iRobot Reports Second-Quarter 2020 Financial Results

BEDFORD, Mass., July 21, 2020 /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the second quarter ended June 27, 2020.

Colin Angle, chairman and chief executive officer of iRobot, stated, "Consistent with our business update last month, iRobot delivered a stronger-than-expected second-quarter performance as demand strengthened meaningfully during the quarter. Our top-line results were highlighted by 43% growth in our premium robots. Quarterly revenue in each major geographic region surpassed our initial targets entering the quarter, led by 13% growth in the U.S. and 43% expansion in Japan. Our return to operating profitability reflected the combination of higher revenue, notable improvement in our gross margin and disciplined expense management."

"We are making tangible progress in our strategy to differentiate our robots through their ability to deliver an exceptional cleaning experience as our product mix continued to shift toward our premium robots," Angle noted. "Maintaining a clean home has taken on greater prominence during this pandemic. Consumers are increasingly realizing that our floor cleaning robots, particularly our premium products such as the Roomba i7 Series and s9 Series, along with the Braava jet m6, possess the cleaning efficacy, thoughtful intelligence and home understanding to become trusted cleaning companions. Related to this, our community of connected customers grew 13% sequentially from the end of March to approximately 6.9 million at the end of Q2."

Angle concluded, "We move into the second half of 2020 with relatively low inventory levels at retailers and solid year-to-date sell-through momentum globally. Despite considerable macroeconomic uncertainty and limited visibility into the timing and magnitude of second-half orders, we are incrementally more optimistic about our second-half revenue growth prospects than we were in mid-June. Rather than an expected decline in annual revenue, we now anticipate 2020 revenue will be relatively unchanged to slightly higher than 2019. While our second-quarter profitability reflects the benefit of our tariff exclusion, we do not yet know whether this exclusion will be extended through the second half of the year. Nevertheless, we are focused on converting our second-half top-line results and prudent spending into a solid operating profitability and EPS performance."

Financial Performance Highlights

    --  Revenue for the second quarter of 2020 was $279.9 million, an increase
        of 8% from $260.2 million in the second quarter of 2019. The growth
        primarily reflected a 43% increase in premium robot (list price of $500
        or higher) revenue. Revenue for the first half of 2020 was $472.4
        million versus $497.8 million in the first half of 2019.
        --  The second-quarter 2020 revenue performance was highlighted by 13%
            growth in the U.S. and 43% in Japan over the prior year period,
            which more than offset a 14% decline in EMEA.
        --  Approximately 70% of the second-quarter 2020 revenue was estimated
            to be generated from e-commerce-related orders that span the
            company's own website and app, dedicated e-commerce websites and the
            online arms of traditional retailers. Direct-to-consumer revenue of
            $33 million grew nearly 160% from the prior year's second quarter.
    --  Second-quarter 2020 GAAP operating income was $70.3 million, compared
        with GAAP operating income of $5.3 million in the second quarter of
        2019. Second-quarter 2020 non-GAAP operating income of $40.5 million
        compared with non-GAAP operating income of $15.7 million in the same
        period one year ago. GAAP operating income for the first six months of
        2020 was $50.1 million, compared with GAAP operating income of $27.5
        million in the first half of 2019. First-half 2020 non-GAAP operating
        income was $26.1 million versus non-GAAP operating income of $48.8
        million in the same period one year ago.
    --  GAAP net income per share was $2.07 for the second quarter of 2020,
        compared with GAAP net income per share of $0.25 in the second quarter
        of 2019. Non-GAAP net income per share was $1.06 for the second quarter
        of 2020 versus non-GAAP second-quarter 2019 net income per share of
        $0.48. First-half GAAP 2020 net income per share was $1.42, compared
        with $1.03 in the first half of 2019. First-half 2020 non-GAAP net
        income per share was $0.73, compared with $1.43 in the first half of
        2019.
    --  As of June 27, 2020, the company's cash, cash equivalents and short-term
        investments were $242.3 million, compared with $263.5 million as of
        March 28, 2020 and $256.4 million as of December 28, 2019. The company,
        which has no debt, also has access to an unsecured revolving line of
        credit of $150 million, with an additional $75 million accordion
        feature.

Second-Quarter and Recent Business Highlights

    --  On April 24, the United States Trade Representative granted iRobot an
        exclusion for its Roomba® robot vacuums from Section 301 tariffs
        through August 7, 2020. The company does not yet know whether an
        extension for its exclusion beyond the expiration date will be granted.
    --  Completed all actions associated with the company's April 2020
        restructuring, recording a $1.9 million charge primarily associated with
        severance costs in the second quarter.
    --  Continued progress in expanding the company's community of engaged
        owners who have opted-in to its digital communications (in-app
        messaging, email or both) to approximately 6.9 million, up 13% since the
        end of the first quarter and nearly 110% from the same period one year
        ago.
    --  Recognition for iRobot and its products continued to grow globally with
        awards and favorable reviews. iRobot was among the winners of the
        Robotics Business Review's 2020 RBR50 Robotics Innovation Award while
        Roomba and Braava received accolades from Reviewed.com, Tom's Guide,
        Popular Mechanics, Red Dot, Real Homes and LEE.

Second-Quarter 2020 Results Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to review its second-quarter 2020 financial results, and discuss its outlook going forward. Pertinent conference call details include:



            Date:                    
            Wednesday, July 22



            Time:                    
            8:30 a.m. ET



            Call-In Number:          
            213-358-0894



            Conference ID:                                    2875976

A live webcast of the conference call, along with the conference call prepared remarks, will be accessible on the event section of the company's website at https://investor.irobot.com/events/event-details/q2-2020-irobot-corp-earnings-conference-call. An archived version of the broadcast will be available on the same website shortly after the conclusion of the live event. A replay of the telephone conference call will be available through July 29, and can be accessed by dialing 404-537-3406, passcode 2875976.

About iRobot Corp.
iRobot®, the leading global consumer robot company, designs and builds robots that empower people to do more both inside and outside of the home. iRobot created the home robot cleaning category with the introduction of its Roomba® Robot Vacuum in 2002. Today, iRobot is a global enterprise that has sold more than 30 million robots worldwide. iRobot's product line, including the Roomba and the Braava® family of mopping robots, feature proprietary technologies and advanced concepts in cleaning, mapping and navigation. iRobot engineers are building an ecosystem of robots and technologies to enable the smart home. For more information about iRobot, please visit www.irobot.com.

For iRobot Investors
Certain statements made in this press release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This press release contains express or implied forward-looking statements relating to, among other things, iRobot Corp.'s expectations regarding: second-half 2020 revenue growth prospects; full-year 2020 revenue expectations ranging from relatively unchanged to slightly higher than 2019 revenue; converting our second-half top-line results and prudent spending into solid operating profitability and EPS performance; the potential extension of our tariff exclusion; and future market conditions. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: the impact of COVID-19 on our business, the industry and markets in which we operate, and the global economy; our ability to operate in an emerging market; the financial strength of our customers and retailers; the impact of tariffs on goods imported into the United States; general economic conditions; market acceptance of and adoption of our products; and competition. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. iRobot Corp. undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise. For additional disclosure regarding these and other risks faced by iRobot Corp., see the disclosure contained in our public filings with the Securities and Exchange Commission.


                                                                                           
       
                iRobot Corporation


                                                                                         
       
           Consolidated Statements of Income


                                                                                     
         
         (in thousands, except per share amounts)


                                                                                             
         
                (unaudited)




                                                          
       For the three months ended         
              For the six months ended



                                                            
           June 27, 2020                     
              June 29, 2019            
     June 27, 2020          
     June 29, 2019

                                                                                                                                                                                     ---




     Revenue                                                                     $279,883                                      $260,172                  $472,418                 $497,833



     Cost of revenue:



     Cost of product revenue                                                      100,686                                       138,891                   214,981                  253,929


      Amortization of acquired intangible assets                                     1,185                                         3,111                     1,470                    6,188




     Total cost of revenue                                                        101,871                                       142,002                   216,451                  260,117






     Gross profit                                                                 178,012                                       118,170                   255,967                  237,716





     Operating expenses:



     Research and development                                                      36,557                                        35,650                    73,316                   70,919



     Selling and marketing                                                         49,062                                        56,409                    85,656                   95,245



     General and administrative                                                    21,856                                        20,592                    46,429                   43,499


      Amortization of acquired intangible assets                                       254                                           269                       508                      540




     Total operating expenses                                                     107,729                                       112,920                   205,909                  210,203






     Operating income                                                              70,283                                         5,250                    50,058                   27,513





     Other (expense) income, net                                                    (384)                                        1,533                     (403)                   2,813






     Income before income taxes                                                    69,899                                         6,783                    49,655                   30,326



     Income tax expense (benefit)                                                  11,283                                         (424)                    9,174                      599




     Net income                                                                   $58,616                                        $7,207                   $40,481                  $29,727

                                                                                                                                                                                     ===




     Net income per share:



     Basic                                                                          $2.10                                         $0.26                     $1.44                    $1.06



     Diluted                                                                        $2.07                                         $0.25                     $1.42                    $1.03





     Number of shares used in per share calculations:



     Basic                                                                         27,923                                        28,079                    28,110                   27,970



     Diluted                                                                       28,280                                        28,763                    28,414                   28,779







     Stock-based compensation included in above figures:



     Cost of revenue                                                                 $292                                          $405                      $819                     $783



     Research and development                                                       2,167                                         2,547                     4,645                    4,925



     Selling and marketing                                                            700                                           916                     1,466                    1,719



     General and administrative                                                     2,711                                         3,726                     4,131                    7,031




     Total                                                                         $5,870                                        $7,594                   $11,061                  $14,458

                                                                                                                                                                                     ===


                                                     
         
              iRobot Corporation


                                                 
         
         Condensed Consolidated Balance Sheets


                                                   
         
             (unaudited, in thousands)




                                                                             
              June 27, 2020          
     December 28, 2019

                                                                                                                                       ---




     Assets





     Cash and cash equivalents                                                                       $230,734                     $239,392



     Short term investments                                                                            11,560                       17,032



     Accounts receivable, net                                                                         128,334                      146,161



     Inventory                                                                                        133,055                      157,347



     Other current assets                                                                              92,555                       34,285



     Total current assets                                                                             596,238                      594,217




     Property and equipment, net                                                                       78,432                       75,988



     Operating lease right-of-use assets                                                               45,978                       47,478



     Deferred tax assets                                                                               39,237                       41,791



     Goodwill                                                                                         119,521                      118,732



     Intangible assets, net                                                                            10,424                       12,352



     Other assets                                                                                      30,938                       30,195



     Total assets                                                                                    $920,768                     $920,753

                                                                                                                                       ===




     Liabilities and stockholders' equity





     Accounts payable                                                                                 $95,522                     $116,185



     Accrued expenses                                                                                  73,745                       81,768



     Deferred revenue and customer advances                                                             3,512                        4,549



     Total current liabilities                                                                        172,779                      202,502



     Operating lease liabilities                                                                       52,819                       54,928



     Deferred tax liabilities                                                                           1,042                          912



     Other long-term liabilities                                                                       12,066                       10,342



     Total long-term liabilities                                                                       65,927                       66,182




     Total liabilities                                                                                238,706                      268,684



     Stockholders' equity                                                                             682,062                      652,069




     Total liabilities and stockholders' equity                                                      $920,768                     $920,753

                                                                                                                                       ===


                                                   
              
                iRobot Corporation


                                          
              
                Consolidated Statements of Cash Flows


                                                
              
                (unaudited, in thousands)




                                                 
              For the six months ended



                                                      
              June 27, 2020                          
     June 29, 2019

                                                                                                                             ---


              
                Cash flows from operating activities:



              Net income                                                       $40,481                                   $29,727


               Adjustments to reconcile net income to net cash provided by
                operating activities, net of the effects
    of acquisition:


               Depreciation and
                amortization                                                     17,784                                    17,905


               Stock-based
                compensation                                                     11,061                                    14,458


               Deferred income taxes,
                net                                                               2,579                                       535



              Other                                                              3,162                                     3,106


               Changes in operating assets and liabilities -(use) source


               Accounts receivable                                               17,891                                    67,808



              Inventory                                                         24,137                                  (27,112)


               Other current assets                                            (57,813)                                 (14,246)


               Accounts payable                                                (20,576)                                 (52,835)


               Accrued expenses and
                other liabilities                                              (10,549)                                 (18,043)


               Net cash provided by
                operating activities                                             28,157                                    21,303






              
                Cash flows from investing activities:


               Additions of property
                and equipment                                                  (18,968)                                 (14,705)


               Change in other assets                                           (2,125)                                  (4,541)


               Cash paid for business
                acquisition, net of
                cash acquired                                                         -                                  (2,817)


               Sales and maturities
                of investments                                                    7,000                                     5,880


               Net cash used in
                investing activities                                           (14,093)                                 (16,183)






              
                Cash flows from financing activities:


               Proceeds from employee
                stock plans                                                       3,690                                     4,680


               Income tax withholding
                payment associated
                with restricted stock
                vesting                                                         (1,816)                                  (7,277)


               Stock repurchases                                               (25,000)                                        -


               Net cash used in
                financing activities                                           (23,126)                                  (2,597)





               Effect of exchange
                rate changes on cash
                and cash equivalents                                                404                                     (101)


               Net (decrease)
                increase in cash and
                cash equivalents                                                (8,658)                                    2,422


               Cash and cash
                equivalents, at
                beginning of period                                             239,392                                   130,373


               Cash and cash
                equivalents, at end
                of period                                                      $230,734                                  $132,795

                                                                                                                             ===


                                                                          
             
                iRobot Corporation


                                                                       
             
                Supplemental Information


                                                                            
              
                (unaudited)




                                  
        For the three months ended    
            For the six months ended



                                     
           June 27, 2020               
             June 29, 2019                       
      June 27, 2020          
     June 29, 2019

                                                                                                                                                                     ---


     Revenue by Geography: *




      Domestic                                              $140,146                               $124,472                             $222,113                   $238,537


      International                                          139,737                                135,700                              250,305                    259,296



     Total                                                 $279,883                               $260,172                             $472,418                   $497,833

                                                                                                                                                                     ===




     Units Shipped *


      Vacuum                                                     930                                    935                                1,553                      1,699


      Mopping                                                    114                                    139                                  210                        251



     Total                                                    1,044                                  1,074                                1,763                      1,950






     Revenue by Product Category **


      Vacuum***                                                 $251                                   $237                                 $420                       $458


      Mopping***                                                  29                                     23                                   52                         40



     Total                                                     $280                                   $260                                 $472                       $498

                                                                                                                                                                     ===



      Average gross
       selling prices
       for robot units                                          $307                                   $296                                 $310                       $307




      Section 301
       tariff costs *                                       $(6,609)                                $4,982              
      $                  -                    $8,500


      Section 301
       tariff impact
       on gross and
       operating
       margin                                                  2.4 %                                (1.9)%                                  -%                   (1.7)%




      Headcount                                                1,120                                  1,120


              * in thousands



              ** in millions


               *** includes accessory
                revenue

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. 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.

Tariff Refunds: iRobot was granted a Section 301 List 3 Tariff Exclusion in April 2020, which temporarily eliminates tariffs on the Company's products imported from China until August 7, 2020 and entitles the Company to a refund of all related tariffs previously paid since September 2018. We exclude the refunds for tariffs paid in 2018 and 2019 from our 2020 second-quarter and year-to-date non-GAAP measures because those tariff refunds associated with tariff costs incurred in the past have no impact to our current period earnings.

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. 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.

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.

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.

Restructuring and Other: Restructuring charges are related to one-time actions associated with workforce reductions, including severance costs, certain professional fees and other 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.

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 that are not reflective of income tax expense incurred as a result of current period earnings. These certain tax items include, among other non-recurring tax items, impacts from the Tax Cuts and Jobs Act of 2017 and stock-based compensation windfalls/shortfalls. 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



                                      
           June 27, 2020                       
              June 29, 2019                                        
     June 27, 2020            
     June 29, 2019

                                                                                                                                                                                                  ---


     GAAP Revenue                                               $279,883                                     $260,172                                              $472,418                    $497,833





     GAAP Gross Profit                                          $178,012                                     $118,170                                              $255,967                    $237,716


      Amortization of acquired
       intangible assets                                            1,185                                        3,111                                                 1,470                       6,188


      Stock-based compensation                                        292                                          405                                                   819                         783



     Tariff refunds                                             (40,017)                                                                                         (40,017)                          -



      Non-GAAP Gross Profit                                      $139,472                                     $121,686                                              $218,239                    $244,687

                                                                                                                                                                                                  ===

      Non-GAAP Gross Profit Margin                                 49.8 %                                      46.8 %                                               46.2 %                     49.2 %




      GAAP Operating Expenses                                    $107,729                                     $112,920                                              $205,909                    $210,203


      Amortization of acquired
       intangible assets                                            (254)                                       (269)                                                (508)                      (540)


      Stock-based compensation                                    (5,578)                                     (7,189)                                             (10,242)                   (13,675)


      Net merger, acquisition and
       divestiture income (expense)                                    66                                        (143)                                                  566                       (295)


      IP litigation expense, net                                  (1,137)                                         676                                               (1,753)                        207


      Restructuring and other                                     (1,863)                                                                                          (1,863)                          -



      Non-GAAP Operating Expenses                                 $98,963                                     $105,995                                              $192,109                    $195,900

                                                                                                                                                                                                  ===

      Non-GAAP Operating Expenses
       as a % of Non-GAAP Revenue                                  35.4 %                                      40.7 %                                               40.7 %                     39.4 %




      GAAP Operating Income                                       $70,283                                       $5,250                                               $50,058                     $27,513


      Amortization of acquired
       intangible assets                                            1,439                                        3,380                                                 1,978                       6,728


      Stock-based compensation                                      5,870                                        7,594                                                11,061                      14,458



     Tariff refunds                                             (40,017)                                                                                         (40,017)                          -


      Net merger, acquisition and
       divestiture (income) expense                                  (66)                                         143                                                 (566)                        295


      IP litigation expense, net                                    1,137                                        (676)                                                1,753                       (207)


      Restructuring and other                                       1,863                                                                                             1,863                           -



      Non-GAAP Operating Income                                   $40,509                                      $15,691                                               $26,130                     $48,787

                                                                                                                                                                                                  ===

      Non-GAAP Operating Margin                                    14.5 %                                       6.0 %                                                5.5 %                      9.8 %




      GAAP Income Tax Expense
       (Benefit)                                                  $11,283                                       $(424)                                               $9,174                        $599


      Tax effect of non-GAAP
       adjustments                                                (1,892)                                       1,797                                               (3,723)                      3,622


      Other tax adjustments                                           206                                        1,461                                               (1,178)                      5,527


      Non-GAAP Income Tax Expense                                  $9,597                                       $2,834                                                $4,273                      $9,748

                                                                                                                                                                                                  ===




     GAAP Net Income                                             $58,616                                       $7,207                                               $40,481                     $29,727


      Amortization of acquired
       intangible assets                                            1,439                                        3,380                                                 1,978                       6,728


      Stock-based compensation                                      5,870                                        7,594                                                11,061                      14,458



     Tariff refunds                                             (40,017)                                                                                         (40,017)                          -


      Net merger, acquisition and
       divestiture (income) expense                                 (741)                                         143                                               (1,241)                        295


      IP litigation expense, net                                    1,137                                        (676)                                                1,753                       (207)


      Restructuring and other                                       1,863                                                                                             1,863                           -


      (Gain) loss on strategic
       investments                                                      -                                       (629)                                                 (87)                      (572)



     Income tax effect                                             1,686                                      (3,258)                                                4,901                     (9,149)



      Non-GAAP Net Income                                         $29,853                                      $13,761                                               $20,692                     $41,280

                                                                                                                                                                                                  ===


                                                                                           
              
                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



                                               
           June 27, 2020                         
              June 29, 2019                                           
        June 27, 2020          
     June 29, 2019

                                                                                                                                                                                                                ---

               GAAP Net Income Per Diluted
                Share                                                        $2.07                                          $0.25                                                     $1.42                      $1.03


               Amortization of acquired
                intangible assets                                             0.05                                           0.12                                                      0.07                       0.24


               Stock-based compensation                                       0.21                                           0.26                                                      0.39                       0.50



              Tariff refunds                                               (1.41)                                                                                                 (1.41)                         -


               Net merger, acquisition and
                divestiture (income) expense                                (0.03)                                                                                                 (0.04)                      0.01


               IP litigation expense, net                                     0.04                                         (0.02)                                                     0.06                     (0.01)


               Restructuring and other                                        0.07                                                                                                    0.07                          -


               (Gain) loss on strategic
                investments                                                      -                                        (0.02)                                                                             (0.02)



              Income tax effect                                              0.06                                         (0.11)                                                     0.17                     (0.32)


               Non-GAAP Net Income Per
                Diluted Share                                                $1.06                                          $0.48                                                     $0.73                      $1.43

                                                                                                                                                                                                                ===



               Number of shares used in
                diluted per share
                calculation                                                 28,280                                         28,763                                                    28,414                     28,779







              Section 301 Tariff Costs


               Section 301 tariff costs                                   $(6,609)                                        $4,982                             
         $                     -                    $8,500


               Impact of Section 301 tariff
                costs to gross and operating
                margin (GAAP & non-                                          2.4 %                                        (1.9)%                                                       -%                   (1.7)%
    GAAP)


               Impact of Section 301 tariff
                costs to net (loss) income
                per diluted share                                            $0.23                                        $(0.17)                            
         $                     -                   $(0.30)
    (GAAP & non-GAAP)





              Supplemental Information


               Days sales outstanding                                           42                                             32



              Days in inventory                                                86                                            127

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SOURCE iRobot Corporation