irbt-20230701

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________________________

FORM 10-Q

______________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED July 1, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 001-36414

______________________________________________

iROBOT CORPORATION

(Exact name of registrant as specified in its charter)

______________________________________________


Delaware			77-0259335
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

8 Crosby Drive

Bedford, MA 01730

(Address of principal executive offices, including zip code)

(781) 430-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	IRBT	The Nasdaq Stock Market LLC

______________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares outstanding of the Registrant’s Common Stock as of July 28, 2023 was 27,696,213.

iROBOT CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED JULY 1, 2023

INDEX


			Page
PART I: FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of July 1 , 2023 and December 31, 2022			3
Consolidated Statements of Operations for the three and six months ended July 1 , 2023 and July 2, 2022			4
Consolidated Statements of Comprehensive Loss for the three and six months ended July 1, 2023 and July 2, 2022			5
Consolidated Statements of Stockholders' Equity for the three an d si x months ended July 1, 2023 and July 2, 2022			6
Consolidated Statements of Cash Flows for the six months ended July 1, 2023 and July 2, 2022			8
Notes to Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures about Market Risk			34
Item 4. Controls and Procedures			34

PART II: OTHER INFORMATION

Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 5. Other Information			37
Item 6. Exhibits			38
Signatures			39

iROBOT CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)


	July 1, 2023		December 31, 2022
ASSETS
Current 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
Current liabilities:
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
Commitments and contingencies (Note 10)
Preferred stock, 5,000 shares authorized and none outstanding	—		—
Common stock, $0.01 par value, 100,000 shares authorized; 27,696 and 27,423 shares issued and outstanding, respectively	277		274
Additional paid-in capital	272,190		257,498
Retained earnings	37,503		199,415
Accumulated other comprehensive income	15,449		18,529
Total stockholders’ equity	325,419		475,716
Total liabilities and stockholders’ equity	$	634,139	$	835,443

The accompanying notes are an integral part of the consolidated financial statements.

iROBOT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended				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

The accompanying notes are an integral part of the consolidated financial statements.

iROBOT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	Three Months Ended				Six Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
Net loss	$	(80,800)	$	(43,421)	$	(161,912)	$	(73,827)
Other comprehensive (loss) income, net of tax:
Net foreign currency translation adjustments	1,909		(7,360)		3,629		(11,375)
Net unrealized gains on cash flow hedges, net of tax	3,797		24,934		1,974		32,587
Net gains on cash flow hedge reclassified into earnings, net of tax	(3,280)		(2,816)		(8,683)		(4,050)

Total comprehensive loss	$	(78,374)	$	(28,663)	$	(164,992)	$	(56,665)

The accompanying notes are an integral part of the consolidated financial statements.

iROBOT CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

(unaudited)



	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income ("AOCI")		Total Stockholders’ Equity
	Shares	Value
Balance at April 1, 2023	27,594	$	276	$	263,837	$	118,303	$	13,023	$	395,439


Vesting of restricted stock units	108	1		(1)						—
Stock-based compensation				8,573						8,573
Stock withheld to cover tax withholdings requirements upon restricted stock vesting	(6)	—		(219)						(219)
Other comprehensive income								2,426		2,426



Net loss						(80,800)				(80,800)
Balance at July 1, 2023	27,696	$	277	$	272,190	$	37,503	$	15,449	$	325,419



	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income ("AOCI")		Total Stockholders’ Equity
	Shares	Value
Balance at December 31, 2022	27,423	$	274	$	257,498	$	199,415	$	18,529	$	475,716
Issuance of common stock under employee stock plans	9	—		9						9

Vesting of restricted stock units	307	3		(3)						—
Stock-based compensation				16,505						16,505
Stock withheld to cover tax withholdings requirements upon restricted stock vesting	(43)	—		(1,819)						(1,819)
Other comprehensive loss								(3,080)		(3,080)


Net loss						(161,912)				(161,912)
Balance at July 1, 2023	27,696	$	277	$	272,190	$	37,503	$	15,449	$	325,419

The accompanying notes are an integral part of the consolidated financial statements.

iROBOT CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

(unaudited)



	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income ("AOCI")		Total Stockholders’ Equity
	Shares	Value
Balance at April 2, 2022	27,116	$	271	$	229,133	$	455,304	$	10,494	$	695,202
Issuance of common stock under employee stock plans	61	1		2,290						2,291

Vesting of restricted stock units	54	—		—						—
Stock-based compensation				8,023						8,023
Stock withheld to cover tax withholdings requirements upon restricted stock vesting	(2)	—		(77)						(77)
Other comprehensive income								14,758		14,758


Net loss						(43,421)				(43,421)
Balance at July 2, 2022	27,229	$	272	$	239,369	$	411,883	$	25,252	$	676,776



	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income ("AOCI")		Total Stockholders’ Equity
	Shares	Value
Balance at January 1, 2022	27,006	$	270	$	222,653	$	485,710	$	8,090	$	716,723
Issuance of common stock under employee stock plans	84	1		3,087						3,088

Vesting of restricted stock units	166	1		(1)						—
Stock-based compensation				15,231						15,231
Stock withheld to cover tax withholdings requirements upon restricted stock vesting	(27)	—		(1,601)						(1,601)
Other comprehensive income								17,162		17,162


Net loss

SEC Form 10-Q filed by iRobot Corporation