BREAKING: iRobot Corporation just pre-announced that its third quarter revenue and earnings will be hurt by production delays in the Roomba 500 Series by its Chinese contractor and by unanticipated legal expenses related to the Robotic FX lawsuit, resulting in a pre-tax loss of $1 million to $1.5 million and revenue of $63-64 million. However, the company reaffirmed full-year guidance with the caveat that it assumes Roomba 500 production will result in strong deliveries and sell-through to customers in the fourth quarter and that there will be no additional unforeseen legal expenses.
iRobot Roomba models, particularly the high-end Roomba 560 and Roomba 570, have been back-ordered for some time, although some have started to appear at store shelves and be shipped. Meanwhile, the Home Shopping Network has been selling scads of them. (Check the Roomba Buyers Guide.) The stock dropped into the 18's before the open, but I think the key issue for the company remains the lawsuit with Robotic FX, by far. The Roomba 500 is a great product and will sell very well, provided that the contractor can start cranking them out. It isn't unusual for a completely new product to have a slower than expected ramp. But they will need to keep ramping and get product over here on that boat ASAP. (I'm wondering if iRobot will need to air-ship any to meet Xmas demand?)
The third quarter conference call has been scheduled for Oct. 25 at 8:30 a.m.
Here is the full press release:
BURLINGTON, Mass.--(BUSINESS WIRE)--iRobot Corp. (Nasdaq: IRBT - News) today announced that its third quarter 2007 financial results will be impacted by initial production delays experienced on the iRobot® Roomba® 500 Series Vacuum Cleaning Robot. "Our financial expectations for 2007 remain unchanged," said Colin Angle, iRobot chief executive officer. "However, the production ramp up by our new contract manufacturer was slower than our initial targeted projections and consequently, revenue from delayed shipments will be recognized in the fourth quarter, resulting in revenue for the third quarter of between $63 million and $64 million," he added. "This shift from the third to fourth quarters, coupled with unanticipated litigation expenses associated with our legal actions against a former employee and his company, will result in a pre-tax loss of $1 million to $1.5 million for the third quarter."
The company reaffirmed its full year 2007 financial expectations announced on July 25, 2007. The company continues to expect revenues to be between $233 million to $243 million and pre-tax income to be between $3 million to $5 million. "While there is by definition uncertainty based on the seasonality of our business, we are optimistic about the prospects for the Roomba 500 series in the upcoming holiday season and our ability to deliver against our full-year financial expectations. Historically, more than two-thirds of our revenues are recorded in the second half of the year due to the highly seasonal, consumer-driven nature of our business. Because of the difficulty of predicting the precise timing of shipments between the third and fourth quarters, we announce our expectations for the business in six-month increments," said Geoff Clear, iRobot chief financial officer. "There are at least three factors critical to our achieving our full-year financial projections: continued successful production of Roomba 500, strong sell through of Roomba 500 in our retail channels and no unanticipated legal expenses," he added.
Third Quarter Earnings Release and Conference Call
iRobot will announce its third quarter financial results after close of market on Oct. 24, at which time additional details will be provided. Management will host a conference call, open to all interested investors, to discuss its third quarter 2007 financial results and outlook for future financial performance on Thursday, Oct. 25. Pertinent details include:
Date: Thursday, Oct. 25, 2007
Time: 8:30 a.m. EDT
Call-In Number: 719-457-2643
A live, audio broadcast of the conference call also will be available at http://investors.irobot.com/events.cfm. An archived version of the broadcast will be available on the same Web site shortly after the conclusion of the live event. A replay of the telephone conference call will be available through midnight on Nov. 1, and can be accessed by dialing 719-457-0820, access code 5484379.
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