iRobot Reports Strong Second Quarter 2008 Results

43 Percent Year-Over-Year Revenue Growth Driven By Home Robot
Division; Management Reaffirms Full Year Financial Expectations
BEDFORD, Mass.--(Business Wire)--
iRobot Corp. (NASDAQ: IRBT) today announced its financial results
for the fiscal quarter ended June 28, 2008. Revenue for the second
quarter of 2008 grew 42.9 percent to $67.2 million, compared with
$47.0 million for the same quarter one year ago. Revenue for the first
half increased 43.9 percent to $124.5 million from $86.5 million for
the first half of 2007.

Gross profit for the second quarter increased to $16.5 million
(24.5 percent of revenue), compared with $15.2 million (32.4 percent
of revenue) in the second quarter of 2007. During the quarter, gross
profit was negatively impacted primarily by revenue mix. First half
2008 gross profit totaled $31.8 million (25.6 percent of revenue) up
from $26.3 million (30.5 percent of revenue) in the first half of
2007.

Net loss in the second quarter of 2008 was $4.5 million compared
with a net loss in the second quarter of 2007 of $4.8 million. Net
loss in the first half of 2008 was $8.5 million compared with a 2007
first half net loss of $10.3 million. Net loss per share for the
second quarter of 2008 was $0.18 compared with $0.20 for the second
quarter of 2007. For the first half of 2008, net loss per share was
$0.35 compared with $0.43 for the same period in 2007. Net loss per
share results for the second quarter and first half 2008 were both
favorably impacted by $0.04 due to a cumulative tax rate change booked
in the second quarter.

"In the second quarter we achieved our 16th consecutive quarter of
year-over-year revenue growth despite increasing economic headwinds.
Our strong revenue performance drove first half results that were
substantially better than the guidance we provided for the period,"
said Colin Angle, chief executive officer of iRobot. "The company
performed well in a difficult environment. The second quarter and
first half results demonstrate the resiliency of our business in an
unstable economic market," he added.

Business Highlights:

-- In the second quarter, total home robot revenue increased 143
percent year-over-year. International home robot revenue was
up more than five times the level of Q2 2007 and comprised
approximately 40 percent of total home robot revenue in the
quarter.

-- iRobot received orders from PEO STRI totaling $39.5 million
for its PackBot robots under the company's xBot contract, as
well as for robots to be used for explosive ordnance disposal
missions.

-- U.S. Army announced acceleration of its Future Combat Systems
(FCS) Program and inclusion of iRobot in SpinOut 1, under
which the first FCS products will be delivered.

-- iRobot announced a sole licensing agreement with UW
TechTransfer at the University of Washington to commercialize
Autonomous Underwater Vehicle Seaglider technology.

Financial Expectations

Based on its financial results for the first half of 2008, and the
outlook for the remainder of the year, management today is reaffirming
its outlook for revenue and pre-tax income for the full year 2008.
Management currently expects revenues to be between $295 million and
$305 million and pre-tax income to be between $5 million and $7
million. Estimated effective tax rate is expected to be 43.9 percent
for the full year, consistent with the first half rate.

Second Quarter Conference Call

iRobot will host a conference call tomorrow at 8:30 a.m. ET to
discuss its financial results for the fiscal quarter ended June 28,
2008, business outlook and outlook for future financial performance.
To access the call, investors should dial 719-325-4867 approximately
10 minutes prior to the initiation of the teleconference and reference
iRobot. 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 August
7, and can be accessed by dialing 719-457-0820, access code 4007782.

About iRobot Corp.

iRobot is a provider of robots that perform dull, dirty or
dangerous missions in a better way. The company's proprietary
technology, iRobot AWARE Robot Intelligence Systems, incorporates
advanced concepts in navigation, mobility, manipulation and artificial
intelligence. This proprietary system enables iRobot to build
behavior-based robots, including its family of consumer and military
robots. For additional 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 concerning future financial performance
and demand for and market acceptance of its products. 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: general economic
conditions, our ability to operate in an emerging market, fluctuations
in our operating results and the seasonality of our business, our
ability to enhance our current consumer robots or develop new consumer
robots, our dependence on the U.S. federal government and government
contracts, our ability to expand our product offering beyond our
current markets, market acceptance of our products, our ability to
manage our rapid growth, changes in government policies or spending
priorities 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.

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iRobot Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)

For the three months ended For the six months ended
-------------------------- ------------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
------------- ------------ ----------- ------------
Revenue
Product revenue $ 60,676 $ 41,361 $ 111,251 $ 75,482
Contract revenue 6,526 5,653 13,253 11,019
------------- ------------ ----------- ------------
Total 67,202 47,014 124,504 86,501
------------- ------------ ----------- ------------

Cost of Revenue
Product revenue 44,382 27,238 80,577 50,724
Contract revenue 6,352 4,552 12,099 9,436
------------- ------------ ----------- ------------
Total 50,734 31,790 92,676 60,160
------------- ------------ ----------- ------------

Gross Profit 16,468 15,224 31,828 26,341

Operating Expense
Research &
development 4,718 4,179 8,691 8,335
Selling &
marketing 13,471 10,944 24,929 18,993
General &
administrative 7,340 5,752 14,118 11,079
------------- ------------ ----------- ------------
Total 25,529 20,875 47,738 38,407
------------- ------------ ----------- ------------

Operating loss (9,061) (5,651) (15,910) (12,066)

Other income, net 242 887 737 1,818
------------- ------------ ----------- ------------

Pre-tax loss (8,819) (4,764) (15,173) (10,248)
Income tax expense
(benefit) (4,306) 12 (6,655) 29
------------- ------------ ----------- ------------
Net loss $ (4,513) $ (4,776) $ (8,518) $ (10,277)
============= ============ =========== ============

Net loss per
common share:
Basic and
diluted $ (0.18) $ (0.20) $ (0.35) $ (0.43)

Shares used in Per
Common Share
Calculations:
Basic and
diluted 24,610 24,226 24,561 24,064

Stock-based
compensation
included in above
figures:
Cost of product
revenue $ 216 $ 239 $ 370 $ 359
Cost of
contract
revenue 114 134 173 211
Research &
development 128 127 95 118
Selling &
marketing 267 450 428 607
General &
administrative 808 578 1,405 890
------------- ------------ ----------- ------------
Total $ 1,533 $ 1,528 $ 2,471 $ 2,185
============= ============ =========== ============
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iRobot Corporation
Condensed Consolidated Balance Sheet
(in thousands)

June 28, December 29,
2008 2007
(unaudited) (audited)
------------ -------------

Assets

Cash and equivalents $ 14,760 $ 26,735
Short term investments 1,200 16,550
Accounts receivable, net 24,253 47,681
Unbilled revenues 2,190 2,244
Inventory, net 43,288 45,222
Deferred tax assets 5,905 5,905
Other current assets 10,384 2,268
------------ -------------
Total current assets 101,980 146,605
Property, plant and equipment, net 24,612 15,694
Deferred tax assets 4,293 4,293
Long term investments 13,639 -
Other assets 2,500 2,500
------------ -------------
Total assets $ 147,024 $ 169,092
============ =============

Liabilities and stockholders' equity

Accounts payable $ 23,965 $ 44,697
Accrued expenses 8,166 7,987
Accrued compensation 6,625 4,603
Deferred revenue 950 1,578
------------ -------------
Total current liabilities 39,706 58,865
------------ -------------
Long term liabilities 4,659 -
------------ -------------
Stockholders' equity 102,659 110,227
------------ -------------
Total liabilities and stockholders' equity $ 147,024 $ 169,092
============ =============
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iRobot Corporation
Consolidated Statement of Cash Flows
(in thousands)

For the three months ended For the six months ended
-------------------------- ------------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
------------- ------------ ----------- ------------
(unaudited) (unaudited)
-------------------------- ------------------------
Cash flows from
operating
activities:
Net loss $ (4,513) $ (4,776) $ (8,518) $ (10,277)
Adjustments to
reconcile net
loss to net cash
provided by
(used in)
operating
activities:
Depreciation
and
amortization 1,725 1,253 3,291 2,459
Loss on
disposal of
fixed assets 23 - 68 35
Stock-based
compensation 1,533 1,528 2,471 2,185
Non-cash
director
deferred
compensation 23 27 47 55
Changes in
working capital
-- (use) source
Accounts
receivable (2,330) (1,442) 23,428 10,831
Unbilled
revenue 419 54 54 472
Inventory 2,928 (5,809) 1,934 (1,118)
Other assets (4,047) (147) (8,116) 883
Accounts
payable (4,001) 9,291 (20,732) (579)
Accrued
expenses 2,240 (114) 179 (2,021)
Accrued
compensation 1,501 968 2,022 286
Deferred
revenue (180) 1,388 (628) 1,457
Change in long
term
liabilities 4,659 - 4,659 -
------------- ------------ ----------- ------------
Net cash provided
by (used in)
operating
activities (20) 2,221 159 4,668
------------- ------------ ----------- ------------

Cash flows from
investing
activities:
Purchase of
property and
equipment (8,340) (2,123) (12,277) (3,921)
Purchases of
investments - (6,600) (29,997) (22,000)
Sales of
investments - 7,000 29,050 26,800
------------- ------------ ----------- ------------
Net cash provided
by (used in)
investing
activities (8,340) (1,723) (13,224) 879
------------- ------------ ----------- ------------

Cash flows from
financing
activities:
Income tax
withholding
payment
associated with
stock option
exercise - - - (1,588)
Proceeds from
stock option
exercises 162 366 732 719
Tax benefit of
disqualifying
dispositions 97 - 358 -
------------- ------------ ----------- ------------
Net cash provided
by (used in)
financing
activities 259 366 1,090 (869)
------------- ------------ ----------- ------------

Net increase
(decrease) in
cash and cash
equivalents (8,101) 864 (11,975) 4,678
Cash and cash
equivalents, at
beginning of
period 22,861 9,397 26,735 5,583
------------- ------------ ----------- ------------
Cash and cash
equivalents, at
end of period $ 14,760 $ 10,261 $ 14,760 $ 10,261
============= ============ =========== ============
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iRobot Corporation
Supplemental Information
(unaudited)

For the three months ended For the six months ended
--------------------------- -------------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
-------------- ------------ ------------ ------------

Revenue by
business unit
(in thousands):
Home Robots
Product $ 41,705 $ 17,197 $ 71,798 $ 36,638
Contract - - 55 -
Government &
Industrial
Product 18,971 24,165 39,453 38,844
Contract 6,526 5,652 13,198 11,019
-------------- ------------ ------------ ------------
$ 67,202 $ 47,014 $ 124,504 $ 86,501
============== ============ ============ ============

Direct Revenue -
Home Robots (in
thousands) $ 7,884 $ 7,509 $ 15,745 $ 12,724
Product
Lifecycle
Revenue -
Government &
Industrial (in
thousands) $ 2,172 $ 1,855 $ 5,374 $ 4,857

International
Revenue (in
thousands):
Home Robots $ 18,175 $ 3,454 $ 28,581 $ 5,301
Government &
Industrial $ 398 $ 4,319 $ 1,209 $ 4,869

Average selling
prices for
robot units:
Home Robots $ 157 $ 147 $ 160 $ 139
Government &
Industrial
(in
thousands) $ 99 $ 146 $ 104 $ 136

Gross Profit by
business unit
(in thousands):
Home Robots $ 10,759 $ 5,392 $ 18,828 $ 11,269
Government &
Industrial 5,709 9,832 13,000 15,072
-------------- ------------ ------------ ------------
$ 16,468 $ 15,224 $ 31,828 $ 26,341
============== ============ ============ ============

Units shipped by
business unit:
Home Robots
(in
thousands) 237 99 406 227
Government &
Industrial 170 152 326 249

Government &
Industrial
Funded Backlog
(in thousands) $ 22,355 $ 19,086 $ 22,355 $ 19,086

Days sales
outstanding 36 37 36 37
Inventory
turnover 4.1 5.0 4.1 5.0
Net cash
provided by
(used in)
operating
activities (in
thousands) $ (20) $ 2,221 $ 159 $ 4,668
Headcount 482 409 482 409
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Investor Relations
iRobot Corp.
Elise Caffrey, 781-430-3003
ecaffrey@irobot.com
or
Media Relations
iRobot Corp.
Nancy Smith, 781-430-3323
nsmith@irobot.com

Copyright Business Wire 2008