BEDFORD, Mass., Feb. 7, 2018 /PRNewswire/ -- iRobot Corp.
(NASDAQ: IRBT), a leader in consumer robots, today announced its
financial results for the fourth quarter and full year ended
December 30, 2017.
"In our first full year as a solely consumer-focused business,
we delivered fantastic quarterly and full-year revenue growth of
54% and 34% respectively, over Q4 and full-year 2016. Record Q4
revenue was driven by very strong sales in the United States, and in EMEA, as the overall
category continued to grow at an accelerating rate. We achieved
record growth while maintaining unambiguous global product and
brand leadership in the robotic vacuum cleaner (RVC) category.
"In 2018, we expect to cross the billion-dollar revenue
threshold and deliver $1.05 to
$1.08 billion in revenue, which is
year-over-year growth of 19% to 22%, operating income of
$86 to $96
million and EPS of $2.10 to
$2.35.
"The opportunity ahead of us is tremendous. Global household
penetration of robotic vacuum cleaners remains extremely low, in
the single digits. Strong economic conditions worldwide are fueling
overall global growth and positive consumer sentiment. We have
demonstrated that in regions where we have run marketing programs
to educate prospective customers about Roomba, we have increased
our market share, and our recent distributor acquisitions enable us
to extend our strategic marketing programs to Japan and Europe.
"Further, the global RVC category grew more than 25% in 2017,
and we expect category growth to continue as we and competitors
invest to drive awareness. And, we have seen retailers in
the United States increasingly
embracing and promoting the category through national advertising
programs featuring RVCs, as well as allocating increased shelf
space and investing in high-visibility displays.
"These are the growth drivers we see for Roomba, but we believe
there is also a great opportunity to drive adoption of our Braava
products through campaigns targeted at our millions of Roomba
customers.
"There is a lot to be excited about. 2017 was a critical year
for iRobot as the first full year focused solely on developing and
delivering products for the home. We delivered outstanding
financial results for the year while successfully executing the
acquisition of two major distributors in key markets and extending
our control over 75% of our global revenue.
"In 2018, we plan to capitalize on the incremental investments
we made in 2017 with the introduction of new products in the second
half of the year. We expect double-digit revenue growth in all
regions as we continue to evolve and extend our proven sales and
marketing initiatives in overseas markets. In the U.S., we
expect continued strong sales following our 40+% growth in 2017,"
said Colin Angle, chairman and chief
executive officer of iRobot.
Financial Results
- Revenue for the fourth quarter of 2017 was $326.9 million, compared with $212.5 million for the fourth quarter of 2016.
Revenue for the full year 2017 was $883.9
million, compared with $660.6
million for the full year 2016. Full-year 2017 and 2016
revenue included $0.3 million and
$4.8 million respectively, of D&S
and other revenue.
- Operating income in the fourth quarter of 2017 was $23.1 million, compared with $18.7 million in the fourth quarter of 2016.
Operating income for the full year 2017 was $72.7 million, compared with $57.6 million for the full year 2016.
- Quarterly earnings per share were $0.16 for the fourth quarter of 2017, compared
with $0.49 in the fourth quarter of
2016. Fourth-quarter 2017 earnings per share included a negative
($0.41) impact from the new tax
reform law for the remeasurement of our net deferred tax assets and
a provisional repatriation toll charge, as well as a discrete tax
benefit of $0.03 relating to the new
2017 stock compensation accounting standard. Full-year 2017 EPS was
$1.77, compared with $1.48 for full-year 2016. Full-year 2017 earnings
per share included a negative ($0.41)
impact from the new tax reform law for the remeasurement of our net
deferred tax assets and a provisional repatriation toll charge, as
well as a discrete tax benefit of $0.41 relating to the new 2017 stock compensation
accounting standard. Fourth-quarter 2016 earnings per share
included a $0.03 benefit associated
with a change in accounting treatment of an equity investment and a
$0.01 contribution from transition
services provided to our former D&S business. Full-year 2016
earnings per share included a negative ($0.10) impact from the divestiture of the
D&S business and a $0.03
contribution from the sale of an investment.
Business Highlights
- In the fourth quarter, the positive impact of our targeted
marketing programs in the U.S., EMEA and Japan drove year-over-year Q4 revenue growth
of 54%. Fourth-quarter consumer revenue grew 47% in the United States, 34% in Japan and more than doubled in EMEA, in each
case over Q4 2016.
- In Q4, we launched our first ever Braava national television
program in the U.S., which drove Braava family revenue growth of
65% in the U.S. over full-year 2016.
- We announced an agreement with Black & Decker in which
Black & Decker agreed to discontinue sales of all home robotic
vacuums for a certain period of time after selling through its
existing inventory. This represents another 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 29,
2018.
(Dollars in millions except Earnings Per Share)
Fiscal Year
2018
Revenue
$1,050 - $1,080
Operating
Income
$86 -
$96
Tax Rate (before discrete
items) 25 - 27%
Earnings Per
Share
$2.10 - $2.35
Three-Year Financial Targets 2018 - 2020
Revenue
Growth
Approximately 20%
Gross
Margin
50 – 51%
Operating
Margin
Increasing to 10%
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 2017, the outlook for
full-year 2018 financial performance, and the company's three-year
financial targets for 2018 through 2020.
Pertinent details include:
Date:
Thursday, February 8
Time:
8:30 a.m. ET
Call-In Number:
213-358-0894
Passcode:
4995868
A live, audio broadcast of the conference call also will be
available at
http://investor.irobot.com/events/event-details/q4-2017-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
February 15, and can be accessed by
dialing 404-537-3406, passcode 4995868.
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 robotic
vacuum cleaners, and for our Roomba® and Braava® robots; the impact
of sales and marketing initiatives; the impact of investments in
research and development, technology and innovation; the
introduction of new products and the timing and impact
thereof; the impact of our acquisition of our
largest European distributor; anticipated revenue, revenue
growth, operating income and earnings per share for the fiscal year
ended December 29, 2018; and
anticipated revenue growth, gross margin and operating income as a
percent of revenue for the next three fiscal years. 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, stock-based compensation expense, net merger,
acquisition and divestiture expense, gain on business acquisition,
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
Statements of Income
|
(in thousands, except
per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the twelve
months ended
|
|
December
30,
|
December
31,
|
|
December
30,
|
December
31,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Revenue
|
$
326,897
|
$
212,494
|
|
$
883,911
|
$
660,604
|
Cost of
revenue:
|
|
|
|
|
|
Cost of
product revenue
|
166,046
|
104,988
|
|
438,114
|
337,832
|
Amortization
of intangible assets
|
7,309
|
864
|
|
12,638
|
3,457
|
Total cost of
revenue
|
173,355
|
105,852
|
|
450,752
|
341,289
|
Gross
margin
|
153,542
|
106,642
|
|
433,159
|
319,315
|
Operating
expenses:
|
|
|
|
|
|
Research and
development
|
32,631
|
21,861
|
|
113,149
|
79,805
|
Selling and
marketing
|
70,766
|
48,153
|
|
162,110
|
115,125
|
General and
administrative
|
26,806
|
17,909
|
|
84,771
|
66,828
|
Amortization
of intangible assets
|
267
|
-
|
|
439
|
-
|
Total operating
expenses
|
130,470
|
87,923
|
|
360,469
|
261,758
|
Operating
income
|
23,072
|
18,719
|
|
72,690
|
57,557
|
Other income
(expense), net
|
(614)
|
1,662
|
|
3,676
|
3,804
|
Income before income
taxes
|
22,458
|
20,381
|
|
76,366
|
61,361
|
Income tax
expense
|
17,838
|
6,700
|
|
25,402
|
19,422
|
Net income
|
$
4,620
|
$
13,681
|
|
$
50,964
|
$
41,939
|
|
|
|
|
|
|
Net income per
share
|
|
|
|
|
|
Basic
|
$
0.17
|
$
0.50
|
|
$
1.85
|
$
1.51
|
Diluted
|
$
0.16
|
$
0.49
|
|
$
1.77
|
$
1.48
|
|
|
|
|
|
|
Number of shares used
in per share calculations
|
|
|
|
|
|
Basic
|
27,885
|
27,159
|
|
27,611
|
27,698
|
Diluted
|
28,792
|
27,823
|
|
28,753
|
28,292
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation included in above figures:
|
|
|
|
|
|
Cost of
revenue
|
$
331
|
$
205
|
|
$
1,082
|
$
760
|
Research
and development
|
1,501
|
1,048
|
|
5,009
|
3,646
|
Selling
and marketing
|
702
|
692
|
|
2,571
|
2,008
|
General
and administrative
|
3,148
|
2,269
|
|
11,089
|
9,581
|
Total
|
$
5,682
|
$
4,214
|
|
$
19,751
|
$
15,995
|
iRobot
Corporation
|
Condensed
Consolidated Balance Sheets
|
(unaudited, in
thousands)
|
|
|
|
|
|
December
30,
|
|
December
31,
|
|
2017
|
|
2016
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
128,635
|
|
$
214,523
|
Short term
investments
|
37,225
|
|
39,930
|
Accounts
receivable, net
|
142,829
|
|
73,048
|
Inventory
|
106,932
|
|
50,578
|
Other current
assets
|
19,105
|
|
5,591
|
Total
current assets
|
434,726
|
|
383,670
|
Property and
equipment, net
|
44,579
|
|
27,532
|
Deferred tax
assets
|
31,531
|
|
30,585
|
Goodwill
|
121,440
|
|
41,041
|
Intangible
assets, net
|
44,712
|
|
12,207
|
Other
assets
|
14,534
|
|
12,877
|
Total
assets
|
$
691,522
|
|
$
507,912
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Accounts
payable
|
$
116,316
|
|
$
67,281
|
Accrued
expenses
|
73,647
|
|
40,869
|
Deferred
revenue and customer advances
|
7,761
|
|
4,486
|
Total
current liabilities
|
197,724
|
|
112,636
|
Deferred tax
liabilities
|
9,539
|
|
-
|
Other long term
liabilities
|
13,932
|
|
6,320
|
Total
long term liabilities
|
23,471
|
|
6,320
|
Stockholders'
equity
|
470,327
|
|
388,956
|
Total
liabilities and stockholders' equity
|
$
691,522
|
|
$
507,912
|
iRobot
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
For the twelve
months ended
|
|
December
30,
|
December
31,
|
|
2017
|
2016
|
Cash flows from
operating activities:
|
|
|
Net income
|
$
50,964
|
$
41,939
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
25,499
|
13,606
|
Gain on sale of
business unit and cost method investment
|
(1,267)
|
(1,067)
|
(Income) loss on
equity method investment
|
65
|
(1,376)
|
Impairment on cost
method investment
|
155
|
-
|
Gain on business
acquisition
|
(2,243)
|
-
|
Stock-based
compensation
|
19,751
|
15,995
|
Deferred income
taxes, net
|
(999)
|
3,557
|
|
|
|
Tax benefit of excess
stock-based compensation deductions
|
-
|
(2,971)
|
Non-cash director
deferred compensation
|
65
|
82
|
Other
|
1,846
|
-
|
Changes in operating
assets and liabilities — (use) source
|
|
|
Accounts
receivable
|
(53,251)
|
25,682
|
Inventory
|
(1,470)
|
(981)
|
Other
assets
|
(10,562)
|
3,187
|
Accounts
payable
|
17,457
|
6,502
|
Accrued
liabilities
|
23,447
|
10,181
|
Deferred revenue and
customer advances
|
2,149
|
2,996
|
Long term
liabilities
|
4,709
|
(908)
|
Net cash provided by
operating activities
|
76,315
|
116,424
|
|
|
|
Cash flows from
investing activities:
|
|
|
Additions of property
and equipment
|
(23,371)
|
(10,817)
|
Change in other
assets
|
(1,542)
|
(2,093)
|
Proceeds from sale of
business unit and cost method investment
|
1,267
|
24,154
|
Cash paid for
business acquisitions, net of cash acquired
|
(148,765)
|
-
|
Purchases of
investments
|
(10,578)
|
(16,554)
|
Sales and maturities
of investments
|
13,066
|
9,500
|
Net cash provided by
(used in) investing activities
|
(169,923)
|
4,190
|
|
|
|
Cash flows from
financing activities:
|
|
|
Proceeds from stock
option exercises
|
10,573
|
9,344
|
Income tax
withholding payment associated with restricted stock
vesting
|
(2,983)
|
(1,300)
|
Stock
repurchases
|
-
|
(97,021)
|
Tax benefit of excess
stock-based compensation deductions
|
-
|
2,971
|
Net cash provided by
(used in) financing activities
|
7,590
|
(86,006)
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
130
|
-
|
Net increase
(decrease) in cash and cash equivalents
|
(85,888)
|
34,608
|
Cash and cash
equivalents, at beginning of period
|
214,523
|
179,915
|
Cash and cash
equivalents, at end of period
|
$
128,635
|
$
214,523
|
iRobot
Corporation
|
Supplemental
Information
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the twelve
months ended
|
|
December
30,
|
December
31,
|
|
December
30,
|
December
31,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Revenue: *
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
$
326,897
|
$
212,096
|
|
$
883,655
|
$
655,850
|
|
|
|
|
|
|
Domestic
|
$
182,509
|
$
123,969
|
|
$
452,307
|
$
319,078
|
International
|
$
144,388
|
$
88,127
|
|
$
431,348
|
$
336,772
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
revenue
|
$
-
|
$
398
|
|
$
256
|
$
4,754
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
Percent
|
47.0%
|
50.2%
|
|
49.0%
|
48.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer units
shipped*
|
1,340
|
940
|
|
3,698
|
2,943
|
Vacuum
|
1,199
|
786
|
|
3,193
|
2,465
|
Mopping
|
141
|
149
|
|
503
|
457
|
|
|
|
|
|
|
Consumer
revenue**
|
$
327
|
$
212
|
|
$
884
|
$
656
|
Vacuum***
|
$
305
|
$
192
|
|
$
807
|
$
591
|
Mopping***
|
$
24
|
$
20
|
|
$
78
|
$
64
|
|
|
|
|
|
|
Average gross selling
prices for robot units - Consumer
|
$
305
|
$
268
|
|
$
276
|
$
249
|
|
|
|
|
|
|
Days sales
outstanding
|
40
|
31
|
|
40
|
31
|
|
|
|
|
|
|
Days in
inventory
|
56
|
42
|
|
56
|
42
|
|
|
|
|
|
|
Headcount
|
920
|
607
|
|
920
|
607
|
|
|
|
|
|
|
|
|
|
|
|
|
* in
thousands
|
|
|
|
|
|
** in
millions
|
|
|
|
|
|
*** includes
accessory revenue
|
|
|
|
|
|
iRobot
Corporation
|
Adjusted EBITDA
Reconciliation to GAAP
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the twelve
months ended
|
|
December
30,
|
December
31,
|
|
December
30,
|
December
31,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Net
income
|
$
4,620
|
$
13,681
|
|
$
50,964
|
$
41,939
|
|
|
|
|
|
|
Interest
income, net
|
(226)
|
(247)
|
|
(1,649)
|
(934)
|
Income tax
expense
|
17,838
|
6,700
|
|
25,402
|
19,422
|
Depreciation
|
3,396
|
2,528
|
|
12,284
|
9,974
|
Amortization
|
7,610
|
907
|
|
13,215
|
3,632
|
|
|
|
|
|
|
EBITDA
|
33,238
|
23,569
|
|
100,216
|
74,033
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
5,682
|
4,214
|
|
19,751
|
15,995
|
Net merger,
acquisition and divestiture expense
|
657
|
619
|
|
3,109
|
1,848
|
Gain on
business acquisition
|
-
|
-
|
|
(2,243)
|
-
|
Net
intellectual property litigation expense
|
3,158
|
201
|
|
5,068
|
665
|
Restructuring
expense
|
-
|
-
|
|
-
|
1,857
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
42,735
|
$
28,603
|
|
$
125,901
|
$
94,398
|
Adjusted
EBITDA as a % of revenue
|
13.1%
|
13.5%
|
|
14.2%
|
14.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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.
|
|
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SOURCE iRobot Corp.