What's better than earning a fair day's wage for a fair day's work? How about getting paid for work you would probably have done for free?
That's basically what happened to iRobot (Nasdaq: IRBT) yesterday, when the government announced it is giving not one, not two, but six grants to the little robot-maker -- $4.4 million in all.
Um, "million"? Did you mean "billion"?
No, unfortunately, that wasn't a typo. The six "Small Business Innovative Grants" that iRobot won from various U.S. Army and Navy departments yesterday tally up in the mere single-digit millions. Likewise, the funding awarded iRobot by Congress last week (to facilitate work on iRobot's new "Warrior" robot) totaled $2 million (again, with an "m"). Not exactly blockbuster awards. I'm pretty sure General Dynamics (NYSE: GD) and Boeing (NYSE: BA) spend more than that on Charmin for the executive washroom.
Still, iRobot says it will use Congress's $2 million will help it to "expand its product line" -- and as we know, iRobot has been planning to build the Warrior for quite some time already. Basically, this is free money from the Feds, which iRobot will use to build stuff that it will then turn around and sell ... to the Feds.
It’s a similar situation with yesterday's $4.4 million. iRobot is still building out its military product line, and the six Pentagon grants should help fund efforts to "develop technology related to human-robot interaction, unmanned ground and air vehicle coordination, semi-autonomous unmanned ground vehicle tele-operation and navigation, and electronics diagnostics and health monitoring."
Seems to me, therefore, that the big "theme" of the contracts is helping iRobot's ground robots coordinate with unmanned air vehicles -- flying robots -- built by firms like fellow Motley Fool Rule Breakers recommendation AeroVironment (Nasdaq: AVAV), Northrop Grumman (NYSE: NOC), and Textron (NYSE: TXT).
Good things might come in small packages
That $6 million in grants and Congressional funding amounts to a major boost to the company's $17.4 million research and development budget, even if only two-thirds of it is dedicated to R&D.
Will that allow the company to do more than keep hope alive? Will it lead iRobot to a time when the military can't help but throw real money iRobot's way -- in the billions, with a “b”? We'll see. Right now, though, it's still pretty speculative.
Read more about iRobot's military ventures in:
Like this article? Get our best articles delivered direct to your inbox at no cost. Sign up for Foolwatch Weekly by entering your email below.
Terms & Conditions
RSS Headlines
Fool UK