<font> <font> Wednesday, July 22, 2009 4:48:01 PM ET </font> </font>
<font> iRobot Corp. ( IRBT ) today announced its financial results for the fiscal quarter ended June 27, 2009. Revenue for the second quarter of 2009 decreased 8.7 percent to $61.3 million, compared with $67.2 million for the same quarter one year ago. Revenue for the first half of 2009 decreased 5.0 percent to $118.3 million from $124.5 million for the first half of 2008. </font>
<font> Gross margin for the second quarter increased to 26.8 percent of revenue, compared with 24.5 percent of revenue in the second quarter of 2008. First-half 2009 gross margin increased to 27.6 percent of revenue, up from 25.6 percent of revenue in the first half of 2008. </font>
<font> Loss per share for the second quarter of 2009 improved to $0.10, compared with $0.18 for the same period a year ago. For the first half of 2009, loss per share improved to $0.18, compared with $0.35 for the same period in 2008. </font>
<font> Adjusted EBITDA improved to $0.1 million for the second quarter of 2009, compared with a loss of $5.8 million in the second quarter of 2008. For the first half of 2009, Adjusted EBITDA loss improved to $0.1 million from $10.2 million in the first half of 2008. </font>
<font> "We delivered revenue and profit results for the second quarter at the top end of expectations in a very challenging environment," said Colin Angle, chairman and chief executive officer of iRobot. "Adjusted EBITDA far exceeded expectations and represented nearly a $6 million improvement over last year’s results. The most profound change over the course of the last year has been our focus on driving operating cash flow. Over the past year we have generated operating cash flow of $31 million and improved our cash position by $21 million to nearly $51 million at the end of the second quarter. </font>
<font> "Based on our performance through the first half, we are narrowing the range of our expectations for full-year revenue and reaffirming our expectations for earnings per share and Adjusted EBITDA. Continuing uncertainty about retail demand during the second half of the year and the potential impact on defense spending of the government’s actions to fund the U.S. economic recovery makes us cautious," Angle concluded. </font>
<font> Business Highlights </font>
<font> -- International home robot revenue in the second quarter of 2009 increased 9 percent from the second quarter of 2008 and comprised more than half of total home robot revenue in the quarter. </font>
<font> -- Government & Industrial revenue was generated primarily from the sale of the iRobot PackBot 510 with FasTac Kit. During the quarter, the first PackBot 510 EOD’s with advanced vision and surveillance capabilities were shipped. The first ten small unmanned ground vehicles, SUGV 310’s (mini-EOD), were also delivered to the Army. </font>
<font> -- In the first half of 2009, operating cash flow was $11.9 million, compared with $0.2 million in the first half of 2008, as aggressive working capital management led to a $14.7 million reduction of inventory versus last year. </font>
<font> Financial Expectations </font>
<font> Management provides the following expectations with respect to the fiscal year ending January 2, 2010 and the third quarter ending September 26, 2009. </font>
<font> Fiscal Year 2009:
Revenue $295-$305 million
Adjusted EBITDA $14-$17 million
Earnings Per Share $0.00 - $0.04
Q3 2009:
Revenue $75-$80 million
Adjusted EBITDA $3 - $5 million
Earnings Per Share $0.00 - $0.03
</font>
<font> Second-Quarter Conference Call </font>
<font> iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the fiscal quarter ended June 27, 2009, business outlook, and outlook for future financial performance. Pertinent details include: </font>
<font> Date: Thurs., July 23, 2009
Time: 8:30 a.m. ET
Call-In Number: 719-325-4811
</font>
<font> A live, audio broadcast of the conference call also will be available at http://investors.irobot.com/events.cfm . An archived version of the broadcast will be available on the same Web site shortly after the conclusion of the live event. A replay of the telephone conference call will be available and can be accessed by dialing 719-457-0820, access code 2717744. </font>
<font> About iRobot Corp. </font>
<font> iRobot designs and builds robots that make a difference. The company’s home robots help people find smarter ways to clean, and its government and industrial robots protect those in harm’s way. iRobot’s consumer and military robots feature iRobot Aware(R) 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. </font>
<font> For iRobot Investors </font>
<font> 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 anticipated revenue, Adjusted EBITDA and earnings per share for fiscal year 2009 and for the third quarter ending September 26, 2009, and demand for and market acceptance of its products. 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, 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. </font>
<font> This release includes Adjusted EBITDA, a non-GAAP financial measure as defined by SEC Regulation G. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and non-cash stock compensation. A reconciliation between net loss and Adjusted EBITDA is provided in the financial tables at the end of this press release. </font>
<font> iRobot Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
For the three months ended For the six months ended
June 27, June 28, June 27, June 28,
2009 2008 2009 2008
Revenue
Product revenue $ 52,609 $ 60,676 $ 102,300 $ 111,251
Contract revenue 8,731 6,526 15,976 13,253
Total 61,340 67,202 118,276 124,504
Cost of Revenue
Product revenue 37,098 44,382 70,537 80,577
Contract revenue 7,833 6,352 15,124 12,099
Total 44,931 50,734 85,661 92,676
Gross Margin 16,409 16,468 32,615 31,828
Operating Expense
Research & development 3,896 4,718 7,474 8,691
Selling & marketing 8,940 13,471 17,906 24,929
General & administrative 7,365 7,340 14,495 14,118
Total 20,201 25,529 39,875 47,738
Operating loss (3,792 ) (9,061 ) (7,260 ) (15,910 )
Other income (expense), net 91 242 (208 ) 737
Pre-tax loss (3,701 ) (8,819 ) (7,468 ) (15,173 )
Income tax benefit (1,092 ) (4,306 ) (3,072 ) (6,655 )
Net loss $ (2,609 ) $ (4,513 ) $ (4,396 ) $ (8,518 )
Net loss per common share:
Basic $ (0.10 ) $ (0.18 ) $ (0.18 ) $ (0.35 )
Diluted $ (0.10 ) $ (0.18 ) $ (0.18 ) $ (0.35 )
Shares used in Per Common Share Calculations:
Basic 24,967 24,610 24,946 24,561
Diluted 24,967 24,610 24,946 24,561
Stock-based compensation included in above figures:
Cost of product revenue $ 278 $ 216 $ 491 $ 370
Cost of contract revenue 162 114 325 173
Research & development 101 128 98 95
Selling & marketing 338 267 655 428
General & administrative 1,016 808 1,928 1,405
Total $ 1,895 $ 1,533 $ 3,497 $ 2,471
</font>
<font> iRobot Corporation
Condensed Consolidated Balance Sheet
(in thousands)
June 27, December 27,
2009 2008
(unaudited) (audited)
Assets
Cash and equivalents $ 50,989 $ 40,852
Accounts receivable, net 31,291 35,930
Unbilled revenues 3,459 2,014
Inventory, net 28,638 34,560
Deferred tax assets 7,565 7,299
Other current assets 5,498 3,340
Total current assets 127,440 123,995
Property, plant and equipment, net 21,672 22,929
Deferred tax assets 4,508 4,508
Other assets 12,000 12,246
Total assets $ 165,620 $ 163,678
Liabilities and stockholders’ equity
Accounts payable $ 21,108 $ 19,544
Accrued expenses 10,966 10,989
Accrued compensation 7,027 6,393
Deferred revenue and customer advances 2,974 2,632
Total current liabilities 42,075 39,558
Long term liabilities 4,229 4,444
Stockholders’ equity 119,316 119,676
Total liabilities and stockholders’ equity $ 165,620 $ 163,678
</font>
<font> iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
For the three months ended For the six months ended
June 27, June 28, June 27, June 28,
2009 2008 2009 2008
Cash flows from operating activities:
Net loss $ (2,609 ) $ (4,513 ) $ (4,396 ) $ (8,518 )
Adjustments to reconcile net loss to net cash provided by (used
in) operating activities:
Depreciation and amortization 1,950 1,725 3,864 3,291
Loss on disposal of fixed assets 87 23 102 68
Stock-based compensation 1,895 1,533 3,497 2,471
Benefit from deferred tax assets (511 ) - (511 ) -
Non-cash director deferred compensation 33 23 66 47
Changes in working capital -- (use) source
Accounts receivable (8,099 ) (2,330 ) 4,639 23,428
Unbilled revenue (326 ) 419 (1,445 ) 54
Inventory 2,104 2,928 5,922 1,934
Other assets (1,001 ) (4,047 ) (2,163 ) (8,116 )
Accounts payable 1,981 (4,001 ) 1,564 (20,732 )
Accrued expenses 225 2,240 (33 ) 179
Accrued compensation 1,656 1,501 634 2,022
Deferred revenue 256 (180 ) 342 (628 )
Change in long term liabilities (108 ) 4,659 (215 ) 4,659
Net cash provided by (used in) operating activities (2,467 ) (20 ) 11,867 159
Cash flows from investing activities:
Purchase of property and equipment (1,672 ) (8,340 ) (2,448 ) (12,277 )
Purchases of investments - - - (29,997 )
Sales of investments - - - 29,050
Net cash used in investing activities (1,672 ) (8,340 ) (2,448 ) (13,224 )
Cash flows from financing activities:
Proceeds from stock option exercises 132 162 459 732
Income tax withholding payment associated with restricted stock (9 ) - (9 ) -
award vesting
Tax benefit of excess stock based compensation deductions 268 97 268 358
Net cash provided by financing activities 391 259 718 1,090
Net increase (decrease) in cash and cash equivalents (3,748 ) (8,101 ) 10,137 (11,975 )
Cash and cash equivalents, at beginning of period 54,737 22,861 40,852 26,735
Cash and cash equivalents, at end of period $ 50,989 $ 14,760 $ 50,989 $ 14,760
</font>
<font> iRobot Corporation
Supplemental Information
(unaudited)
For the three months ended For the six months ended
June 27, June 28, June 27, June 28,
2009 2008 2009 2008
Revenue by business unit (in thousands):
Home Robots
Product $ 34,099 $ 41,705 $ 66,922 $ 71,798
Contract - - - 55
Government & Industrial
Product 18,510 18,971 35,378 39,453
Contract 8,731 6,526 15,976 13,198
$ 61,340 $ 67,202 $ 118,276 $ 124,504
Direct Revenue - Home Robots (in thousands) $ 6,037 $ 7,884 $ 11,689 $ 15,745
Product Lifecycle Revenue - Government & Industrial (in thousands) $ 4,542 $ 2,172 $ 8,931 $ 5,374
International Revenue (in thousands):
Home Robots $ 19,741 $ 18,175 $ 37,279 $ 28,581
Government & Industrial $ 1,640 $ 398 $ 4,455 $ 1,209
Average selling prices for robot units:
Home Robots $ 159 $ 157 $ 160 $ 160
Government & Industrial (in thousands) $ 93 $ 99 $ 88 $ 104
Gross Margin by business unit (in thousands):
Home Robots $ 10,109 $ 10,759 $ 20,261 $ 18,828
Government & Industrial 6,300 5,709 12,354 13,000
$ 16,409 $ 16,468 $ 32,615 $ 31,828
Units shipped by business unit:
Home Robots (in thousands) 192 237 375 406
Government & Industrial 151 170 301 326
Government & Industrial Funded Backlog (in thousands) $ 17,537 $ 22,355 $ 17,537 $ 22,355
Days sales outstanding 52 36 52 36
Inventory turnover 5.2 4.1 5.2 4.1
Net cash provided by (used in) operating activities (in thousands) $ (2,467 ) $ (20 ) $ 11,867 $ 159
Headcount 508 482 508 482
</font>
<font> iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
For the three months ended For the six months ended
June 27, June 28, June 27, June 28,
2009 2008 2009 2008
Net loss $ (2,609 ) $ (4,513 ) $ (4,396 ) $ (8,518 )
Interest income, net (15 ) (260 ) (36 ) (829 )
Income tax benefit (1,092 ) (4,306 ) (3,072 ) (6,655 )
Depreciation 1,820 1,725 3,613 3,291
Amortization 128 - 251 -
EBITDA (1,768 ) (7,354 ) (3,640 ) (12,711 )
Stock-based compensation expense 1,895 1,533 3,497 2,471
Adjusted EBITDA $ 127 $ (5,821 ) $ (143 ) $ (10,240 )
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, 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.
</font>
<font> SOURCE: iRobot Corp. </font>
<font> iRobot Corp.
Elise Caffrey, Investor Relations
781-430-3003
ecaffrey@irobot.com
or
Nancy Smith, Media Relations
781-430-3323
nsmith@irobot.com
www.irobot.com
</font>
$12.75 (07/23/09)
