Current Report

Table of Contents

 
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 22, 2009
iROBOT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
     
000-51598   77-0259335
     
(Commission File Number)   (IRS Employer Identification No.)
     
8 Crosby Drive, Bedford, Massachusetts   01730
     
(Address of Principal Executive Offices)   (Zip Code)
Registrant’s telephone number, including area code: ( 781) 430-3000
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition
Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
Ex-99.1 Press Release issued by the registrant on July 22, 2009

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Item 2.02 Results of Operations and Financial Condition.
     On July 22, 2009, iRobot Corporation announced its financial results for the fiscal quarter ended June 27, 2009. A copy of the press release is being furnished as Exhibit 99.1 to this Report on Form 8-K.
     The information in this Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
     (d) Exhibits:
  99.1   Press Release issued by the registrant on July 22, 2009, furnished herewith.

 

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  iRobot Corporation
  		 
July 22, 2009  By:   /s/ Glen D. Weinstein    
    Name:   Glen D. Weinstein   
    Title:   General Counsel and Secretary   

 

Table of Contents

         
EXHIBIT INDEX
     
Exhibit Number   Description
 
   
99.1
  Press Release issued by the registrant on July 22, 2009, furnished herewith.

 

Exhibit 99.1
     
Contacts:
   
Elise Caffrey
  Nancy Smith
Investor Relations
  Media Relations
iRobot Corp.
  iRobot Corp.
(781) 430-3003
  (781) 430-3323
ecaffrey@irobot.com
  nsmith@irobot.com
iRobot Reports Second-Quarter 2009 Results
Company’s Strong Results Exceed Revenue and Earnings Estimates
BEDFORD, Mass., July 22, 2009 — iRobot Corp. (NASDAQ: IRBT) today announced its financial results for the fiscal quarter ended June 27, 2009. Revenue for the second quarter of 2009 decreased 8.7 percent to $61.3 million, compared with $67.2 million for the same quarter one year ago. Revenue for the first half of 2009 decreased 5.0 percent to $118.3 million from $124.5 million for the first half of 2008.
Gross margin for the second quarter increased to 26.8 percent of revenue, compared with 24.5 percent of revenue in the second quarter of 2008. First-half 2009 gross margin increased to 27.6 percent of revenue, up from 25.6 percent of revenue in the first half of 2008.
Loss per share for the second quarter of 2009 improved to $0.10, compared with $0.18 for the same period a year ago. For the first half of 2009, loss per share improved to $0.18, compared with $0.35 for the same period in 2008.
Adjusted EBITDA improved to $0.1 million for the second quarter of 2009, compared with a loss of $5.8 million in the second quarter of 2008. For the first half of 2009, Adjusted EBITDA loss improved to $0.1 million from $10.2 million in the first half of 2008.
“We delivered revenue and profit results for the second quarter at the top end of expectations in a very challenging environment,” said Colin Angle, chairman and chief executive officer of iRobot. “Adjusted EBITDA far exceeded expectations and represented nearly a $6 million improvement over last year’s results. The most profound change over the course of the last year has been our focus on driving operating cash flow. Over the past year we have generated operating cash flow of $31 million and improved our cash position by $21 million to nearly $51 million at the end of the second quarter.
“Based on our performance through the first half, we are narrowing the range of our expectations for full-year revenue and reaffirming our expectations for earnings per share and Adjusted EBITDA. Continuing uncertainty about retail demand during the second half of the year and the potential impact on defense spending of the government’s actions to fund the U.S. economic recovery makes us cautious,” Angle concluded.
Business Highlights
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730, Phone: 781-430-3000, Fax: 781-430-3001, www.irobot.com

 

 

•   International home robot revenue in the second quarter of 2009 increased 9 percent from the second quarter of 2008 and comprised more than half of total home robot revenue in the quarter.
•   Government & Industrial revenue was generated primarily from the sale of the iRobot PackBot 510 with FasTac Kit. During the quarter, the first PackBot 510 EOD’s with advanced vision and surveillance capabilities were shipped. The first ten small unmanned ground vehicles, SUGV 310’s (mini-EOD), were also delivered to the Army.
•   In the first half of 2009, operating cash flow was $11.9 million, compared with $0.2 million in the first half of 2008, as aggressive working capital management led to a $14.7 million reduction of inventory versus last year.
Financial Expectations
Management provides the following expectations with respect to the fiscal year ending January 2, 2010 and the third quarter ending September 26, 2009.
Fiscal Year 2009:
     
Revenue
  $295-$305 million
Adjusted EBITDA
  $14-$17 million
Earnings Per Share
  $0.00 — $0.04
Q3 2009:
     
Revenue
  $75-$80 million
Adjusted EBITDA
  $3 — $5 million
Earnings Per Share
  $0.00 — $0.03
Second-Quarter Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its financial results for the fiscal quarter ended June 27, 2009, business outlook, and outlook for future financial performance. Pertinent details include:
Date: Thurs., July 23, 2009
Time: 8:30 a.m. ET
Call-In Number: 719-325-4811
A live, audio broadcast of the conference call also will be available at http://investors.irobot.com/events.cfm . An archived version of the broadcast will be available on the same Web site shortly after the conclusion of the live event. A replay of the telephone conference call will be available and can be accessed by dialing 719-457-0820, access code 2717744.
About iRobot Corp.
iRobot designs and builds robots that make a difference. The company’s home robots help people find smarter ways to clean, and its government and industrial robots protect those in harm’s way. iRobot’s consumer and military robots feature iRobot Aware ® robot intelligence systems, proprietary technology incorporating advanced concepts in navigation, mobility, manipulation and artificial intelligence. For more information about iRobot, please visit www.irobot.com .
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730, Phone: 781-430-3000, Fax: 781-430-3001, 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 anticipated revenue, Adjusted EBITDA and earnings per share for fiscal year 2009 and for the third quarter ending September 26, 2009, and demand for and market acceptance of its products. 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, our dependence on the U.S. federal government and government contracts, market acceptance of our products, changes in government policies or spending priorities, 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 release includes Adjusted EBITDA, a non-GAAP financial measure as defined by SEC Regulation G. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and non-cash stock compensation. A reconciliation between net loss and Adjusted EBITDA is provided in the financial tables at the end of this press release.
iRobot Corporation
8 Crosby Drive, Bedford, MA 01730, Phone: 781-430-3000, Fax: 781-430-3001, www.irobot.com

 

 

iRobot Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
                                 
    For the three months ended   For the six months ended
    June 27,   June 28,   June 27,   June 28,
    2009   2008   2009   2008
         
Revenue
                               
Product revenue
  $ 52,609     $ 60,676     $ 102,300     $ 111,251  
Contract revenue
    8,731       6,526       15,976       13,253  
         
Total
    61,340       67,202       118,276       124,504  
         
Cost of Revenue
                               
Product revenue
    37,098       44,382       70,537       80,577  
Contract revenue
    7,833       6,352       15,124       12,099  
         
Total
    44,931       50,734       85,661       92,676  
         
 
                               
Gross Margin
    16,409       16,468       32,615       31,828  
 
                               
Operating Expense
                               
Research & development
    3,896       4,718       7,474       8,691  
Selling & marketing
    8,940       13,471       17,906       24,929  
General & administrative
    7,365       7,340       14,495       14,118  
         
Total
    20,201       25,529       39,875       47,738  
         
 
                               
Operating loss
    (3,792 )     (9,061 )     (7,260 )     (15,910 )
 
                               
Other income (expense), net
    91       242       (208 )     737  
         
 
                               
Pre-tax loss
    (3,701 )     (8,819 )     (7,468 )     (15,173 )
Income tax benefit
    (1,092 )     (4,306 )     (3,072 )     (6,655 )
         
Net loss
  $ (2,609 )   $ (4,513 )   $ (4,396 )   $ (8,518 )
         
 
                               
Net loss per common share:
                               
Basic
  $ (0.10 )   $ (0.18 )   $ (0.18 )   $ (0.35 )
Diluted
  $ (0.10 )   $ (0.18 )   $ (0.18 )   $ (0.35 )
 
                               
Shares used in Per Common Share Calculations:
                               
Basic
    24,967       24,610       24,946       24,561  
Diluted
    24,967       24,610       24,946       24,561  
 
                               
Stock-based compensation included in above figures:
                               
Cost of product revenue
  $ 278     $ 216     $ 491     $ 370  
Cost of contract revenue
    162       114       325       173  
Research & development
    101       128       98       95  
Selling & marketing
    338       267       655       428  
General & administrative
    1,016       808       1,928       1,405  
         
Total
  $ 1,895     $ 1,533     $ 3,497     $ 2,471  
         

 

 

iRobot Corporation
Condensed Consolidated Balance Sheet
(in thousands)
                 
    June 27,     December 27,  
    2009     2008  
    (unaudited)     (audited)  
Assets
               
 
               
Cash and equivalents
  $ 50,989     $ 40,852  
Accounts receivable, net
    31,291       35,930  
Unbilled revenues
    3,459       2,014  
Inventory, net
    28,638       34,560  
Deferred tax assets
    7,565       7,299  
Other current assets
    5,498       3,340  
 
           
Total current assets
    127,440       123,995  
Property, plant and equipment, net
    21,672       22,929  
Deferred tax assets
    4,508       4,508  
Other assets
    12,000       12,246  
 
           
Total assets
  $ 165,620     $ 163,678  
 
           
 
               
Liabilities and stockholders’ equity
               
 
               
Accounts payable
  $ 21,108     $ 19,544  
Accrued expenses
    10,966       10,989  
Accrued compensation
    7,027       6,393  
Deferred revenue and customer advances
    2,974       2,632  
 
           
Total current liabilities
    42,075       39,558  
 
           
Long term liabilities
    4,229       4,444  
 
           
Stockholders’ equity
    119,316       119,676  
 
           
Total liabilities and stockholders’ equity
  $ 165,620     $ 163,678  
 
           

 

 

iRobot Corporation
Consolidated Statement of Cash Flows
(unaudited, in thousands)
                                 
    For the three months ended   For the six months ended
    June 27,   June 28,   June 27,   June 28,
    2009   2008   2009   2008
             
Cash flows from operating activities:
                               
Net loss
  $ (2,609 )   $ (4,513 )   $ (4,396 )   $ (8,518 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
                               
Depreciation and amortization
    1,950       1,725       3,864       3,291  
Loss on disposal of fixed assets
    87       23       102       68  
Stock-based compensation
    1,895       1,533       3,497       2,471  
Benefit from deferred tax assets
    (511 )     —       (511 )     —  
Non-cash director deferred compensation
    33       23       66       47  
Changes in working capital — (use) source
                               
Accounts receivable
    (8,099 )     (2,330 )     4,639       23,428  
Unbilled revenue
    (326 )     419       (1,445 )     54  
Inventory
    2,104       2,928       5,922       1,934  
Other assets
    (1,001 )     (4,047 )     (2,163 )     (8,116 )
Accounts payable
    1,981       (4,001 )     1,564       (20,732 )
Accrued expenses
    225       2,240       (33 )     179  
Accrued compensation
    1,656       1,501       634       2,022  
Deferred revenue
    256       (180 )     342       (628 )
Change in long term liabilities
    (108 )     4,659       (215 )     4,659  
             
Net cash provided by (used in) operating activities
    (2,467 )     (20 )     11,867       159  
             
 
                               
Cash flows from investing activities:
                               
Purchase of property and equipment
    (1,672 )     (8,340 )     (2,448 )     (12,277 )
Purchases of investments
    —       —       —       (29,997 )
Sales of investments
    —       —       —       29,050  
             
Net cash used in investing activities
    (1,672 )     (8,340 )     (2,448 )     (13,224 )
             
 
                               
Cash flows from financing activities:
                               
Proceeds from stock option exercises
    132       162       459       732  
Income tax withholding payment associated with restricted stock award vesting
    (9 )     —       (9 )     —  
Tax benefit of excess stock based compensation deductions
    268       97       268       358  
             
Net cash provided by financing activities
    391       259       718       1,090  
             
 
                               
Net increase (decrease) in cash and cash equivalents
    (3,748 )     (8,101 )     10,137       (11,975 )
Cash and cash equivalents, at beginning of period
    54,737       22,861       40,852       26,735  
             
Cash and cash equivalents, at end of period
  $ 50,989     $ 14,760     $ 50,989     $ 14,760  
             

 

 

iRobot Corporation
Supplemental Information
(unaudited)
                                 
    For the three months ended   For the six months ended
    June 27,   June 28,   June 27,   June 28,
    2009   2008   2009   2008
         
Revenue by business unit (in thousands):
                               
Home Robots
                               
Product
  $ 34,099     $ 41,705     $ 66,922     $ 71,798  
Contract
    —       —       —       55  
Government & Industrial
                               
Product
    18,510       18,971       35,378       39,453  
Contract
    8,731       6,526       15,976       13,198  
         
 
  $ 61,340     $ 67,202     $ 118,276     $ 124,504  
             
 
                               
Direct Revenue — Home Robots (in thousands)
  $ 6,037     $ 7,884     $ 11,689     $ 15,745  
Product Lifecycle Revenue — Government & Industrial (in thousands)
  $ 4,542     $ 2,172     $ 8,931     $ 5,374  
 
                               
International Revenue (in thousands):
                               
Home Robots
  $ 19,741     $ 18,175     $ 37,279     $ 28,581  
Government & Industrial
  $ 1,640     $ 398     $ 4,455     $ 1,209  
 
                               
Average selling prices for robot units:
                               
Home Robots
  $ 159     $ 157     $ 160     $ 160  
Government & Industrial (in thousands)
  $ 93     $ 99     $ 88     $ 104  
 
                               
Gross Margin by business unit (in thousands):
                               
Home Robots
  $ 10,109     $ 10,759     $ 20,261     $ 18,828  
Government & Industrial
    6,300       5,709       12,354       13,000  
         
 
  $ 16,409     $ 16,468     $ 32,615     $ 31,828  
             
 
                               
Units shipped by business unit:
                               
Home Robots (in thousands)
    192       237       375       406  
Government & Industrial
    151       170       301       326  
 
                               
Government & Industrial Funded Backlog (in thousands)
  $ 17,537     $ 22,355     $ 17,537     $ 22,355  
 
                               
Days sales outstanding
    52       36       52       36  
Inventory turnover
    5.2       4.1       5.2       4.1  
Net cash provided by (used in) operating activities (in thousands)
  $ (2,467 )   $ (20 )   $ 11,867     $ 159  
Headcount
    508       482       508       482  

 

 

iRobot Corporation
Adjusted EBITDA Reconciliation to GAAP
(unaudited, in thousands)
                                 
    For the three months ended   For the six months ended
    June 27,   June 28,   June 27,   June 28,
    2009   2008   2009   2008
Net loss
  $ (2,609 )   $ (4,513 )   $ (4,396 )   $ (8,518 )
 
Interest income, net
    (15 )     (260 )     (36 )     (829 )
Income tax benefit
    (1,092 )     (4,306 )     (3,072 )     (6,655 )
Depreciation
    1,820       1,725       3,613       3,291  
Amortization
    128       —       251       —  
         
 
                               
EBITDA
    (1,768 )     (7,354 )     (3,640 )     (12,711 )
 
                               
Stock-based compensation expense
    1,895       1,533       3,497       2,471  
         
 
                               
Adjusted EBITDA
  $ 127     $ (5,821 )   $ (143 )   $ (10,240 )
         
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 and amortization, and non-cash stock compensation. 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.