iRobot First-Quarter Financial Results Exceed Expectations
Apr 21, 2015, 04:01 ET
BEDFORD, Mass., April 21, 2015 /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the first quarter ended March 28, 2015.
"Our first quarter results exceeded our expectations. Home Robot revenue was up slightly over last year while Defense & Security Robot revenue grew 17%. We are off to a good start in 2015 as we weather global macros and invest to drive Home Robot growth," said Colin Angle, chairman and chief executive officer of iRobot.
"Based on our Q1 results and our outlook for the rest of 2015, we continue to expect revenue of $625 to $635 million, driven by Home Robot growth. We are reducing the high end of our EPS and Adjusted EBITDA ranges and now expect EPS of between $1.25 and $1.35, and adjusted EBITDA of $85 to $90 million, or approximately 14% of revenue. These expectations reflect our confidence that Home Robot revenue will grow 11-13% driven by growth in the United States and China, and our incremental marketing investments to strengthen awareness and support our international partners."
Financial Results
- Revenue for the first quarter of 2015 was $118.0 million, compared with $114.2 million for the first quarter of 2014.
- Net income for the first quarter of 2015 was $4.8 million, compared with net income of $5.3 million for the first quarter of 2014.
- Quarterly earnings per share were $0.16, compared with earnings per share of $0.18 in the first quarter of 2014.
- Adjusted EBITDA for the first quarter of 2015 was $13.1 million, compared with $14.2 million in the first quarter of 2014.
Business Highlights
- International Home Robot revenues were up 5% year over year driven by growth in EMEA and China from higher Roomba 800 sales.
- Defense & Security revenues grew 17% in Q1 2015 from Q1 2014, and more than 70% of revenue was from spares and support.
- We recently installed multiple Ava 500 robots at Fidelity Investments FCAT center in Boston for various applications including collaboration and FCAT tours for internal and external customers as well as partners.
Financial Expectations
Management provides the following expectations with respect to the second quarter ending June 27, 2015 and fiscal year ending January 2, 2016.
| Q2 2015: |
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| Revenue |
$143 - $146 million |
|||||||
| Earnings Per Share |
$0.02 - $0.06 |
|||||||
| Adjusted EBITDA |
$8 - $10 million |
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| Fiscal Year 2015: |
Current |
Prior |
||||||
| Revenue |
$625 - $635 million |
$625 - $635 million |
||||||
| Earnings Per Share |
$1.25 - $1.35 |
$1.25 - $1.45 |
||||||
| Adjusted EBITDA |
$85 - $90 million |
$85 - $95 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 2015, business outlook, and outlook for second-quarter and fiscal year 2015 financial performance. Pertinent details include:
| Date: |
Wednesday, April 22, 2015 |
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| Time: |
8:30 a.m. ET |
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| Call-In Number: |
847-619-6396 |
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| Passcode: |
38036249 |
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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=5168625. 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 April 30, and can be accessed by dialing 630-652-3042, passcode 38036249#.
About iRobot Corp.
iRobot designs and builds robots that empower people to do more. 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 proprietary technologies 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, outlook for and future performance of our businesses, the impact of our investments to develop robotic technology, the impact of our marketing investments, and anticipated revenue, earnings per share and Adjusted EBITDA for fiscal year 2015 and the second quarter ending June 27, 2015. 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, amortization, stock-based compensation expense, merger and acquisition expense, net intellectual property litigation expense, and restructuring expense. A reconciliation between net income 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 28, |
March 29, |
|
| 2015 |
2014 |
|
| Revenue |
$ 117,961 |
$ 114,204 |
| Cost of revenue |
64,253 |
62,494 |
| Gross margin |
53,708 |
51,710 |
| Operating expenses: |
||
| Research and development |
19,032 |
16,934 |
| Selling and marketing |
14,188 |
14,532 |
| General and administrative |
12,589 |
12,264 |
| Total operating expenses |
45,809 |
43,730 |
| Operating income |
7,899 |
7,980 |
| Other income (expense), net |
(794) |
(187) |
| Income before income taxes |
7,105 |
7,793 |
| Income tax expense |
2,351 |
2,513 |
| Net income |
$ 4,754 |
$ 5,280 |
| Net income per share |
||
| Basic |
$ 0.16 |
$ 0.18 |
| Diluted |
$ 0.16 |
$ 0.18 |
| Number of shares used in calculations per share |
||
| Basic |
29,653 |
29,189 |
| Diluted |
30,230 |
30,033 |
| Stock-based compensation included in above figures: |
||
| Cost of revenue |
$ 215 |
$ 169 |
| Research and development |
832 |
731 |
| Selling and marketing |
309 |
338 |
| General and administrative |
1,751 |
1,840 |
| Total |
$ 3,107 |
$ 3,078 |
| iRobot Corporation |
|||
| Condensed Consolidated Balance Sheet |
|||
| (unaudited, in thousands) |
|||
| March 28, |
December 27, |
||
| 2015 |
2014 |
||
| Assets |
|||
| Cash and cash equivalents |
$ 183,661 |
$ 185,957 |
|
| Short term investments |
37,256 |
36,166 |
|
| Accounts receivable, net |
37,705 |
71,056 |
|
| Unbilled revenue |
633 |
2,614 |
|
| Inventory |
49,698 |
47,857 |
|
| Deferred tax assets |
22,030 |
21,505 |
|
| Other current assets |
9,501 |
9,704 |
|
| Total current assets |
340,484 |
374,859 |
|
| Property and equipment, net |
30,501 |
31,297 |
|
| Deferred tax assets |
8,393 |
8,409 |
|
| Goodwill |
48,751 |
48,751 |
|
| Intangible assets, net |
18,274 |
19,146 |
|
| Other assets |
11,265 |
10,751 |
|
| Total assets |
$ 457,668 |
$ 493,213 |
|
| Liabilities and stockholders' equity |
|||
| Accounts payable |
$ 35,666 |
$ 60,256 |
|
| Accrued expenses |
14,322 |
18,701 |
|
| Accrued compensation |
7,805 |
16,235 |
|
| Deferred revenue and customer advances |
1,769 |
3,849 |
|
| Total current liabilities |
59,562 |
99,041 |
|
| Long term liabilities |
3,819 |
3,736 |
|
| Stockholders' equity |
394,287 |
390,436 |
|
| Total liabilities and stockholders' equity |
$ 457,668 |
$ 493,213 |
|
| iRobot Corporation |
||
| Consolidated Statement of Cash Flows |
||
| (unaudited, in thousands) |
||
| For the three months ended |
||
| March 28, |
March 29, |
|
| 2015 |
2014 |
|
| Cash flows from operating activities: |
||
| Net income |
$ 4,754 |
$ 5,280 |
| Adjustments to reconcile net income to net cash provided by (used in) |
||
| Depreciation and amortization |
3,561 |
3,142 |
| (Gain)/Loss on disposal of property and equipment |
22 |
(10) |
| Stock-based compensation |
3,107 |
3,078 |
| Deferred income taxes, net |
(102) |
1,912 |
| Tax benefit of excess stock based compensation deductions |
(560) |
(2,231) |
| Non-cash director deferred compensation |
38 |
11 |
| Changes in operating assets and liabilities — (use) source |
||
| Accounts receivable |
33,351 |
2,808 |
| Unbilled revenue |
1,981 |
(75) |
| Inventory |
(1,998) |
4,080 |
| Other assets |
203 |
(3,588) |
| Accounts payable |
(21,835) |
(7,924) |
| Accrued expenses |
(4,374) |
(1,399) |
| Accrued compensation |
(8,430) |
(11,862) |
| Deferred revenue and customer advances |
(2,080) |
(665) |
| Long term liabilities |
83 |
(319) |
| Net cash provided by (used in) operating activities |
7,721 |
(7,762) |
| Cash flows from investing activities: |
||
| Additions of property and equipment |
(4,445) |
(2,177) |
| Change in other assets |
(515) |
- |
| Purchases of investments |
(3,541) |
(11,211) |
| Sales of investments |
2,500 |
2,500 |
| Net cash used in investing activities |
(6,001) |
(10,888) |
| Cash flows from financing activities: |
||
| Proceeds from stock option exercises |
1,466 |
6,957 |
| Income tax withholding payment associated with restricted stock vesting |
(1,118) |
(1,118) |
| Stock repurchases |
(4,924) |
- |
| Tax benefit of excess stock based compensation deductions |
560 |
2,231 |
| Net cash provided by (used in) financing activities |
(4,016) |
8,070 |
| Net decrease in cash and cash equivalents |
(2,296) |
(10,580) |
| Cash and cash equivalents, at beginning of period |
185,957 |
165,404 |
| Cash and cash equivalents, at end of period |
$ 183,661 |
$ 154,824 |
| iRobot Corporation |
||
| Supplemental Information |
||
| (unaudited) |
||
| For the three months ended |
||
| March 28, |
March 29, |
|
| 2015 |
2014 |
|
| Revenue: * |
||
| Home Robots |
$ 111,085 |
$ 108,035 |
| Domestic |
$ 40,627 |
$ 41,030 |
| International |
$ 70,458 |
$ 67,005 |
| Defense & Security |
$ 6,526 |
$ 5,602 |
| Domestic |
$ 3,853 |
$ 3,135 |
| International |
$ 2,673 |
$ 2,467 |
| Product |
$ 6,372 |
$ 5,592 |
| Contract |
$ 154 |
$ 10 |
| Product Life Cycle |
$ 4,728 |
$ 3,533 |
| Gross Margin Percent: |
||
| Home Robots |
51.1% |
50.4% |
| Defense & Security |
33.2% |
37.2% |
| Total Company |
45.5% |
45.3% |
| Units shipped: |
||
| Home Robots * |
491 |
465 |
| Defense & Security |
28 |
38 |
| Average gross selling prices for robot units: |
||
| Home Robots |
$ 238 |
$ 243 |
| Defense & Security * |
$ 59 |
$ 54 |
| Defense & Security Funded Product Backlog * |
$ 13,655 |
$ 12,444 |
| Days sales outstanding |
30 |
30 |
| Days in inventory |
71 |
61 |
| Headcount |
589 |
539 |
| * in thousands |
||
| iRobot Corporation |
||||||||
| Adjusted EBITDA Reconciliation to GAAP |
||||||||
| (unaudited, in thousands) |
||||||||
| For the three months ended |
||||||||
| March 28, |
March 29, |
|||||||
| 2015 |
2014 |
|||||||
| Net income |
$ 4,754 |
$ 5,280 |
||||||
| Interest income, net |
(154) |
(145) |
||||||
| Income tax expense |
2,351 |
2,513 |
||||||
| Depreciation |
2,621 |
2,167 |
||||||
| Amortization |
940 |
975 |
||||||
| EBITDA |
10,512 |
10,790 |
||||||
| Stock-based compensation expense |
3,107 |
3,078 |
||||||
| Merger and acquisition expense |
- |
- |
||||||
| Net intellectual property litigation expense |
(510) |
369 |
||||||
| Restructuring expense |
- |
- |
||||||
| Adjusted EBITDA |
$ 13,109 |
$ 14,237 |
||||||
| 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, amortization, stock-based compensation expense, merger and acquisition expense, net intellectual property litigation expense, and restructuring expense. 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. |
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| 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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SOURCE iRobot Corp.
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