Adept Technology, Inc. Reports Strong Top Line Revenue Growth in First Quarter Fiscal 2006; Both Intelligent Robotic and Worldwide Service Operations Show Substantial Margin Improvement.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 its first quarter fiscal 2006 which ended October 1, 2005. Revenues were $14.6 million, an increase of $3.3 million or 29.6% over the comparable period in fiscal 2005. Gross margin for the first quarter 2006 was $7.5 million, an increase of $2.0 million or 36.7% from the same period of the prior year. Adept reported net income of $160,000 or $0.03 per basic share for the three months ended October 1, 2005, versus net income of $40,000, or $0.01 per basic share, for the same period a year ago. The results compared with the same quarter in fiscal 2005 are highlighted in the table below:
Revenue from Operating Net Income Basic
Time Period Continuing Gross Margin Income (Loss) EPS
Operations
---------------- ------------ ------------ --------- ---------- ------
Current quarter:
Q1-06 $14,641 $7,474 $ 358 $160 $0.03
---------------- -------- ------- ------ ----- ------
Prior year's
quarter: Q1-05 $11,293 $5,466 $ 6 $ 40 $0.01
---------------- -------- ------- ------ ----- ------
Change from Q1-
05 to Q1-06 29.6% 36.7% 5867% 300% 200%
---------------- -------- ------- ------ ----- ------
"The first quarter of fiscal 2006 showed the best operational performance since I have been with the company," said Robert Bucher, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Adept posted a robust top line revenue growth and a historic high gross margin. Adept nearly doubled its service revenue and increased assembly robot revenue from vertical market sales in the USA and S.E. Asia. European revenue was relatively high for a summer quarter, due to design win bookings and new customers in Germany and France. And with volume delivery of the new Adept MotionBLOX(TM) motion control platform, Adept's margins continue to improve, reflecting common Adept 'Smart Servo' software and system investments." During the quarter, Adept also launched Adept Python Python, in Greek mythology Python, in Greek mythology, a huge serpent. In some myths the infant Apollo slew Python at the oracle of Gaea in Delphi; in others Apollo killed the serpent in order to claim the oracle for himself. (TM), a high performance, but low cost, line of linear robots, an extended reach Adept Viper(TM) 6-axis robot and a smaller footprint, Adept Cobra(TM) SCARA 4-axis robot. As part of this major product introduction, Adept invested in trade show and seminar participation and added new product and service sales and support staff. This included an aggressive "brand label" marketing effort to expand Adept's served markets and geographies. "With these investments we have balanced our new organization between sales and marketing, product development, and field service and support to achieve and maintain good top line growth," commented Robert Bucher. New marketing methods and distribution tools are also being deployed. Adept's updated web-site (www.adept.com) now allows customers to define, customize and order complex robotic systems robotic system An integrated system of devices that automate production and manufacturing of goods and services Surgery An AI-based surgical assistant system, which processes sensory input from haptic interfaces and/or allows surgeons to act with more accuracy than , online, from anywhere in the world. Production line designers can build complete one, two and three axis Adept Python robots with Adept controls, cabling, brackets brackets: see punctuation. , mounts, etc. This powerful tool builds standard commercial 3D and 2D CAD (computer aided design (application) Computer Aided Design - (CAD) The part of CAE concerning the drawing or physical layout steps of engineering design. Often found in the phrase "CAD/CAM" for ".. manufacturing". ) files and, once completed, generates the proposal and working files required to immediately launch manufacturing. The result is a custom product delivered to the customer in weeks, versus months, with perfect fit and maximum quality. Bucher continued, "Online design with www.adept.com is a breakthrough service for our customers who want Adept quality 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 , Adept 24/7 parts and support, and fast product delivery anywhere in the world." Details of the First Quarter Statement of Operations See Income statement. Highlights -- Three months ended October 1, 2005 --Adept, 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. manufacturer in the USA, delivered 52% more SCARA and 6-axis intelligent multi-axis robots in the first quarter of fiscal 2006 than the same period last year. --Adept launched and delivered MotionBlox 10 and MotionBlox 40, a new generation of high reliability, networked, one- and four-axis motion controllers with Adept Smart Servo An electromechanical device that uses feedback to provide precise starts and stops for such functions as the motors on a tape drive or the moving of an access arm on a disk. (TM) performance and precision. --Adept launched and delivered the Adept Viper 850 intelligent 6-axis robot, the Adept Cobra 350 intelligent SCARA robot and the Adept Python intelligent linear robot. With this new product launch, the Adept portfolio is the industry's most complete robotic ro·bot·ic adj. Relating to, characteristic of, or employing robots. product line for small part Material Handling and Assembly automation. --Revenue for the first quarter of fiscal 2006 increased 29.6% from the first quarter of fiscal 2005. The increase resulted from strong sales in both the Robotics and Service business segments. Robotics segment revenues increased due to continuing strong sales of 4-axis Cobra robots and improving sales of the new 6-axis Viper robots, partially offset by reduced revenues from vision software. The Service segment benefited from very substantial growth in revenues from the sale of remanufactured robots. --Gross margin was 51.0% in the first quarter of fiscal 2006 compared to 48.4% in the same quarter of fiscal 2005. The gross margin improvement resulted from a sales mix sales mix See product mix. favoring favoring an animal is said to be favoring a leg when it avoids putting all of its weight on the limb. A part of being lame in a limb. higher margin products, as well as 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. . --Research & Development (R&D) expense in the first quarter of fiscal 2006 increased 14.5% from the first quarter of fiscal 2005. The growth in R&D outlays Outlays Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interest coupons. was the result primarily of increased expenditures for software development activities. --Selling, General & Administrative (SG&A) expense increased 36.2% in the first quarter of 2006 as compared with the first quarter of 2005. The increases are primarily due to several sales and marketing projects for new product launches and sales development activities, plus higher expenses for audit work and legal review relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. matters as well as the company's public reporting requirements, partially offset by a reduction in charges for bad debt. --Restructuring expenses for the first quarter of fiscal 2005 reflect a reversal of $42,000 of 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. as we subleased an unused field sales office. --Currency exchange loss in the first quarter of fiscal 2006 was $164,000 as compared with a gain of $83,000 in the first quarter of fiscal 2005. The currency exchange gains and losses are primarily related to movement in the Euro as compared with the U.S. Dollar. Balance Sheet Highlights -- October 1, 2005 --Adept's cash and short-term investment balance at October 1, 2005 was $3.8 million as compared to $5.3 million at June 30, 2005. The principal reason for the reduced cash position was the increase in trade receivables. --Net 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 at October 1, 2005 was $14.2 million, an increase of $3.0 million or 26.6% from the balance at June 30, 2005. 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 October 1 were 79 days compared to 68 days at June 30, 2005. The increase in receivables is primarily the result of strong sales for the quarter. Balance Sheet Highlights -- October 1, 2005 (Continued) --Inventories at October 1, 2005 were $10.1 million, a decrease of 0.7% from $10.2 million at June 30, 2005. 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, November 2, 2005, at 5:00p.m. Eastern Time to review the company's financials and operations for the first quarter of fiscal 2006. The company intends not to provide statements regarding the company's anticipated financial performance. 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 of the conference call will also be available for five business days from Wednesday, November 2, 2005 to Wednesday, November 9, 2005. Listeners should call 719-457-0820 or 888-203-1112 and use CODE No. "2218604." About Adept Technology, Inc. Adept Technology, Inc. designs, manufactures and markets robotic systems, motion control and machine vision technology for global markets including automotive, consumer electronics, consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and , disk drive, food, industrial tooling, medical devices, and pharmaceutical. Adept robots, controllers, and software are used for small parts assembly, material handling and packaging. Adept intelligent automation product lines include industrial robots, configurable linear modules, machine controllers for robot mechanisms and other flexible automation equipment, machine vision, and systems and applications software. Founded in 1983, Adept Technology is the largest U.S.-based manufacturer of industrial robots. More information is available at www.adept.com. 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. This press release may contain certain forward-looking statements including statements regarding cost controls, margins, expenses, revenues, 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; 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 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 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, 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)
(unaudited)
Three months ended
-----------------------
October 1, October 2,
2005 2004
----------- ----------
Revenues $14,641 $11,293
Cost of revenues 7,167 5,827
-------- --------
Gross margin 7,474 5,466
Operating expenses:
Research, development and engineering 1,902 1,661
Selling, general and administrative 5,165 3,793
Restructuring expenses (reversals) - (42)
Amortization of other intangibles 49 48
-------- --------
Total operating expenses 7,116 5,460
-------- --------
Operating income (loss) 358 6
Interest income (expense), net (28) (37)
Currency exchange gain (loss) (164) 83
-------- --------
Income before income taxes 166 52
Provision for income taxes 6 12
-------- --------
Net income $ 160 $ 40
======== ========
Basic net income per share $ 0.03 $ 0.01
======== ========
Diluted net income (loss) per share $ 0.02 $ 0.01
======== ========
Basic number of shares used in computing per
share amounts: 6,173 5,978
======== ========
Diluted number of shares used in computing per
share amounts: 7,971 7,801
======== ========
Note: Amounts for prior periods have been reclassified to conform to
present year's presentation.
ADEPT TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
October 1, June 30,
2005 2005 (a)
---------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 3,754 $ 5,334
Accounts receivable, less allowance for
doubtful accounts of $855 at October 1, 2005
and $754 at June 30, 2005 14,156 11,184
Inventories 10,130 10,201
Prepaid expenses and other current assets 384 642
-------- --------
Total current assets 28,424 27,361
Property and equipment at cost 10,563 10,112
Less accumulated depreciation and amortization 9,000 8,869
-------- --------
Net property and equipment 1,563 1,243
Goodwill 3,176 3,176
Other intangibles, net 179 228
Other assets 187 201
-------- --------
Total assets $33,529 $32,209
======== ========
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 3,000 $ 3,000
Accounts payable 6,964 6,916
Accrued warranty 1,944 2,040
Other accrued liabilities 3,209 2,310
-------- --------
Total current liabilities 15,117 14,266
Commitments and contingencies
Long term liabilities:
Subordinated convertible note - -
Other long term liabilities 216 242
Redeemable convertible preferred stock - -
Total shareholders' equity 18,196 17,701
-------- --------
Total liabilities and shareholders' equity $33,529 $32,209
======== ========
(a) Based on audited information included on Form 10-K for fiscal year
ended June 30, 2005.
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