BEDFORD,
Mass., Nov. 8, 2022 /PRNewswire/ -- iRobot Corp.
(NASDAQ: IRBT), a leader in consumer robots, today announced its
financial results for the third quarter ended October 1, 2022.
Financial Performance Highlights
- Revenue for the third quarter of 2022 was $278.2 million, compared with $440.7 million in the third quarter of 2021.
Revenue for the first nine months of 2022 was $825.5 million versus $1,109.5 million in the comparable period of
2021.
-
- The company's third-quarter 2022 revenue performance was
primarily impacted by lower orders from retailers and distributors
in North America and EMEA as part
of their ongoing efforts to rebalance inventory levels and, to a
much lesser extent, the impact of changes in foreign exchange
rates.
- Geographically, third-quarter 2022 revenue declined 60% in
EMEA, 32% in the U.S. and 20% in Japan over the prior 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 76% of total robot sales in the third quarter
of 2022 versus 86% in the same quarter one year ago.
- Aeris air purifier revenue was approximately $2 million in the third quarter of 2022.
- We estimate that iRobot's third-quarter 2022 revenue to support
e-commerce, which spans the company's own website and app,
dedicated e-commerce websites and the online arms of traditional
retailers, declined by 41% from the third quarter of 2021 and
represented 56% of third-quarter 2022 revenue. iRobot's
direct-to-consumer (DTC) revenue of $41
million in the third quarter of 2022 increased 2% from the
prior year's third quarter.
- The company's third-quarter 2022 GAAP operating loss was
$68.4 million, compared with
third-quarter 2021 GAAP operating income of $40.5 million. iRobot's third-quarter 2022
non-GAAP operating loss was $34.5
million, compared with non-GAAP operating income of
$48.0 million in the same period one
year ago. The company's third-quarter 2022 operating loss primarily
reflected the impact of lower revenue and a lower gross profit
margin. The company's GAAP operating loss for the first nine months
of 2022 was $155.6 million, compared
with GAAP operating income of $43.8
million in the first nine months of 2021. iRobot's non-GAAP
operating loss for the first nine months of 2022 was $106.3 million versus non-GAAP operating income
of $71.9 million in the same period
one year ago.
- iRobot's GAAP net loss per share was $4.71 for the third quarter of 2022, compared
with GAAP net income per share of $2.06 in the third quarter of 2021. Non-GAAP net
loss per share was $1.78 for the
third quarter of 2022 versus non-GAAP net income per share of
$1.67 in the third quarter of 2021.
GAAP net loss per share for the first nine months of 2022 was
$7.44, compared with GAAP net income
per share of $2.17 in the same period
of 2021. For the first nine months of 2022, the company's non-GAAP
net loss per share was $2.80,
compared with non-GAAP net income per share of $2.32 for the same period of 2021.
- As of October 1, 2022, the
company's cash, cash equivalents and short-term investments were
$89.6 million, compared with
$63.4 million as of July 2, 2022 and $234.5
million at the end of 2021. During the third quarter, the
company drew down an incremental $55
million from its unsecured revolving line of credit of
$150 million, which brought its
balance outstanding to $90 million as
of October 1, 2022.
- The company's inventory balance was $419
million, or 191 days, as of October
1, 2022, versus $354 million,
or 116 days, at the end of the third quarter one year ago. The
increase in inventory primarily reflected higher on-hand inventory
levels entering the quarter and the impact of relatively soft
orders during the quarter as retailers and distributors in
North America and EMEA took
actions to reduce their own inventory levels. iRobot plans to use
its on-hand inventory to help fulfill anticipated fourth-quarter
2022 orders.
Third-Quarter and Recent Business Highlights
- On September 27, 2022, iRobot
introduced the Roomba Combo™ j7+, the world's most advanced robot
vacuum and mop, along with thoughtful iRobot OS 5.0 updates. Thus
far, the product has been favorably received by the
marketplace.
-
- The Roomba Combo j7+ has received positive coverage by The
Verge, GQ, CNET and CNET France, The Independent, El Pais and
Computerbild.de among many other popular websites, newspapers and
magazines in the U.S. and Europe.
- Roomba® was a featured product in Amazon's Prime
Early Access Sale event that was held on October 11-12, 2022 to kick off upcoming holiday
celebrations.
- In mid-October, iRobot announced a favorable initial
determination in the company's patent infringement action against
SharkNinja Operating LLC and its related entities ("SharkNinja") at
the International Trade Commission ("ITC"). The ruling, which found
that SharkNinja had infringed valid claims of multiple iRobot
asserted patents, recommends that the ITC issue an order barring
the importation of various infringing SharkNinja robotic cleaning
products.
- The company's community of engaged, connected customers who
have opted-in to its digital communications grew to 16.4 million,
an increase of 31% from the third quarter of 2021.
- On August 5, 2022, iRobot
announced a definitive agreement to be acquired by Amazon.com, Inc.
(NASDAQ: AMZN) for $61.00 per share
in cash. On October 17, 2022,
iRobot's stockholders approved the merger and compensation
proposals at the company's special meeting of stockholders.
- During the third quarter, iRobot initiated a restructuring of
its operations aimed at better aligning its cost structure with
near-term revenue. The company recorded restructuring charges
totaling $5 million in the third
quarter and expects to record an additional restructuring charge
for the consolidation of certain facilities in the fourth quarter.
iRobot currently anticipates that its second-half 2022
restructuring actions will deliver net non-GAAP cost savings of
approximately $5 million to
$6 million in the fourth quarter of
2022 with approximately $30 million
in net 2023 non-GAAP cost savings, including actions associated
with the facilities consolidation.
- On November 1, 2022, iRobot
disclosed that it amended the terms and conditions of its
$150 million revolving credit
facility.
Given the ongoing disruptions and uncertainty that could impact
the company's outlook and in light of the pending transaction with
Amazon.com, Inc., which was announced on August 5, 2022, iRobot will not hold a
third-quarter 2022 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, including the Company's expectations
regarding the restructuring of operations and the financial impacts
thereof and management's plans for inventory use in the fourth
quarter 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 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. 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
|
|
October 1,
2022
|
|
October 2,
2021
|
|
October 1,
2022
|
|
October 2,
2021
|
|
|
|
|
|
|
|
|
Revenue
|
$
278,191
|
|
$
$ 440,682
|
|
$
825,511
|
|
$
1,109,539
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Cost of product
revenue
|
200,947
|
|
277,703
|
|
558,111
|
|
684,190
|
Amortization of
acquired intangible assets
|
837
|
|
225
|
|
2,533
|
|
675
|
Total cost of
revenue
|
201,784
|
|
277,928
|
|
560,644
|
|
684,865
|
|
|
|
|
|
|
|
|
Gross profit
|
76,407
|
|
162,754
|
|
264,867
|
|
424,674
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
41,425
|
|
40,262
|
|
125,893
|
|
120,859
|
Selling and
marketing
|
60,273
|
|
59,055
|
|
197,355
|
|
186,722
|
General and
administrative
|
31,508
|
|
22,688
|
|
84,585
|
|
72,587
|
Amortization of
acquired intangible assets
|
11,568
|
|
251
|
|
12,603
|
|
661
|
Total operating
expenses
|
144,774
|
|
122,256
|
|
420,436
|
|
380,829
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
(68,367)
|
|
40,498
|
|
(155,569)
|
|
43,845
|
|
|
|
|
|
|
|
|
Other (expense) income,
net
|
(979)
|
|
26,585
|
|
(19,906)
|
|
26,139
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
(69,346)
|
|
67,083
|
|
(175,475)
|
|
69,984
|
Income tax
expense
|
59,020
|
|
9,867
|
|
26,718
|
|
8,083
|
Net (loss)
income
|
$
(128,366)
|
|
$
57,216
|
|
$
(202,193)
|
|
$
61,901
|
|
|
|
|
|
|
|
|
Net (loss) income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
(4.71)
|
|
$
2.09
|
|
$
(7.44)
|
|
$
2.22
|
Diluted
|
$
(4.71)
|
|
$
2.06
|
|
$
(7.44)
|
|
$
2.17
|
|
|
|
|
|
|
|
|
Number of shares used
in per share calculations:
|
|
|
|
|
|
|
Basic
|
27,264
|
|
27,413
|
|
27,159
|
|
27,923
|
Diluted
|
27,264
|
|
27,803
|
|
27,159
|
|
28,475
|
|
|
|
|
|
|
|
|
Stock-based
compensation included in above figures:
|
|
|
|
|
Cost of
revenue
|
$
548
|
|
$
284
|
|
$
1,574
|
|
$
929
|
Research and
development
|
2,797
|
|
2,361
|
|
7,657
|
|
6,896
|
Selling and
marketing
|
1,658
|
|
895
|
|
4,800
|
|
2,982
|
General and
administrative
|
3,274
|
|
(1,467)
|
|
9,477
|
|
5,388
|
Total
|
$
8,277
|
|
$
2,073
|
|
$
23,508
|
|
$
16,195
|
iRobot Corporation
|
Condensed Consolidated Balance
Sheets
|
(unaudited, in thousands)
|
|
|
|
|
|
October 1,
2022
|
|
January 1,
2022
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
89,588
|
|
$
201,457
|
Short term
investments
|
-
|
|
33,044
|
Accounts
receivable, net
|
133,055
|
|
160,642
|
Inventory
|
419,088
|
|
333,296
|
Other current
assets
|
84,067
|
|
61,094
|
Total current
assets
|
725,798
|
|
789,533
|
Property and
equipment, net
|
67,173
|
|
78,887
|
Operating lease
right-of-use assets
|
28,520
|
|
37,609
|
Deferred tax
assets
|
8,223
|
|
37,945
|
Goodwill
|
159,531
|
|
173,292
|
Intangible
assets, net
|
10,948
|
|
28,410
|
Other
assets
|
38,089
|
|
38,753
|
Total assets
|
$
1,038,282
|
|
$
1,184,429
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Accounts
payable
|
$
233,169
|
|
$
251,298
|
Accrued
expenses
|
84,359
|
|
132,618
|
Deferred revenue
and customer advances
|
12,875
|
|
11,767
|
Short-term notes
payable
|
90,000
|
|
-
|
Total current
liabilities
|
420,403
|
|
395,683
|
Operating lease
liabilities
|
33,246
|
|
43,462
|
Deferred tax
liabilities
|
1,013
|
|
3,250
|
Other long-term
liabilities
|
21,841
|
|
25,311
|
Total long-term
liabilities
|
56,100
|
|
72,023
|
Total
liabilities
|
476,503
|
|
467,706
|
Stockholders'
equity
|
561,779
|
|
716,723
|
Total liabilities and
stockholders' equity
|
$
1,038,282
|
|
$
1,184,429
|
iRobot Corporation
|
Consolidated Statements of Cash
Flows
|
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
For the nine months
ended
|
|
October 1,
2022
|
|
October 2,
2021
|
Cash flows from
operating activities:
|
|
|
|
Net (loss)
income
|
$
(202,193)
|
|
$
61,901
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
39,078
|
|
23,978
|
Loss (gain) on equity
investment
|
18,828
|
|
(26,929)
|
Stock-based
compensation
|
23,508
|
|
16,195
|
Deferred income taxes,
net
|
13,090
|
|
(8,190)
|
Other
|
4,209
|
|
4,496
|
Changes in operating
assets and liabilities — (use) source, excluding effects of
acquisition
|
|
|
|
Accounts
receivable
|
23,767
|
|
(71,368)
|
Inventory
|
(85,447)
|
|
(173,986)
|
Other assets
|
31,268
|
|
(5,851)
|
Accounts
payable
|
(24,054)
|
|
93,530
|
Accrued expenses and
other liabilities
|
(54,649)
|
|
(4,551)
|
Net cash used in
operating activities
|
(212,595)
|
|
(90,775)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Additions of property
and equipment
|
(8,895)
|
|
(25,302)
|
Purchase of
investments
|
(3,150)
|
|
(9,641)
|
Sales and maturities of
investments
|
17,723
|
|
63,976
|
Net cash provided by
investing activities
|
5,678
|
|
29,033
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from employee
stock plans
|
3,274
|
|
5,157
|
Income tax withholding
payment associated with restricted stock vesting
|
(1,775)
|
|
(5,161)
|
Stock
repurchases
|
-
|
|
(150,000)
|
Proceeds from
borrowings
|
90,000
|
|
-
|
Net cash provided by
(used in) financing activities
|
91,499
|
|
(150,004)
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
3,549
|
|
(2,877)
|
Net decrease in cash
and cash equivalents
|
(111,869)
|
|
(214,623)
|
Cash and cash
equivalents, at beginning of period
|
201,457
|
|
432,635
|
Cash and cash
equivalents, at end of period
|
$
89,588
|
|
$
218,012
|
iRobot Corporation
|
Supplemental Information
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the nine months
ended
|
|
October 1,
2022
|
|
October 2,
2021
|
|
October 1,
2022
|
|
October 2,
2021
|
Revenue by Geography:
*
|
|
|
|
|
|
|
|
Domestic
|
$
147,075
|
|
$
216,542
|
|
$
439,626
|
|
$
528,138
|
International
|
131,116
|
|
224,140
|
|
385,885
|
|
581,401
|
Total
|
$
278,191
|
|
$
440,682
|
|
$
825,511
|
|
$
1,109,539
|
|
|
|
|
|
|
|
|
Robot Units Shipped
*
|
|
|
|
|
|
|
|
Vacuum
|
925
|
|
1,379
|
|
2,556
|
|
3,496
|
Mopping
|
81
|
|
164
|
|
289
|
|
449
|
Total
|
1,006
|
|
1,543
|
|
2,845
|
|
3,945
|
|
|
|
|
|
|
|
|
Revenue by Product
Category **
|
|
|
|
|
|
|
|
Vacuum***
|
$
251
|
|
$
398
|
|
$
736
|
|
$
991
|
Mopping and
other****
|
27
|
|
43
|
|
90
|
|
119
|
Total
|
$
278
|
|
$
441
|
|
$
826
|
|
$
1,110
|
|
|
|
|
|
|
|
|
Average gross selling
prices for robot units
|
$
314
|
|
$
322
|
|
$
325
|
|
$
322
|
|
|
|
|
|
|
|
|
Headcount
|
1,316
|
|
1,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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 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 warehouses, 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 nine months
ended
|
|
October 1,
2022
|
October 2,
2021
|
|
October 1,
2022
|
October 2,
2021
|
GAAP
Revenue
|
$
278,191
|
$
440,682
|
|
$
825,511
|
$
1,109,539
|
|
|
|
|
|
|
GAAP Gross
Profit
|
$
76,407
|
$
162,754
|
|
$
264,867
|
$
424,674
|
Amortization of
acquired intangible assets
|
837
|
225
|
|
2,533
|
675
|
Stock-based
compensation
|
548
|
284
|
|
1,574
|
929
|
Tariff
refunds
|
-
|
(270)
|
|
(11,727)
|
(270)
|
Restructuring and
other
|
530
|
-
|
|
4,551
|
-
|
Non-GAAP Gross
Profit
|
$
78,322
|
$
162,993
|
|
$
261,798
|
$
426,008
|
Non-GAAP Gross
Margin
|
28.2 %
|
37.0 %
|
|
31.7 %
|
38.4 %
|
|
|
|
|
|
|
GAAP Operating
Expenses
|
$
144,774
|
$
122,256
|
|
$
420,436
|
$
380,829
|
Amortization of
acquired intangible assets
|
(11,568)
|
(251)
|
|
(12,603)
|
(661)
|
Stock-based
compensation
|
(7,729)
|
(1,789)
|
|
(21,934)
|
(15,266)
|
Net merger, acquisition
and divestiture expense
|
(7,837)
|
(635)
|
|
(8,117)
|
(1,274)
|
IP litigation expense,
net
|
(312)
|
(4,569)
|
|
(4,234)
|
(9,292)
|
Restructuring and
other
|
(4,486)
|
-
|
|
(5,413)
|
(213)
|
Non-GAAP
Operating Expenses
|
$
112,842
|
$
115,012
|
|
$
368,135
|
$
354,123
|
Non-GAAP
Operating Expenses as a % of Non-GAAP Revenue
|
40.6 %
|
26.1 %
|
|
44.6 %
|
31.9 %
|
|
|
|
|
|
|
GAAP Operating
(Loss) Income
|
$
(68,367)
|
$
40,498
|
|
$
(155,569)
|
$
43,845
|
Amortization of
acquired intangible assets
|
12,405
|
476
|
|
15,136
|
1,336
|
Stock-based
compensation
|
8,277
|
2,073
|
|
23,508
|
16,195
|
Tariff
refunds
|
-
|
(270)
|
|
(11,727)
|
(270)
|
Net merger, acquisition
and divestiture expense
|
7,837
|
635
|
|
8,117
|
1,274
|
IP litigation expense,
net
|
312
|
4,569
|
|
4,234
|
9,292
|
Restructuring and
other
|
5,016
|
-
|
|
9,964
|
213
|
Non-GAAP
Operating (Loss) Income
|
$
(34,520)
|
$
47,981
|
|
$
(106,337)
|
$
71,885
|
Non-GAAP
Operating Margin
|
(12.4) %
|
10.9 %
|
|
(12.9) %
|
6.5 %
|
|
|
|
|
|
|
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
|
|
October 1,
2022
|
October 2,
2021
|
|
October 1,
2022
|
October 2,
2021
|
GAAP Income
Tax Expense
|
$
59,020
|
$
9,867
|
|
$
26,718
|
$
8,083
|
Tax effect of non-GAAP
adjustments
|
(16,282)
|
(8,905)
|
|
(27,647)
|
(5,995)
|
Other tax
adjustments
|
(29,679)
|
156
|
|
(30,479)
|
2,929
|
Non-GAAP Income
Tax Expense (Benefit)
|
$
13,059
|
$
1,118
|
|
$
(31,408)
|
$
5,017
|
|
|
|
|
|
|
GAAP Net (Loss)
Income
|
$
(128,366)
|
$
57,216
|
|
$
(202,193)
|
$
61,901
|
Amortization of
acquired intangible assets
|
12,405
|
476
|
|
15,136
|
1,336
|
Stock-based
compensation
|
8,277
|
2,073
|
|
23,508
|
16,195
|
Tariff
refunds
|
-
|
(270)
|
|
(11,727)
|
(270)
|
Net merger, acquisition
and divestiture expense
|
7,837
|
635
|
|
8,117
|
1,274
|
IP litigation expense,
net
|
312
|
4,569
|
|
4,234
|
9,292
|
Restructuring and
other
|
5,016
|
-
|
|
9,964
|
213
|
Loss (gain) on
strategic investments
|
14
|
(27,141)
|
|
18,828
|
(26,929)
|
Income tax
effect
|
45,961
|
8,749
|
|
58,126
|
3,066
|
Non-GAAP Net
(Loss) Income
|
$
(48,544)
|
$
46,307
|
|
$
(76,007)
|
$
66,078
|
|
|
|
|
|
|
GAAP Net (Loss)
Income Per Diluted Share
|
$
(4.71)
|
$
2.06
|
|
$
(7.44)
|
$
2.17
|
Amortization of
acquired intangible assets
|
0.46
|
0.02
|
|
0.56
|
0.05
|
Stock-based
compensation
|
0.30
|
0.08
|
|
0.86
|
0.57
|
Tariff
refunds
|
-
|
(0.01)
|
|
(0.43)
|
(0.01)
|
Net merger, acquisition
and divestiture expense
|
0.29
|
0.02
|
|
0.30
|
0.04
|
IP litigation expense,
net
|
0.01
|
0.16
|
|
0.15
|
0.33
|
Restructuring and
other
|
0.18
|
-
|
|
0.37
|
0.01
|
Loss (gain) on
strategic investments
|
-
|
(0.98)
|
|
0.69
|
(0.95)
|
Income tax
effect
|
1.69
|
0.32
|
|
2.14
|
0.11
|
Non-GAAP Net
(Loss) Income Per Diluted Share
|
$
(1.78)
|
$
1.67
|
|
$
(2.80)
|
$
2.32
|
|
|
|
|
|
|
Number of shares used
in diluted per share calculation
|
27,264
|
27,803
|
|
27,159
|
28,475
|
|
|
|
|
|
|
Supplemental
Information
|
|
|
|
|
|
Days sales
outstanding
|
44
|
50
|
|
|
|
GAAP Days in
inventory
|
190
|
116
|
|
|
|
Non-GAAP Days in
inventory
|
191
|
116
|
|
|
|
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
|
|
|
October 1,
2022
|
|
October 2,
2021
|
|
October 1,
2022
|
|
October 2,
2021
|
|
Section 301 Tariff
Costs
|
$
948
|
|
$
14,145
|
|
$
2,471
|
|
$
29,150
|
|
Impact of Section 301
tariff costs to gross and operating margin
(GAAP & non-GAAP)
|
(0.3) %
|
|
(3.2) %
|
|
(0.3) %
|
|
(2.6) %
|
|
Tax effected impact of
Section 301 tariff costs to net income per
diluted share (GAAP)
|
$
(0.03)
|
|
$
(0.43)
|
|
$
(0.09)
|
|
$
(0.86)
|
|
Tax effected impact of
Section 301 tariff costs to net income per
diluted share (non-GAAP)
|
$
(0.05)
|
|
$
(0.50)
|
|
$
(0.06)
|
|
$
(0.95)
|
|
|
|
|
|
|
|
|
|
|
Certain numbers may
not total due to rounding
|
|
|
|
|
|
|
|
|
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SOURCE iRobot Corporation