iROBOT CORP (Update 2)
Spruce Point is pleased to release its updated report on iRobot Corp (Nasdaq: IRBT)
New research into iRobot’s recent distributor acquisitions further calls into question the reliability and accuracy of the Company’s financial guidance. If iRobot cannot give further clarity, we believe its guidance should be suspended.
Distributor acquisitions need to be heavily scrutinized given the related-party nature of the transactions. Its Japanese and European distributors act as exclusive agents for iRobot with nearly 100% of revenues from iRobot products.
•The 2017E sales implied from Robopolis from iRobot’s incremental margin contribution forecast doesn’t make sense
Further evidence of issues with the Japanese distributor acquisition emerge from our research. Download the report to read more.