BEDFORD,
Mass., Nov. 7, 2023 /PRNewswire/ -- iRobot Corp.
(NASDAQ: IRBT), a leader in consumer robots, today announced its
financial results for the third quarter ended September 30, 2023.
Q3 2023 Financial Performance Highlights
- Revenue for the third quarter of 2023 was $186.2 million, compared with $278.2 million in the same period last year.
- Geographically, third-quarter 2023 revenue declined 42% in the
U.S, 35% in Japan and 1% in EMEA
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 81% of total robot sales in the third quarter
of 2023 versus 76% from the same period last year.
- We estimate that iRobot's third-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, decreased approximately 27% from the same period last
year and represented approximately 61% of third-quarter 2023
revenue. iRobot's direct-to-consumer (DTC) revenue of $37 million in the third quarter of 2023
decreased 8% from the prior-year third quarter.
- GAAP operating expenses for the third quarter of 2023 were
$107.5 million, compared with GAAP
operating expenses of $144.8 million
in the same period last year. Third-quarter 2023 non-GAAP operating
expenses were $90.1 million, compared
with non-GAAP operating expenses of $112.8
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 third quarter of 2023 was
($59.5) million, compared with GAAP
operating loss of ($68.4) million in
the same period last year. Non-GAAP operating loss for the third
quarter of 2023 was ($40.6) million,
compared with non-GAAP operating loss of ($34.5) million in the same period last year. The
Company's operating loss reflected the impact of decreased revenue
and a lower gross margin, partially offset by the benefit of
expense management. The decrease in gross margin of 2 percentage
points in the third quarter of 2023, compared with the same period
last year, was impacted by lower leverage on fixed costs and
increased promotional activities, partially offset by improved
channel mix. Sequentially compared with Q2 2023, gross margin
increased 3 percentage points, reflecting improved product and
channel mix and reduced rework costs despite lower leverage on
fixed costs. We also benefitted from lower ocean freight costs from
our new products.
- GAAP net loss per share for the third quarter of 2023 was
($2.86), compared with GAAP net loss
per share of ($4.71) in the same
period last year. Non-GAAP net loss per share was ($2.82) for the third quarter of 2023, compared
with non-GAAP net loss per share of ($1.78) in the same period last year.
- During the third quarter, the Company received $188.2 million, net of debt issuance costs, from
its new term loan that matures on July 24,
2026. The loan proceeds received will be used to fund the
Company's on-going operations. As of September 30, 2023, the Company's cash and cash
equivalents were $189.6 million,
compared with $58.0 million as of
July 1, 2023, and $117.9 million at the end of 2022.
- The Company's inventory balance was $244.5 million as of September 30, 2023, compared with $285.3 million at the end of 2022. GAAP days in
inventory (DII) was 161 days, compared with 95 days at the end of
2022. Non-GAAP DII was 163 days, compared with 96 days at the end
of 2022. iRobot plans to use its on-hand inventory to help fulfill
anticipated fourth-quarter 2023 orders.
Third-Quarter and Recent Business Highlights
- During the third quarter of 2023, iRobot introduced multiple
new products and digital technologies to markets worldwide.
- On August 28, 2023, iRobot
introduced the Roomba Combo® j5+ and Roomba
Combo® i5+ robot vacuum and mops, giving customers more
choice when it comes to an iRobot 2-in-1 floor cleaning
solution.
- On September 11, 2023, iRobot
expanded its product lineup further with the introductions of the
Roomba Combo® j9+ robot vacuum and mop and
Roomba® j9+ robot vacuum. iRobot also introduced
thoughtful iRobot OS features Dirt Detective and SmartScrub, our
latest cleaning automation features.
- iRobot's expanded product lineup and digital features have
received positive reviews and media coverage by Reviewed, Vacuum
Wars, The Verge, Engadget, Gear Patrol, Digital Trends, TechRadar,
Les Numériques, El Confidencial, Süddeutsche Zeitung, My Navi News
and Business Insider Japan among many other media outlets
worldwide.
- iRobot was listed as one of U.S. News and World Report's "Best
Companies to Work For."
- iRobot products were featured in Amazon's Prime Big Deal Days
event, which was held October 10-11,
2023. The Company's products received favorable Prime Big
Deal Days related media coverage in outlets including TODAY, Good
Morning America, CNN Underscored, Good Housekeeping, Frandroid, El
Mundo, Stern and Mirror.
- The Company's community of engaged, connected customers who
have opted-in to its digital communications grew 18% to 19.3
million, from the third quarter of 2022.
Proposed Merger with Amazon
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. On October
12, 2023, iRobot's stockholders approved and adopted the
amended merger agreement at the Company's special meeting of
stockholders.
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 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.
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;
(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 various global
conflicts 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. 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 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 nine months
ended
|
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
|
|
|
|
|
|
|
|
Revenue
|
$
186,176
|
|
$
278,191
|
|
$
583,036
|
|
$
825,511
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Cost of product
revenue
|
137,871
|
|
200,947
|
|
444,106
|
|
558,111
|
Amortization of
acquired intangible assets
|
292
|
|
837
|
|
864
|
|
2,533
|
Total cost of
revenue
|
138,163
|
|
201,784
|
|
444,970
|
|
560,644
|
|
|
|
|
|
|
|
|
Gross profit
|
48,013
|
|
76,407
|
|
138,066
|
|
264,867
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
37,239
|
|
41,425
|
|
117,137
|
|
125,893
|
Selling and
marketing
|
41,744
|
|
60,273
|
|
142,002
|
|
197,355
|
General and
administrative
|
28,350
|
|
31,508
|
|
90,245
|
|
84,585
|
Amortization of
acquired intangible assets
|
174
|
|
11,568
|
|
529
|
|
12,603
|
Total operating
expenses
|
107,507
|
|
144,774
|
|
349,913
|
|
420,436
|
|
|
|
|
|
|
|
|
Operating
loss
|
(59,494)
|
|
(68,367)
|
|
(211,847)
|
|
(155,569)
|
|
|
|
|
|
|
|
|
Other expense,
net
|
(19,113)
|
|
(979)
|
|
(24,217)
|
|
(19,906)
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(78,607)
|
|
(69,346)
|
|
(236,064)
|
|
(175,475)
|
Income tax
expense
|
598
|
|
59,020
|
|
5,053
|
|
26,718
|
Net loss
|
$
(79,205)
|
|
$
(128,366)
|
|
$
(241,117)
|
|
$
(202,193)
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
(2.86)
|
|
$
(4.71)
|
|
$
(8.73)
|
|
$
(7.44)
|
Diluted
|
$
(2.86)
|
|
$
(4.71)
|
|
$
(8.73)
|
|
$
(7.44)
|
|
|
|
|
|
|
|
|
Number of shares used
in per share calculations:
|
|
|
|
|
|
|
Basic
|
27,738
|
|
27,264
|
|
27,608
|
|
27,159
|
Diluted
|
27,738
|
|
27,264
|
|
27,608
|
|
27,159
|
|
|
|
|
|
|
|
|
Stock-based
compensation included in above figures:
|
|
|
|
|
Cost of
revenue
|
$
838
|
|
$
548
|
|
$
2,226
|
|
$
1,574
|
Research and
development
|
3,355
|
|
2,797
|
|
8,737
|
|
7,657
|
Selling and
marketing
|
1,384
|
|
1,658
|
|
4,221
|
|
4,800
|
General and
administrative
|
3,798
|
|
3,274
|
|
10,696
|
|
9,477
|
Total
|
$
9,375
|
|
$
8,277
|
|
$
25,880
|
|
$
23,508
|
iRobot Corporation
|
Condensed Consolidated Balance
Sheets
|
(unaudited, in thousands)
|
|
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
189,649
|
|
$
117,949
|
Accounts
receivable, net
|
73,457
|
|
66,025
|
Inventory
|
244,509
|
|
285,250
|
Other current
assets
|
49,234
|
|
59,076
|
Total current
assets
|
556,849
|
|
528,300
|
Property and
equipment, net
|
44,942
|
|
60,909
|
Operating lease
right-of-use assets
|
20,482
|
|
26,084
|
Deferred tax
assets
|
10,536
|
|
16,248
|
Goodwill
|
167,630
|
|
167,724
|
Intangible
assets, net
|
9,692
|
|
11,260
|
Other
assets
|
21,347
|
|
24,918
|
Total assets
|
$
831,478
|
|
$
835,443
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Accounts
payable
|
$
211,341
|
|
$
184,016
|
Accrued
expenses
|
103,101
|
|
98,959
|
Deferred revenue
and customer advances
|
10,951
|
|
13,208
|
Total current
liabilities
|
325,393
|
|
296,183
|
Term
loan
|
204,411
|
|
-
|
Operating lease
liabilities
|
28,981
|
|
33,247
|
Deferred tax
liabilities
|
377
|
|
931
|
Other long-term
liabilities
|
19,428
|
|
29,366
|
Total long-term
liabilities
|
253,197
|
|
63,544
|
Total
liabilities
|
578,590
|
|
359,727
|
Stockholders'
equity
|
252,888
|
|
475,716
|
Total liabilities and
stockholders' equity
|
$
831,478
|
|
$
835,443
|
iRobot Corporation
|
Consolidated Statements of Cash
Flows
|
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
For the nine months
ended
|
|
September 30,
2023
|
|
October 1,
2022
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(241,117)
|
|
$
(202,193)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
21,367
|
|
39,078
|
Loss on equity
investment
|
3,910
|
|
18,828
|
Stock-based
compensation
|
25,880
|
|
23,508
|
Change in fair value of
term loan
|
5,292
|
|
-
|
Debt issuance costs
expensed under fair value option
|
11,837
|
|
-
|
Deferred income taxes,
net
|
4,115
|
|
13,090
|
Other
|
(8,618)
|
|
4,209
|
Changes in operating
assets and liabilities — (use) source
|
|
|
|
Accounts
receivable
|
(7,943)
|
|
23,767
|
Inventory
|
34,675
|
|
(85,447)
|
Other assets
|
12,544
|
|
31,268
|
Accounts
payable
|
28,904
|
|
(24,054)
|
Accrued expenses and
other liabilities
|
(4,483)
|
|
(54,649)
|
Net cash used in
operating activities
|
(113,637)
|
|
(212,595)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Additions of property
and equipment
|
(3,132)
|
|
(8,895)
|
Purchase of
investments
|
(213)
|
|
(3,150)
|
Sales and maturities of
investments
|
-
|
|
17,723
|
Net cash (used in)
provided by investing activities
|
(3,345)
|
|
5,678
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from employee
stock plans
|
9
|
|
3,274
|
Income tax withholding
payment associated with restricted stock vesting
|
(1,924)
|
|
(1,775)
|
Proceeds from credit
facility
|
-
|
|
90,000
|
Proceeds from term
loan
|
200,000
|
|
-
|
Payment of debt
issuance costs
|
(11,837)
|
|
-
|
Net cash provided by
financing activities
|
186,248
|
|
91,499
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
4,193
|
|
3,549
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
73,459
|
|
(111,869)
|
Cash, cash equivalents
and restricted cash, at beginning of period
|
117,949
|
|
201,457
|
Cash, cash equivalents
and restricted cash, at end of period
|
$
191,408
|
|
$
89,588
|
|
|
|
|
Cash, cash equivalents
and restricted cash, at end of period:
|
|
|
|
Cash and cash
equivalents
|
$
189,649
|
|
$
89,588
|
Restricted cash,
non-current (included in other assets)
|
1,759
|
|
-
|
Cash, cash equivalents
and restricted cash, at end of period
|
$
191,408
|
|
$
89,588
|
iRobot Corporation
|
Supplemental Information
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the nine months
ended
|
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
Revenue by Geography:
*
|
|
|
|
|
|
|
|
Domestic
|
$
85,781
|
|
$
147,075
|
|
$
288,725
|
|
$
439,626
|
International
|
100,395
|
|
131,116
|
|
294,311
|
|
385,885
|
Total
|
$
186,176
|
|
$
278,191
|
|
$
583,036
|
|
$
825,511
|
|
|
|
|
|
|
|
|
Robot Units Shipped
*
|
|
|
|
|
|
|
|
Vacuum
|
585
|
|
925
|
|
1,760
|
|
2,556
|
Mopping
|
42
|
|
81
|
|
135
|
|
289
|
Total
|
627
|
|
1,006
|
|
1,895
|
|
2,845
|
|
|
|
|
|
|
|
|
Revenue by Product
Category **
|
|
|
|
|
|
|
|
Vacuum***
|
$
172
|
|
$
251
|
|
$
540
|
|
$
736
|
Mopping and
other****
|
14
|
|
27
|
|
43
|
|
90
|
Total
|
$
186
|
|
$
278
|
|
$
583
|
|
$
826
|
|
|
|
|
|
|
|
|
Average gross selling
prices for robot units
|
$
331
|
|
$
314
|
|
$
354
|
|
$
325
|
|
|
|
|
|
|
|
|
Headcount
|
1,126
|
|
1,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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: Our exclusion from Section 301 List 3
tariffs 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, and then further extended
until December 31, 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 matters against SharkNinja. 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.
Debt issuance costs: Debt issuance costs include
various incremental fees and commissions paid to third parties in
connection with the issuance of debt.
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
regularly assess the need to record valuation allowances based on
non-GAAP profitability and other factors. We also exclude certain
tax items, including the impact from stock-based compensation
windfalls/shortfalls, that are not reflective of income tax expense
incurred as a result of current period earnings. During the three
months ended September 30, 2023, we
concluded that, based on the introduction of negative evidence
associated with increased expenses expected from the Term Loan
issued during the quarter, it is no longer more likely than not
that the net deferred tax assets are recoverable on a non-GAAP
basis. Accordingly, we recorded a valuation allowance of
$41.7 million as a non-GAAP
adjustment during the three months ended September 30, 2023. 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 nine months
ended
|
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
GAAP
Revenue
|
$
186,176
|
|
$
278,191
|
|
$
583,036
|
|
$
825,511
|
|
|
|
|
|
|
|
|
GAAP Gross
Profit
|
$
48,013
|
|
$
76,407
|
|
$
138,066
|
|
$
264,867
|
Amortization of
acquired intangible assets
|
292
|
|
837
|
|
864
|
|
2,533
|
Stock-based
compensation
|
838
|
|
548
|
|
2,226
|
|
1,574
|
Tariff
refunds
|
-
|
|
-
|
|
-
|
|
(11,727)
|
Net merger, acquisition
and divestiture expense
|
288
|
|
-
|
|
898
|
|
-
|
Restructuring and
other
|
(17)
|
|
530
|
|
174
|
|
4,551
|
Non-GAAP Gross
Profit
|
$
49,414
|
|
$
78,322
|
|
$
142,228
|
|
$
261,798
|
GAAP Gross
Margin
|
25.8 %
|
|
27.5 %
|
|
23.7 %
|
|
32.1 %
|
Non-GAAP Gross
Margin
|
26.5 %
|
|
28.2 %
|
|
24.4 %
|
|
31.7 %
|
|
|
|
|
|
|
|
|
GAAP Operating
Expenses
|
$
107,507
|
|
$
144,774
|
|
$
349,913
|
|
$
420,436
|
Amortization of
acquired intangible assets
|
(174)
|
|
(11,568)
|
|
(529)
|
|
(12,603)
|
Stock-based
compensation
|
(8,537)
|
|
(7,729)
|
|
(23,654)
|
|
(21,934)
|
Net merger, acquisition
and divestiture expense
|
(8,564)
|
|
(7,837)
|
|
(21,991)
|
|
(8,117)
|
IP litigation expense,
net*
|
-
|
|
(312)
|
|
(91)
|
#
|
(4,234)
|
Restructuring and
other
|
(169)
|
|
(4,486)
|
|
(8,062)
|
|
(5,413)
|
Non-GAAP
Operating Expenses
|
$
90,063
|
|
$
112,842
|
|
$
295,586
|
|
$
368,135
|
GAAP Operating
Expenses as a % of GAAP Revenue
|
57.7 %
|
|
52.0 %
|
|
60.0 %
|
|
50.9 %
|
Non-GAAP
Operating Expenses as a % of Non-GAAP Revenue
|
48.4 %
|
|
40.6 %
|
|
50.7 %
|
|
44.6 %
|
|
|
|
|
|
|
|
|
GAAP Operating
Loss
|
$
(59,494)
|
|
$
(68,367)
|
|
$
(211,847)
|
|
$
(155,569)
|
Amortization of
acquired intangible assets
|
466
|
|
12,405
|
|
1,393
|
|
15,136
|
Stock-based
compensation
|
9,375
|
|
8,277
|
|
25,880
|
|
23,508
|
Tariff
refunds
|
-
|
|
-
|
|
-
|
|
(11,727)
|
Net merger, acquisition
and divestiture expense
|
8,852
|
|
7,837
|
|
22,889
|
|
8,117
|
IP litigation expense,
net*
|
-
|
|
312
|
|
91
|
#
|
4,234
|
Restructuring and
other
|
152
|
|
5,016
|
|
8,236
|
|
9,964
|
Non-GAAP
Operating Loss
|
$
(40,649)
|
|
$
(34,520)
|
|
$
(153,358)
|
|
$
(106,337)
|
GAAP Operating
Margin
|
(32.0) %
|
|
(24.6) %
|
|
(36.3) %
|
|
(18.8) %
|
Non-GAAP
Operating Margin
|
(21.8) %
|
|
(12.4) %
|
|
(26.3) %
|
|
(12.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 nine months
ended
|
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
GAAP Income Tax
Expense
|
$
598
|
|
$
59,020
|
|
$
5,053
|
|
$
26,718
|
Tax effect of non-GAAP
adjustments
|
32,045
|
|
(16,282)
|
|
565
|
|
(27,647)
|
Other tax
adjustments
|
(1,638)
|
|
(29,679)
|
|
(4,150)
|
|
(30,479)
|
Non-GAAP Income
Tax Expense (Benefit)
|
$
31,005
|
|
$
13,059
|
|
$
1,468
|
|
$
(31,408)
|
|
|
|
|
|
|
|
|
GAAP Net
Loss
|
$
(79,205)
|
|
$
(128,366)
|
|
$
(241,117)
|
|
$
(202,193)
|
Amortization of
acquired intangible assets
|
466
|
|
12,405
|
|
1,393
|
|
15,136
|
Stock-based
compensation
|
9,375
|
|
8,277
|
|
25,880
|
|
23,508
|
Tariff
refunds
|
-
|
|
-
|
|
-
|
|
(11,727)
|
Net merger, acquisition
and divestiture expense
|
8,852
|
|
7,837
|
|
22,889
|
|
8,117
|
IP litigation expense,
net*
|
-
|
|
312
|
|
91
|
#
|
4,234
|
Restructuring and
other
|
152
|
|
5,016
|
|
8,236
|
|
9,964
|
Loss on strategic
investments
|
758
|
|
14
|
|
3,910
|
|
18,828
|
Debt issuance
costs
|
11,837
|
|
-
|
|
11,837
|
|
-
|
Income tax
effect
|
(30,407)
|
|
45,961
|
|
3,585
|
|
58,126
|
Non-GAAP Net
Loss
|
$
(78,172)
|
|
$
(48,544)
|
|
$
(163,296)
|
|
$
(76,007)
|
|
|
|
|
|
|
|
|
GAAP Net Loss Per
Diluted Share
|
$
(2.86)
|
|
$
(4.71)
|
|
$
(8.73)
|
|
$
(7.44)
|
Amortization of
acquired intangible assets
|
0.02
|
|
0.46
|
|
0.05
|
|
0.56
|
Stock-based
compensation
|
0.34
|
|
0.30
|
|
0.94
|
|
0.86
|
Tariff
refunds
|
-
|
|
-
|
|
-
|
|
(0.43)
|
Net merger, acquisition
and divestiture expense
|
0.32
|
|
0.29
|
|
0.83
|
|
0.30
|
IP litigation expense,
net*
|
-
|
|
0.01
|
|
-
|
#
|
0.15
|
Restructuring and
other
|
-
|
|
0.18
|
|
0.30
|
|
0.37
|
Loss on strategic
investments
|
0.03
|
|
-
|
|
0.14
|
|
0.69
|
Debt issuance
costs
|
0.43
|
|
-
|
|
0.43
|
|
-
|
Income tax
effect
|
(1.10)
|
|
1.69
|
|
0.13
|
|
2.14
|
Non-GAAP Net Loss
Per Diluted Share
|
$
(2.82)
|
|
$
(1.78)
|
|
$
(5.91)
|
|
$
(2.80)
|
|
|
|
|
|
|
|
|
Number of shares used
in diluted per share calculation
|
27,738
|
|
27,264
|
|
27,608
|
|
27,159
|
|
|
|
|
|
|
|
|
Supplemental
Information
|
|
|
|
|
|
|
|
Days sales
outstanding
|
36
|
|
44
|
|
|
|
|
GAAP Days in
inventory
|
161
|
|
190
|
|
|
|
|
Non-GAAP Days in
inventory(1)
|
163
|
|
191
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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 nine months
ended
|
|
September 30,
2023
|
October 1,
2022
|
September 30,
2023
|
October 1,
2022
|
Section 301 Tariff
Costs
|
$
433
|
$
948
|
$
1,093
|
$
2,471
|
Impact of Section 301
tariff costs to gross and operating margin (GAAP
& non-GAAP)
|
(0.2) %
|
(0.3) %
|
(0.2) %
|
(0.3) %
|
Tax effected impact of
Section 301 tariff costs to net income per diluted
share (GAAP)
|
$
(0.02)
|
$
(0.03)
|
$
(0.04)
|
$
(0.09)
|
Tax effected impact of
Section 301 tariff costs to net income per diluted
share (non-GAAP)
|
$
(0.03)
|
$
(0.05)
|
$
(0.04)
|
$
(0.06)
|
|
|
|
|
|
Certain numbers may
not total due to rounding
|
|
|
|
|
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SOURCE iRobot Corporation