iRobot (NASDAQ:IRBT) reported fourth-quarter and full year earnings yesterday and … what can I say? Unlike the company's ubiquitous robotic vacuums, the numbers didn't suck.

Oh, I know that Q4's earnings were down a penny from last year. A recession will do that to you, and it looks like iRobot had to sacrifice some gross margin, to keep the Roombas rolling out the door and into American living rooms. (But roll they did.)

More important than sales through U.S. retail outlets like Sears (NASDAQ:SHLD), Bed, Bath & Beyond (NASDAQ:BBBY), and Best Buy (NYSE:BBY), however, was Roomba's international business. International sales spiked 31% in Q4, helping to lift overall sales 12%. And while gross margins slipped, the company ended the quarter with a profit ($5.1 million) and managed to close out the year in the black.

Behind the headlines lies value
These were the headlines. Now for the real story, which basically boils down to just four words: "Inventories," and "free cash flow." iRobot continued the relentless march to efficiency we've witnessed all year long, ending the year with inventories down 6% against a 3% decline in sales for the year.

iRobot generated $35.6 million in free cash flow last year, or eight times its 2008 performance, and more than 10 times reported GAAP profits. Incidentally, this makes for an enterprise value-to-free cash flow ratio of roughly 10x on the stock -- a much more attractive-sounding valuation than the 133 P/E iRobot currently sports. It also makes the stock look like quite a compelling bargain if iRobot can achieve the 20% long-term growth that Wall Street has it pegged for.

Now that we've covered the relevant business numbers, let's pause a quick look at the fun stuff -- iRobot's military 'bots. As you probably know, iRobot faces only limited competition in its specific sphere. General Dynamics (NYSE:GD) does some military robotics work. So do Deere, SAIC (NYSE:SAI), and Boeing (NYSE:BA) (but these latter three actually cooperate with iRobot.) Historically, iRobot's stiffest competition has come from across the pond, in the form of U.K. defense stalwart QinetiQ.

Reports claim QinetiQ's 2500 Talon robots currently deployed with the US Military "far surpasses the deployment of any other military-use robot." But just this week, iRobot put doubt on that assertion, issuing a press release on the delivery of its 3,000th PackBot to the U.S. military.

Foolish takeaway
QinetiQ better watch its flank; iRobot is sweeping up contracts at a rate that should propel it forward to the lofty growth rates investors expect.

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Fool contributor Rich Smith has no position in any stocks named above. Best Buy, General Dynamics, and SAIC are Motley Fool Inside Value choices. iRobot is a Motley Fool Rule Breakers recommendation. Bed Bath & Beyond and Best Buy are Motley Fool Stock Advisor picks. The Fool owns shares of Best Buy. The Motley Fool has a disclosure policy.