EX-99.1 2 q12018pressrelease.htm EXHIBIT 99.1 Exhibit


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
Strength in All Major Regions Drives 29% Year-Over-Year Consumer Revenue Growth

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

“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,
2018
 
April 1,
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,
2018
 
December 30,
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,
2018
 
April 1,
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,
2018
 
April 1,
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,
2018
 
April 1,
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.