BEDFORD, Mass., April 24, 2018 /PRNewswire/ — iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the first quarter ended March 31, 2018.

iRobot logo. (PRNewsfoto/iRobot Corp.)

«We are off to the strong start we expected in 2018. First-quarter revenue grew 29% over Q1 2017, driven by growth across all major regions. Robust replenishment, following strong Q4 2017 holiday sell-through, and shipments to support Q2 holidays in the United States, drove domestic revenue growth of 26% over last year. EMEA and Japan also saw significant year-over-year growth of 47% and 38%, respectively, in part driven by the revenue uplift from acquisitions, neither of which we had in Q1 2017,» said Colin Angle, chairman and chief executive officer of iRobot.

«Given our Q1 results and our outlook for the rest of the year, we are reaffirming our 2018 full-year revenue and operating income expectations, and increasing our full-year expectations for earnings per share. We anticipate full-year 2018 revenue of $1.05 to $1.08 billion, which is year-over-year growth of 19 – 22%, operating income of $86 to $96 million, and EPS of $2.15 to $2.40.

«We are off to a very strong start in 2018, and I am very excited about the year ahead. We expect our global business to deliver strong financial performance in 2018 that will fund our ability to reinforce our core product leadership in the RVC category, widen our competitive moat through technological differentiation protected by our IP portfolio, and extend our product portfolio.

«We believe that consistent execution of this strategy is the most effective way to drive sustainable growth and shareholder value.»

Financial Results

  • Revenue for the first quarter of 2018 was $217.1 million, compared with $168.5 million for the first quarter of 2017.
  • Operating income in the first quarter of 2018 was $25.4 million, compared with $21.6 million in the first quarter of 2017.
  • Quarterly earnings per share were $0.71, compared with earnings per share of $0.58 in the first quarter of 2017. In Q1 2018, earnings per share included $0.05 of tax benefit relating to stock compensation accounting compared with a $0.06 tax benefit in Q1 2017.

Business Highlights

  • We delivered year-over-year double-digit Q1 quarterly revenue growth across all major regions. 
  • First-quarter revenue grew 26% in the U.S. and 32% internationally over Q1 2017.
  • Our acquisitions have enabled more consistent global control of our brand and execution of our marketing programs.
  • Our investments in R&D continue as planned, and our new product introductions are on schedule for launch in the second half.

Financial Expectations

Management provides the following expectations with respect to the fiscal year ending December 29, 2018.

Fiscal Year 2018:                     

Current 

Previous

Revenue                                     

$1.05 – $1.08 billion         

$1.05 – $1.08 billion               

Operating Income                        

$86 – $96 million                

$86 – $96 million                    

Earnings Per Share                      

$2.15 – $2.40                    

$2.10 – $2.35  

 

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 2018, business outlook, and outlook for fiscal year 2018 financial performance. Pertinent details include: 

Date:                     

Wednesday, April 25, 2018  

Time:                      

8:30 a.m. ET

Call-In Number:       

213-358-0894

Passcode:                

7776299

A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/events/event-details/q1-2018-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 May 1, and can be accessed by dialing 404-537-3406, passcode 7776299.

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 technologies 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; the impact of our investments in intellectual property, technology and innovation; the introduction of new products and the timing and impact thereof; the impact of our acquisitions on our brand and execution of marketing programs; and anticipated revenue, operating income and earnings per share for the fiscal year ended December 29, 2018. 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 (income) 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 

March 31,

April 1,

2018

2017

Revenue

$

217,068

$

168,467

Cost of revenue:

  Cost of product revenue

96,501

80,260

  Amortization of intangible assets

4,782

864

Total cost of revenue

101,283

81,124

Gross margin

115,785

87,343

Operating expenses:

  Research and development

32,945

25,508

  Selling and marketing

31,329

22,575

  General and administrative

25,833

17,622

  Amortization of intangible assets

273

      Total operating expenses

90,380

65,705

Operating income

25,405

21,638

Other income, net

519

3

Income before income taxes

25,924

21,641

Income tax expense

5,523

5,282

Net income

$

20,401

$

16,359

Net income per share

   Basic

$

0.73

$

0.60

   Diluted

$

0.71

$

0.58

Number of shares used in per share calculations

   Basic

27,988

27,304

   Diluted

28,923

28,295

Stock-based compensation included in above figures:

        Cost of revenue

$

341

$

226

        Research and development

1,689

1,099

        Selling and marketing

738

570

        General and administrative

3,178

2,436

            Total

$

5,946

$

4,331

 

iRobot Corporation 

Condensed Consolidated Balance Sheets 

(unaudited, in thousands) 

March 31,

 December 30, 

2018

2017

 Assets 

 Cash and cash equivalents 

$

144,501

$

128,635

 Short term investments 

39,960

37,225

 Accounts receivable, net 

69,532

142,829

 Inventory 

112,111

106,932

 Other current assets 

24,584

19,105

   Total current assets 

390,688

434,726

 Property and equipment, net 

47,223

44,579

 Deferred tax assets 

32,690

31,531

 Goodwill 

123,218

121,440

 Intangible assets, net 

40,613

44,712

 Other assets 

15,005

14,534

 Total assets 

$

649,437

$

691,522

 Liabilities and stockholders’ equity 

 Accounts payable 

$

69,119

$

116,316

 Accrued expenses 

56,107

73,647

 Deferred revenue and customer advances 

6,271

7,761

   Total current liabilities 

131,497

197,724

 Deferred tax liabilities 

8,349

9,539

 Other long term liabilities 

12,963

13,932

 Total liabilities 

152,809

221,195

 Stockholders’ equity 

496,628

470,327

 Total liabilities and stockholders’ equity 

$

649,437

$

691,522

 

iRobot Corporation 

Consolidated Statements of Cash Flows 

(unaudited, in thousands) 

For the three months ended

March 31,

April 1,

2018

2017

Cash flows from operating activities:

Net income

$

20,401

$

16,359

Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation and amortization 

8,747

3,486

Stock-based compensation 

5,946

4,331

Deferred income taxes, net

(3,061)

17

Non-cash director deferred compensation 

16

16

Deferred rent

1,077

Other

390

166

Changes in operating assets and liabilities — (use) source

Accounts receivable

73,642

25,155

Inventory 

(4,223)

(6,546)

Other assets 

(6,114)

(1,745)

Accounts payable 

(46,461)

(5,026)

Accrued expenses

(19,693)

(8,612)

Deferred revenue and customer advances

(517)

(284)

Long term liabilities

(360)

(558)

Net cash provided by operating activities 

29,790

26,759

Cash flows from investing activities:

Additions of property and equipment 

(8,717)

(3,008)

Change in other assets

379

(504)

Purchases of investments 

(6,438)

(3,498)

Sales and maturities of investments 

3,500

3,500

Net cash used in investing activities 

(11,276)

(3,510)

Cash flows from financing activities:

Income tax withholding payment associated with restricted stock vesting

(3,478)

(2,778)

Proceeds from stock option exercises 

399

722

Net cash used in financing activities 

(3,079)

(2,056)

Effect of exchange rate changes on cash and cash equivalents

431

12

Net increase in cash and cash equivalents 

15,866

21,205

Cash and cash equivalents, at beginning of period 

128,635

214,523

Cash and cash equivalents, at end of period 

$

144,501

$

235,728

 

iRobot Corporation 

Supplemental Information

(unaudited)

For the three months ended

March 31,

April 1,

2018

2017

Revenue: *

Consumer

$

217,068

$

168,248

    Domestic

$

106,862

$

84,789

    International

$

110,206

$

83,459

Other revenue

$

$

Gross Margin Percent

53.3%

51.8%

Consumer units shipped*

815

704

      Vacuum

712

582

      Mopping

103

121

      Other

1

Consumer revenue**

$

217

$

168

      Vacuum***

$

201

$

151

      Mopping***

$

16

$

17

      Other

Average gross selling prices for robot units – Consumer

$

309

$

258

Days sales outstanding

29

26

Days in inventory

101

64

Headcount

954

636

* in thousands

** in millions

*** includes accessory revenue

 

 

iRobot Corporation  

Adjusted EBITDA Reconciliation to GAAP 

(unaudited, in thousands) 

 For the three months ended 

March 31,

April 1,

2018

2017

 Net income 

$

20,401

$

16,359

 Interest income, net 

(330)

(383)

 Income tax expense 

5,523

5,282

 Depreciation 

3,661

2,580

 Amortization 

5,086

906

 EBITDA 

34,341

24,744

 Stock-based compensation expense 

5,946

4,331

 Net merger, acquisition and divestiture (income) expense 

(141)

840

 Net intellectual property litigation expense 

2,571

262

 Adjusted EBITDA 

$

42,717

$

30,177

 Adjusted EBITDA as a % of revenue 

19.7%

17.9%

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 (income) 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.