Monday, March 27, 2006

iRobot Corporation Signs $26 million Packbot Contract with Navy

iRobot's Packbot provided a much-needed boost to IRBT shares today with the signing of a $26 million contract to deliver 213 additional Packbots to the Naval Sea Systems Command (which is acquiring the Packbots for explosive ordnance disposal in Iraq and other locales).

The contract is for the top-of-the-line Packbot EOD model, as well as spare parts, etc. Keep in mind that with military contracts, ongoing service revenue after the inital sale is where the gravy, and higher profit margins lie, so this is potentially a very lucrative long-term development. (The company CFO discussed this at the first quarter conference call. If you haven't listened to the call, you are doing yourself a disservice.)

It's hard to know what impact this will have on earnings and revenue because the release does not mention when the Packbots are expected to be delivered, but if they are all delivered this year, there is the potential for significant military revenue growth again this year. At last check, the company's was building about 30 Packbots every month.

Here's the release:

U.S. Navy Awards iRobot Additional $26 Million for Man Transportable Robotic System Robots
Monday March 27, 2:28 pm ET
BURLINGTON, Mass.--(BUSINESS WIRE)--March 27, 2006--iRobot Corp. (Nasdaq:IRBT - News) today announced a new contract delivery order from the U.S. Navy to build additional bomb disposal robots for shipment to the U.S. forces. Under the terms, iRobot will deliver an additional 213 iRobot PackBot® Man Transportable Robotic Systems (MTRS), plus spare parts to repair robots in the field. The new award of $26 million marks the third round of funding by the Naval Sea Systems Command (NAVSEA), bringing the total value of the orders placed to date to more than $43 million.

"The PackBot MTRS robots are helping to reduce casualties as our soldiers battle insurgents who are littering Iraq with thousands of Improvised Explosive Devices (IEDs)," said Helen Greiner, chairman and co-founder, iRobot. "iRobot continues to develop innovative robot technologies that will offer soldiers options for more safely dealing with bombs and other threats."

The PackBot MTRS robots are customized for NAVSEA and are based on iRobot's combat-proven PackBot Explosive Ordnance Disposal (EOD) robots. PackBot MTRS robots are equipped with advanced tools and sensors that enable EOD technicians to identify and disrupt bombs from a safe distance. The U.S. military's dual-sourced MTRS program has requirements for up to 1200 robots through 2012.

These PackBot MTRS robots will be deployed in Iraq and elsewhere. Currently more than 300 PackBot robots are deployed worldwide where they are used extensively to disarm IEDs. The PackBot robots have performed tens of thousands of missions in the region and are credited with saving scores of soldiers' lives.

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1 comment:

thorn_stevens said...

The Motley fool profiles iRobot's room for growth in both domestic and military markets, in "Love and War at iRobot":