Over a million robots shipped in 9 months

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iRobot Scooba 230

iRobot has published 3rd quarter results yesterday showing an unexpected growth in many of the business aspects. Third quarter revenue was up by 28% on a year over year basis, and net income has also doubled during this period (mainly due to a one-time tax benefit of $2.3 million). The Home Robot Division takes about 3/4 of total revenue, and due to declining governmental orders, the importance of home robots is expected to raise next year. In the first nine months of this year iRobot's domestic robot business has shipped 1,014,000 units what is a 14% increase compared to the first 9 months of last year. Meanwhile, probably due to the introduction of the new models, the margin on Roombas and Scoobas has grown from 39% to nearly 45%.

While the revenue of the company increased by over 27% in the first 9 months, most of this increase is coming from overseas markets. While the domestic market has increased by only 10% in the first 9 months, international sales exceed the numbers in the same period of last year by more than 36%. Looking at the third quarter, the increase in international revenue is even more impressive. The revenue was up by 56%, what was most probably caused by the release of the initial shipments of the Roomba 700 series for the European markets at the end of September.

Due to the expected decrease in defense spendings iRobot is planning to layoff 8 percent of its 700 employees (about 56 people).

Press release: 

iRobot Reports Record Third-Quarter Financial Results

Exceeds Expectations; Increases 2011 Outlook

BEDFORD, Mass., October 25, 2011 – iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the third quarter ended October 1, 2011.

  • Revenue for the third quarter of 2011 increased 28 percent to $120.4 million, compared with $94.2 million for the same quarter one year ago. Revenue for the first nine months of 2011 increased 17 percent to $334.7 million from $287.0 million last year.
  • Net income in the third quarter of 2011 was $14.1 million, compared with $7.0 million in the third quarter of 2010. For the first nine months, net income was $29.6 million, up from $18.5 million a year ago. Net income included a one-time tax benefit of $3.5 million in the third-quarter and nine-month periods in 2011. Net income for the third-quarter and nine-month periods in 2010 included a one-time tax benefit of $2.3 million.
  • Quarterly earnings per share grew by 85 percent to $0.50, compared with $0.27 in the third quarter last year. Nine-month earnings per share grew to $1.06, up from $0.70 in 2010. EPS included a one-time tax benefit of $0.12 in 2011 and $0.09 in 2010.
  • Adjusted EBITDA for the third quarter of 2011 was $20.2 million, or 17 percent of revenue, compared with $11.5 million, or 12 percent of revenue, in the third quarter of 2010. Adjusted EBITDA for the first nine months of 2011 was $51.7 million, compared with $37.6 million for the same period a year ago.

"Our third quarter and year-to-date results were excellent across all measures and far exceeded our expectations,” said Colin Angle, chairman and chief executive officer of iRobot. “Due to strong performance by both divisions and our expectations for the fourth quarter, we are increasing our full-year 2011 expectations for the second time this year."

Business Highlights

  • International home robot business continued to perform well in long-term markets as it lays the groundwork to enter new markets. In Q3, international home robot revenue grew 56 percent over Q3 2010 and comprised 75 percent of total home robot revenue.
  • During the third quarter, Government and Industrial Robots division revenue grew 21 percent, and it received delivery orders totaling $51 million, primarily for delivery of PackBot and SUGV robots.
  • Operating cash flow was $25 million in Q3 2011, due to record net income and reduced inventory levels, compared with $10 million in the third quarter last year. Cash and investments totaled $145 million, up $38 million from Q3 last year.
  • Research and development expense increased 45 percent in Q3 2011 and 58 percent in the first nine months year over year.
  • Driven by expectations for a reduction in government-funded research in 2012, iRobot implemented a reduction in force in the Government and Industrial Robots division in the fourth quarter.

Financial Expectations

Management provides the following expectations with respect to the fourth quarter ending December 31, 2011.

Q4 2011:  
Revenue$130 - $135 million
Earnings Per Share$0.26 - $0.30
Adjusted EBITDA $16 - $18 million

Management raises its expectations for the full year ending December 31, 2011.

Fiscal Year 2011:CurrentPrior
Revenue$465 - $470 million $460 - $470 million
Earnings Per Share$1.32 - $1.36$1.04 - $1.10
Adjusted EBITDA $67 - $69 million$62 - $64 million

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.

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 and growth, anticipated revenue, Adjusted EBITDA and earnings per share for fiscal year 2011 and the fourth quarter of 2011. 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, the timing of government contracts and orders, 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, merger and acquisition expenses, restructuring expenses, net intellectual property litigation expenses and non-cash stock compensation. A reconciliation between net income and Adjusted EBITDA is provided in the financial tables at the end of this press release.

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