~Colin Angle, iRobot CEO
MASS HIGH TECH?Stock in iRobot Corp. declined 20 percent Wednesday morning after the company announced late Tuesday that it will have lower-than-expected 2012 revenues, that it?s closing its Durham, N.C.-plant and laying off 13 percent of its workforce.
Matt Lloyd, spokesman for the Bedford-based company, told Mass High Tech that the company has closed down the maritime operations in North Carolina, where it produced its Seaglider robot for defense. The company is stopping production of those robots immediately, he said, and moving the unit to its Bedford headquarters. All 80 of the company?s layoffs of full-time employees are from that office, and 11 contractors were also affected, said Lloyd.
Overall, this year?s revenue is expected to be as much as $47 million less than the $465 million to $485 million iRobot predicted in July, and the decrease is due largely to a slowing demand for the company?s defense and security robots. According to a statement from the company, it now believes its defense and security unit to bring in $75 million to $80 million, rather than $100 million to $110 million.
Lloyd said the closing of the North Carolina site was needed to address the slowing demand, as the election year has given rise to mixed message from the federal government as to its appetite for defense robots.
?The government is talking and saying it?s committed to maintain and grow it ground robots (for defense),? said Lloyd. ?But we continue to see a tremendous amount of indecision.?
Lloyd said that iRobot is not the only company to be affected, citing Northrop Grumman?s announcement Tuesday that it will cut up to 350 jobs from its electronics systems sector, most of the reductions expected in the Baltimore area.
In the last quarter, iRobot acquired Evolution Robotics Inc. in Pasadena, Calif, and appointed three new leaders, including Frank Wilson, a former executive at Charlotte, N.C.-based BAE Systems, to head the Defense & Security business unit. Wilson replaced Tim Trainer, previous acting interim general manager, who became vice president of programs.
The company said in its quarterly earnings statement that while profits rose 8 percent for the period from July to September of this year over the same time last year, it?s now predicting 2012 revenue to be between $434 million and $438 million. The company also split its stock earnings expectations in half to $0.44-$0.50 from $0.90-$1. As of 10 a.m. Wednesday, its stock was trading at $18, down from Tuesday?s close of $22.65.
?Our Home Robot unit has had an outstanding year and we expect continued growth in that business,? said Chairman and CEO Colin Angle in a statement. ?The 2012 outlook for (defense and security robots) has deteriorated and we expect further declines in 2013. To right-size the business, we have restructured D&S and taken costs out. These moves will result in a fourth quarter 2012 restructuring charge of $4-5 million. We are taking these actions in order to invest in our high growth Home Robot business as well as our emerging high potential remote presence business, while meeting our commitment to profitable growth,? he added.
Last year, the company announced the formation of a new unit, now called the Remote Presence Unit, which produced a healthcare robot unveiled in July. The unit is expected to start generating revenue starting next year.Read More