The leader in developing robotic based solutions, iRobot Corporation (NASDAQ:IRBT), reported two bits of business news on its operations in the second quarter: one on its home-side of business and the other on its defense business. The home side of the business continues to perform well in the Industry shown by its full year guidance that is up by 19% year-over-year, according to its CEO, Colin Angle, in an Interview on CNBC.
The defense system business is also doing well with the CEO announcing that the company is in line to sign some large defense contracts. Free cash flow, on the other hand, remains solid despite iRobot Corporation (NASDAQ:IRBT) making a number of adjustments that suppressed margins in the quarter with expectations remaining high that the same will come back to single digits as of the end of the year. Mr. Angie said:
“Cash is all very strong. We had a few adjustments that we made this quarter that suppressed margins, but we expect cash flow to come back in heated ties of single digits by the end of the year as predicted.”
The defense industry continues to pose the biggest challenge for the company taking into consideration how it is extremely unpredictable although it accounts for 10% of the company’s earnings. iRobot Corporation’s (NASDAQ:IRBT) other big challenge is that it can’t sell to anyone its defense robots due to regulations from the U.S government thereby limiting its ability to enjoy the benefits of mass sales. The CEO continued:
“You know what, our products are controlled by certain U.S regulations. Basically, [for] NATO nations, we are all free and clear to sell to. There are some states out of NATO where there are restrictions, but we sell to dozens of companies at this point.”
iRobot Corporation (NASDAQ:IRBT)’s defense robots have been used in a number of occasions for detecting bombs with the recent one being at the recent Boston marathon tragedy. After the event, the company’s 20 robots were used by police officers and the SWAT team to detect any hidden explosive devices.
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