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 31, 2011.

  • Revenue for the fourth quarter of 2011 increased 15 percent to $130.8 million, compared with $114.0 million for the same quarter one year ago. Revenue for the full year 2011 increased 16 percent to $465.5 million from $401.0 million for the full year 2010.
  • Net income in the fourth quarter of 2011 was $10.6 million, compared with $7.0 million in the fourth quarter of 2010. Net income for the full year 2011 was $40.2 million, compared with $25.5 million for the same period in 2010.
  • Quarterly earnings per share were $0.38, compared with $0.26 in the fourth quarter last year. Full-year earnings per share were $1.44, compared with $0.96 last year. The full-year results include the impact of a $3.5 million, or $0.12 per share, tax benefit in Q3 2011 and a $2.3 million, or $0.08 per share, tax benefit in Q3 2010. Excluding the impact of these tax benefits, earnings per share for the full year 2011 would have been $1.32, compared with $0.88 for the full year 2010.
  • Adjusted EBITDA for the fourth quarter of 2011 was $21.3 million, or 16 percent of revenue, compared with $11.7 million, or 10 percent of revenue, in the fourth quarter of 2010. Adjusted EBITDA for the full year 2011 was $73.0 million, compared with $49.3 million for the same period a year ago.
  • Raising Adjusted EBITDA margin target to high-teens by 2014.

"Our record financial results in 2011 were exceptional on all fronts, driven by especially strong performance in our Home Robots division. Revenue increased 16 percent to $465 million for the full year, while Adjusted EBITDA increased nearly 50 percent to $73 million or 16 percent of revenue," said Colin Angle, chairman and chief executive officer of iRobot. "EPS of $1.44 for the year was up 50 percent from 2010.

"As we look at 2012, we feel very good about the growth opportunity for our home robot business in 2012 and beyond. However, we expect a decline in top and bottom line in our G&I division this year due to our current limited visibility in our defense business. We anticipate continued demand from the warfighters and support from military leadership for our products will drive higher revenue in the second half of 2012.

"To capitalize on our growing home robot business, intermediate and longer term opportunities in the defense business and exciting emerging opportunities, we will continue to make investments in marketing and iR&D that extend our leadership position.

"Given the underlying strength of our business model, I am confident that we will achieve our updated 3-year targets of:

  • Mid-to-high-teen revenue CAGR
  • High-teen Adjusted EBITDA margin and
  • High single digit OCF margin."

Business Highlights

  • Surpassed each of our 3 key long-term financial goals, including achievement of mid-teen Adjusted EBITDA margin target, a year ahead of schedule.
  • Strong demand in overseas markets drove a 21 percent year-over-year increase in full-year home robot revenue. International home robot revenue of $196 million comprised 70 percent of total home robot 2011 revenue.
  • Government & industrial robot revenue grew 9 percent in 2011, driven by shipments of Small Unmanned Ground Vehicles and spares.
  • In 2011, operating cash flow was $55.7 million, compared with $49.2 million in 2010. As a result of improved net income, our year-end cash and investment position was $184 million.

Financial Expectations

Management provides the following expectations with respect to the year ending December 29, 2012 and first quarter ending March 31, 2012.

Fiscal Year 2012:

  
Revenue $465 - $485 million
Earnings Per Share $0.75 - $0.95
Adjusted EBITDA $56 - $63 million
 

Q1 2012:

Revenue $90 - $100 million
Earnings Per Share ($0.08) - $0.00
Adjusted EBITDA $2 - $5 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 2011, business outlook, and outlook for 2012 financial performance. Pertinent details include:

Date:   Thursday, February 9, 2012
Time: 8:30 a.m. ET
Call-In Number: 847-413-3362
Passcode: 31615791

A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/phoenix.zhtml?c=193096&p=irol-irhome. 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 16, and can be accessed by dialing 630-652-3042, passcode 31615791#.

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 government and industrial 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 and growth, demand for our robots, longer-term profitability and operating performance, and anticipated revenue, earnings per share and Adjusted EBITDA for the full year ending December 29, 2012 and the first quarter ending March 31, 2012. 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 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, merger and acquisition expenses, net intellectual property litigation related activity, restructuring related expense, and non-cash stock compensation. A reconciliation between net income and Adjusted EBITDA 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 31, January 1, December 31, January 1,
2011 2011 2011 2011
Revenue
Product revenue $ 122,425 $ 103,287 $ 426,525 $ 360,394
Contract revenue   8,343     10,708   38,975   40,558
Total   130,768     113,995   465,500   400,952
 
Cost of Revenue
Product revenue 69,210 62,506 246,905 228,403
Contract revenue   5,473     6,001   26,477   27,117
Total   74,683     68,507   273,382   255,520
 
Gross Margin 56,085 45,488 192,118 145,432
 
Operating Expense
Research & development 10,675 8,434 36,498 24,809
Selling & marketing 18,243 19,576 58,544 50,535
General & administrative   12,094     9,925   43,753   36,618
Total   41,012     37,935   138,795   111,962
 
Operating income 15,073 7,553 53,323 33,470
 
Other income (expense), net   (40 )   136   218   504
 
Pre-tax income 15,033 7,689 53,541 33,974
Income tax expense   4,395     689   13,350   8,460
Net income $ 10,638   $ 7,000 $ 40,191 $ 25,514
 
Net income per common share:
Basic $ 0.39 $ 0.27 $ 1.50 $ 1.00
Diluted $ 0.38 $ 0.26 $ 1.44 $ 0.96
 
Shares used in per common share calculations:
Basic 27,119 25,604 26,712 25,394
Diluted 28,147 26,798 27,924 26,468
 
 
Stock-based compensation included in above figures:
Cost of product revenue $ 281 $ 314 $ 1,197 $ 1,311
Cost of contract revenue 113 109 478 446
Research & development 262 237 743 725
Selling & marketing 211 276 724 1,161
General & administrative   1,531     1,197   5,642   4,522
Total $ 2,398   $ 2,133 $ 8,784 $ 8,165
iRobot Corporation
Condensed Consolidated Balance Sheet
(unaudited, in thousands)
   
December 31, January 1,
2011 2011
 
Assets
 
Cash and equivalents $ 166,308 $ 108,383
Short term investments 17,811 13,928
Accounts receivable, net 43,338 34,056
Unbilled revenues 2,362 4,012
Inventory 31,089 27,160
Deferred tax assets 15,344 12,917
Other current assets   7,928   6,137
Total current assets 284,180 206,593
Property, plant and equipment, net 29,029 25,620
Deferred tax assets 6,127 8,338
Other assets   12,877   13,780
Total assets $ 332,213 $ 254,331
 
Liabilities and stockholders' equity
 
Accounts payable $ 48,406 $ 38,689
Accrued expenses 17,188 15,790
Accrued compensation 17,879 17,827
Deferred revenue and customer advances   1,527   3,534
Total current liabilities   85,000   75,840
Long term liabilities   4,255   3,584
Stockholders' equity   242,958   174,907
Total liabilities and stockholders' equity $ 332,213 $ 254,331

iRobot Corporation

Consolidated Statement of Cash Flows
(unaudited, in thousands)
   
 
For the three months ended For the twelve months ended
December 31, January 1, December 31, January 1,
2011 2011 2011 2011
Cash flows from operating activities:
Net income $ 10,638 $ 7,000 $ 40,191 $ 25,514
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 3,075 1,868 10,312 7,541
Loss on disposal of property and equipment 123 87 599 204
Stock-based compensation 2,398 2,133 8,784 8,165
Deferred income taxes, net (295 ) (1,986 ) 6,154 (4,998 )
Tax benefit of excess stock based compensation deductions (915 ) (1,767 ) (6,917 ) (2,622 )
Non-cash director deferred compensation 36 33 162 132
Changes in operating assets and liabilities -- (use) source

 

 

Accounts receivable (1,938 ) (6,262 ) (9,282 ) 1,115
Unbilled revenue 5,537 (1,478 ) 1,650 (2,181 )
Inventory 900 6,809 (3,929 ) 5,246
Other assets 4,729 (3,092 ) (1,843 ) (2,082 )
Accounts payable 7,884 3,012 9,717 8,130
Accrued expenses 1,951 1,810 1,421 1,495
Accrued compensation 2,834 4,710 52 4,302
Deferred revenue (831 ) 1,511 (2,007 ) (374 )
Change in long term liabilities   528     (108 )   671     (430 )
Net cash provided by operating activities   36,654     14,280     55,735     49,157  
 
Cash flows from investing activities:
Purchase of property and equipment (2,654 ) (5,060 ) (13,011 ) (12,597 )
Purchases of investments (4,189 ) - (9,189 ) (30,461 )
Sales of investments   -     2,500     5,000     21,500  
Net cash used in investing activities   (6,843 )   (2,560 )   (17,200 )   (21,558 )
 
Cash flows from financing activities:
Proceeds from stock option exercises 4,003 4,293 13,401 6,590
Income tax withholding payment associated with restricted stock vesting (83 ) - (928 ) (284 )
Tax benefit of excess stock based compensation deductions   915     1,767     6,917     2,622  
Net cash provided by financing activities   4,835     6,060     19,390     8,928  
 
Net increase in cash and cash equivalents 34,646 17,780 57,925 36,527
Cash and cash equivalents, at beginning of period   131,662     90,603     108,383     71,856  
Cash and cash equivalents, at end of period $ 166,308   $ 108,383   $ 166,308   $ 108,383  

iRobot Corporation

Supplemental Information
(unaudited)
   
 
For the three months ended For the twelve months ended
December 31, January 1, December 31, January 1,
2011 2011 2011 2011
 
Revenue: *
 
Home Robots $ 74,435   $ 69,247   $ 278,551   $ 229,348  
 
Domestic $ 24,371 $ 24,841 $ 82,787 $ 77,918
International $ 50,064 $ 44,406 $ 195,764 $ 151,430
 
 
Government & Industrial $ 56,333   $ 44,748   $ 186,949   $ 171,604  
 
Domestic $ 51,458 $ 41,779 $ 170,968 $ 154,404
International $ 4,875 $ 2,969 $ 15,981 $ 17,200
 
Product $ 47,990 $ 34,040 $ 147,974 $ 131,046
Contract $ 8,343 $ 10,708 $ 38,975 $ 40,558
 
Product Life Cycle $ 10,974 $ 11,490 $ 42,579 $ 38,101
 
 
Gross Margin Percent:
Home Robots 45.8 % 42.4 % 45.2 % 40.0 %
Government & Industrial 39.0 % 36.0 % 35.5 % 31.3 %
Total Company 42.9 % 39.9 % 41.3 % 36.3 %
 
 
Units shipped:
Home Robots * 358 380 1,371 1,269
Government & Industrial 273 169 773 871
 
 
Average gross selling prices for robot units:
Home Robots $ 218 $ 194 $ 207 $ 189
Government & Industrial * $ 132 $ 133 $ 136 $ 107
 
 
Government & Industrial Funded Product Backlog * $ 7,600 $ 23,869 $ 7,600 $ 23,869
 
 
Days sales outstanding 32 30 32 30
 
Days in inventory 41 40 41 40
 
Headcount 619 657 619 657
 
 
* in thousands

iRobot Corporation

Adjusted EBITDA Reconciliation to GAAP

(unaudited, in thousands)

   
For the three months ended For the twelve months ended
December 31, January 1, December 31, January 1,
2011 2011 2011 2011
 
Net income $ 10,638 $ 7,000 $ 40,191 $ 25,514
 
Interest income, net (212 ) (193 ) (967 ) (765 )
Income tax expense 4,395 689 13,350 8,460
Depreciation 2,387 1,741 9,002 7,002
Amortization   688     127     1,310     539  
 
EBITDA 17,896 9,364 62,886 40,750
 
 
Stock-based compensation expense 2,398 2,133 8,784 8,165
Merger and acquisition expense 11 73 41 205
Net intellectual property litigation expense 116 110 287 181
Restructuring expense   914     -     1,015     -  
 
Adjusted EBITDA $ 21,335   $ 11,680   $ 73,013   $ 49,301  

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
Non-GAAP 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 31, January 1, December 31, January 1,
2011 2011 2011 2011
 
GAAP net income $ 10,638 $ 7,000 $ 40,191 $ 25,514
 
Less one-time net income tax benefit associated with release of state deferred tax asset valuation allowance

-

- - (2,259 )
 
Less one-time net income tax benefit associated with Section 199 deductions and R&D tax credit true-ups

-

  -   (3,455 )   -  
 
Non-GAAP net income $ 10,638 $ 7,000 $ 36,736   $ 23,255  
 
 
GAAP net income per common share:
Basic $ 0.39 $ 0.27 $ 1.50 $ 1.00
Diluted $ 0.38 $ 0.26 $ 1.44 $ 0.96
 
Less one-time net income tax benefit associated with release of state deferred tax asset valuation allowance
Basic $ - $ - $ - $ (0.08 )
Diluted $ - $ - $ - $ (0.08 )
 
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 ) $ -
 
Non-GAAP net income per common share:
Basic $ 0.39 $ 0.27 $ 1.38 $ 0.92
Diluted $ 0.38 $ 0.26 $ 1.32 $ 0.88
 
 
Shares used in Per Common Share Calculations:
Basic 27,119 25,604 26,712 25,394
Diluted 28,147 26,798 27,924 26,468

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