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Irobot Reports Third-Quarter Financial Results Meets Revenue; Exceeds Earnings Expectations

The following excerpt is from the company's SEC filing.

iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the third quarter ended September 26, 2015.

“Q3 revenue met our expectations due to continued strong growth in the United States and China, partially offset by softness in Japan. Q3 earnings exceeded expectations in part because we decided to curtail the planned Japan investment, as the overall economic climate in the region was dampening its impact. Although we expect continued strong growth in the U.S. and China, we are revising our f ull-year revenue expectations to $610 to $615 million,

due to a slower than expected recovery in Japan and our continued caution in a few other international markets,” said Colin Angle, chairman and chief executive officer of iRobot.

“We are increasing our full year expectations for EPS and Adjusted EBITDA as we have reduced our spending plans for Q4 in order to offset the lower revenue. We will also be recording a gain on investment of $0.06 per share, or $3 million pre-tax income, from the sale of an investment we made several years ago that was not previously contemplated in our expectations. We now expect full-year earnings per share of $1.35

and Adjusted EBITDA of $89

million. These expectations continue to reflect our confidence that domestic Home Robot revenue will grow in the high teens for the full year, and that China and many European markets will also show significant growth.

“While we are experiencing weakness in a few isolated international markets, we expect the macro impact to be temporary. Global spending on robotic vacuum cleaners continues to grow,

and we are maintaining our leadership position in the market despite several recent entrants in the category. We remain optimistic about the industry and our growth prospects in the coming years.

“On September 16, we launched the Roomba® 980, our first connected home robot with navigating and mapping capabilities. The reaction we have received has been tremendous, exceeding our expectations. The Roomba 980 is the first iRobot product to incorporate the VSLAM technology we acquired as part of acquisition of Evolution Robotics. This flagship Roomba is our first step into the Internet of Things, enabling new functionality today, such as remote app-control and systematic navigation, as well as paving the way for new products and capabilities in the future. We look forward to discussing our strategies to take advantage of these advances in other forums in coming months.”

Financial Results

Revenue for the third quarter of 2015 was $143.6 million, compared with $143.5 million for the same quarter one year ago, in line with expectations.

Net income in the third quarter of 2015 was $12.8 million, compared with $14.6 million in the third quarter of 2014, ahead of expectations.

Quarterly earnings per share were $0.42 for the third quarter of 2015, compared with $0.48 in the third quarter last year. Adjusted EBITDA for the third quarter of 2015 was $25.9 million, compared with $29.7 million in the third quarter of 2014. Both EPS and Adjusted EBITDA were ahead of expectations.

Re-purchased $20 million of stock under the stock repurchase plan in the quarter.

Business Highlights

Fourth-quarter year-over-year revenue growth of 26 to 29% expected. Full-year expectations imply U.S. revenue growth in high teens, growth in China of more than 70% and substantial growth in many larger EMEA countries.

Successfully launched the first connected Roomba, the 980, on the iRobot website and began shipping into U.S. retail and overseas markets for the holidays; U.S. Amazon rated 4.5 out of 5 stars.

Collecting insightful Roomba 980 usage information to inform future investments.

Received and fulfilled several Defense & Security orders, announced two significant new IDIQ contracts totaling $96 million and ended the quarter with $28 million in backlog.

Financial Expectations

Management provides the following expectations with respect to the fourth quarter and fiscal year ending January 2, 2016.

Q4 2015:

$200 - $205 million

Earnings Per Share

$0.53 - $0.58

$32 - $34 million

Fiscal Year 2015:


$610 - $615 million

$625 - $635 million

$1.35 - $1.40

$1.25 - $1.35

$89 - $91...