iRobot Morgan Stanley Conference Details

iRobot had an extensive Q&A session at Morgan Stanley.

Some notes:
Helen Greiner: Roomba 500 Series Roomba...Ready for the Holiday season. Two-thirds of business has been in the back half of the year. Three years in the making. A lot of input from consumers, work on quality and durability. This is the product that we believe will take us across the chasm.
What about warranty extensions? Geoff: Double and triple the life of the product. Didn't change the warranty policy. Fewer challenges and claims expected.
How is Scooba doing? Helen: It does take some education of the customer base. A whole new process for floor washing. Informercials. What we've discovered is the infomercial not only sells product, sells direct. 2nd Qtr. 33 percent was direct, primarily driven by Scooba sales.
Retailers -- horse driving the cart to being on the cart. Helen: 33 percent direct great news. More of an education about the robot, better margins, train customers to come back to our web page for accessories.
You can find the Roomba everywhere from Target to Lowe's to Sears, almost everywhere you would go to find a vacuum, except Wal-Mart.
Geoff: Not a conflict with retailers. They are ramping up substantially. Very little product in the stores now. New product coming in the next few weeks. They are anxious to have it.
Int'l sales? Geoff: 10-15 percent of sales. Sell through select distributors. 12-18 months, beginning to make significant changes in Europe. Selling direct to national distributors and will start selling direct in back half of 2008. European HQ.
Helen: Said there have been missteps along the way. Excellent in Korea. Geoff: Highest per-capita in Korea of any country. The way the product is marketed. More hands-on, the better. Can't just put it on the shelf and it's going to jump off. (What have I been saying???? Open your own stores!)
Q: Cash deployment, acquisitions? Helen: We haven't gone out and done anything rash. See opportunities for accelerating the market, new products that can take advantage of our distribution. We're very choosy. We're going to be very very selective. Geoff: Don't think you're going to be seeing us gobbling up companies of similar size to ours. May see an investment in a company to get a presence in an intellectual area important to us.
Cash flow? Geoff: Don't see a lot of cash flow, we intend to reinvest the cash in the business.
Competition in vacuums? Helen: No market impact in U.S. (Robots). Overseas knockoffs are $1,000.
Unmanned systems have a lot of attention. We do have competitors. Large defense companies and smaller garage shop entities. We tend to bid on most unmanned ground vehicle programs.
Anybody getting closer to your capabilities? Helen: We do tend to go head to head with one company, Foster-Miller. Working with Boeing, Lockheed Martin. Contract in negotiations.