iRobot's BOD approved management's stock buy-back plan, and the first day that iRobot may begin buying back up to $25 million worth of shares is Thursday, March 28th. With a recent acquisition to digest and excess cash on hand, I like that my shares will own more of the company as the buy-back progresses, and I expect to see the stock continue to increase in price over the period as well.
iRobot is in the process of integrating Evolution Robotics, a company it acquired in Fall 2012. As a small company, iRobot's leadership team understands that it will spend 2013 maximizing the benefits of the Evolution Robotics acquisition, and will not become distracted by making a bunch of acquistions. With excess cash and an undervalued share price, management has made a decision to use a small portion of its cash in a stock buy-back program, which I view as a gift to shareholders (in lieu of a dividend payment). Even if iRobot uses all of the $25 million approved for a stock buy-back, the company will still have sufficient cash for other small acquisitions, but my belief is that iRobot has sufficient IP and projects to remain busy as-is. What I am particularly curious about is when iRobot will roll out it's next home helper robot, leveraging knowledge gained from (1) its venture with InTouch Health, (2) its military robots with stair-climbing and other capabilities, (3) its ealier home monitoring robots, and (4) its newly developed suction-based hand that can be used to open doors. The market potential would seem to me to be quite large for a home-based mobile robot that would make it possible for its operator to keep a remote eye on, and to interact with, aging parents, pets, children and/or the babysitter. I think that iRobot finally has all of the key components, as well as the benefit of knowledge from past efforts, to build a first-of-its-kind, reasonably priced, extremely functional multi-use home robot.
With a market cap of only around $31 million, yes, iRobot could buy Adept Technology. Buy why would iRobot want to do so? ADEP is losing money every year, and its robots are in the lower-margin industrial automation sector primarily - not where iRobot wants to play right now. iRobot does not need a mill stone like Adept, and the company is wise to only pursue truly complimentary companies such as Evolution Robotics, with profitable products in and around iRobot's consumer space (the Mint), and which also brought great I.P. and wonderful "human capital" including Dr. Paolo Pirjanian, who is now iRobot's Chief Technology Officer.