Company Spotlight - IRobot

Today's Spotlight

iRobot Corporation (IRBT)

iRobot Founded in 1990 by Massachusetts Institute of Technology roboticists, iRobot Corp. specializes in behavior-based robots that help people complete tasks with better results. Powered by iRobot’s unique AWARE™ Robot Intelligence Systems, the company’s robots can navigate in complex and dynamic real-world situations. To date, the company has sold more than 2 million iRobot Roomba® Vacuuming Robots worldwide, making it the best-selling consumer robot in history. Also, more than 500 iRobot PackBot® Tactical Mobile Robots have been delivered to a broad range of military and civilian customers around the world. These robots have performed tens of thousands of missions in Iraq and Afghanistan and are credited with saving scores of soldiers’ lives.

Bottom Line: Revenues for the second quarter of 2006 grew 33.5 percent to $34.6 million, compared with $25.9 million for the same quarter one year ago. Gross profit for the second quarter grew 86.6 percent to $11.8 million (34.1 percent of sales), compared with $6.3 million (24.4 percent of sales) in the second quarter of 2005. This growth in gross profit as a percentage of sales represents an improvement of 9.7 percentage points in Q2 of fiscal 2006 when compared to Q2 of fiscal 2005. Net loss in the second quarter of 2006 was $1.8 million, or $0.08 per share, compared with a net loss in the second quarter of 2005 of $3.1 million, or $0.30 per share. Also, as of mid 2006, iRobot had sold 500 Packbot robots to the US military including an IDIQ contract from the Navy. Under the terms of the IDIQ contract, the military could order up to $64.3 million in robots, spare parts, training and repair services through May 2008. The company has undertaken a strategy to build market share and brand awareness in the medium term while profits and margins may be under some pressure. The company also released the Scooba washing robot as well as the Dirt Dog utility robot in recent months. Sales could ramp up as we approach the holiday season and iRobot seems to be executing its strategy quite well. The stock price is currently around $20.53 as of 10/20/06 which could be a good entry point