Considering the magnitude of iRobot's
Reporting after markets closed, iRobot announced that it grew revenue 12% in fiscal Q4 2011, and increased profits at a 30% clip. The quarter wound up a simply monster year, in which iRobot's cumulative revenues leapt 34% and profits exploded upward by 638%. When all was said and done, iRobot earned $0.96 per share.
Once again, iRobot owed the bulk of its success to two factors:
- International sales of the Roomba (and corollary "home robots" designs). Sales here rose 70% over 2009 levels
- Warbots. So-called "government & industrial" sales climbed 29%, and recent bullish pronouncements from the Pentagon suggest that we could see further sales of the SUGV robot that iRobot is building for SAIC
and Boeing (NYSE: SAI) . (NYSE: BA)
But even in the lagging U.S. home robot market, iRobot reversed last year's decline, eking out a small sales gain in the final months of the year. Looking forward, management predicts a somewhat less hit-it-outta-the-park performance in 2011 -- but still a good year overall. Sales are projected to climb 12% or more, while profits (lacking last year's tax boost) should at least hold steady in the mid-$0.90s.
What's under the hood?
As you may recall, three months ago I worried that Roomba inventories had once again begun to outrun sales growth. That was bad news the last time we saw it happen, so last month, I urged you to keep close lookout in case the issue reemerged in February.
To the contrary, iRobot consigned this worry to the dustbin of history. Year-end inventories now show a 16% Roomba reduction from year-ago levels -- quite a feat, considering the strong 34% growth in sales . Accounts receivable, too, are down roughly 3.5% from a year ago. With its cash management now once more beyond reproach, iRobot easily achieved my projection for free cash flow, generating $36.6 million in 2010.
Here's hoping for more of the same as the New Year trundles along.
Fool contributor Rich Smith owns shares of iRobot, a Motley Fool Rule Breakers recommendation. SAIC is a Motley Fool Inside Value selection and a Motley Fool holding. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.