Adept Technology, Inc. Reports Third Quarter Fiscal 2007 Results.Sales Increase 14% Sequentially Gaining Traction in Vertical Market Strategy LIVERMORE, Calif. -- Adept Technology, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ADEP ADEP Association d'Entraide des Polios et Handicapés ADEP Accelerated Degree Evening Program ADEP Accelerator-Driven Energy Production ADEP Avionics Document for Execution & Planning ADEP Automatic Depth Control ), the leading provider of intelligent vision-guided robotics and global robotics services, today announced financial results for its fiscal 2007 third quarter, ended March 31, 2007. Revenues in the third quarter of fiscal 2007 were $12.6 million, down 16% year-over-year from $15.1 million in the third quarter of fiscal 2006 due to ongoing weakness in certain of the Company's traditional markets over the past several months. On a sequential basis, sales in the fiscal 2007 third quarter grew 14% from the $11.1 million reported in the second quarter of fiscal 2007. Adept has been investing in new products and infrastructure to take advantage of specific high-growth vertical markets globally, including Data Management, Life Sciences, Packaging and Semiconductor/Solar, and to increase sales in Europe and Asia, while transitioning its U.S. revenue base away from slowing industrial markets. Gross margin in the third quarter of fiscal 2007 was 45.7% of revenue, compared with 45.3% of revenue in the third quarter of fiscal 2006 and 35.1% of revenue in the second quarter of fiscal 2007. Improvements in gross margin in the third quarter of fiscal 2007 compared with the previous quarter were the result of improved absorption of manufacturing expenses, increased standard margin on Viper robots due to the availability of MotionBLOX 60 functionality and lower manufacturing costs on remanufactured robots. 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. in the third quarter of 2007 were $8.3 million, and included a $1.9 million non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) associated with the settlement of a dispute by Crosslink Capital Partners with the Company, emanating from an investment of $10 million made by Crosslink in the Company in June 2006. Under the terms of the settlement of its dispute with the Company, described in the 8-K filed by the Company on May 14, 2007, Crosslink will receive an additional 225,000 shares of Adept stock; the parties exchanged mutual releases waiving claims associated with Crosslink Capital Partners' investment in the Company; and Crosslink will continue to maintain its representation on Adept's Board of Directors. Excluding the non-cash $1.9 million settlement expense, fiscal third quarter operating expenses were $6.5 million, essentially flat with $6.6 million in the second quarter of fiscal 2007. Including the non-cash $1.9 million settlement expense, Adept recorded an 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. of $2.6 million in the third quarter of fiscal 2007, compared with an operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $0.2 million in the same quarter of the previous year. Net loss was $2.4 million or $0.32 per basic and diluted share for the third quarter of fiscal 2007, compared with net income of $0.2 million, or $0.03 per basic and $0.02 per diluted share, for the same period of the prior year. Adept's cash and short-term investment balance at March 31, 2006 was $11.0 million, as compared to $11.7 million at December 31, 2006. During the fiscal 2007 third quarter, Adept: * Shipped and saw installation of its first QUATTRO robot, targeted at the high-speed Packaging industry; * Signed new 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 customers for medical device and surgical assist applications in the Life Sciences market; * Shipped record levels of product to European customers from its manufacturing and distribution center in Dortmund, Germany, executing on Adept's strategy to create a more local relationship with European customers and thereby improve market share; * Announced a portfolio of UL and Class 1 clean room products to address the stringent environmental product requirements in the Life Sciences and Data Management verticals; * Improved service revenues and margins by focusing on inventory used in remanufactured robots and evergreen part sales; and * Signed new distributors in both Australia and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. in order to increase market coverage as part of the Company's reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation of sales productivity resources. Robert Bucher, chief executive officer of Adept, commented, "As expected, our Cobra and Viper sales into Europe remained strong, which when combined with traction by QUATTRO and our new inverted inverted reverse in position, direction or order. inverted L block a pattern of local filtration anesthesia commonly used in laparotomy in the ox. COBRA product in the French packaging industry, produced a record European quarter. "To further strengthen our product set in Europe, we continued our investment in the Solar vertical in the third quarter. Our investments in high-growth vertical markets position Adept with a strong product portfolio to address growing revenue opportunities with increased value. While transitioning our business remains a long-term proposition, we continue to make progress in penetrating new verticals, as we saw with both the Packaging and Life Sciences markets in the third quarter. "We also made progress in plans and programs that are designed to rebalance our sales and operational resources to support our target vertical markets much more cost efficiently. We will continue to see progress on these programs in the June quarter," concluded Bucher. Conference Call and Simultaneous Webcast Robert Bucher, Chief Executive Officer, and Steven Moore This biographical article or section needs additional references for verification. Please help [ to improve this article] by adding additional sources. Unverifiable material about living persons must be removed immediately, especially if potentially libelous or harmful. , Vice President and Chief Financial Officer, will host an investor conference call today, May 14, 2007, at 5:00 P.M. Eastern Time to review the Company's financial and operating performance for the third quarter of fiscal 2007. The Company intends not to provide statements regarding the Company's anticipated future 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 from Monday, May 14, 2007 to Friday, May 18, 2007. Listeners should call 719-457-0820 or 888-203-1112 and use CODE No. "6339418". About Adept Technology, Inc. Adept Technology, Inc. designs, manufactures and markets 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 , 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. All trade names are either trademarks or registered trademarks of their respective holders. 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 contains certain forward-looking statements including statements regarding our products, the markets we serve, sources of revenues, market opportunities for Adept's growth, cost reduction activities and impact on margins, 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, factors affecting our fluctuating operating results, 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; financial and operating risks and regulatory requirements 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. ; customers' ability to pay invoices in a timely manner; the risk that some of customers may become insolvent; the company's restructuring efforts and 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; company's highly competitive industry; rapid technological change within the intelligent automation industry; 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 company's outsourced manufacturing dependence and 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. ; risks associated with the seasonality of the company's products; 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 and original equipment manufacturers who may also promote competing products; the need to hire and retain qualified personnel and to complete acquisitions to expand operations; risks associated with variations in our gross margins based on factors which are not always in the company's control or risks related to the company's potential inability to strengthen its internal controls over financial reporting. 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 SEC filings, including the company'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, 2006 and quarterly report on Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended December 31, 2006, which include 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 Risk Factors contained therein. 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