The maker of Roomba robot vacuums, iRobot Corp., has announced serious financial difficulties and warned that there is "significant doubt" about its ability to continue as a going concern, Bloomberg reports.
The US company, which was recently tipped to be acquired by Amazon for more than $1 billion, saw its shares fall 26% in premarket trading on Wednesday after the release of its financial report. In response to the crisis, iRobot's board of directors has launched a formal strategic review that includes possible options for refinancing debt or selling the company.
Amazon scrapped plans to acquire iRobot in 2023 after the European Commission threatened to block the deal over antitrust concerns. The deal's collapse was a major blow to iRobot, which was already struggling financially. The company's shares plunged, and its market capitalization fell to less than $200 million as of Tuesday.
To support its operations during the antitrust investigation, iRobot received a $200 million loan from Carlyle Group Inc. in 2023. However, after the Amazon deal fell through, Carlyle was left with that debt. The loan was provided at an interest rate that was 9 percentage points above the market average.
iRobot reported a net loss of $77.1 million for the fourth quarter ended Dec. 28. The company said it had $134 million in cash and cash equivalents at the end of the year, up from the previous quarter but down from a year ago. Some of that amount ($40 million) was drawn from restricted reserves to purchase inventory.
While iRobot plans to regain its footing with new products, the company acknowledges that "there are no guarantees of success" due to factors such as consumer demand, market competition, economic conditions and trade tariffs.
Amid growing losses and declining revenues, iRobot is considering all possible options, including finding a buyer.