Industrial division could help iRobot grow
IRobot Corp. may dust off plans for an oil-industry robot as the maker of Roomba home vacuums and battlefield bomb-disposers considers adding a third division to diversify into industrial markets, two of its cofounders said.
Expanding beyond the consumer and military market within five years may provide more opportunities for growth, chairman Helen Greiner and chief executive Colin Angle said in a joint interview Monday at company headquarters in Bedford. IRobot's sales rose to $249 million last year from $142 million in 2005, the year of its initial public sale.
One possibility is to resurrect a robot called MicroRig developed more than seven years ago for the energy industry, Angle said. MicroRig, which was intended to increase production in older oil and gas wells, wasn't economically viable when first designed but may be now due to rising energy prices, Angle said.
"At the time, the military and consumer opportunities caused us to abandon that business opportunity," Angle said of MicroRig. "We would imagine that, with gas prices where they are, this type of technology might become interesting again."
IRobot shares rose for the first time in five days, gaining 10 cents to close at $13.35 yesterday. The stock has dropped 26 percent this year on concern that a weaker US economy may undermine consumer demand for Roomba vacuums. The shares have declined about 44 percent since the initial public offering at $24 a share in November 2005.
IRobot made about 40 percent of its $249 million in sales from military products last year and the rest from consumer robots like Roomba, Greiner said. After winning a five-year, $286 million Army contract in December, military sales this year may rise to 45 percent of the total, Angle said.
Sales at iRobot's consumer and military divisions will grow about 20 percent this year, Angle said at the new 150,000-square-foot headquarters in Bedford, which is about twice the size of its old plant in Burlington. International sales, which were five times higher in the first quarter than a year earlier as a weaker US dollar lifted sales to Europe and Asia, will help make up for any decline in North America, he said.
"If we run the business focused on the long-term opportunity that robots are, and focused on continuing to strategically position ourselves, we will ultimately be rewarded," Angle said. "People will figure it out."
The Roomba is a disc-shaped vacuum small enough to clean under furniture as it navigates through a home on its own. The Army uses the company's PackBot for bomb disposal in Iraq and Afghanistan.
IRobot in 2001 worked with Halliburton Co., the world's second-largest oilfield contractor, to adapt MicroRig for use in oil and gas wells. It works in part by helping keep water from seeping in, helping the wells produce longer.
Any benefit iRobot gets from expanding into industrial products would take years to achieve, outside the time horizon of most investors looking at the next 12 to 18 months, said Alex Hamilton, a New York-based analyst with Jesup & Lamont Securities. He rates the shares "neutral" and doesn't own any.
"Wall Street wants to see results now," Hamilton said. "In the interim, if they can't get a grip on the consumer and government business, the Street is going to punish them."
