iRobot has ‘substantial doubt’ on future amid largest Roomba product launch

[KALÉ CAREY]

IT’S NEWS IROBOT WOULD HAVE LIKED TO HAVE SWEPT UNDER THE RUG.

JUST A DAY AFTER IT ANNOUNCED A SUITE OF NEW CONSUMER ROBOTS — ON WEDNESDAY THE MAKERS OF THE ROOMBA VACCUM LAID OUT A POSSIBLE BLEAK FUTURE FOR THE MASSACHUSETTS-BASED COMPANY.

IT WAS JUST OVER A YEAR AGO WHEN A PROPOSED 1 POINT 7 BILLION DOLLAR MERGER WITH AMAZON FELL THROUGH OVER SCRUTINY FROM EUROPEAN UNION REGULATORS. NOW, IROBOT SAYS ITS BOARD HAS INITIATED A FORMAL STRATEGIC REVIEW OF “ALTERNATIVES FOR THE BUSINESS” – MEANING REFINANCING THE COMPANY’S DEBT OR AGREEING ON A FUTURE POTENTIAL SALE.

THE WORD CAME DURING IROBOT’S FOURTH QUARTER FINANCIAL REPORT – WHICH SHOWED REVENUE FELL 44 PERCENT FROM THE SAME PERIOD LAST YEAR.

ROOMBA FIRST CAME ON THE MARKET IN 2002 – BUT IN RECENT YEARS — HAS FACED STRONG COMPETITION FROM RIVALS IN THE ROBOTIC VACCUM CLEANER DEPARTMENT, FUELING IROBOT TO FIND WAYS TO STAY COMPETITIVE.

SINCE THE DEMISE OF AMAZON’S ILL-FATED ACQUISITION, IROBOT LAUNCHED AN OPERATIONAL RESTRUCTURING PLAN THAT HAS SEEN A CUT TO OVER 50 PERCENT OF ITS WORKFORCE AND A REINVENTION OF ITS RESEARCH AND DEVELOPMENT LAB.

IROBOT IS HOPING ITS LINEUP OF 8 NEW ROOMBA ROBOTS – THE BIGGEST PRODUCT LAUNCH IN THE COMPANY’S 30-YEAR HISTORY – WILL NAVIGATE THE COMPANY TO RENEWED SUCCESS.

THE LINEUP — ACCORDING TO IROBOT — INCLUDES ROOMBAS THAT FEATURE IMPROVED POWER-LIFTING SUCTION, DEBRIS-COMPACTING SYSTEMS, AND DUAL-SPINNING MOP PADS. THE NEW ROOMBAS WILL BE AVAILABLE BEGINNING MARCH 18TH.

IROBOT CEO GARY COHEN SAID THE NEW VACUUMS “UNDERSCORE THE RETURN OF IROBOT AS THE CATEGORY CREATOR AND OUR LEADERSHIP POSITION THAT WAS ESTABLISHED MORE THAN THREE DECADES AGO.”

BUT LIKE A DARK CLOUD OF DUST HOVERING OVER THAT ENTHUSIASM, IROBOT WARNED THERE IS NO GUARENTEE THAT THE EIGHT NEW ROOMBAS WILL SOLVE THE COMPANY’S WOES.

SAYING IN ITS EARNINGS REPORT, “There can be no assurance that the new product launches will be successful due to potential factors, including, but not limited to consumer demand, competition, macroeconomic conditions, and tariff policies.”

ADDING, “Given these uncertainties and the implication they may have on the Company’s financials, there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least 12 months.”

IROBOT SAYS THERE IS NO TIMETABLE FOR THE BOARD TO CONCLUDE ITS REVIEW AND THAT THERE IS NO ASSURANCE THAT AN EXPLORATION FOR A POSSIBLE SALE WILL AMOUNT TO ONE.

SO AS THE COMPANY THAT MADE A NAME FOR ITS INNOVATIVE ROBOTIC VACUUM CLEANERS LOOKS FIND WAYS TO EVOLVE, IT’S NOW JUST HOPING IT DOESN’T GET SUCKED UP IN THE PROCESS.

FOR STRAIGHT ARROW NEWS, I’M KALÉ CAREY.

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