Adept Technology, Inc. Reports Continued Earnings Improvements in Fourth Quarter and Fiscal 2005; Expands Intelligent Robotic Sales and Marketing Programs to Generate Revenue Growth.LIVERMORE, Calif. -- Adept Technology, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ADEO ADEO Air Defense Engagement Operations (US Army) ) today announced results of its operations for the fourth quarter fiscal 2005 which ended June 30 included revenue of $14.4 million and net income of $633,000, or $0.10 per share. These results are compared with results for the same quarter of fiscal 2004 in the table below:
Income
(loss)
Revenue from Net
Time Period from Gross Continuing Income Basic
Continuing Margin Operations (Loss) EPS
Operations Before
Income
Taxes
----------------------------------------------------------------------
Current quarter:
Q4-05 $14,377 $6,407 $604 $633 $0.10
----------------------------------------------------------------------
Prior year's quarter:
Q4-04 $14,465 $6,099 $557 $569 $0.10
----------------------------------------------------------------------
Change from Q4-04
to Q4-05 (0.6)% 5.1% 8.4% 11.2% -
----------------------------------------------------------------------
For the fiscal year ended June 30, 2005, Adept reported revenues of $50.5 million, net income of $1.0 million, and earnings per share of $0.17. These results are compared with fiscal 2004 in the table below:
Income
(loss)
Revenue from Net
Time Period from Gross Continuing Income Basic
Continuing Margin Operations (Loss) EPS
Operations Before
Income
Taxes
----------------------------------------------------------------------
Fiscal 2005 $50,480 $23,161 $1,025 $1,025 $0.17
----------------------------------------------------------------------
Fiscal 2004 $49,084 $19,596 $(1,664) $(7,325)$(1.35)
----------------------------------------------------------------------
Change from
2004 to 2005 2.8% 18.2% NM NM NM
----------------------------------------------------------------------
"Adept now has recorded 6 straight quarters of operational profitability and the first annual profitability since fiscal year 1999. This success required a disciplined business model combining cost control, sales focus and operational streamlining," said Robert Bucher, chairman and chief executive officer of Adept Technology, Inc. "Now our focus will expand to generate top line growth in fiscal 2006. To fuel that growth, we are introducing an expanded portfolio of Intelligent Adept Cobra(TM) SCARA and AdeptViper(TM) 6-axis robots, plus a broad lineup A criminal investigation technique in which the police arrange a number of individuals in a row before a witness to a crime and ask the witness to identify which, if any, of the individuals committed the crime. of non-proprietary Adept SmartController(TM) Motion Controls and Adept iSight(TM) Machine Vision products. New sales programs will target both competitor markets and new market geographies for material handling and assembly robotics robotics, science and technology of general purpose, programmable machine systems. Contrary to the popular fiction image of robots as ambulatory machines of human appearance capable of performing almost any task, most robotic systems are anchored to fixed positions systems." During the fourth quarter, Adept rounded out its management team with the appointment of Barry Dale as vice president, worldwide sales, and Janine Roth as vice president, marketing. The Company also formed a dedicated worldwide Adept service business unit reporting to Lee Blake. "These changes reflect our renewed focus on marketing, sales and sales channel development," Bucher remarked. "Combined with our expanded product portfolio, additions to our veteran sales staff, and the previously announced in-country Asia and China programs, European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. manufacturing and delivery center, and vertical markets selling team, we are structured to drive increased revenue from sales and service worldwide." Bucher continued, "Already, sales traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in our vertical markets programs is contributing significantly to our growth, generating over 20% of our fourth quarter 2005 revenue. Our focus on the major manufacturers of disk drive, smart card, cell phones and consumer electronic products has produced major design wins in the US, Northern Europe, Singapore, and China. The vertical markets team also has been the major contributor to our increased bookings in service sales, primarily from remanufactured robotics systems destined des·tine tr.v. des·tined, des·tin·ing, des·tines 1. To determine beforehand; preordain: a foolish scheme destined to fail; a film destined to become a classic. 2. for expanding Asian manufacturing plants." Adept believes its extensive and growing product portfolio, service offerings and expanded sales teams will deliver further revenue opportunities. Whether in the Americas, Asia, or Europe, Adept is well positioned to grow with the market as investments by manufacturers continue to improve. This effort, together with the company's ongoing operational execution, provides a solid basis for improved top line results and shareholder value. Details of the Fourth Quarter and Fiscal Year Statement of Operations See Income statement. Highlights - Three months and year ended June 30, 2005 --Revenue for the fourth quarter of fiscal 2005 decreased 0.6% from the fourth quarter of fiscal 2004. The decrease resulted from reduced sales of components for semiconductor manufacturing systems, partially offset by increased sales of remanufactured robots in the Company's Service and Support business segment. Revenue for fiscal 2005 increased 2.8% over fiscal 2004. The revenue increase was the result primarily of strong sales of Adept's Cobra family of robots, which are 4-axis SCARA (Selective Compliance Assembly Robot robot or automaton (ôtäm`ətän') mechanical device designed to perform the work generally done by a human being. Arm) robot mechanisms designed primarily for assembly and material handling applications, increased sales of 6-axis robots, and a significant software license sale in the first quarter of 2005. --Gross margin was 44.6% in the fourth quarter of fiscal 2005 compared to 42.2% in the same quarter of fiscal 2004. The gross margin improvement resulted from improved robot component designs, increased outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of robot subassemblies, and reduced manufacturing overhead costs overhead costs see fixed costs. . For fiscal 2005, gross margin was 45.9% as compared with 39.9% in fiscal 2004. The gross margin improvement resulted from the above-mentioned items plus the software license sale in the first quarter with low associated cost of revenue. --Research & Development (R&D) expense in the fourth quarter of fiscal 2005 decreased 0.4% from the fourth quarter of fiscal 2004. R&D expense for fiscal 2005 decreased 3.0% from fiscal 2004. The decreases are primarily the result of modest reductions in headcount and expanding operations at lower cost facilities. --Selling, General & Administrative (SG&A) expense increased 18.4% in the fourth quarter of 2005 as compared with the fourth quarter of 2004. Increases were incurred in selling expenses, legal services legal services n. the work performed by a lawyer for a client. and audit fees, partially offset by a reduction in bad debt reserves. SG&A expense for fiscal 2005 increased 8.7% from fiscal 2004. The increases were in selling, marketing, customer service, and audit expenses, offset in part by a reduction in bad debt reserves. --Restructuring charge reversals of $33,000 for fiscal 2005 resulted from early lease terminations, and those in fiscal 2004 reflect a net reversal of $697,000 in previously accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. resulting from favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. settlement of an outstanding lease obligation. --Amortization of other intangibles for the fourth quarter and fiscal 2005 were $49,000 and $195,000, respectively, as compared with $111,000 and $538,000 for the same respective periods of the prior year as certain other intangibles are now fully amortized. --Net interest expense was $30,000 for the fourth quarter of fiscal 2005 as compared with $28,000 for the fourth quarter of fiscal 2004. For fiscal 2005, net interest expense was $163,000 as compared with $362,000 for fiscal 2004. In fiscal 2005 the net interest expense was primarily the accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. on Adept's $3 million convertible note, whereas the prior year charges also included interest on borrowings under an accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying purchase facility which has since been repaid. --Other income of $314,000 was recorded in the fourth quarter of 2005 as we disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of equity positions in third parties, the substantial majority of which we had previously written off. --Currency exchange loss in the fourth quarter of fiscal 2005 was $104,000 as compared with a loss of $95,000 in the fourth quarter of fiscal 2004. For fiscal 2005 the currency exchange gain was $270,000 while in fiscal 2004 the gain was $304,000. The currency exchange gains or losses in all periods are primarily related to movement in the Euro as compared with the U.S. Dollar. --The provision for income taxes for fiscal 2005 is zero as the Company has utilized its operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carryforwards Carryforwards Tax losses allowed to be applied to offset future income in some specified number of future years. to offset both domestic and foreign taxes. Benefit from income taxes for the fourth quarter and fiscal year 2004 reflects a one-time benefit for the reversal of previously accrued taxes that resulted from management's reassessment Reassessment The process of re-determining the value of property or land for tax purposes. Notes: Property is usually reassessed on an annual basis. You may request a "reassessment" if you disagree with your assessment. of the appropriate level of tax contingency contingency n. an event that might not occur. accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for the Company. --During the third quarter of fiscal 2004, Adept adopted a formal plan and completed the disposition of its Solutions business. Accordingly, the Solutions business was accounted for as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. and the results of its operations have been removed from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the third quarter of fiscal 2004. The after tax loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for that quarter was $7.0 million. Balance Sheet Highlights - June 30, 2005 --Adept's cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investment balance at June 30, 2005 was $5.3 million as compared to $5.0 million at June 30, 2004. --Net accounts receivable at June 30, 2005 was $11.2 million, a decrease of $2.2 million or 16.4% from the balance at June 30, 2004. Trade accounts receivable days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO See CSO. ) at June 30 was 68 days compared to 90 days at June 30, 2004, and reflects significant collection of past due receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . --Inventories at June 30, 2005 were $10.2 million, an increase of 64% from $6.2 million at June 30, 2004. The inventory increase is the result of a program to improve customer order lead times by maintaining standard robot components in stock, as well as increased parts inventory Noun 1. parts inventory - an inventory of replacement parts inventory, stock list - a detailed list of all the items in stock to support expansion of the remanufacturing and service business. Business Trends and Financial Outlook --Adept is the largest industrial robot An industrial robot is officially defined by ISO[1] as an automatically controlled, reprogrammable, multipurpose manipulator programmable in three or more axes. company manufacturing in the USA, delivering over 1,000 multi-axis robots and nearly 2,000 robotic ro·bot·ic adj. Relating to, characteristic of, or employing robots. motion and vision controllers annually. Fourth quarter 2005 figures, supported by independent industry association statistics, show Adept domestic market share growing to 50% in small part electronic assembly and to over 40% of all reporting companies in our key Cobra SCARA product marketplace. As reported quarterly this year, Adept intelligent robot deliveries continue to increase. 4-axis and 6-axis robot unit deliveries, primarily the Cobra SCARA 600 and 800's, grew a total of 41% this year, exceeding our original business model goal for fiscal 2005. --Adept robotic sales revenue in Europe expanded by 103% over fiscal 2004, providing good return on investments made in local delivery and expanded sales and service support from our Dortmund Germany facility. These trends were driven by stronger German and French automotive electronics and packaging projects, offsetting weakness in similar markets domestically. --The fourth quarter of fiscal 2005 saw service revenues increase 45% from the fourth quarter of 2004 and 52% over the third quarter fiscal 2005. These results are primarily from new in-field technical support products and a record total of 95 remanufactured robots being delivered to customers around the world. Total remanufactured robot deliveries in fiscal 2005 were 281 units, increasing our best-ever yearly total by over 100%. However, this represents less than 4% of the total Adept legacy product installations we've targeted as remanufacture opportunities for us. --Our ongoing focus on cost control is anticipated to continue to gradually improve margins as revenue improves. With our fiscal 2006 focus on sales growth across our global markets, we expect revenue for the first quarter of fiscal 2006 to be between $13.0 million and $14.5 million. At that revenue level, gross margin is expected to be in the 44%-47% range and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. (R&D and SG&A) from continuing operations are expected to be between approximately $6.0 and 6.3 million. --The company expects its cash and short-term investment balance to be between $4 and $6 million at October 1, 2005, the end of its first quarter of fiscal 2006. Analyst Conference Call and Simultaneous Webcast Robert Bucher, Chairman and Chief Executive Officer and Robert Strickland, Vice President and Chief Financial Officer will host an investor conference call today, September 1, 2005, at 5:00p.m. Eastern Time to review the company's financials and operations for the fourth quarter and fiscal 2005. The call will include statements regarding the company's anticipated financial performance in the first quarter of fiscal 2006. These statements will be forward-looking, and actual results may differ materially. The company intends to continue its practice of not updating forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. until its next quarter end results announcement. The call will be open to all interested investors through a live audio Web broadcast via the Internet at www.streetevents.com or may be accessed through the investor relations Investor relations The process by which the corporation communicates with its investors. section of our website at www.adept.com. For those who are not available to listen to the live broadcast, the call will be archived at www.adept.com, www.streetevents.com and www.fulldisclosure.com. A telephonic playback Playback could mean:
About Adept Technology, Inc. Adept Technology designs, manufactures and markets factory automation components for the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , consumer electronics, semiconductor, automotive, lab automation and pharmaceutical industries throughout the world. Adept's robots, controllers, and software products are used for small parts assembly, material handling and precision process applications. Our intelligent automation product lines include industrial robots, configurable linear modules, flexible feeders, semiconductor process components, OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and motion controllers for robot mechanisms and other flexible automation equipment, machine vision systems and software, and application software. Founded in 1983, Adept is America's largest manufacturer of industrial robots. More information is available at www.adept.com Forward-Looking Statements This press release contains certain forward-looking statements including statements regarding cash balances, expenses and cost controls, margins, revenues, future operating results, strategic marketing initiatives, and market shares that involve a number of risks and uncertainties. The company's actual results could differ materially from those expressed in any of the above forward-looking statements for a variety of reasons, including but not limited to, its customers' ability to pay invoices in a timely manner; the risk that some of its customers may become insolvent INSOLVENT. This word has several meanings. It signifies a person whose estate is not sufficient to pay his debts. Civ. Code of Louisiana, art. 1980.. A person is also said to be insolvent, who is under a present inability to answer, in the ordinary course of business, the responsibility ; future economic, competitive and market conditions including those in Europe and Asia and those related to the company's strategic markets; risks of acceptance of the company's new or current products in the marketplace; the financial and operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. and regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. associated with the company's international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. ; the company's limited cash resources, continuing operating losses and negative cash flow which could impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. the company's operations and revenue generating activities; the risk associated with the effectiveness of the company's restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities; risks associated with our management reorganization; the cyclicality of capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. of the company's customers, including in the semiconductor industry and lack of long-term customer contracts; the company's dependence on the continued growth of the intelligent automation market; the company's highly competitive industry; rapid technological change within the intelligent automation industry; the lengthy sales cycles for the company's products; the company's significant fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). which are not easily reduced; the risks associated with sole or single sources of supply and lengthy procurement lead times The interval in months between the initiation of procurement action and receipt into the supply system of the production model (excludes prototypes) purchased as the result of such actions. It is composed of two elements, production lead time and administrative lead time. ; the risks associated with the seasonality of the company's products; the risks associated with product defects; the potential delays associated with the development and introduction of new products or software releases; the company's ability to sell its products through systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. and original equipment manufacturers who may also promote competing products; or risks associated with variations in our gross margins based on factors which are not always in our control. For a discussion of risk factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Adept's business, see Adept's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended June 30, 2004 and quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarters ended October 2, 2004 and January 1, 2005, and April 2, 2005 including the discussion in Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations and Factors Affecting Future Operating Results contained therein.
ADEPT TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended Year ended
------------------- --------------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
-------- -------- ----------- --------
(unaudited) (unaudited)
Net revenues $14,377 $14,465 $50,480 $49,084
Cost of revenues 7,970 8,366 27,319 29,488
-------- -------- ----------- --------
Gross margin 6,407 6,099 23,161 19,596
Operating expenses:
Research, development and
engineering 1,859 1,867 6,868 7,082
Selling, general and
administrative 4,075 3,441 15,527 14,279
Restructuring expenses
(reversals) - - (33) (697)
Amortization of other
intangibles 49 111 195 538
-------- -------- ----------- --------
Total operating expenses 5,983 5,419 22,557 21,202
-------- -------- ----------- --------
Operating income (loss) 424 680 604 (1,606)
Interest income (expense), net (30) (28) (163) (362)
Other income 314 - 314 -
Currency exchange gain (loss) (104) (95) 270 304
-------- -------- ----------- --------
Income (loss) from continuing
operations before income
taxes 604 557 1,025 (1,664)
Provision for (benefit from)
income taxes (29) (141) - (1,555)
-------- -------- ----------- --------
Income (loss) from continuing
operations 633 698 1,025 (109)
Loss from discontinued
operations, net of tax - (129) - (7,216)
-------- -------- ----------- --------
Net income (loss) $633 $569 $1,025 $(7,325)
======== ======== =========== ========
Basic income (loss) per share
from:
continuing operations $0.10 $0.12 $0.17 $(0.02)
======== ======== =========== ========
discontinued operations $0.00 $(0.02) $0.00 $(1.33)
======== ======== =========== ========
Basic net income (loss) per
share $0.10 $0.10 $0.17 $(1.35)
======== ======== =========== ========
Diluted income (loss) per
share from:
continuing operations $0.09 $0.10 $0.15 $(0.02)
======== ======== =========== ========
discontinued operations $0.00 $(0.02) $0.00 $(1.33)
======== ======== =========== ========
Diluted net income (loss)
per share $0.09 $0.08 $0.15 $(1.35)
======== ======== =========== ========
Basic number of shares used in
computing per share amounts
from:
continuing operations 6,136 5,978 6,063 5,427
======== ======== =========== ========
discontinued operations 6,136 5,978 6,063 5,427
======== ======== =========== ========
Diluted number of shares used
in computing per share amounts
from:
continuing operations 7,939 7,801 7,873 5,427
======== ======== =========== ========
discontinued operations 7,939 7,801 7,873 5,427
======== ======== =========== ========
Note: Amounts for prior periods have been reclassified to conform to
present year's presentation.
ADEPT TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, June 30,
2005 2004(a)
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $5,334 $4,957
Accounts receivable, less allowance for doubtful
accounts of $633 at June 30, 2005 and $1,269 at
June 30, 2004 11,184 13,385
Inventories 10,201 6,233
Prepaid expenses and other current assets 581 656
-------- --------
Total current assets 27,300 25,231
Property and equipment at cost 10,112 9,372
Less accumulated depreciation and amortization 8,869 7,924
-------- --------
Net property and equipment 1,243 1,448
Goodwill 3,176 3,176
Other intangibles, net 228 423
Other assets 1,182 1,293
-------- --------
Total assets $33,129 $31,571
======== ========
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK
AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $3,000 $-
Accounts payable 6,916 5,689
Accrued warranty 2,040 2,111
Other accrued liabilities 2,160 3,721
-------- --------
Total current liabilities 14,116 11,521
Commitments and contingencies
Long term liabilities:
Subordinated convertible note - 3,000
Other long term liabilities 1,582 1,422
Redeemable convertible preferred stock - -
Total shareholders' equity 17,431 15,628
-------- --------
Total liabilities and shareholders'
equity $33,129 $31,571
======== ========
(a) Based on audited information included on Form 10-K for fiscal year
ended June 30, 2004.
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