BEDFORD, Mass., Oct. 24, 2017 /PRNewswire/ -- iRobot
Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced
its financial results for the third quarter ended September 30, 2017.
"We delivered another outstanding quarter in which total revenue
grew 22% over Q3 last year. Based on our Q3 results, and on our Q4
outlook fueled by continued positive momentum in the United States and in EMEA, where growth is
accelerating, we are increasing our full-year 2017 financial
expectations. The U.S. and EMEA are now expected to grow 40% and
45% respectively for the full year.
"And, we expect 2017 revenue of $870 to
$880 million, a 33 – 34% increase over 2016 consumer
revenue, operating income of between $55 and
$65 million, and EPS of between $1.65
and $2.00, including the impact of our recent European
distributor acquisition," said Colin
Angle, chairman and chief executive officer of iRobot.
"U.S. household penetration of robotic vacuum cleaners is still
less than 10%, so there is plenty of runway domestically and even
more overseas. With the leading global segment share, at a time
when adoption is accelerating, we are in an excellent position to
capitalize on the momentum to drive future growth."
Financial Results
- Revenue for the third quarter of 2017 was $205.4 million, compared with $168.6 million for the third quarter of
2016.
- Operating income in the third quarter of 2017 was $23.9 million, compared with $27.5 million in the third quarter of 2016.
- Quarterly earnings per share were $0.76 for the third quarter of 2017, compared
with $0.70 in the third quarter of
2016. Third-quarter 2017 EPS included a discrete tax benefit of
$0.16 relating to the new 2017 stock
compensation accounting standard and $0.08 from an adjustment to the original purchase
price allocation for Japan.
Business Highlights
- In the third quarter, the positive impact of our targeted
marketing programs in the U.S., EMEA and Japan drove year-over-year Q3 revenue growth
of 22%. Third-quarter consumer revenue grew 34% in the United States, 31% in EMEA, and 65% in
Japan over Q3 2016.
- We successfully completed the acquisition of our largest
European distributor, which we expect will enable us to capitalize
on the current market momentum and drive robotic floor care
adoption in EMEA.
- We announced an agreement with Micro-Star International
Co. representing an early win in an ongoing effort by iRobot to
defend and protect its valuable intellectual property.
Financial Expectations
Management provides the following expectations with respect to
the fiscal year ending December 30,
2017.
(Dollars in millions except Earnings Per Share)
Fiscal Year
2017
|
Previous
|
Current
|
Revenue
|
$840 -
$860
|
$870 -
$880
|
Operating
Income
|
$50 - $60
|
$55 - $65
|
Earnings Per
Share
|
$1.35 -
$1.70
|
$1.65 -
$2.00
|
Third-Quarter Conference Call
iRobot will host a
conference call tomorrow at 8:30 a.m.
ET to discuss its financial results for the third fiscal
quarter of 2017 and outlook for the fourth fiscal quarter of 2017
and fiscal year 2017 financial performance.
Pertinent details include:
Date:
|
Wednesday, October
25
|
Time:
|
8:30 a.m.
ET
|
Call-In
Number:
|
213-358-0894
|
Passcode:
|
15414375
|
A live, audio broadcast of the conference call also will be
available at:
http://investor.irobot.com/events/event-details/q3-2017-irobot-corp-earnings-conference-call.
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
November 1, and can be accessed by
dialing 404-537-3406, passcode 15414375.
About iRobot Corp.
iRobot, the leading global consumer
robot company, designs and builds robots that empower people to do
more both inside and outside of the home. iRobot created the home
robot cleaning category with the introduction of its Roomba®
Vacuuming Robot in 2002. Today, iRobot is a global enterprise that
has sold more than 20 million robots worldwide. iRobot's product
line, including the Roomba and the Braava™ family of mopping
robots, feature proprietary technologies and advanced concepts in
cleaning, mapping and navigation. iRobot's engineers are building
an ecosystem of robots and data to enable the smart home. 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; revenue growth; demand for our
robots; and anticipated revenue, operating income and earnings per
share for the fiscal year ended December
30, 2017. 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 and
adoption of our products; 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, merger, acquisition and divestiture expense, gain on
business acquisition, restructuring expense, net intellectual
property litigation expense, and non-cash stock compensation
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
Statements of Income
|
(in thousands, except
per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
September
30,
|
October 1,
|
|
September
30,
|
October
1,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Revenue
|
$
205,399
|
$
168,610
|
|
$
557,014
|
$
448,110
|
Cost of
revenue
|
103,016
|
87,550
|
|
277,397
|
235,437
|
|
|
|
|
|
|
Gross
margin
|
102,383
|
81,060
|
|
279,617
|
212,673
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development
|
28,843
|
19,672
|
|
80,518
|
57,944
|
Selling and
marketing
|
28,646
|
17,925
|
|
91,344
|
66,972
|
General and
administrative
|
21,002
|
16,012
|
|
58,137
|
48,919
|
Total operating
expenses
|
78,491
|
53,609
|
|
229,999
|
173,835
|
|
|
|
|
|
|
Operating
income
|
23,892
|
27,451
|
|
49,618
|
38,838
|
|
|
|
|
|
|
Other income,
net
|
2,601
|
523
|
|
4,290
|
2,142
|
|
|
|
|
|
|
Income before income
taxes
|
26,493
|
27,974
|
|
53,908
|
40,980
|
Income tax
expense
|
4,411
|
8,462
|
|
7,565
|
12,722
|
Net income
|
$
22,082
|
$
19,512
|
|
$
46,343
|
$
28,258
|
|
|
|
|
|
|
Net income per
share
|
|
|
|
|
|
Basic
|
$
0.80
|
$
0.72
|
|
$
1.68
|
$
1.01
|
Diluted
|
$
0.76
|
$
0.70
|
|
$
1.61
|
$
0.99
|
|
|
|
|
|
|
Number of shares used
in per share calculations
|
|
|
|
|
|
Basic
|
27,739
|
27,237
|
|
27,520
|
27,878
|
Diluted
|
28,916
|
27,778
|
|
28,719
|
28,423
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation included in above figures:
|
|
|
|
|
|
Cost of
revenue
|
$
274
|
$
184
|
|
$
751
|
$
555
|
Research
and development
|
1,261
|
1,028
|
|
3,508
|
2,598
|
Selling
and marketing
|
728
|
444
|
|
1,869
|
1,316
|
General
and administrative
|
2,771
|
2,247
|
|
7,941
|
7,312
|
Total
|
$
5,034
|
$
3,903
|
|
$
14,069
|
$
11,781
|
iRobot
Corporation
|
Condensed
Consolidated Balance Sheets
|
(unaudited, in
thousands)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2017
|
|
2016
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
241,786
|
|
$
214,523
|
Short term
investments
|
36,442
|
|
39,930
|
Accounts
receivable, net
|
76,956
|
|
72,909
|
Unbilled
revenue
|
1,668
|
|
139
|
Inventory
|
92,813
|
|
50,578
|
Other current
assets
|
18,395
|
|
5,591
|
Total
current assets
|
468,060
|
|
383,670
|
Property and
equipment, net
|
37,093
|
|
27,532
|
Deferred tax
assets
|
35,088
|
|
30,585
|
Goodwill
|
41,041
|
|
41,041
|
Intangible
assets, net
|
15,315
|
|
12,207
|
Other
assets
|
14,064
|
|
12,877
|
Total
assets
|
$
610,661
|
|
$
507,912
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Accounts
payable
|
$
88,798
|
|
$
67,281
|
Accrued
expenses
|
28,949
|
|
19,854
|
Accrued
compensation
|
23,773
|
|
21,015
|
Deferred
revenue and customer advances
|
4,607
|
|
4,486
|
Total
current liabilities
|
146,127
|
|
112,636
|
Long term
liabilities
|
8,042
|
|
6,320
|
Stockholders'
equity
|
456,492
|
|
388,956
|
Total
liabilities and stockholders' equity
|
$
610,661
|
|
$
507,912
|
iRobot
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
For the nine
months ended
|
|
September
30,
|
October 1,
|
|
2017
|
2016
|
Cash flows from
operating activities:
|
|
|
Net income
|
$
46,343
|
$
28,258
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
14,569
|
10,376
|
Loss on equity method
investment
|
32
|
-
|
Impairment on cost
method investment
|
155
|
-
|
Gain on sale of
business unit and cost method investment
|
(1,056)
|
(1,067)
|
Gain on business
acquisition
|
(2,243)
|
-
|
Stock-based
compensation
|
14,069
|
11,781
|
Deferred income
taxes, net
|
(3,226)
|
6,314
|
Tax benefit of excess
stock-based compensation deductions
|
-
|
(1,115)
|
Non-cash director
deferred compensation
|
49
|
66
|
Changes in operating
assets and liabilities — (use) source
|
|
|
Accounts receivable
and unbilled revenue
|
(10,957)
|
30,979
|
Inventory
|
(23,944)
|
(11,472)
|
Other
assets
|
(11,099)
|
(1,579)
|
Accounts
payable
|
20,824
|
(2,261)
|
Accrued
liabilities
|
7,034
|
(56)
|
Deferred revenue and
customer advances
|
(965)
|
(193)
|
Long term
liabilities
|
1,513
|
(2,997)
|
Net cash provided by
operating activities
|
51,098
|
67,034
|
|
|
|
Cash flows from
investing activities:
|
|
|
Additions of property
and equipment
|
(16,630)
|
(8,352)
|
Change in other
assets
|
(1,374)
|
(435)
|
Proceeds from sale of
business unit and cost method investment
|
1,056
|
24,154
|
Cash paid for
business acquisition, net of cash acquired
|
(16,524)
|
-
|
Purchase of
investments
|
(7,034)
|
(16,556)
|
Sales and maturities
of investments
|
10,500
|
11,502
|
Net cash provided by
(used in) investing activities
|
(30,006)
|
10,313
|
|
|
|
Cash flows from
financing activities:
|
|
|
Proceeds from stock
option exercises
|
8,990
|
4,496
|
Income tax
withholding payment associated with restricted stock
vesting
|
(2,974)
|
(1,300)
|
Stock
repurchases
|
-
|
(97,021)
|
Tax benefit of excess
stock-based compensation deductions
|
-
|
1,115
|
Net cash provided by
(used in) financing activities
|
6,016
|
(92,710)
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
155
|
-
|
Net increase
(decrease) in cash and cash equivalents
|
27,263
|
(15,363)
|
Cash and cash
equivalents, at beginning of period
|
214,523
|
179,915
|
Cash and cash
equivalents, at end of period
|
$
241,786
|
$
164,552
|
iRobot
Corporation
|
Supplemental
Information
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
September
30,
|
October 1,
|
|
September
30,
|
October
1,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Revenue: *
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
$
205,360
|
$
167,962
|
|
$
556,757
|
$
443,754
|
|
|
|
|
|
|
Domestic
|
$
87,626
|
$
65,466
|
|
$
269,998
|
$
195,109
|
International
|
$
117,734
|
$
102,496
|
|
$
286,758
|
$
248,645
|
|
|
|
|
|
|
|
|
|
|
|
|
Defense &
Security
|
$
-
|
$
-
|
|
$
-
|
$
3,075
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
Percent
|
49.8%
|
48.1%
|
|
50.2%
|
47.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer units
shipped*
|
906
|
779
|
|
2,358
|
2,002
|
Vacuum
|
774
|
602
|
|
1,994
|
1,678
|
Mopping
|
131
|
170
|
|
362
|
308
|
|
|
|
|
|
|
Consumer
revenue**
|
$
205
|
$
168
|
|
$
557
|
$
444
|
Vacuum***
|
$
186
|
$
144
|
|
$
504
|
$
402
|
Mopping***
|
$
21
|
$
23
|
|
$
55
|
$
42
|
|
|
|
|
|
|
Average gross selling
prices for robot units - Consumer
|
$
249
|
$
229
|
|
$
260
|
$
240
|
|
|
|
|
|
|
Days sales
outstanding
|
35
|
37
|
|
35
|
37
|
|
|
|
|
|
|
Days in
inventory
|
82
|
64
|
|
82
|
64
|
|
|
|
|
|
|
Headcount
|
798
|
572
|
|
798
|
572
|
|
|
|
|
|
|
|
|
|
|
|
|
* in
thousands
|
|
|
|
|
|
** in
millions
|
|
|
|
|
|
*** includes
accessory revenue
|
|
|
|
|
|
iRobot
Corporation
|
Adjusted EBITDA
Reconciliation to GAAP
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
September
30,
|
October 1,
|
|
September
30,
|
October 1,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Net
income
|
$
22,082
|
$
19,512
|
|
$
46,343
|
$
28,258
|
|
|
|
|
|
|
Interest
income, net
|
(558)
|
(217)
|
|
(1,423)
|
(687)
|
Income tax
expense
|
4,411
|
8,462
|
|
7,564
|
12,722
|
Depreciation
|
3,350
|
2,533
|
|
8,888
|
7,446
|
Amortization
|
2,419
|
909
|
|
5,605
|
2,725
|
|
|
|
|
|
|
EBITDA
|
31,704
|
31,199
|
|
66,977
|
50,464
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
5,034
|
3,903
|
|
14,069
|
11,781
|
Net merger,
acquisition and divestiture expense
|
681
|
376
|
|
2,452
|
1,229
|
Gain on
business acquisition
|
(2,243)
|
-
|
|
(2,243)
|
-
|
Net
intellectual property litigation expense
|
1,266
|
103
|
|
1,910
|
464
|
Restructuring
(income) expense
|
-
|
(37)
|
|
-
|
1,665
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
36,442
|
$
35,544
|
|
$
83,165
|
$
65,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, net
merger, acquisition and divestiture expense, gain on business
acquisition, net intellectual property litigation expense, and
restructuring (income) 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.
|
|
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
|
Expected
Incremental Impact of Robopolis Acquisition
|
(in millions,
except per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2017
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Expected
|
|
Expected
|
|
Three
|
|
Three
|
|
Three
|
|
Three
|
|
Twelve
|
|
Months
Ending
|
|
Months
Ending
|
|
Months
Ending
|
|
Months
Ending
|
|
Months
Ending
|
|
April 1
|
|
July
1
|
|
September
30
|
|
December
30
|
|
December
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
-
|
|
-
|
|
-
|
|
$25 -
$35
|
|
$25 -
$35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share
|
($0.01)
|
|
($0.02)
|
|
($0.03)
|
|
($0.39 -
0.24)
|
|
($0.45 -
0.30)
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/irobot-reports-strong-third-quarter-financial-results-300542347.html
SOURCE iRobot Corp.