IROBOT CORP - FORM 8-K - EX-1.99.1 - EXHIBIT - April 23, 2013

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EX-99.1
Contacts:
 
 
 
 
Elise Caffrey
 
Matthew Lloyd
 
 
Investor Relations
 
Media Relations
 
 
iRobot Corp.
 
iRobot Corp.
 
 
(781) 430-3003
 
(781) 430-3720
 
 
ecaffrey@irobot.com
 
mlloyd@irobot.com
 
 
 
 
 
 
 

iRobot Reports First-Quarter Financial Results
Exceeds Expectations; Increases Full-Year Outlook

BEDFORD, Mass., Apr. 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 First Look 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.  A reconciliation 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,
2013
 
March 31,
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,
2013
 
December 29,
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,
2013
 
March 31,
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 compensation deductions
(43
)
 
(705
)
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 with restricted stock vesting
(513
)
 
(227
)
Tax benefit of excess stock based compensation deductions
43

 
705

Net cash provided by financing activities
1,274

 
1,801

 
 
 
 
Net increase (decrease) in cash and cash equivalents
(3,194
)
 
490

Cash and cash equivalents, at beginning of period
126,770

 
166,308

Cash and cash equivalents, at end of period
$
123,576

 
$
166,798

 
 
 
 




 iRobot Corporation
Supplemental Information
(unaudited)
 
 
 
 
 
 
 
 
 
 For the three months ended
 
March 30,
2013
 
March 31,
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, 2013
 
March 31, 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.



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