,371         (2,979)        4,774         8,310
(benefit)
Net income (loss)       $        $          $         $    
                        3,188         (5,938)       27,641        17,297
Net income (loss) per
common share:
 Basic                $        $         $        $     
                        0.11         (0.21)         0.97         0.63
 Diluted              $        $         $        $     
                        0.11         (0.21)         0.94         0.61
Shares used in per
common share
calculations:
 Basic                28,902        27,802         28,495        27,577
 Diluted              29,712        27,802         29,354        28,301
Stock-based
compensation included
in above figures:
 Cost of product $       $        $       $     
revenue                 204           174            700            889
 Research &      737           633            2,700         1,904
development
 Selling &       414           234            1,246         808
marketing
 General &       2,385         1,919          8,763         7,382
administrative
 Total       $        $         $         $    
                        3,740         2,960          13,409        10,983

iRobot Corporation
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
                                         December 28,      December 29,
                                         2013                2012
Assets
Cash and equivalents                   $     165,404  $    126,770
Short term investments                 21,954              12,430
Accounts receivable, net               39,348              29,413
Unbilled revenues                      856                 1,196
Inventory                              46,107              36,965
Deferred tax assets                    20,144              19,266
Other current assets                   6,848               8,853
 Total current assets                 300,661             234,893
Property, plant and equipment, net     23,661              24,953
Deferred tax assets                    10,095              8,792
Goodwill                               48,751              48,951
Intangible assets, net                 22,668              28,224
Other assets                           10,501              8,500
Total assets                           $     416,337  $    354,313
Liabilities and stockholders' equity
Accounts payable                       $      41,344  $     42,515
Accrued expenses                       14,880              13,642
Accrued compensation                   19,606              11,864
Deferred revenue and customer advances 5,085               6,257
 Total current liabilities            80,915              74,278
Long term liabilities                  4,733               4,218
Stockholders' equity                   330,689             275,817
Total liabilities and stockholders'     $     416,337  $    354,313
equity

iRobot Corporation
 Consolidated Statements of Cash Flows
(unaudited, in thousands)
                          For the three months      For the twelve months
                          ended                     ended
                          December    December     December    December
                          28,         29,          28,         29,
                          2013         2012          2013         2012
Cash flows from operating
activities:
Net income (loss)         $         $          $   27,641 $   17,297
                          3,188       (5,938)
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Depreciation and          3,140        3,491         12,169       11,672
amortization
Loss on disposal of       540          554           189          1,332
assets
Goodwill and intangible   -            -             1,988        -
assets impairment
Stock-based compensation 3,740        2,960         13,409       10,983
Deferred income taxes,    (106)        (908)         (768)        (3,763)
net
Tax benefit of excess
stock based compensation  (168)        16            (2,406)      (1,445)
deductions
Non-cash director         11           23            44           87
deferred compensation
Changes in operating
assets and liabilities —
(use) source
Accounts receivable      14,679       25,601        (9,935)      15,560
Unbilled revenue         700          497           340          1,166
Inventory                2,708        696           (9,365)      (807)
Other assets             (717)        (6,158)       1,980        (2,892)
Accounts payable         (5,872)      1,405         (1,743)      (8,684)
Accrued expenses         1,471        (2,252)       1,255        (656)
Accrued compensation     4,747        2,736         7,751        (6,106)
Deferred revenue and      3,059        4,139         (1,172)      4,730
customer advances
Change in long term       177          (298)         515          (613)
liabilities
Net cash provided by      31,297       26,564        41,892       37,861
operating activities
Cash flows from investing
activities:
Purchase of property and  (1,705)      (2,703)       (6,829)      (6,770)
equipment
Change in other assets    -            -             (2,000)      (6,000)
Purchase of Evolution net -            (74,530)      -            (74,530)
of cash received
Purchases of investments (5,049)      -             (17,946)     (5,086)
Sales of investments     -            7,500         8,044        10,000
Proceeds from sale of     -            -             650          -
assets
Net cash used in          (6,754)      (69,733)      (18,081)     (82,386)
investing activities
Cash flows from financing
activities:
Proceeds from stock       1,265        304           13,629       4,326
option exercises
Income tax withholding
payment associated with   (303)        (7)           (1,212)      (784)
restricted stock vesting
Tax benefit of excess
stock based compensation  168          (16)          2,406        1,445
deductions
Net cash provided by      1,130        281           14,823       4,987
financing activities
Net increase (decrease)
in cash and cash          25,673       (42,888)      38,634       (39,538)
equivalents
Cash and cash
equivalents, at beginning 139,731      169,658       126,770      166,308
of period
Cash and cash
equivalents, at end of    $  165,404 $  126,770  $  165,404  $  126,770
period



iRobot Corporation
Supplemental Information
(unaudited)
                      For the three months        For the twelve months
                      ended                       ended
                      December     December      December     December
                      28,          29,           28,          29,
                      2013          2012           2013          2012
Revenue: *
Home Robots           $  108,263   $   82,918  $  427,853  $  356,805
 Domestic          $   47,843  $   31,821  $  154,112  $  117,690
 International     $   60,420  $   51,097  $  273,741  $  239,115
Defense & Security    $   16,339  $   15,731  $   50,003 $   70,948
 Domestic          $   10,035  $   14,389  $   34,193 $   64,346
 International     $    6,304 $           $   15,810 $   
                                    1,342                       6,602
 Product           $   16,321  $   13,773  $   45,612 $   57,092
 Contract          $        $           $          $   13,856
                      18           1,958         4,391
 Product Life      $   11,625  $   12,254  $   26,097 $   36,272
Cycle
Gross Margin Percent:
 Home Robots       49.6%         51.2%          49.3%         51.0%
 Defense &         59.4%         45.3%          50.1%         43.0%
Security
 Total Company     46.6%         44.2%          45.4%         44.6%
Units shipped:
 Home Robots *     494           387            1,933         1,621
 Defense &         49            29             534           274
Security
Average gross selling
prices for robot
units:
 Home Robots       $         $         $        $     
                      233          227            231           222
 Defense &         $        $        $       $      
Security *            96           52             36            76
Defense & Security                                 $   
Funded Product        $    8,765 $   11,356  8,765        $   11,356
Backlog *
Days sales            29            28             29            28
outstanding
Days in inventory     63            61             63            61
Headcount             528           534            528           534
* 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
                            28,          29,       28,         29,
                            2013          2012       2013         2012
Net income (loss)         $    3,188 $        $   27,641 $   17,297
                                          (5,938)
Interest income, net      (131)         (201)      (660)        (1,016)
Income tax expense         1,371         (2,979)    4,774        8,310
(benefit)
Depreciation              2,153         2,418      8,077        9,898
Amortization              987           1,073      4,092        1,774
EBITDA                    7,568         (5,627)    43,924       36,263
Stock-based compensation   3,740         2,960      13,409       10,983
expense
Merger and acquisition     7             717        400          1,404
expense
Net intellectual property  758           26         1,202        155
litigation expense
Restructuring expense     721           2,905      3,296        3,679
Adjusted EBITDA           $   12,794  $      $   62,231 $   52,484
                                          981

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.

SOURCE iRobot Corp.

Website: http://www.irobot.com
Contact: Elise Caffrey, Investor Relations, iRobot Corp., (781) 430-3003,
ecaffrey@irobot.com, or Matthew Lloyd, Media Relations, iRobot Corp., (781)
430-3720, mlloyd@irobot.com
 
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