Tag: Financial Results

Ballard Reports Q3 2022 Results

VANCOUVER, BC, Nov. 7, 2022 – Ballard Power Systems (NASDAQ: BLDP) (TSX: BLDP) today announced consolidated financial results for the third quarter ended September 30, 2022. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS).

“We made important customer progress across our verticals during Q3, while also advancing our global manufacturing strategy and product cost reduction initiatives,” said Mr. Randy MacEwen, President and CEO. “On the customer front, we continued to focus on platform wins, with commercial milestones achieved in our truck and rail verticals. In truck, we announced an order from Quantron for 140 fuel cell engines to support their planned deployment of heavy-duty fuel cell trucks in Europe. In rail, we announced orders across three continents, including an order from Siemens Mobility to power seven trains in the Berlin-Brandenburg region and an LOI for up to an additional 200 engines for the European commuter rail market. Our total order backlog grew 11 percent from last quarter to a total of $102 million, with Europe now contributing over half of our total backlog.”

“As part of our ‘local for local’ global manufacturing strategy, we announced our plan to invest $130 million in a new MEA manufacturing facility in Shanghai, with an annual production capacity of approximately 13 million MEAs, which can supply approximately 20,000 fuel cell engines,” Mr. MacEwen continued. “With the facility planned to be in operation in 2025 to support anticipated growth in MEA demand, this investment is expected to reduce MEA manufacturing costs, align with China’s fuel cell value chain localization policy, and position Ballard more strongly in the large China market.”

Mr. MacEwen added, “We continue to advance on our product cost reduction roadmap, with measured progress from technology innovation, supply chain developments and advanced manufacturing initiatives. We are running ahead of our cost reduction targets which we expect to enable significant gross margin expansion in our long-term financial plan.”

“This quarter our revenue and gross margin were $21.3 million and (22)%, respectively. As previously communicated, we continue to see a challenging gross margin picture which we expect to persist through 2023 until our volume ramps and our product cost reduction initiatives move into production. We exited the quarter with a strong balance sheet to support our growth strategy.”

Q3 2022 Financial Highlights
(all comparisons are to Q3 2021 unless otherwise noted)

  • Total revenue was $21.3 million in the quarter, down 15% year-over-year.
    • Power Products revenue of $15.9 million decreased 2%, driven by lower shipments of fuel cell products.
      • Heavy-Duty revenues of $12.1 million increased 8% due to increased sales in North America, Europe and other areas offsetting lower sales in China.
      • Stationary Power Generation revenues of $2.1 million increased 9% due to increased sales in North America, offsetting lower sales in Europe.
      • Material Handling revenues of $1.7 million decreased 46%, primarily as a result of lower shipments to Plug Power.
    • Technology Solutions revenue of $5.5 million decreased 39% due primarily to decreased amounts earned on the Weichai Ballard JV and Audi programs.
  • Gross margin was (22)% in the quarter, a decrease of 33-points, driven by a combination of shift to lower overall product margin and service revenue mix including the impacts of pricing strategy, investment in manufacturing capacity, increases in supply costs and inventory adjustments.
  • Total Operating Expenses and Cash Operating Costs3 were $40.0 million and $30.0 million in the quarter, an increase of 46% and 32%, respectively. Increases were driven primarily by higher expenditure on research, technology and product development activities. Costs were also higher as a result of increased general and administrative expenses.
  • Adjusted EBITDA3 was ($35.1) million, compared to ($23.1) million in Q3 2021, primarily a result of the decrease in gross margin and increase in Cash Operating Costs.
  • Ballard received approximately $31.8 million of new orders in Q3, and delivered orders valued at $21.3 million, resulting in an Order Backlog of approximately $101.7 million at end-Q3. Order Backlog growth was driven predominantly by increased orders from Europe, which now represents approximately 55% of the total Order Backlog, compared to approximately 38% at end-Q3 2021.
  • The 12-month Order Book was $51.0 million at end-Q3, a decrease of $10.4 million from the end of Q2 2022.

Order Backlog ($M)

Order Backlog
at End-Q2 2022

Orders Received
in Q3 2022

Orders Delivered
in Q3 2022

Order Backlog
at End-Q3 2022

Total Fuel Cell
Products & Services

$91.2

$31.8

$21.3

$101.7

2022 Outlook

Ballard 2022 Total Operating Expense4 and Capital Expenditure5 guidance remains unchanged, but now expects to be at the higher end of the Total Operating Expense range and the lower end of the Capital Expenditure range.

2022

Guidance

Total Operating Expense4

$130 – $150 million

Capital Expenditure5

$30 – $50 million

Q3 2022 Financial Summary

(Millions of U.S. dollars,
except per share amounts)

 

 Three months ended September 30

2022

2021

% Change

REVENUE

Fuel Cell Products & Services:1,2

  Heavy Duty Motive

$12.1

$11.2

8 %

  Material Handling

$1.7

$3.1

(46) %

  Stationary Power Generation

$2.1

$1.9

9 %

  Sub-Total

$15.9

$16.3

(2) %

  Technology Solutions

$5.5

$9.0

(39) %

Total Fuel Cell Products & Services Revenue

$21.3

$25.2

(15) %

PROFITABILITY

Gross Margin $

($4.8)

$2.8

(268) %

Gross Margin %

(22) %

11 %

(33) pts

Total Operating Expenses

$40.0

$27.4

46 %

Cash Operating Costs3

$30.0

$22.7

32 %

Equity (loss) in JV & Associates

($1.0)

($4.1)

76 %

Adjusted EBITDA3

($35.1)

($23.1)

(52) %

Net (Loss) from continuing operations

($42.9)

($30.8)

(39) %

Earnings Per Share

($0.14)

($0.10)

(40) %

CASH

Cash provided by (used in) Operating Activities:

Cash Operating (Loss)

($35.7)

($20.8)

(71) %

Working Capital Changes

$5.4

$6.4

(16) %

Cash provided by (used in) Operating Activities

($30.3)

($14.4)

(110) %

Cash Reserves

$957.4

$1,222.3

(22) %

For a more detailed discussion of Ballard Power Systems’ third quarter 2022 results, please see the company’s financial statements and management’s discussion & analysis, which are available at www.ballard.com/investors, www.sedar.com and www.sec.gov/edgar.shtml.

Conference Call

Ballard will hold a conference call on Monday, November 7, 2022 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review third quarter 2022 operating results. The live call can be accessed by dialing +1.604.638.5340. Alternatively, a live audio and webcast can be accessed through a link on Ballard’s homepage (www.ballard.com). Following the call, the audio webcast and presentation materials will be archived in the ‘Earnings, Interviews & Presentations’ area of the ‘Investors’ section of Ballard’s website (www.ballard.com/investors).

About Ballard Power Systems

Ballard Power Systems’ (NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for a sustainable planet. Ballard zero-emission PEM fuel cells are enabling electrification of mobility, including buses, commercial trucks, trains, marine vessels, and stationary power. To learn more about Ballard, please visit www.ballard.com.

Important Cautions Regarding Forward-Looking Statements

This release contains forward-looking statements concerning the hydrogen economy and markets for our products and the effects of governmental regulations on such markets, expected revenues, operating expenses, capital expenditures, corporate development activities, impacts of investments in manufacturing and R&D capabilities and market growth, and our carbon emissions goals. These forward-looking statements reflect Ballard’s current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any such statements are based on Ballard’s assumptions relating to its financial forecasts and expectations regarding its product development efforts, manufacturing capacity, and market demand. For a detailed discussion of the factors and assumptions that these statements are based upon, and factors that could cause our actual results or outcomes to differ materially, please refer to Ballard’s most recent management discussion & analysis. Other risks and uncertainties that may cause Ballard’s actual results to be materially different include general economic and regulatory changes, detrimental reliance on third parties, successfully achieving our business plans and achieving and sustaining profitability. For a detailed discussion of these and other risk factors that could affect Ballard’s future performance, please refer to Ballard’s most recent Annual Information Form. These forward-looking statements are provided to enable external stakeholders to understand Ballard’s expectations as at the date of this release and may not be appropriate for other purposes. Readers should not place undue reliance on these statements and Ballard assumes no obligation to update or release any revisions to them, other than as required under applicable legislation.

Further Information
Kate Charlton +1.604.453.3939, investors@ballard.com or media@ballard.com

Endnotes

1

We report our results in the single operating segment of Fuel Cell Products and Services. Our Fuel Cell Products and Services segment consists of the sale and service of PEM fuel cell products for our power product markets of Heavy Duty Motive (consisting of bus, truck, rail and marine applications), Material Handling and Stationary Power Generation, as well as the delivery of Technology Solutions, including engineering services, technology transfer and the license and sale of our extensive intellectual property portfolio and fundamental knowledge for a variety of fuel cell applications.

2

The UAV market has been classified as a discontinued operation in our third quarter of 2020 consolidated condensed financial statements. As such, the assets of the UAV market have been classified as assets held for sale as of September 30, 2020. Furthermore, the historic operating results of the UAV market for 2020 have been removed from continuing operating results and are instead presented separately in the statement of comprehensive income as income from discontinued operations. 

3

Note that Cash Operating Costs, EBITDA, and Adjusted EBITDA are non-GAAP measures. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other companies. Ballard believes that Cash Operating Costs, EBITDA, and Adjusted EBITDA assist investors in assessing Ballard’s operating performance. These measures should be used in addition to, and not as a substitute for, net income (loss), cash flows and other measures of financial performance and liquidity reported in accordance with GAAP. For a reconciliation of Cash Operating Costs, EBITDA, and Adjusted EBITDA to the Consolidated Financial Statements, please refer to the tables below.

Cash Operating Costs measures operating expenses excluding stock-based compensation expense, depreciation and amortization, impairment losses or recoveries on trade receivables, restructuring charges, acquisition related costs, the impact of unrealized gains or losses on foreign exchange contracts, and financing charges. EBITDA measures net loss from continuing operations excluding finance expense, income taxes, depreciation of property, plant and equipment, and amortization of intangible assets. Adjusted EBITDA adjusts EBITDA for stock-based compensation expense, transactional gains and losses, asset impairment charges, finance and other income, the impact of unrealized gains or losses on foreign exchange contracts, and acquisition related costs.

4

Total Operating Expenses refer to the measure reported in accordance with IFRS.

5

Capital Expenditure is defined as Additions to property, plant and equipment and Investment in other intangible assets as disclosed in the Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

Three months ended September 30

Cash operating costs

2022

2021

$ Change

Research and product development

$     25,263

$         16,566

$      8,697

General and administrative

8,727

6,768

1,959

Sales and marketing

3,486

3,570

(84)

Operating expenses

$     37,476

$         26,904

$    10,572

Research and product development (cash operating cost)

$     21,201

$         14,174

$      7,027

General and administrative (cash operating cost)

5,679

5,349

330

Sales and marketing (cash operating cost)

3,115

3,211

(96)

Cash operating costs

$     29,995

$         22,734

$      7,261

(Expressed in thousands of U.S. dollars)

Three months ended September 30,

EBITDA and adjusted EBITDA

2022

2021

        $ Change

Net loss from continuing operations

$     (42,881)

$     (30,844)

$        (12,037)

Depreciation and amortization

3,979

2,167

1,812

Finance expense

324

335

(11)

Income taxes (recovery)

(420)

3

(423)

EBITDA

$      (38,998)

$     (28,339)

$        (10,659)

Stock-based compensation expense

2,828

2,477

351

Acquisition related costs

2,261

535

1,726

Finance and other (income) loss

(2,781)

1,545

(4,326)

Impairment loss on assets

–

263

(263)

Impact of unrealized (gains) losses on foreign
     exchange contracts

1,588

440

1,148

Adjusted EBITDA

$      (35,102)

$     (23,079)

$        (12,023)

 

SOURCE Ballard Power Systems Inc.

************************

Disclaimer
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.

WISeKey Reports FY 2021 Audited Consolidated Financial Results

WISeKey Reports FY 2021 Audited Consolidated Financial Results

Schedules conference call for Friday, April 29 at 3:00 pm CET (9:00 am ET)

  • Revenue growth: 51% increase in FY 2021 revenue to $22.3 million, as compared to $14.8 million in FY 2020.
  • Increase in gross profit margin: FY 2021 gross profit margin increased to 41% from 37% in FY 2020.
  • Strong cash position: cash and cash equivalents together with restricted cash increased to $34.4 million at December 31, 2021, from $21.8 million at December 31, 2020.

Geneva, Switzerland, April 14, 2022 – Ad-Hoc announcement pursuant to Art. 53 of SIX Listing Rules– WISeKey International Holding Ltd. (NASDAQ: WKEY / SIX: WIHN) (“WISeKey” or the “Company” or the “Group”), a leading cybersecurity and IoT company, announced today its audited consolidated financial results for full year (FY) 2021 (period ended December 31, 2021).

Carlos Moreira, WISeKey’s Founder and CEO, noted, “In 2021, demand for WISeKey’s products and services substantially increased. With a 51% increase in revenue, the Group is back on its growth path, supported by investments in R&D aiming to remain at the edge of technology, and investments focused on strengthening our sales force. A large part of our revenue increase came from the new AI revenue stream after the acquisition of a 51% controlling interest in arago GmbH (“arago”) in February 2021. During the year, we invested significantly in arago to streamline its operations and to try to get the company to improve its operational efficiencies.”

Mr. Moreira added, “2022 is set to be another strong year for WISeKey on several fronts. Demand for our IoT products remains very high and we have already started scheduling deliveries for 2023. While we continue to face semiconductors supply chain shortages, we are looking at every option to further shorten customer delivery times. WISeKey is positioning itself as a strong, reliable and customer-focused supplier. We are progressing well on our two new revenue streams with the launch of the first WISeSaT PocketQube Satellite in January 2022 and the expansion of the NFT portfolio available on our WISe.ART NFT platform which already includes over 300 artists.”

As regards to operational costs, in 2022 we will continue to invest strongly in research and development, following $7.0 million of investments made in 2021, as we have re-focused our efforts on software components that form the USP for our IoT products.

The final significant movement on the balance sheet is the increase in the balance of our convertible notes, which relates to the issuance of two new convertible bonds for a total of $22 million in June 2021. This balance has been currently reduced to just over $10 million, and under the terms of the agreement, we have an additional $11.5 million available to draw down.

WISeKey’s FY21 audited consolidated financial results are available at https://www.wisekey.com/company/investors/financial-reports/.

2021 KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS:

  • Revenue growth: 51% increase in revenue to $22.3 million for FY 2021, compared to $14.8 million in FY 2020.
  • Increase in gross profit margin: FY 2021 gross profit margin increased to 41% from 37% in FY 2020.
  • Strong cash position: cash and cash equivalents together with restricted cash increased to $34.4 million at December 31, 2021, from $21.8 million at December 31, 2020.
  • Acquired 51% controlling interest in arago GmbH (arago) on February 1, 2021: arago’s leading technology provides AI to enterprises, globally, through Knowledge Automation provides WISeKey with an opportunity to approach the fast-growing AIoT market. The combination of arago’s AI based Knowledge Automation and Data platform HIRO and WISeKey’s Cybersecurity, European Root of Trust and IoT/semiconductors technologies creates the AIoT offering that integrates semiconductors, smart sensors, IoT systems, Artificial Intelligence and a data cloud to deliver to customers a unique offering to power innovation and digital transformation. Using WISeKey’s cybersecurity technology and IoT network, data will be collected in HIRO where it can be processed and through automation acted upon in real time in a highly secure environment.
  • Development and launch of the WISe.ART NFT auction platform: an innovative platform where WISeKey adds identification to the emerging NFT trade market, therefore ensuring that NFTs sold on its platform are genuine. Our WISe.ART NFT platform provides the most secure and scalable blockchain back-end for creating real digital twins for valuable objects and trading high-value NFTs from the collectible and luxury space, incorporating vetting, provenance, proof of ownership, and follow-on monetization control into the NFTs. The revenue streams arising from WISeArt will be split across two key areas.
    • Firstly, we are charging commissions on the sales that are carried out on the WISeArt platform. This is a percentage of the total sale and will depend upon multiple factors but, ultimately, will be a relatively straight-forward revenue transaction.
    • Secondly, we are offering a white label version of the WISeArt platform that can be taken by clients that wish to have their own branded platform for auctions and sales. Here we would generate a one-off fee for the platform sale, as well as fees for the set-up and installation, with an ongoing hosting, maintenance and support packages being added with a separate annual fee. Our intention is that, with the hosting still being carried out by WISeKey, commission fees would also still apply to the sales on the platform.

2022 KEY GROWTH AREAS

  • The launch of the WISe.ART NFT platform in 2021 is expected to provide new WISe.ART revenue streams in the shape of commissions on the sales carried out on the platform, and the sale of a white label version of the WISe.ART platform for clients that wish to have their own branded platform for auctions and sales.
  • The launch of the first WISeSaT PocketQube Satellite in January 2022 is the result of the investment of WISeKey in FOSSA Systems to integrate their picosatellite technology into the WISeKey IoT Connect & Trust model and improve IoT communication in remote and poor connectivity areas.
  • New strategic partnerships to strengthen its position as IoT cybersecurity provider and to develop new use cases based on our established technologies (refer to page 29 of the financial report for details).
  • Investments in post-quantum cryptography that are resistant against quantum cryptanalysis so as to anticipate future cybersecurity threats, working in collaboration with the American National Institute of Standards and Technology (NIST) and the European Union Agency for Cybersecurity (ENISA).
  • Planned significant investment into new equipment to increase the production volume of semiconductors.
  • Investment in R&D to expand its patent portfolio.

FY 2021 RESULTS CONFERENCE CALL
Carlos Moreira, CEO and Peter Ward, CFO will host a conference call on Friday, April 29, 2022, at 3:00 p.m. CET / 9:00 a.m. ET to discuss these results, recent business developments and growth initiatives. A Q&A session will follow the prepared remarks.

Interested parties may participate in the call by dialing:

United States (Toll)877-445-9755
United States (Toll Free)201-493-6744
Spain (fixed) ATT:900 834 236
Spain (mobile) ATT:900 834 876
United Kingdom (fixed) ATT:0 800 756 3429
France (fixed) ATT /excl. Monaco:0 800 912 848
Switzerland (fixed) ATT:0 800 835 525
Switzerland (mobile) ATT:0 800 891 374
Italy (fixed) ATT:800 791 612
Italy (mobile) ATT:800 796 508
Netherlands (fixed) ATT:0 800 023 4340
Netherlands (mobile) ATT:0 800 022 3580
Germany (fixed) ATT:0 800 182 0040
Germany (mobile) ATT:0 800 184 4713

To access the call, please dial-in approximately five minutes before the start time. The call will also be simultaneously webcasted over the Internet via this link and such link will also be made available in the “Investor Relations” section of WISeKey’s website http://wisekey.com/investors/.

An archived version of the webinar will be available on WISeKey’s website following the live presentation. For any questions regarding the event, please email Lcati@equityny.com.

ADDITIONAL FINANCIAL & OPERATIONAL DATA

FY 2021 Key Financials – WISeKey Group

(Million US$)
US GAAP 20212020
Net sales22.314.8
Gross profit9.15.5
Operating loss as reported(26.7)(18.5)
Net income attributable to WISeKey as reported(20.3)(28.7)
Non-GAAP 20212020
EBITDA(25.7)(16.9)
Adjusted EBITDA(20.7)(15.8)
Total Cash and restricted cash34.421.8

Consolidated Statements of Comprehensive Income/(Loss) [as reported]

 12 months ended December 31,
USD’0002021 2020 2019
     
Net sales22,25814,77922,652
Cost of sales(12,869)(8,578)(12,871)
Depreciation of production assets(301)(736)(325)
Gross profit9,088  5,465  9,456
Other operating income18343180
Research & development expenses(7,007)(6,012)(6,422)
Selling & marketing expenses(10,226)(7,355)(7,929)
General & administrative expenses(18,726)(10,673)(15,789)
Total operating expenses(35,776) (23,997) (29,960)
Operating loss(26,688) (18,532) (20,504)
 
Non-operating income8,6381,1271,918
Debt conversion expense(325)
Gain on derivative liability–44214
Gain / (loss) on debt extinguishment––(233)
Interest and amortization of debt discount(1,057)(458)(742)
Non-operating expenses(4,755)(11,079)(3,670)
Loss from continuing operations before income tax expense(24,187) (28,898) (23,017)
 
Income tax expense93(9)(13)
Loss from continuing operations, net(24,094) (28,907) (23,030)
 
Discontinued operations: 
Net sales from discontinued operations––1,934
Cost of sales from discontinued operations––(791)
Total operating and non-operating expenses from discontinued operations––(1,801)
Income tax recovery from discontinued operations––42
Gain on disposal of a business, net of tax on disposal––31,100
Income / (loss) on discontinued operations– – 30,484
 
Net income / (loss)(24,094) (28,907) 7,454
 
Less: Net income / (loss) attributable to noncontrolling interests(3,754)(248)(733)
Net income / (loss) attributable to WISeKey International Holding AG(20,340) (28,659) 8,187
Earnings per share
Earnings from continuing operations per share – Basic(0.34)(0.68)(0.64)
Earnings from continuing operations per share – Diluted(0.34)(0.68)(0.64)
Earnings from discontinued operations per share – Basic––0.84
Earnings from discontinued operations per share – Diluted––0.81
Earning per share attributable to WISeKey International Holding AG
Basic(0.28)(0.67)0.23
Diluted(0.28)(0.67)0.23
Other comprehensive income / (loss), net of tax:
Foreign currency translation adjustments(1,534)1,729516
Change in unrealized gains related to available-for-sale debt securities1,9655,385–
Defined benefit pension plans:
Net gain (loss) arising during period1,5721,189(2,199)
Reclassification adjustments(7,350)––
Other comprehensive income / (loss)(5,347) 8,303  (1,683)
Comprehensive income / (loss)(29,441) (20,604) 5,771
Other comprehensive income / (loss) attributable to noncontrolling interests186(95)(127)
Other comprehensive income / (loss) attributable to WISeKey International Holding AG(5,533) 8,398  (1,556)
 
Comprehensive income / (loss) attributable to noncontrolling interests(3,567)(343)(860)
Comprehensive income / (loss) attributable
to WISeKey International Holding AG		(25,874) (20,261) 6,631

The notes are an integral part of our consolidated financial statements.

Consolidated Balance Sheets [as reported]

 As at December 31,
USD’0002021 2020
ASSETS   
Current assets   
Cash and cash equivalents34,24919,650
Restricted cash, current1102,113
Accounts receivable, net of allowance for doubtful accounts3,2612,900
Notes receivable from employees6837
Available-for-sale debt security–9,190
Inventories2,7102,474
Prepaid expenses1,435649
Deferred charges, current–836
Other current assets677814
Total current assets                       42,510  38,663
 
Noncurrent assets
Notes receivable, noncurrent190183
Deferred income tax assets63
Deferred tax credits8481,312
Property, plant and equipment net of accumulated depreciation5871,000
Intangible assets, net of accumulated amortization9,1869
Finance lease right-of-use assets171246
Operating lease right-of-use assets3,7062,502
Goodwill30,8418,317
Deferred charges, noncurrent–169
Equity securities, at cost501–
Equity securities, at fair value1301
Other noncurrent assets258176
Total noncurrent assets 46,295   14,218
TOTAL ASSETS 88,805   52,881
    
LIABILITIES
Current Liabilities
Accounts payable16,44813,099
Notes payable6,2494,115
Convertible note payable, current–5,633
Deferred revenue, current487302
Current portion of obligations under finance lease liabilities55119
Current portion of obligations under operating lease liabilities950601
Income tax payable113
Other current liabilities5521,105
Total current liabilities24,752  24,977
Noncurrent liabilities
Bonds, mortgages, convertible note payable and other long-term debt458646
Convertible note payable, noncurrent9,0493,710
Deferred revenue, noncurrent10019
Finance lease liabilities, noncurrent–67
Operating lease liabilities, noncurrent2,8781,901
Indebtedness to related parties, noncurrent2,395–
Employee benefit plan obligation4,7696,768
Deferred income tax liability2,906–
Other deferred tax liabilities6238
Other noncurrent liabilities57329
Total noncurrent liabilities22,674  13,478
TOTAL LIABILITIES47,426  38,455
SHAREHOLDERS’ EQUITY
Common stock – Class A400400
CHF 0.01 par value
           Authorized – 40,021,988 and 40,021,988 shares
Issued and outstanding – 40,021,988 and 40,021,988 shares
Common stock – Class B4,6852,490
CHF 0.05 par value
           Authorized – 138,058,468 and 63,234,625
           Issued – 88,120,054 and 47,622,689
           Outstanding – 80,918,390 and 42,839,554
Share subscription in progress–1
Treasury stock, at cost (7,201,664 and 4,783,135 shares held)(636)(505)
Additional paid-in capital268,199224,763
Accumulated other comprehensive income / (loss)1,4076,940
Accumulated deficit(238,160)(217,820)
Total shareholders’equity attributable to WISeKey shareholders35,895  16,269
Noncontrolling interests in consolidated subsidiaries5,484(1,843)
Total shareholders’equity41,379  14,426
TOTAL LIABILITIES AND EQUITY 88,805  52,881

The notes are an integral part of our consolidated financial statements.

Non-GAAP Financial Measures
In managing WISeKey’s business on a consolidated basis, WISeKey management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures. In measuring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce costs with the goal of increasing our gross margin and operating margin and when assessing appropriate levels of research and development efforts. In addition, management relies upon these non-GAAP financial measures when making decisions about product spending, administrative budgets, and other operating expenses. We believe that these non-GAAP financial measures, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company’s results of operations and the factors and trends affecting WISeKey’s business. We believe that they enable investors to perform additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to operations, certain non-cash expenses related to acquisitions and share-based compensation expense, which may obscure trends in WISeKey’s underlying performance. This information also enables investors to compare financial results between periods where certain items may vary independent of business performance and allows for greater transparency with respect to key metrics used by management.

These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The presentation of these and other similar items in WISeKey’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled “Financial Reconciliation of GAAP to non-GAAP Results (unaudited).”

Non-GAAP to GAAP Reconciliations

Financial Reconciliation of GAAP to non-GAAP Results (unaudited)12 months to December 31,
(Million US$)20212020
Operating loss as reported(26.7)(18.5)
Non-GAAP adjustments:
      Depreciation expense0.51.0
      Amortization expense on intangibles0.50.6
EBITDA(25.7)(16.9)
Non-GAAP adjustments:
Stock-based compensation3.80.4
Expenses settled in equity0.1–
M&A-related legal fees0.90.5
M&A-related professional fees–0.1
Listing-related professional fees0.10.1
Adjusted EBITDA(20.7)(15.8)
GAAP to Non-GAAP Cash and Cash Equivalents As of December 31,
(Million US$)20212020
Cash and cash equivalents as reported34.3*19.7
Restricted cash, current as reported0.12.1
Total Cash and restricted cash34.421.8
* Rounded up

About WISeKey

WISeKey (NASDAQ: WKEY; SIX Swiss Exchange: WIHN) is a leading global cybersecurity company currently deploying large scale digital identity ecosystems for people and objects using Blockchain, AI and IoT respecting the Human as the Fulcrum of the Internet. WISeKey microprocessors secure the pervasive computing shaping today’s Internet of Everything. WISeKey IoT has an install base of over 1.5 billion microchips in virtually all IoT sectors (connected cars, smart cities, drones, agricultural sensors, anti-counterfeiting, smart lighting, servers, computers, mobile phones, crypto tokens etc.).  WISeKey is uniquely positioned to be at the edge of IoT as our semiconductors produce a huge amount of Big Data that, when analyzed with Artificial Intelligence (AI), can help industrial applications to predict the failure of their equipment before it happens.

Our technology is Trusted by the OISTE/WISeKey’s Swiss based cryptographic Root of Trust (“RoT”) provides secure authentication and identification, in both physical and virtual environments, for the Internet of Things, Blockchain and Artificial Intelligence. The WISeKey RoT serves as a common trust anchor to ensure the integrity of online transactions among objects and between objects and people. For more information, visit www.wisekey.com.

Press and investor contacts:

WISeKey International Holding Ltd
Company Contact:  Carlos Moreira
Chairman & CEO
Tel: +41 22 594 3000
info@wisekey.com		WISeKey Investor Relations (US)
Contact:  Lena Cati
The Equity Group Inc.
Tel: +1 212 836-9611
lcati@equityny.com

Disclaimer:
This communication expressly or implicitly contains certain forward-looking statements concerning WISeKey International Holding Ltd and its business. Such statements involve certain known and unknown risks, uncertainties and other factors, which could cause the actual results, financial condition, performance or achievements of WISeKey International Holding Ltd to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. WISeKey International Holding Ltd is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events or otherwise.
This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and it does not constitute an offering prospectus within the meaning of article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange. Investors must rely on their own evaluation of WISeKey and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of WISeKey.

************************

Disclaimer
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.

iRobot Reports Second-Quarter 2021 Financial Results

iRobot Reports Second-Quarter 2021 Financial Results

Second-Quarter Revenue Grew 31% Despite Supply Chain Challenges;

Company Updates Full-Year 2021 Outlook Due to Semiconductor Chip Shortage;

Company Announces Plans to Execute a $100 million Accelerated Share Repurchase

BEDFORD, Mass., July 28, 2021 — iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the second quarter ended July 3, 2021.

Colin Angle, chairman and chief executive officer of iRobot, stated, “We delivered a solid second-quarter financial performance as we navigated an increasingly challenging supply chain environment. Our results were generally in line with our plans entering the quarter despite $17 million in orders that we could not fulfill due to COVID-related disruptions to shipping activities in southern China in late June. Revenue grew 31% over last year’s second quarter primarily due to strong orders for our mid-tier and premium floor cleaning robots from retailers in North America and from our retail and distribution partners across EMEA.”

“Overall, retailer demand trends and consumer interest in our products remain favorable,” continued Angle. “However, the semiconductor chip shortage, which continues to disrupt a wide range of industries, is constraining our ability to fulfill anticipated second-half orders. To manage through this short-term turbulence, we are focused on carefully managing channel and product mix, adjusting promotional activities, qualifying new alternative suppliers, optimizing inventory levels and reducing our second-half spending plans. As we balance investing for the future with cost management discipline, we anticipate that our second-half profitability will be aided by the expected reinstatement of a tariff exclusion covering all of 2021. Accordingly, we have updated our 2021 outlook to reflect these and other dynamics.”

Angle concluded, “Despite this temporary supply chain headwind, we remain confident in our strategic direction. Although visibility is limited right now, we believe our efforts to enhance our supply chain resiliency will help lead to improved availability of components starting in the beginning of next year and steadily strengthen as we move into the second half of 2022. With household penetration still low, a growing global connected customer base and many exciting growth initiatives now underway or in the advanced planning stages, we believe that our exit trajectory for the second half of 2022 in combination with continued strategic progress will set the stage for sustaining solid annual top-line expansion that can be converted into improving double-digit operating profit margins, substantial EPS growth, and robust operating cash flow generation. Our upcoming plan to execute a $100 million Accelerated Share Repurchase agreement demonstrates our confidence in our strategic direction and in our ability to capitalize on the exciting opportunities that lie ahead.”

Financial Performance Highlights

  • Revenue for the second quarter of 2021 was $365.6 million, an increase of 31% from $279.9 million in the second quarter of 2020. The growth primarily reflected healthy demand from retailers in North America and from the company’s retail and distribution partners in EMEA. Revenue for the first half of 2021 was $668.9 million versus $472.4 million in the first half of 2020.
    • The second-quarter 2021 revenue performance was highlighted by 40% growth in the U.S., 29% in EMEA and 7% in Japan over the prior year period.
    • 42% revenue growth in mid-tier and premium robots, which accounted for 82% of total quarterly robot sales.
    • We estimate that iRobot’s second-quarter 2021 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, grew by 20% over the second quarter of 2020 and represented 66% of second-quarter 2021 revenue. iRobot’s direct-to-consumer (DTC) revenue of $45 million grew 36% from the prior year’s second quarter.
  • The company’s second-quarter 2021 GAAP operating loss was $3.0 million, compared with GAAP operating income of $70.3 million in the second quarter of 2020. Second-quarter 2021 non-GAAP operating income of $9.0 million compared with non-GAAP operating income of $40.5 million in the same period one year ago. The company’s second-quarter 2020 GAAP and non-GAAP operating profitability benefited from the timing and impact of receiving an exclusion from Section 301 tariffs. GAAP operating income for the first six months of 2021 was $3.3 million, compared with GAAP operating income of $50.1 million in the first half of 2020. First-half 2021 non-GAAP operating income was $23.9 million versus non-GAAP operating income of $26.1 million in the same period one year ago.
  • iRobot’s GAAP net loss per share was $0.10 for the second quarter of 2021, compared with GAAP net income per share of $2.07 in the second quarter of 2020. Non-GAAP net income per share was $0.27 for the second quarter of 2021 versus non-GAAP second-quarter 2020 net income per share of $1.06. First-half 2021 GAAP net income per share was $0.16, compared with $1.42 in the first half of 2020. First-half 2021 non-GAAP net income per share was $0.68, compared with $0.73 in the first half of 2020.
  • As of July 3, 2021, the company’s cash, cash equivalents and short-term investments were $415.8 million, compared with $500.8 million as of April 3, 2021 and $483.7 million at the end of 2020. 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

  • During the second quarter of 2021, the company repurchased 446,954 shares of common stock at an average purchase price of $111.85 per share, totaling approximately $50 million.
  • On June 3, 2021, iRobot announced the appointment of Faris Habbaba as EVP and Chief Research and Development Officer.
  • For the 7th consecutive year, Roomba® was a featured product in Amazon’s Prime Day event, which was held on June 21-22, 2021. Roomba was cited by Amazon as a top-selling product.
  • The company’s community of engaged, connected customers who have opted-in to its digital communications grew to 11.6 million, an increase of 67% from the second quarter of 2020.
  • Roomba and Braava were cited as best-in-class floor cleaning robots in Consumer Reports (North America), Fortune (North America), TechRadar (EMEA – United Kingdom), Xataka (EMEA – Spain), Lee (Japan) and Story (Japan).
  • iRobot is planning to hold an Investor Day later this year. Additional details about this event will be made publicly available in advance.

Share Repurchase Plans
iRobot also announced that it plans to enter into an accelerated share repurchase (“ASR”) agreement to repurchase $100 million of its common stock, subject to the terms of the ASR agreement. The planned ASR is expected to be executed next month. The company will fund the ASR from cash on hand. iRobot plans to file a Current Report on Form 8-K when the ASR is formally executed.

Financial Expectations
iRobot has updated its full-year 2021 GAAP and non-GAAP financial expectations, all of which were most recently provided on May 3, 2021. The updated outlook reflects the company’s results to date and anticipated performance during the second half of the year as well as the impact of an anticipated tariff exclusion and anticipated share repurchase activities. A detailed reconciliation between the company’s GAAP and non-GAAP expectations is included in the attached financial tables.

Fiscal Year 2021 ending January 1, 2022:

Metric

GAAP

Adjustments

Non-GAAP

Revenue

$1.55 – $1.62 billion

—

$1.55 – $1.62 billion

Gross Profit

$609 – $642 million

~$3 million

$612 – $645 million

Operating Income

$37 – $67 million

~$43 million

$80 – $110 million

Earnings Per Share

$1.02 – $1.89

~$1.23 – ~$1.26

$2.25 – $3.15

Second-Quarter 2021 Results Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to review its second-quarter 2021 financial results, and discuss its outlook going forward. Pertinent conference call details include:

Date:                  

Thursday, July 29

Time:                    

8:30 a.m. ET

Call-In Number:    

213-358-0894   

Conference ID:    

1444896

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/q2-2021-irobot-corp-financial-results-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 August 5, and can be accessed by dialing 404-537-3406, passcode 1444896.

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: future financial performance, including with respect to 2021 revenue, gross profit, operating profit and EPS; the anticipated impact of the semiconductor chip shortage and our plans to manage through such shortage; the expected reinstatement of a tariff exclusion; the company’s plans to execute a $100 million share repurchase through an ASR; the potential for the company’s strategies activities to lead to improved availability of components; and the future potential for sustaining solid annual top-line expansion that can be converted into improving double-digit operating profit margins, substantial EPS growth and robust operating cash flow generation. 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; the limited number of manufacturers and suppliers of key components; 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 and any exclusions therefrom; 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 Operations

(in thousands, except per share amounts)

(unaudited)

For the three months ended

For the six months ended

July 3, 2021

June 27, 2020

July 3, 2021

June 27, 2020

Revenue

$              365,596

$          $  279,883

$              668,857

$          $  472,418

Cost of revenue:

Cost of product revenue

226,395

100,686

406,487

214,981

Amortization of acquired intangible assets

225

1,185

450

1,470

Total cost of revenue

226,620

101,871

406,937

216,451

Gross profit

138,976

178,012

261,920

255,967

Operating expenses:

Research and development

38,677

36,557

80,597

73,316

Selling and marketing

76,677

49,062

127,668

85,656

General and administrative

26,459

21,856

49,899

46,429

Amortization of acquired intangible assets

205

254

409

508

Total operating expenses

142,018

107,729

258,573

205,909

Operating (loss) income

(3,042)

70,283

3,347

50,058

Other expense, net

(286)

(384)

(446)

(403)

(Loss) income before income taxes

(3,328)

69,899

2,901

49,655

Income tax (benefit) expense

(570)

11,283

(1,784)

9,174

Net (loss) income

$                (2,758)

$                58,616

$                  4,685

$                40,481

Net (loss) income per share:

Basic

$                  (0.10)

$                    2.10

$                    0.17

$                    1.44

Diluted

$                  (0.10)

$                    2.07

$                    0.16

$                    1.42

Number of shares used in per share calculations:                                         

Basic

28,100

27,923

28,178

28,110

Diluted

28,100

28,280

28,908

28,414

Stock-based compensation included in above figures:                            

Cost of revenue

$                     283

$                     292

$                     646

$                     819

Research and development

2,386

2,167

4,534

4,645

Selling and marketing

1,128

700

2,087

1,466

General and administrative

3,543

2,711

6,855

4,131

Total

$                  7,340

$                  5,870

$                14,122

$                11,061

 iRobot Corporation

 Condensed Consolidated Balance Sheets

 (unaudited, in thousands)

July 3, 2021

January 2, 2021

 Assets

 Cash and cash equivalents

$                        415,841

$                      432,635

 Short term investments

–

51,081

 Accounts receivable, net

74,759

170,526

 Inventory

276,517

181,756

 Other current assets

48,816

45,223

Total current assets

815,933

881,221

 Property and equipment, net

81,161

76,584

 Operating lease right-of-use assets

40,551

43,682

 Deferred tax assets

34,076

33,404

 Goodwill

123,735

125,872

 Intangible assets, net

8,927

9,902

 Other assets

29,436

19,063

Total assets

$                     1,133,819

$                   1,189,728

 Liabilities and stockholders’ equity

 Accounts payable

$                        166,779

$                      165,779

 Accrued expenses

104,538

131,388

 Deferred revenue and customer advances

11,445

10,400

Total current liabilities

282,762

307,567

 Operating lease liabilities

47,014

50,485

 Deferred tax liabilities

1,458

705

 Other long-term liabilities

21,353

26,537

Total long-term liabilities

69,825

77,727

Total liabilities

352,587

385,294

 Stockholders’ equity

781,232

804,434

Total liabilities and stockholders’ equity

$                     1,133,819

$                   1,189,728

 iRobot Corporation

Consolidated Statements of Cash Flows

 (unaudited, in thousands)

For the six months ended

July 3, 2021

June 27, 2020

Cash flows from operating activities:

Net income

$                4,685

$                40,481

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

15,635

17,784

Stock-based compensation

14,122

11,061

Deferred income taxes, net

210

2,579

Other

3,286

3,162

Changes in operating assets and liabilities — (use) source

Accounts receivable

94,477

17,891

Inventory

(94,918)

24,137

Other assets

(7,554)

(57,813)

Accounts payable 

2,071

(20,576)

Accrued expenses and other liabilities

(30,215)

(10,549)

Net cash provided by operating activities

1,799

28,157

Cash flows from investing activities:

Additions of property and equipment

(21,924)

(18,968)

Purchase of investments

(9,606)

(2,125)

Sales and maturities of investments

63,644

7,000

Net cash provided by (used in) investing activities

32,114

(14,093)

Cash flows from financing activities:

Proceeds from employee stock plans

5,131

3,690

Income tax withholding payment associated with restricted stock vesting

(4,799)

(1,816)

Stock repurchases

(50,000)

(25,000)

Net cash used in financing activities

(49,668)

(23,126)

Effect of exchange rate changes on cash and cash equivalents

(1,039)

404

Net decrease in cash and cash equivalents

(16,794)

(8,658)

Cash and cash equivalents, at beginning of period

432,635

239,392

Cash and cash equivalents, at end of period

$            415,841

$              230,734

 iRobot Corporation

Supplemental Information

(unaudited)

For the three months ended

For the six months ended

July 3, 2021

June 27, 2020

July 3, 2021

June 27, 2020

Revenue by Geography: *

    Domestic

$              196,824

$              140,146

$              311,596

$              222,113

    International

168,772

139,737

357,261

250,305

Total

$              365,596

$              279,883

$              668,857

$              472,418

Robot Units Shipped *

      Vacuum

1,146

930

2,117

1,553

      Mopping

168

114

285

210

Total

1,314

1,044

2,402

1,763

Revenue by Product Category **

      Vacuum***

$                     323

$                     251

$                     593

$                     420

      Mopping***

43

29

76

52

Total

$                     366

$                     280

$                     669

$                     472

Average gross selling prices for robot units

$                     325

$                     307

$                     322

$                     310

Section 301 tariff costs *

$                11,622

$                (6,609)

$                15,005

$                          –

Section 301 tariff impact on gross and operating margin

(3.2)%

2.4 %

(2.2)%

– %

Headcount

1,321

1,120

* in thousands

** in millions

*** includes accessory revenue

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. 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. 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.

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 six months ended

July 3, 2021

June 27, 2020

July 3, 2021

June 27, 2020

 GAAP Revenue

$                    365,596

$                279,883

$                        668,857

$                    472,418

 GAAP Gross Profit

$                    138,976

$                178,012

$                        261,920

$                    255,967

Amortization of acquired intangible assets

225

1,185

450

1,470

Stock-based compensation

283

292

646

819

Tariff refunds

–

(40,017)

–

(40,017)

 Non-GAAP Gross Profit

$                    139,484

$                139,472

$                        263,016

$                    218,239

 Non-GAAP Gross Margin

38.2 %

49.8 %

39.3 %

46.2 %

 GAAP Operating Expenses

$                    142,018

$                107,729

$                        258,573

$                    205,909

Amortization of acquired intangible assets

(205)

(254)

(409)

(508)

Stock-based compensation 

(7,057)

(5,578)

(13,476)

(10,242)

Net merger, acquisition and divestiture (expense) income

(640)

66

(640)

566

IP litigation expense, net 

(3,583)

(1,137)

(4,724)

(1,753)

Restructuring and other

–

(1,863)

(213)

(1,863)

 Non-GAAP Operating Expenses

$                    130,533

$                  98,963

$                        239,111

$                    192,109

 Non-GAAP Operating Expenses as a % of Non-GAAP Revenue

35.7 %

35.4 %

35.7 %

40.7 %

 GAAP Operating (Loss) Income

$                       (3,042)

$                  70,283

$                            3,347

$                      50,058

Amortization of acquired intangible assets

430

1,439

859

1,978

Stock-based compensation

7,340

5,870

14,122

11,061

Tariff refunds

–

(40,017)

–

(40,017)

Net merger, acquisition and divestiture expense (income)

640

(66)

640

(566)

IP litigation expense, net

3,583

1,137

4,724

1,753

Restructuring and other

–

1,863

213

1,863

 Non-GAAP Operating Income

$                        8,951

$                  40,509

$                          23,905

$                      26,130

 Non-GAAP Operating Margin

2.4 %

14.5 %

3.6 %

5.5 %

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 six months ended

July 3, 2021

June 27, 2020

July 3, 2021

June 27, 2020

 GAAP Income Tax (Benefit) Expense

$                          (570)

$                  11,283

$                           (1,784)

$                        9,174

Tax effect of non-GAAP adjustments

1,512

(1,892)

2,910

(3,723)

Other tax adjustments

120

206

2,773

(1,178)

 Non-GAAP Income Tax Expense

$                        1,062

$                    9,597

$                            3,899

$                        4,273

 GAAP Net (Loss) Income

$                       (2,758)

$                  58,616

$                            4,685

$                      40,481

Amortization of acquired intangible assets

430

1,439

859

1,978

Stock-based compensation

7,340

5,870

14,122

11,061

Tariff refunds

–

(40,017)

–

(40,017)

Net merger, acquisition and divestiture expense (income)

640

(741)

640

(1,241)

IP litigation expense, net

3,583

1,137

4,724

1,753

Restructuring and other

–

1,863

213

1,863

Loss (gain) on strategic investments

250

–

212

(87)

Income tax effect

(1,632)

1,686

(5,683)

4,901

 Non-GAAP Net Income

$                        7,853

$                  29,853

$                          19,772

$                      20,692

 GAAP Net (Loss) Income Per Diluted Share

$                         (0.10)

$                      2.07

$                              0.16

$                          1.42

Amortization of acquired intangible assets

0.01

0.05

0.03

0.07

Stock-based compensation

0.26

0.21

0.49

0.39

Tariff refunds

–

(1.41)

–

(1.41)

Net merger, acquisition and divestiture expense (income)

0.02

(0.03)

0.02

(0.04)

IP litigation expense, net

0.13

0.04

0.16

0.06

Restructuring and other

–

0.07

0.01

0.07

Loss (gain) on strategic investments

0.01

–

0.01

–

Income tax effect

(0.06)

0.06

(0.20)

0.17

 Non-GAAP Net Income Per Diluted Share

$                          0.27

$                      1.06

$                              0.68

$                          0.73

Number of shares used in diluted per share calculation

28,700

28,280

28,908

28,414

Section 301 Tariff Costs

Section 301 tariff costs

$                      11,622

$                  (6,609)

$                          15,005

$                               –

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

(3.2)%

2.4 %

(2.2)%

– %

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

$                         (0.40)

$                      0.23

$                             (0.52)

$                               –

Supplemental Information

Days sales outstanding

19

42

Days in inventory

112

86

 iRobot Corporation

Supplemental Reconciliation of Fiscal Year 2021 GAAP to Non-GAAP Guidance

(unaudited)

FY-21

GAAP Gross Profit

$609 – $642 million

Amortization of acquired intangible assets

~$1 million

Stock-based compensation

~$2 million

Total adjustments

~$3 million

Non-GAAP Gross Profit

$612 – $645 million

FY-21

GAAP Operating Income 

$37 – $67 million

Amortization of acquired intangible assets

~$1.5 million

Stock-based compensation

~$30.8 million

Net merger, acquisition and divestiture expense (income)

~$1.0 million

IP litigation expense, net

~$9.5 million

Restructuring and other

~$0.2 million

Loss on strategic investments

~$0.2 million

Total adjustments

~$43 million

Non-GAAP Operating Income 

$80 – $110 million

FY-21

GAAP Net Income Per Diluted Share

$1.02 – $1.89

Amortization of acquired intangible assets

 ~ $0.05

Stock-based compensation

 ~ $1.08

Net merger, acquisition and divestiture expense (income)

~ $0.04

IP litigation expense, net

~ $0.33

Restructuring and other

~ $0.01

Loss on strategic investments

~ $0.01

Income tax effect

~ ($0.29) – ($0.26)

Total adjustments

~ $1.23 – $1.26

Non-GAAP Net Income Per Diluted Share

$2.25 – $3.15

Number of shares used in diluted per share calculations

~ 28.5 million

SOURCE iRobot Corporation

************************

Disclaimer
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.

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