iRobot Corporation : iRobot Reports Record Fourth-Quarter and Full-Year Financial Results
02/08/2012| 04:05pm US/Eastern
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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 $0.88for
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
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