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Irobot Corp – ‘8-K’ for 7/23/19 – ‘EX-99.1’

On:  Tuesday, 7/23/19, at 4:23pm ET   ·   For:  7/23/19   ·   Accession #:  1159167-19-26   ·   File #:  1-36414

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 7/23/19  Irobot Corp                       8-K:2,9     7/23/19    2:511K

Current Report   —   Form 8-K   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML     23K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML    172K 


‘EX-99.1’   —   Miscellaneous Exhibit


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EX-99.1
Contacts:
 
 
 
 
Andrew Kramer
 
 
 
Matthew Lloyd
Investor Relations
 
 
 
Media Relations
iRobot Corp.
 
 
 
iRobot Corp.
(781) 430-3003
 
 
 
(781) 430-3720
 
 
 
 
 
 
 
 

iRobot Reports Second-Quarter Financial Results
Double-Digit Revenue Growth in All Regions

BEDFORD, Mass., July 23, 2019 - iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the second quarter ended June 29, 2019.

“We delivered 15% revenue growth as a result of double-digit expansion in each major geographic region,” said Colin Angle, chairman and chief executive officer of iRobot. “We took steps to adjust spending during the quarter, which enabled us to deliver higher-than-expected operating income and EPS results. The successful launch of our new Roomba s9 vacuums and Braava jet m6 mops at the end of May represented an important milestone in our plans to strengthen Roomba leadership, extend the portfolio beyond vacuuming and advance our position in the Smart Home.”

Commenting on the Company’s outlook for 2019, Angle stated, “Although we achieved our U.S. revenue target in the second quarter, we believe that the direct and indirect impacts of the ongoing U.S.-China trade war and the recently implemented 25% tariffs are likely to constrain U.S. market segment growth in the second half of the year below our expectations at the start of 2019. Given our results for the year-to-date and the anticipated impact of higher tariffs on domestic segment growth, we believe it is prudent to update our 2019 full-year expectations. We now anticipate full-year 2019 revenue of $1.2 to $1.25 billion, which represents year-over-year growth of approximately 10% to 14%, full-year 2019 operating income of $75 to $100 million, and full-year 2019 EPS of $2.40 to $3.15.”

“Even as we operate in a higher tariff environment in the U.S., 2019 is shaping up to be another successful year of double-digit revenue growth and impressive global segment leadership. Moving forward, we remain enthusiastic about the many attractive opportunities we see to advance key elements of our strategy that underpin our efforts to drive sustainable growth and shareholder value,” concluded Angle.
 
Financial Results

Revenue for the second quarter of 2019 was $260.2 million, compared with $226.3 million for the second quarter of 2018. Revenue for the first half of 2019 was $497.8 million, compared with $443.4 million last year.
Operating income in the second quarter of 2019 was $5.3 million, compared with $13.4 million in the second quarter of 2018. For the first half of 2019, operating income was $27.5 million, compared with $38.8 million a year ago.
Quarterly earnings per share were $0.25 for the second quarter of 2019, compared with $0.37 in the second quarter of 2018. First-half earnings per share were $1.03, compared with $1.08 in the first half of 2018.







Q219 and Recent Business Highlights

Delivered double-digit Q2 revenue growth in all major geographic markets.
Q2 revenue grew 18% internationally and 12% in the U.S.
Investments in R&D continued to yield tangible results.
Launched the Roomba® s9 vacuum and Braava jet® m6 mop in Q2 - two of three new products planned for 2019.
Continued progress with manufacturing diversification initiatives.
Appointed Eva Manolis to the iRobot Board of Directors, bringing substantial product development and global ecommerce experience within the consumer technology space.
Roomba was featured as part of Amazon Prime Day for the fifth consecutive year, and was specifically touted by Amazon as one of the event’s top-selling smart home devices.

Financial Expectations

Management provides the following expectations with respect to the fiscal year ending December 28, 2019.

Fiscal Year 2019:
Current
Previous
Revenue
$1.2 - $1.25 billion
$1.28 - $1.31 billion
Operating Income
$75 - $100 million
$108 - $118 million
Earnings Per Share
$2.40 - $3.15
$3.15 - $3.40

Second-Quarter Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the second fiscal quarter 2019, business outlook, and outlook for fiscal year 2019 financial performance. Pertinent details include:
Date:
Wednesday, July 24, 2019
Time:
8:30 a.m. ET
Call-In Number:
213-358-0894
Passcode:
8832179

A live, audio broadcast of the conference call will also be available at https://investor.irobot.com/events/event-details/q2-2019-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 July 30, and can be accessed by dialing 404-537-3406, passcode 8832179.
 
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® Robot Vacuum in 2002. Today, iRobot is a global enterprise that has sold more than 25 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 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; growth and investment strategy; demand for robots; new product introductions; and anticipated revenue, operating income and earnings per share for the fiscal year ending December 28, 2019. 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; the impact of tariffs on goods imported into the United States; 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.









iRobot Corporation
Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 For the three months ended
 
For the six months ended
 
 
 
 
Revenue
$
260,172

 
$
226,317

 
$
497,833

 
$
443,385

Cost of revenue:
 
 
 
 
 
 
 
  Cost of product revenue
138,891

 
103,712

 
253,929

 
200,213

  Amortization of acquired intangible assets
3,111

 
4,679

 
6,188

 
9,461

Total cost of revenue
142,002

 
108,391

 
260,117

 
209,674

Gross profit
118,170

 
117,926

 
237,716

 
233,711

Operating expenses:
 
 
 
 
 
 
 
  Research and development
35,650

 
34,924

 
70,919

 
67,869

  Selling and marketing
56,409

 
45,910

 
95,245

 
77,239

  General and administrative
20,592

 
23,468

 
43,499

 
49,301

  Amortization of acquired intangible assets
269

 
269

 
540

 
542

      Total operating expenses
112,920

 
104,571

 
210,203

 
194,951

Operating income
5,250

 
13,355

 
27,513

 
38,760

Other income, net
1,533

 
1,507

 
2,813

 
2,026

Income before income taxes
6,783

 
14,862

 
30,326

 
40,786

Income tax (benefit) expense
(424
)
 
4,391

 
599

 
9,914

Net income
$
7,207

 
$
10,471

 
$
29,727

 
$
30,872

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
   Basic
$
0.26

 
$
0.38

 
$
1.06

 
$
1.11

   Diluted
$
0.25

 
$
0.37

 
$
1.03

 
$
1.08

 
 
 
 
 
 
 
 
Number of shares used in per share calculations:
 
 
 
 
 
 
 
   Basic
28,079

 
27,615

 
27,970

 
27,802

   Diluted
28,763

 
28,337

 
28,779

 
28,658

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation included in above figures:
 
 
 
 
 
 
 
        Cost of revenue
$
405

 
$
347

 
$
783

 
$
688

        Research and development
2,547

 
1,794

 
4,925

 
3,483

        Selling and marketing
916

 
750

 
1,719

 
1,488

        General and administrative
3,726

 
3,540

 
7,031

 
6,718

            Total
$
7,594

 
$
6,431

 
$
14,458

 
$
12,377

 
 
 
 
 
 
 
 









 iRobot Corporation
 Condensed Consolidated Balance Sheets
 (unaudited, in thousands)
 
 
 
 
 
 
 
 
 
 
 Assets
 
 
 
 Cash and cash equivalents
$
132,795

 
$
130,373

 Short term investments
23,984

 
31,605

 Accounts receivable, net
90,401

 
162,166

 Inventory
192,010

 
164,633

 Other current assets
41,960

 
25,660

Total current assets
481,150

 
514,437

 Property and equipment, net
71,728

 
57,026

 Operating lease right-of-use assets
50,002

 

 Deferred tax assets
33,862

 
36,979

 Goodwill
120,538

 
118,896

 Intangible assets, net
18,636

 
24,273

 Other assets
25,099

 
15,350

Total assets
$
801,015

 
$
766,961

 
 
 
 
 Liabilities and stockholders' equity
 
 
 
 Accounts payable
$
86,848

 
$
136,742

 Accrued expenses
63,629

 
71,259

 Deferred revenue and customer advances
2,101

 
5,756

Total current liabilities
152,578

 
213,757

 Operating lease liabilities
58,068

 

 Deferred tax liabilities
2,110

 
4,005

 Other long-term liabilities
8,683

 
13,877

Total long-term liabilities
68,861

 
17,882

Total liabilities
221,439

 
231,639

 Stockholders' equity
579,576

 
535,322

Total liabilities and stockholders' equity
$
801,015

 
$
766,961

 
 
 
 






 iRobot Corporation
Consolidated Statements of Cash Flows
 (unaudited, in thousands)
 
 
 
 
 
 
 
 
 
For the six months ended
 
 
Cash flows from operating activities:
 
 
 
Net income
$
29,727

 
$
30,872

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
17,905

 
17,606

Stock-based compensation
14,458

 
12,377

Deferred income taxes, net
535

 
(4,208
)
Other
3,106

 
384

Changes in operating assets and liabilities — (use) source
 
 
 
Accounts receivable
67,808

 
66,085

Inventory
(27,112
)
 
(10,303
)
Prepaid and other current assets
(14,246
)
 
(12,764
)
Accounts payable
(52,835
)
 
(46,519
)
Accrued expenses and other liabilities
(18,043
)
 
(27,211
)
Net cash provided by operating activities
21,303

 
26,319

 
 
 
 
Cash flows from investing activities:
 
 
 
Additions of property and equipment
(14,705
)
 
(14,284
)
Change in other assets
(4,541
)
 
(1,837
)
Proceeds from sale of equity investment

 
629

Cash paid for business acquisitions, net of cash acquired
(2,817
)
 

Purchases of investments

 
(6,438
)
Sales and maturities of investments
5,880

 
7,000

Net cash used in investing activities
(16,183
)
 
(14,930
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from employee stock plans
4,680

 
2,605

Income tax withholding payment associated with restricted stock vesting
(7,277
)
 
(3,532
)
Stock repurchases

 
(50,000
)
Net cash used in financing activities
(2,597
)
 
(50,927
)
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
(101
)
 
(314
)
Net increase (decrease) in cash and cash equivalents
2,422

 
(39,852
)
Cash and cash equivalents, at beginning of period
130,373

 
128,635

Cash and cash equivalents, at end of period
$
132,795

 
$
88,783

 
 
 
 





 iRobot Corporation
Supplemental Information
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended
 
For the six months ended
 
 
 
 
Revenue: *
 
 
 
 
 
 
 
Consumer
$
260,172

 
$
226,317

 
$
497,833

 
$
443,385

 
 
 
 
 
 
 
 
    Domestic
$
124,472

 
$
111,526

 
$
238,537

 
$
218,388

    International
$
135,700

 
$
114,791

 
$
259,296

 
$
224,997

 
 
 
 
 
 
 
 
Gross margin
45.4
%
 
52.1
%
 
47.8
%
 
52.7
%
 
 
 
 
 
 
 
 
Consumer units shipped*
1,074

 
953

 
1,950

 
1,768

      Vacuum
935

 
819

 
1,699

 
1,530

      Mopping
139

 
134

 
251

 
237

 
 
 
 
 
 
 
 
Consumer revenue**
$
260

 
$
226

 
$
498

 
$
443

      Vacuum***
$
237

 
$
204

 
$
458

 
$
405

      Mopping***
$
23

 
$
22

 
$
40

 
$
38

 
 
 
 
 
 
 
 
Average gross selling prices for robot units - Consumer
$
296

 
$
285

 
$
307

 
$
296

 
 
 
 
 
 
 
 
Days sales outstanding
32

 
30

 

 

 
 
 
 
 
 
 
 
Days in inventory
123

 
97

 

 

 
 
 
 
 
 
 
 
Headcount
1,120

 
982

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* in thousands
 
 
 
 
 
 
 
** in millions
 
 
 
 
 
 
 
*** includes accessory revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





iRobot Corporation
Explanation of Non-GAAP Measures
In addition to disclosing financial results in accordance with U.S. GAAP, this earnings release contains references to the non-GAAP financial measures described below. We use non-GAAP measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures.
Our non-GAAP financial measures reflect adjustments based on the following items. We also provide a non-GAAP financial measure of Adjusted EBITDA, as described below. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
Amortization of acquired intangible assets: Amortization of acquired intangible assets consists of amortization of intangible assets including completed technology, customer relationships, and reacquired distribution rights acquired in connection with business combinations. Amortization charges for our acquisition-related intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
Net Merger, Acquisition and Divestiture (Income) Expense: Net merger, acquisition and divestiture (income) expense primarily consists of transaction fees, professional fees, and transition and integration costs directly associated with mergers, acquisitions and divestitures. The occurrence and amount of these costs will vary depending on the timing and size of these transactions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
Stock-Based Compensation: Stock-based compensation is a non-cash charge relating to stock-based awards. We exclude this expense as it is a non-cash expense, and we assess our internal operations excluding this expense and believe it facilitates comparisons to the performance of other companies.
IP Litigation Expense, Net: IP litigation expense, net relates to legal costs incurred to litigate patent, trademark, copyright and false advertising infringements, or to oppose or defend against interparty actions related to intellectual property. Any settlement payment or proceeds resulting from these infringements are included or netted against the costs. We exclude these costs from our non-GAAP measures as we do not believe these costs have a direct correlation to the operations of our business and may vary in size depending on the timing and results of such litigations and settlements.
Gain/Loss on Strategic Investments: Gain/loss on strategic investments includes fair value adjustments, realized gains and losses on the sales of these investments and losses on the impairment of these investments. We exclude these items from our non-GAAP measures because we do not believe they correlate to the performance of our core business and may vary in size based on market conditions and events. We believe that the exclusion of these gains or losses provides investors with a supplemental view of our operational performance.
Income tax adjustments: Income tax adjustments include the tax effect of the non-GAAP adjustments, calculated using the appropriate statutory tax rate for each adjustment. We also exclude certain tax items





that are not reflective of income tax expense incurred as a result of current period earnings. These certain tax items include, among other non-recurring tax items, impacts from the Tax Cuts and Jobs Act of 2017 and stock-based compensation windfall benefits. We believe disclosure of the income tax provision before the effect of such tax items is important to permit investors’ consistent earnings comparison between periods.
Adjusted EBITDA:  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. Management believes this non-GAAP measure is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.





 iRobot Corporation
Supplemental Reconciliation of GAAP Net Income to Adjusted EBITDA
 (unaudited, in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended
 
For the six months ended
 
 
 
 
 GAAP Net Income
$
7,207

 
$
10,471

 
$
29,727

 
$
30,872

 
 
 
 
 
 
 
 
 Interest income, net
(682
)
 
(196
)
 
(1,530
)
 
(495
)
 Income tax (benefit) expense
(424
)
 
4,391

 
599

 
9,914

 Depreciation
5,801

 
3,942

 
11,177

 
7,603

 Amortization of acquired intangible assets
3,380

 
4,948

 
6,728

 
10,003

 
 
 
 
 
 
 
 
 EBITDA
15,282

 
23,556

 
46,701

 
57,897

 
 
 
 
 
 
 
 
 Stock-based compensation
7,594

 
6,431

 
14,458

 
12,377

 Net merger, acquisition and divestiture (income) expense
143

 
164

 
295

 
23

 IP litigation expense, net
(676
)
 
759

 
(207
)
 
3,330

 
 
 
 
 
 
 
 
 Adjusted EBITDA
$
22,343

 
$
30,910

 
$
61,247

 
$
73,627

 Adjusted EBITDA as a % of revenue
8.6
%
 
13.7
%
 
12.3
%
 
16.6
%
































iRobot Corporation
Supplemental Reconciliation of GAAP Actuals to Non-GAAP Actuals
(in thousands, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended
 
For the six months ended
 
 
 
 
 GAAP Revenue
$
260,172

 
$
226,317

 
$
497,833

 
$
443,385

 
 
 
 
 
 
 
 
 GAAP Gross Profit
118,170

 
117,926

 
237,716

 
233,711

Amortization of acquired intangible assets
3,111

 
4,679

 
6,188

 
9,461

Stock-based compensation
405

 
347

 
783

 
688

 Non-GAAP Gross Profit
$
121,686

 
$
122,952

 
$
244,687

 
$
243,860

 
 
 
 
 
 
 
 
 GAAP Operating Income
$
5,250

 
$
13,355

 
$
27,513

 
$
38,760

Amortization of acquired intangible assets
3,380


4,948

 
6,728

 
10,003

Stock-based compensation
7,594


6,431

 
14,458

 
12,377

Net merger, acquisition and divestiture (income) expense
143


164

 
295

 
23

IP litigation expense, net
(676
)

759

 
(207
)
 
3,330

 Non-GAAP Operating Income
$
15,691

 
$
25,657

 
$
48,787

 
$
64,493

 
 
 
 
 
 
 
 
 GAAP Income Tax (Benefit) Expense
$
(424
)
 
$
4,391

 
$
599

 
$
9,914

Tax effect of non-GAAP adjustments
1,797

 
2,830

 
3,622

 
6,170

Other tax adjustments
1,461

 
(2,440
)
 
5,527

 
(1,728
)
 Non-GAAP Income Tax Expense
$
2,834

 
$
4,781

 
$
9,748

 
$
14,356

 
 
 
 
 
 
 
 
 GAAP Net Income
$
7,207

 
$
10,471

 
$
29,727

 
$
30,872

Amortization of acquired intangible assets
3,380

 
4,948

 
6,728

 
10,003

Stock-based compensation
7,594

 
6,431

 
14,458

 
12,377

Net merger, acquisition and divestiture (income) expense
143

 
164

 
295

 
23

IP litigation expense, net
(676
)
 
759

 
(207
)
 
3,330

(Gain)/loss on strategic investments
(629
)
 
(682
)
 
(572
)
 
(401
)
Income tax effect
(3,258
)
 
(390
)
 
(9,149
)
 
(4,442
)
 Non-GAAP Net Income
$
13,761

 
$
21,701

 
$
41,280

 
$
51,762

 
 
 
 
 
 
 
 
 GAAP Net Income Per Diluted Share
$
0.25

 
$
0.37

 
$
1.03

 
$
1.08

Amortization of acquired intangible assets
0.12

 
0.17

 
0.24

 
0.35

Stock-based compensation
0.26

 
0.23

 
0.50

 
0.43

Net merger, acquisition and divestiture (income) expense

 

 
0.01

 

IP litigation expense, net
(0.02
)
 
0.03

 
(0.01
)
 
0.12

(Gain)/loss on strategic investments
(0.02
)
 
(0.02
)
 
(0.02
)
 
(0.01
)
Income tax effect
(0.11
)
 
(0.01
)
 
(0.32
)
 
(0.16
)
 Non-GAAP Net Income Per Diluted Share
$
0.48

 
$
0.77

 
$
1.43

 
$
1.81





Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘8-K’ Filing    Date    Other Filings
12/28/19
7/24/19
Filed on / For Period End:7/23/19
6/29/19
12/29/1810-K
6/30/1810-Q,  4
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