BEDFORD,
Mass., Aug. 8, 2023 /PRNewswire/ -- iRobot Corp.
(NASDAQ: IRBT), a leader in consumer robots, today announced its
financial results for the second quarter ended July 1, 2023.
Q2 2023 Financial Performance Highlights
- Revenue for the second quarter of 2023 was $236.6 million, compared with $255.4 million in the same period last year.
-
- Geographically, second-quarter 2023 revenue grew 9% in
Japan, declined 9% in EMEA
and declined 6% in the U.S. over the same period last year.
- Revenue from mid-tier robots (with an MSRP between
$300 and $499) and premium robots (with an MSRP of
$500 or more) represented 84% of
total robot sales in the second quarter of 2023 versus 83% from the
same period last year.
- We estimate that iRobot's second-quarter 2023 revenue from
e-commerce, which spans the Company's own website and app,
dedicated e-commerce websites and the online arms of traditional
retailers, increased approximately 6% from the same period last
year and represented approximately 71% of second-quarter 2023
revenue. As expected, the increase is due to order timing. In 2022,
certain large orders from an e-tailer customer occurred in the
first quarter, and in 2023 these orders were shipped in the second
quarter. iRobot's direct-to-consumer (DTC) revenue of $40 million in the second quarter of 2023
increased 1% from the prior-year second quarter.
- GAAP operating expenses for the second quarter of 2023 were
$124.6 million, compared with GAAP
operating expenses of $144.9 million
in the same period last year. Second-quarter 2023 non-GAAP
operating expenses were $105.4
million, compared with non-GAAP operating expenses of
$136.2 million in the same period
last year. The decrease in operating expenses is attributable to
cost-reduction actions in August 2022
and February 2023, along with careful
expense management and scaled back working media.
- GAAP operating loss for the second quarter of 2023 was
($71.1) million, compared with GAAP
operating loss of ($63.9) million in
the same period last year. Non-GAAP operating loss for the second
quarter of 2023 was ($50.5) million,
compared with non-GAAP operating loss of ($53.3) million in the same period last year. The
Company's operating loss reflected the impact of decreased revenue
and a lower gross profit margin, partially offset by the benefits
of careful expense management. The lower gross margin was due to
increased promotional activities, higher rework costs to our
on-hand inventory to fulfill orders as well as costs associated
with the Company's contract manufacturers and was partially offset
by the benefits from improved product costs and lower ocean freight
costs.
- GAAP net loss per share for the second quarter of 2023 was
($2.93), compared with GAAP net loss
per share of ($1.60) in the same
period last year. Non-GAAP net loss per share was ($1.42) for the second quarter of 2023, compared
with non-GAAP net loss per share of ($0.35) in the same period last year.
- As of July 1, 2023, the Company's
cash and cash equivalents were $58.0
million, compared with $47.9
million as of April 1, 2023,
and $117.9 million at the end of
2022. During the second quarter, the Company repaid its total
outstanding borrowings of $27 million
on its credit facility.
- The Company's inventory balance was $170.6 million as of July
2, 2023, compared with $285.3
million at the end of 2022. GAAP days in inventory (DII) was
85 days, compared with 95 days at the end of 2022. Non-GAAP DII was
86 days, compared with 96 days at the end of 2022. The decrease in
inventory primarily reflected the use of on-hand inventory to
fulfill first-half 2023 orders.
Second-Quarter and Recent Business Highlights
- For the 9th consecutive year,
Roomba® was a featured product in Amazon's Prime
Day event, which was held on July
11-12, 2023. The Company's products received favorable
Prime Day related media coverage in outlets including CNN
Underscored, Wall Street Journal and Good Morning America.
- The Company's Roomba Combo j7+, an advanced 2-in-1 robot
introduced in September 2022, won the
Gear Patrol Home Award. In addition, New York Magazine's The
Strategist named Roomba j7+ as 'Best Overall Robot Vacuum' and
Roomba Combo j7+ as 'Best Robot Vacuum for Pet Owners.' The Roomba
Combo j7+ also received favorable reviews by Der Spiegel in Germany, El Pais and Deia in Spain, and Pocket Lint in UK.
- The Company's Roomba s9+ won the Tom's Guide Award for 'Best
Robot Vacuum Cleaner.'
- The Company's community of engaged, connected customers who
have opted-in to its digital communications grew 18% to 18.6
million, from the second quarter of 2022.
Proposed Merger with Amazon and new $200 million Financing Facility
On
July 24, 2023, iRobot entered into a
$200 million financing facility to
fund its ongoing operations. At the same time, iRobot and Amazon
amended the existing terms of their merger agreement to reflect a
reduction in the price per share. For Amazon, the change in price
per share is expected to be largely offset by the increase in
iRobot's net debt under the new financing facility. In light of the
pending transaction with Amazon, which was originally announced on
August 5, 2022, iRobot will not hold
a financial results conference call, and its practice of providing
full-year financial guidance remains suspended.
About iRobot Corp.
iRobot is a global consumer robot company that designs and builds
thoughtful robots and intelligent home innovations that make life
better. iRobot introduced the first Roomba robot vacuum in 2002.
Today, iRobot is a global enterprise that has sold millions of
robots worldwide. iRobot's product portfolio features technologies
and advanced concepts in cleaning, mapping and navigation. Working
from this portfolio, iRobot engineers are building robots and smart
home devices to help consumers make their homes easier to maintain
and healthier places to live. For more information about iRobot,
please visit www.irobot.com.
Important Information and Where to Find It
In
connection with the proposed transaction between iRobot and Amazon,
iRobot will file with the SEC a Proxy Statement, the definitive
version of which will be sent or provided to iRobot stockholders.
iRobot may also file other documents with the SEC regarding the
proposed transaction. This document is not a substitute for the
Proxy Statement or any other document which iRobot may file with
the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL
BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THESE DOCUMENTS AND DOCUMENTS INCORPORATED BY REFERENCE THEREIN,
CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
RELATED MATTERS. Investors and security holders may obtain free
copies of the Proxy Statement (when it is available) and other
documents that are filed or will be filed with the SEC by iRobot
through the website maintained by the SEC at www.sec.gov, iRobot's
investor relations website at investor.irobot.com or by contacting
iRobot's investor relations department at the following:
Karian Wong
investorrelations@irobot.com
(781) 430-3003
Participants in the Solicitation
iRobot and certain of
its directors and executive officers may be deemed to be
participants in the solicitation of proxies from iRobot's
stockholders in respect of the proposed transaction and any other
matters to be voted on at the special meeting. Information
regarding iRobot's directors and executive officers, including a
description of their direct interests, by security holdings or
otherwise, is contained in iRobot's proxy statement for its 2023
annual meeting of stockholders, which was filed with the SEC on
April 11, 2023, and will be included
in the Proxy Statement (when available). iRobot stockholders may
obtain additional information regarding the direct and indirect
interests of the participants in the solicitation of proxies in
connection with the proposed transaction, including the interests
of iRobot directors and executive officers in the transaction,
which may be different than those of iRobot stockholders generally,
by reading the Proxy Statement and any other relevant documents
that are filed or will be filed with the SEC relating to the
transaction. You may obtain free copies of these documents using
the sources indicated above.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains "forward-looking
statements" within the meaning of the federal securities laws,
including Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements are based on the Company's current
expectations, estimates and projections about its business and
industry, all of which are subject to change. In this context,
forward-looking statements often address expected future business
and financial performance and financial condition, and often
contain words such as "expect," "anticipate," "intend," "plan,"
"believe," "could," "seek," "see," "will," "may," "would," "might,"
"potentially," "estimate," "continue," "expect," "target," similar
expressions or the negatives of these words or other comparable
terminology that convey uncertainty of future events or outcomes.
All forward-looking statements by their nature address matters that
involve risks and uncertainties, many of which are beyond our
control, and are not guarantees of future results, such as
statements about the consummation of the proposed transaction and
the anticipated benefits thereof. These and other forward-looking
statements are not guarantees of future results and are subject to
risks, uncertainties and assumptions that could cause actual
results to differ materially from those expressed in any
forward-looking statements. Accordingly, there are or will be
important factors that could cause actual results to differ
materially from those indicated in such statements and, therefore,
you should not place undue reliance on any such statements and
caution must be exercised in relying on forward-looking statements.
Important risk factors that may cause such a difference include,
but are not limited to: (i) the ability of the parties to
consummate the proposed transaction with Amazon.com, Inc in a
timely manner or at all; (ii) the satisfaction (or waiver) of
closing conditions to the consummation of the proposed transaction,
including with respect to the approval of the Company's
stockholders; (iii) potential delays in consummating the proposed
transaction; (iv) the ability of the Company to timely and
successfully achieve the anticipated benefits of the proposed
transaction; (v) the occurrence of any event, change or other
circumstance or condition that could give rise to the termination
of the merger agreement; (vi) the impact of the COVID-19 pandemic
and the current conflict between the Russian Federation and Ukraine on the Company's business and general
economic conditions; (vii) the Company's ability to implement its
business strategy; (viii) significant transaction costs associated
with the proposed transaction; (ix) potential litigation relating
to the proposed transaction; (x) the risk that disruptions from the
proposed transaction will harm the Company's business, including
current plans and operations; (xi) the ability of the Company to
retain and hire key personnel; (xii) potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the proposed transaction; (xiii) legislative,
regulatory and economic developments affecting the Company's
business; (xiv) general economic and market developments and
conditions; (xv) the evolving legal, regulatory and tax regimes
under which the Company operates; (xvi) potential business
uncertainty, including changes to existing business relationships,
during the pendency of the merger that could affect the Company's
financial performance; (xvii) restrictions during the pendency of
the proposed transaction that may impact the Company's ability to
pursue certain business opportunities or strategic transactions;
(xviii) unpredictability and severity of catastrophic events,
including, but not limited to, acts of terrorism or outbreak of war
or hostilities, (xviv) current supply chain challenges including
current constraints in the availability of certain semiconductor
components used in our products; (xx) the financial strength of our
customers and retailers; (xxi) the impact of tariffs on goods
imported into the United States;
and (xxii) competition, as well as the Company's response to any of
the aforementioned factors. These risks, as well as other risks
associated with the proposed transactions, will be fully discussed
in the Proxy Statement to be filed with the SEC in connection with
the proposed transaction. Additional risks and uncertainties that
could cause actual outcomes and results to differ materially from
those contemplated by the forward-looking statements are included
under the caption "Risk Factors" in the Company's most recent
annual and quarterly reports filed with the SEC and any subsequent
reports on Form 10-K, Form 10-Q or Form 8-K filed from time to time
and available at www.sec.gov. While the list of factors presented
here is, and the list of factors presented in the Proxy Statement
will be, considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, legal liability and similar risks, any of which
could have a material adverse effect on the Company's financial
condition, results of operations, or liquidity. The forward-looking
statements included herein are made only as of the date hereof. The
Company does not assume any obligation to publicly provide
revisions or updates to any forward-looking statements, whether as
a result of new information, future developments or otherwise,
should circumstances change, except as otherwise required by
securities and other applicable laws.
iRobot Corporation
|
Consolidated Statements of
Operations
|
(in thousands, except per share
amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the six months
ended
|
|
July 1, 2023
|
|
July 2, 2022
|
|
July 1, 2023
|
|
July 2, 2022
|
|
|
|
|
|
|
|
|
Revenue
|
$
236,568
|
|
$
255,351
|
|
$
396,860
|
|
$
547,320
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Cost of product
revenue
|
182,776
|
|
173,531
|
|
306,235
|
|
357,164
|
Amortization of
acquired intangible assets
|
290
|
|
875
|
|
572
|
|
1,696
|
Total cost of
revenue
|
183,066
|
|
174,406
|
|
306,807
|
|
358,860
|
|
|
|
|
|
|
|
|
Gross profit
|
53,502
|
|
80,945
|
|
90,053
|
|
188,460
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
37,964
|
|
41,937
|
|
79,898
|
|
84,466
|
Selling and
marketing
|
55,493
|
|
76,017
|
|
100,258
|
|
137,082
|
General and
administrative
|
30,924
|
|
26,380
|
|
61,895
|
|
53,078
|
Amortization of
acquired intangible assets
|
177
|
|
525
|
|
355
|
|
1,035
|
Total operating
expenses
|
124,558
|
|
144,859
|
|
242,406
|
|
275,661
|
|
|
|
|
|
|
|
|
Operating
loss
|
(71,056)
|
|
(63,914)
|
|
(152,353)
|
|
(87,201)
|
|
|
|
|
|
|
|
|
Other expense,
net
|
(4,027)
|
|
(2,182)
|
|
(5,104)
|
|
(18,928)
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(75,083)
|
|
(66,096)
|
|
(157,457)
|
|
(106,129)
|
Income tax expense
(benefit)
|
5,717
|
|
(22,675)
|
|
4,455
|
|
(32,302)
|
Net loss
|
$
(80,800)
|
|
$
(43,421)
|
|
$
(161,912)
|
|
$
(73,827)
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
(2.93)
|
|
$
(1.60)
|
|
$
(5.88)
|
|
$
(2.72)
|
Diluted
|
$
(2.93)
|
|
$
(1.60)
|
|
$
(5.88)
|
|
$
(2.72)
|
|
|
|
|
|
|
|
|
Number of shares used
in per share calculations:
|
|
|
|
|
|
|
Basic
|
27,619
|
|
27,161
|
|
27,543
|
|
27,106
|
Diluted
|
27,619
|
|
27,161
|
|
27,543
|
|
27,106
|
|
|
|
|
|
|
|
|
Stock-based
compensation included in above figures:
|
|
|
|
|
Cost of
revenue
|
$
801
|
|
$
585
|
|
$
1,387
|
|
$
1,026
|
Research and
development
|
2,737
|
|
2,178
|
|
5,383
|
|
4,860
|
Selling and
marketing
|
1,371
|
|
1,692
|
|
2,837
|
|
3,142
|
General and
administrative
|
3,664
|
|
3,568
|
|
6,898
|
|
6,203
|
Total
|
$
8,573
|
|
$
8,023
|
|
$
16,505
|
|
$
15,231
|
iRobot Corporation
|
Condensed Consolidated Balance
Sheets
|
(unaudited, in thousands)
|
|
|
|
|
|
July 1, 2023
|
|
December 31,
2022
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
57,954
|
|
$
117,949
|
Accounts
receivable, net
|
72,306
|
|
66,025
|
Inventory
|
170,561
|
|
285,250
|
Other current
assets
|
47,424
|
|
59,076
|
Total current
assets
|
348,245
|
|
528,300
|
Property and
equipment, net
|
49,894
|
|
60,909
|
Operating lease
right-of-use assets
|
21,720
|
|
26,084
|
Deferred tax
assets
|
12,972
|
|
16,248
|
Goodwill
|
170,873
|
|
167,724
|
Intangible
assets, net
|
10,421
|
|
11,260
|
Other
assets
|
20,014
|
|
24,918
|
Total assets
|
$
634,139
|
|
$
835,443
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Accounts
payable
|
$
138,803
|
|
$
184,016
|
Accrued
expenses
|
105,707
|
|
98,959
|
Deferred revenue
and customer advances
|
12,172
|
|
13,208
|
Total current
liabilities
|
256,682
|
|
296,183
|
Operating lease
liabilities
|
30,517
|
|
33,247
|
Deferred tax
liabilities
|
398
|
|
931
|
Other long-term
liabilities
|
21,123
|
|
29,366
|
Total long-term
liabilities
|
52,038
|
|
63,544
|
Total
liabilities
|
308,720
|
|
359,727
|
Stockholders'
equity
|
325,419
|
|
475,716
|
Total liabilities and
stockholders' equity
|
$
634,139
|
|
$
835,443
|
iRobot Corporation
|
Consolidated Statements of Cash
Flows
|
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
For the six months
ended
|
|
July 1, 2023
|
|
July 2, 2022
|
Cash flows from operating
activities:
|
|
|
|
Net loss
|
$
(161,912)
|
|
$
(73,827)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
14,843
|
|
19,715
|
Loss on equity
investment
|
3,152
|
|
18,814
|
Stock-based
compensation
|
16,505
|
|
15,231
|
Deferred income taxes,
net
|
1,999
|
|
(35,467)
|
Other
|
(3,085)
|
|
2,844
|
Changes in operating
assets and liabilities — (use) source
|
|
|
|
Accounts
receivable
|
(6,114)
|
|
70,372
|
Inventory
|
109,890
|
|
(70,400)
|
Other assets
|
13,204
|
|
(31,657)
|
Accounts
payable
|
(44,149)
|
|
(58,520)
|
Accrued expenses and
other liabilities
|
(2,444)
|
|
(43,617)
|
Net cash used in
operating activities
|
(58,111)
|
|
(186,512)
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
Additions of property
and equipment
|
(2,514)
|
|
(4,894)
|
Purchase of
investments
|
(158)
|
|
(3,090)
|
Sales and maturities of
investments
|
-
|
|
17,383
|
Net cash (used in)
provided by investing activities
|
(2,672)
|
|
9,399
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
Proceeds from employee
stock plans
|
9
|
|
3,088
|
Income tax withholding
payment associated with restricted stock vesting
|
(1,819)
|
|
(1,601)
|
Proceeds from
borrowings
|
-
|
|
35,000
|
Net cash (used in)
provided by financing activities
|
(1,810)
|
|
36,487
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
2,598
|
|
2,578
|
Net decrease in cash
and cash equivalents
|
(59,995)
|
|
(138,048)
|
Cash and cash
equivalents, at beginning of period
|
117,949
|
|
201,457
|
Cash and cash
equivalents, at end of period
|
$
57,954
|
|
$
63,409
|
iRobot Corporation
|
Supplemental Information
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the six months
ended
|
|
July 1, 2023
|
|
July 2, 2022
|
|
July 1, 2023
|
|
July 2, 2022
|
Revenue by Geography:
*
|
|
|
|
|
|
|
|
Domestic
|
$
130,958
|
|
$
139,377
|
|
$
202,944
|
|
$
292,551
|
International
|
105,610
|
|
115,974
|
|
193,916
|
|
254,769
|
Total
|
$
236,568
|
|
$
255,351
|
|
$
396,860
|
|
$
547,320
|
|
|
|
|
|
|
|
|
Robot Units Shipped
*
|
|
|
|
|
|
|
|
Vacuum
|
776
|
|
766
|
|
1,174
|
|
1,631
|
Mopping
|
55
|
|
99
|
|
92
|
|
208
|
Total
|
831
|
|
865
|
|
1,266
|
|
1,839
|
|
|
|
|
|
|
|
|
Revenue by Product
Category **
|
|
|
|
|
|
|
|
Vacuum***
|
$
222
|
|
$
225
|
|
$
368
|
|
$
484
|
Mopping and
other****
|
15
|
|
30
|
|
29
|
|
63
|
Total
|
$
237
|
|
$
255
|
|
$
397
|
|
$
547
|
|
|
|
|
|
|
|
|
Average gross selling
prices for robot units
|
$
347
|
|
$
331
|
|
$
366
|
|
$
332
|
|
|
|
|
|
|
|
|
Headcount
|
1,139
|
|
1,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* in
thousands
|
|
|
|
|
|
|
|
** in
millions
|
|
|
|
|
|
|
|
*** Includes Roomba
robot vacuum-related accessory revenue
|
**** Includes Braava
robot mop-related accessory revenue and air purifier, handheld
vacuum and Root
|
|
|
|
|
|
|
|
|
Certain numbers may not total due to
rounding
|
|
|
|
|
|
|
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. 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 as well as
any non-cash impairment charges associated with intangible assets
in connection with our past acquisitions. 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, including with respect to the iRobot-Amazon
Merger. It also includes business combination adjustments including
adjustments after the measurement period has ended. 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.
Tariff Refunds: iRobot's Section 301 List 3 Tariff
Exclusion was reinstated in March
2022, which temporarily eliminates tariffs on our Roomba
products imported from China
beginning on October 12, 2021 until
December 31, 2022. This temporary
exclusion, which was subsequently extended until September 30, 2023, entitles us to a refund of
all related tariffs previously paid since October 12, 2021. We exclude the refunds for
tariff costs expensed during fiscal 2021 from our 2022 non-GAAP
measures because those tariff refunds associated with tariff costs
incurred in the past have no impact to our current period
earnings.
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.
Restructuring and Other: Restructuring charges are
related to one-time actions associated with realigning resources,
enhancing operational productivity and efficiency, or improving our
cost structure in support of our strategy. Such actions are not
reflective of ongoing operations and include costs primarily
associated with severance costs, certain professional fees, costs
associated with consolidation of facilities, warehouses and any
other leased properties, and other non-recurring costs directly
associated with resource realignments tied to strategic initiatives
or changes in business conditions. We exclude this item from our
non-GAAP measures when evaluating our recent and prospective
business performance as such items vary significantly based on the
magnitude of the action and do not reflect anticipated future
operating costs. In addition, these charges do not necessarily
provide meaningful insight into the fundamentals of current or past
operations of our business.
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 reassess the
need for any valuation allowance recorded based on the non-GAAP
profitability and have eliminated the effect of the valuation
allowance recorded in the U.S. jurisdiction. We also exclude
certain tax items, including impact from stock-based compensation
windfalls/shortfalls, that are not reflective of income tax expense
incurred as a result of current period earnings. 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.
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
|
|
July 1, 2023
|
|
July 2, 2022
|
|
July 1, 2023
|
|
July 2, 2022
|
GAAP
Revenue
|
$
236,568
|
|
$
255,351
|
|
$
396,860
|
|
$
547,320
|
|
|
|
|
|
|
|
|
GAAP Gross
Profit
|
$
53,502
|
|
$
80,945
|
|
$
90,053
|
|
$
188,460
|
Amortization of
acquired intangible assets
|
290
|
|
875
|
|
572
|
|
1,696
|
Stock-based
compensation
|
801
|
|
585
|
|
1,387
|
|
1,026
|
Tariff
refunds
|
-
|
|
-
|
|
-
|
|
(11,727)
|
Net merger, acquisition
and divestiture expense
|
289
|
|
-
|
|
610
|
|
-
|
Restructuring and
other
|
-
|
|
483
|
|
191
|
|
4,021
|
Non-GAAP Gross
Profit
|
$
54,882
|
|
$
82,888
|
|
$
92,813
|
|
$
183,476
|
GAAP Gross
Margin
|
22.6 %
|
|
31.7 %
|
|
22.7 %
|
|
34.4 %
|
Non-GAAP Gross
Margin
|
23.2 %
|
|
32.5 %
|
|
23.4 %
|
|
33.5 %
|
|
|
|
|
|
|
|
|
GAAP Operating
Expenses
|
$
124,558
|
|
$
144,859
|
|
$
242,406
|
|
$
275,661
|
Amortization of
acquired intangible assets
|
(177)
|
|
(525)
|
|
(355)
|
|
(1,035)
|
Stock-based
compensation
|
(7,772)
|
|
(7,438)
|
|
(15,118)
|
|
(14,205)
|
Net merger, acquisition
and divestiture expense
|
(6,964)
|
|
(171)
|
|
(13,427)
|
|
(280)
|
IP litigation expense,
net
|
-
|
*
|
(435)
|
|
(91)
|
*#
|
(3,922)
|
Restructuring and
other
|
(4,278)
|
|
(102)
|
|
(7,893)
|
|
(927)
|
Non-GAAP
Operating Expenses
|
$
105,367
|
|
$
136,188
|
|
$
205,522
|
|
$
255,292
|
GAAP Operating
Expenses as a % of GAAP Revenue
|
52.7 %
|
|
56.7 %
|
|
61.1 %
|
|
50.4 %
|
Non-GAAP
Operating Expenses as a % of Non-GAAP Revenue
|
44.5 %
|
|
53.3 %
|
|
51.8 %
|
|
46.6 %
|
|
|
|
|
|
|
|
|
GAAP Operating
Loss
|
$
(71,056)
|
|
$
(63,914)
|
|
$
(152,353)
|
|
$
(87,201)
|
Amortization of
acquired intangible assets
|
467
|
|
1,400
|
|
927
|
|
2,731
|
Stock-based
compensation
|
8,573
|
|
8,023
|
|
16,505
|
|
15,231
|
Tariff
refunds
|
-
|
|
-
|
|
-
|
|
(11,727)
|
Net merger, acquisition
and divestiture expense
|
7,253
|
|
171
|
|
14,037
|
|
280
|
IP litigation expense,
net
|
-
|
*
|
435
|
|
91
|
*#
|
3,922
|
Restructuring and
other
|
4,278
|
|
585
|
|
8,084
|
|
4,948
|
Non-GAAP
Operating Loss
|
$
(50,485)
|
|
$
(53,300)
|
|
$
(112,709)
|
|
$
(71,816)
|
GAAP Operating
Margin
|
(30.0) %
|
|
(25.0) %
|
|
(38.4) %
|
|
(15.9) %
|
Non-GAAP
Operating Margin
|
(21.3) %
|
|
(20.9) %
|
|
(28.4) %
|
|
(13.1) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iRobot Corporation
|
Supplemental Reconciliation of GAAP Actuals to
Non-GAAP Actuals continued
|
(in thousands, except per share
amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the six months
ended
|
|
July 1, 2023
|
|
July 2, 2022
|
|
July 1, 2023
|
|
July 2, 2022
|
GAAP Income
Tax Expense (Benefit)
|
$
5,717
|
|
$
(22,675)
|
|
$
4,455
|
|
$
(32,302)
|
Tax effect of non-GAAP
adjustments
|
(15,215)
|
|
(21,255)
|
|
(31,481)
|
|
(11,365)
|
Other tax
adjustments
|
(2,529)
|
|
(95)
|
|
(2,511)
|
|
(800)
|
Non-GAAP Income
Tax Benefit
|
$
(12,027)
|
|
$
(44,025)
|
|
$
(29,537)
|
|
$
(44,467)
|
|
|
|
|
|
|
|
|
GAAP Net
Loss
|
$
(80,800)
|
|
$
(43,421)
|
|
$
(161,912)
|
|
$
(73,827)
|
Amortization of
acquired intangible assets
|
467
|
|
1,400
|
|
927
|
|
2,731
|
Stock-based
compensation
|
8,573
|
|
8,023
|
|
16,505
|
|
15,231
|
Tariff
refunds
|
-
|
|
-
|
|
-
|
|
(11,727)
|
Net merger, acquisition
and divestiture expense
|
7,253
|
|
171
|
|
14,037
|
|
280
|
IP litigation expense,
net
|
-
|
*
|
435
|
|
91
|
*#
|
3,922
|
Restructuring and
other
|
4,278
|
|
585
|
|
8,084
|
|
4,948
|
Loss on strategic
investments
|
3,152
|
|
1,979
|
|
3,152
|
|
18,814
|
Income tax
effect
|
17,744
|
|
21,350
|
|
33,992
|
|
12,165
|
Non-GAAP Net
Loss
|
$
(39,333)
|
|
$
(9,478)
|
|
$
(85,124)
|
|
$
(27,463)
|
|
|
|
|
|
|
|
|
GAAP Net Loss Per
Diluted Share
|
$
(2.93)
|
|
$
(1.60)
|
|
$
(5.88)
|
|
$
(2.72)
|
Amortization of
acquired intangible assets
|
0.02
|
|
0.05
|
|
0.04
|
|
0.10
|
Stock-based
compensation
|
0.31
|
|
0.30
|
|
0.60
|
|
0.56
|
Tariff
refunds
|
-
|
|
-
|
|
-
|
|
(0.43)
|
Net merger, acquisition
and divestiture expense
|
0.26
|
|
0.01
|
|
0.51
|
|
0.01
|
IP litigation expense,
net
|
-
|
*
|
0.01
|
|
-
|
*#
|
0.15
|
Restructuring and
other
|
0.16
|
|
0.02
|
|
0.30
|
|
0.18
|
Loss on strategic
investments
|
0.12
|
|
0.07
|
|
0.11
|
|
0.69
|
Income tax
effect
|
0.64
|
|
0.79
|
|
1.23
|
|
0.45
|
Non-GAAP Net Loss
Per Diluted Share
|
$
(1.42)
|
|
$
(0.35)
|
|
$
(3.09)
|
|
$
(1.01)
|
|
|
|
|
|
|
|
|
Number of shares used
in diluted per share calculation
|
27,619
|
|
27,161
|
|
27,543
|
|
27,106
|
|
|
|
|
|
|
|
|
Supplemental
Information
|
|
|
|
|
|
|
|
Days sales
outstanding
|
28
|
|
31
|
|
|
|
|
GAAP Days in
inventory
|
85
|
|
208
|
|
|
|
|
Non-GAAP Days in
inventory(1)
|
86
|
|
210
|
|
|
|
|
|
|
|
|
|
|
|
|
* Beginning in the three months ended July 1, 2023,
we no longer exclude IP litigation expense, net from our non-GAAP
performance measures.
|
# Reflects IP litigation expense, net recorded in the
three months ended April 1, 2023.
|
|
|
|
|
|
|
|
|
(1) Non-GAAP Days in inventory is calculated as inventory
divided by (Revenue minus Non-GAAP Gross Profit), multiplied by 91
days.
|
iRobot Corporation
|
Supplemental Data - Impact of Section 301
Tariffs
|
(in thousands, except per share
amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
For the six months
ended
|
|
July 1, 2023
|
July 2, 2022
|
July 1, 2023
|
July 2, 2022
|
Section 301 Tariff
Costs
|
$
313
|
$
525
|
$
660
|
$
1,523
|
Impact of Section 301
tariff costs to gross and operating margin (GAAP
& non-GAAP)
|
(0.1) %
|
(0.2) %
|
(0.2) %
|
(0.3) %
|
Tax effected impact of
Section 301 tariff costs to net income per diluted
share (GAAP)
|
$
(0.01)
|
$
(0.01)
|
$
(0.02)
|
$
(0.04)
|
Tax effected impact of
Section 301 tariff costs to net income per diluted
share (non-GAAP)
|
$
(0.01)
|
$
0.00
|
$
(0.02)
|
$
(0.02)
|
|
|
|
|
|
Certain numbers may not total due to
rounding
|
|
|
|
|
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SOURCE iRobot Corporation