Adept Technology, Inc. Reports Third Quarter Results; Vertical Market Sales Efforts in Consumer and Telecom Post First Design Wins.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 third quarter fiscal 2005 which ended April 2, 2005 included revenue of $13.0 million and net income of $292,000, or $0.05 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. These results are compared with results for the same quarter of fiscal 2004 in the table below:
Income (loss)
Revenue from from
Time Period Continuing Gross Continuing
Operations Margin Operations Net Income
Before Income (Loss) EPS
Taxes
----------------------------------------------------------------------
Current quarter:
Q3-05 $13,025 $5,964 $303 $292 $0.05
----------------------------------------------------------------------
Prior year's
quarter: Q3-04 $13,334 $5,512 $510(a) $(5,057) $(0.86)
----------------------------------------------------------------------
Change from Q3-04
to Q3-05 (2.3)% 8.2% (40.6)% NM NM
----------------------------------------------------------------------
(a) Income from continuing operations includes a reversal of
$697,000 of restructuring cost accruals
Net revenues from continuing operations for the nine months ended
April 2, 2005 were $36.1 million and net income was $392,000, or $0.06
per diluted share. These results are compared with the first nine
months of fiscal 2004 in the table below:
Income (loss)
Revenue from from
Time Period Continuing Gross Continuing
Operations Margin Operations Net Income
Before Income (Loss) EPS
Taxes
----------------------------------------------------------------------
Current quarter:
Nine Months-05 $36,103 $16,754 $421 $392 $0.06
----------------------------------------------------------------------
Prior year period
Nine Months-04 $34,619 $13,497 $(2,221) $(7,894) $(1.77)
----------------------------------------------------------------------
Change from
9 mos 04 to
9 mos-05 4.3% 24.1% NM NM NM
----------------------------------------------------------------------
"Adept shipped a record number of robots during the quarter," commented Robert Bucher, 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. of Adept Technology, Inc. "Quarterly revenues, although flat from last year, showed a major increase in core and new product revenue from both the robotic ro·bot·ic adj. Relating to, characteristic of, or employing robots. and service business units, fully replacing less profitable component and semiconductor revenue. After taking into account the 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). reversal of last year, these improved margins from new product developments and investments and a change in sales focus, resulted in 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. versus a loss last year. Altogether a very encouraging result. "Revenue improved by 10.5% and profitability was $311,000 versus a loss in the second quarter of fiscal 2005. Gross margin for the quarter was 45.8%, an increase from 41.3% for the same period last year. Standard product margins continue to increase quarter-to-quarter, reflecting the new product introductions, continued volume ramp-up and yet to be released product initiatives, plus greater supply chain improvements and investments in cost reduction, standardization standardization In industry, the development and application of standards that make it possible to manufacture a large volume of interchangeable parts. Standardization may focus on engineering standards, such as properties of materials, fits and tolerances, and drafting and 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. . "This quarter we moved to a vertical sales and market organization," continued Bucher. "Adept products and services better reflect the project and performance needs of our key Global and Fortune 500 customers supplied through strong integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. and 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 channels. Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. continued to be strong, driven by expansion and upgrade of consumer, telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. , medical and automotive electronic precision manufacturing and assembly plants. International markets increased and remain strong, representing over 60% of total sales. Our service revenue from parts, training and applications improved and we have maintained momentum in the Adept remanufactured product portfolio. This produced a record service backlog, primarily for disk drive assembly applications 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 China and Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. markets." Bucher continued, "A key company milestone was met with the introduction of the advanced AdeptViper(TM) 6-axis robotic. During the quarter we delivered 60 units of AdeptViper to a global cell phone contract manufacturer as part of a multi-year flexible manufacturing project. Adept iSight(TM) vision guidance and inspection was also introduced in the quarter. Adept iSight provides advanced object refinement and resolution with simple integrated application development tools for robotic assembly operations. The Adept iSight machine vision products along with the AdeptViper 6-axis and Adept Cobra(TM) SCARA robots give Adept the strongest portfolio of simple-to-use, performance products on a common Adept SmartController(TM) network." Bucher concluded, "The overall result of substantial improvement in profitable operations due to focused investment in engineering, service and sales programs is starting to take hold at Adept. We are now moving to take advantage of these expanded served markets and growth opportunities that will drive our shareholder value through increased revenue and profitability." Details of the Third Quarter and Nine Months Statement of Operations See Income statement. Highlights - Three and nine months ended April 2, 2005 --Revenue 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 2005 decreased 2.3% from the third quarter of fiscal 2004. The decrease resulted from reduced sales of components for semiconductor manufacturing systems, partially offset by increased sales of the Company's new AdeptViper(TM) 6-axis robot. Revenue from continuing operations for the first nine months of 2005 increased 4.3% over the comparable period in 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 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 from continuing operations was 45.8% in the third quarter of fiscal 2005 compared to 41.3% in the same quarter of fiscal 2004. The gross margin improvement resulted from improved robot component designs, increased outsourcing of robot subassemblies, reduced manufacturing overhead costs overhead costs see fixed costs. , and a reduction in inventory reserves. For the nine months, gross margin was 46.4% in fiscal 2005 as compared with 39.0% 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 from continuing operations in the third quarter of fiscal 2005 increased 5.4% from the third quarter of fiscal 2004. The increase resulted primarily from development work on the AdeptViper. R&D expense from continuing operations for the nine months of fiscal 2005 decreased 4.0% from the comparable period in fiscal 2004. This decrease is primarily the result of reduced headcount and decreased project spending in the first half of fiscal 2005. --Selling, General & Administrative (SG&A) expense from continuing operations was essentially unchanged in the third quarter of 2005 as compared with the third quarter of 2004, and increased 5.7% for the nine months of 2005 as compared with the same period in fiscal 2004. The increase reflects increases in sales compensation and the conversion to vertical markets. --Restructuring charges for the third quarter and nine months of 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 from continuing operations for the third quarter and nine months of fiscal 2005 was $49,000 and $146,000 respectively as compared with $142,000 and $427,000 for the same respective periods of the prior year as certain other intangibles are now fully amortized. --Net interest expense was $58,000 for the third quarter of fiscal 2005 as compared with $71,000 for the third quarter of fiscal 2004. For the nine months of fiscal 2005, net interest expense was $133,000 as compared with $334,000 for the nine months of 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. --Currency exchange gain in the third quarter and nine months of 2005 was $50,000 and $374,000 respectively, as compared with $34,000 and $399,000 respectively for the same periods of fiscal 2004. The currency exchange gains in all periods are primarily related to the strengthening Euro as compared with the U.S. Dollar. --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 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 - April 2, 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 April 2, 2005 was $3.4 million as compared to $5.0 million at June 30, 2004. --Net accounts receivable at April 2, 2005 was $12.2 million, a decrease of $1.2 million or 8.7% 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 March 31 was 81 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 April 2, 2005 were $8.7 million, an increase of 39.6% 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 --The company expects its cash and short-term investment balance to be between $3 and $5 million at June 30, 2005, the end of its fiscal year 2005. --Our recently announced AdeptViper 6-axis robot line, increasing shipments from our new European factory, a new HexSight(TM) vision software product, cost reductions from subassembly sub·as·sem·bly n. pl. sub·as·sem·blies An assembled unit forming a component to be incorporated into a larger assembly. outsourcing, and improved quality and reduced warranty expenses are anticipated to continue to improve margins as revenue improves. In addition, the company is increasing its sales and marketing resources to focus on the telecom, data storage, and automotive components vertical markets. The company expects revenue from continuing operations for the fourth quarter of 2005 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 $5.6 and 5.8 million. 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 May 4, 2005 at 5:00p.m. Eastern Time to review the company's financials and operations for the third quarter of fiscal 2005. The call will include statements regarding the company's anticipated financial performance in the third quarter of fiscal 2005. 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 An industrial robot is officially defined by ISO[1] as an automatically controlled, reprogrammable, multipurpose manipulator programmable in three or more axes. , configurable linear modules, flexible feeders, semiconductor process components, OEM 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 including restructuring charges, margins, revenue and future operating results 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 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. 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 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, 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
(unaudited)
(in thousands, except per share data)
Three months ended Nine months ended
-------------------- -------------------
April 2, March 27, April 2, March 27,
2005 2004 2005 2004
-------- ---------- -------- ---------
(unaudited) (unaudited)
Net revenues $13,025 $13,334 $36,103 $34,619
Cost of revenues 7,061 7,822 19,349 21,122
-------- ---------- -------- ---------
Gross margin 5,964 5,512 16,754 13,497
Operating expenses:
Research, development
and engineering 1,787 1,696 5,008 5,215
Selling, general and
administrative 3,817 3,824 11,453 10,838
Restructuring expenses
(reversals) -- (697) (33) (697)
Amortization of other
intangibles 49 142 146 427
-------- ---------- -------- ---------
Total operating expenses 5,653 4,965 16,574 15,783
-------- ---------- -------- ---------
Operating income (loss) 311 547 180 (2,286)
Interest income (expense), net (58) (71) (133) (334)
Currency exchange gain (loss) 50 34 374 399
-------- ---------- -------- ---------
Income (loss) from continuing
operations before income
taxes 303 510 421 (2,221)
Provision for income taxes 11 (1,433) 29 (1,414)
-------- ---------- -------- ---------
Income (loss) from continuing
operations 292 1,943 392 (807)
Loss from discontinued
operations, net of tax -- (7,000) -- (7,087)
-------- ---------- -------- ---------
Net income (loss) $ 292 $(5,057) $ 392 $(7,894)
======== ========== ======== =========
Basic income (loss) per share
from:
continuing operations $0.05 $ 0.33 $0.06 $(0.18)
======== ========== ======== =========
discontinued
operations $0.00 $(1.18) $0.00 $(1.59)
======== ========== ======== =========
Basic net income (loss)
per share $0.05 $(0.85) $0.06 $(1.77)
======== ========== ======== =========
Diluted income (loss) per
share from:
continuing operations $0.05 $ 0.32 $0.06 $(0.18)
======== ========== ======== =========
discontinued
operations $0.00 $(1.18) $0.00 $(1.59)
======== ========== ======== =========
Diluted net income (loss)
per share $0.05 $(0.86) $0.06 $(1.77)
======== ========== ======== =========
Basic number of shares used in
computing per share amounts
from:
continuing operations 6,124 5,944 6,046 4,461
======== ========== ======== =========
discontinued
operations 6,124 5,944 6,046 4,461
======== ========== ======== =========
Diluted number of shares used
in computing per share
amounts from:
continuing operations 6,218 6,057 6,154 4,461
======== ========== ======== =========
discontinued
operations 6,218 5,944 6,154 4,461
======== ========== ======== =========
Note: Amounts for prior periods have been reclassified to conform
to present year's presentation
ADEPT TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 2, June 30,
2005 2004(a)
----------- ---------
(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short term
investments $3,364 $4,957
Accounts receivable, less allowance for
doubtful accounts of $1,349 at April 2,
2005 and $1,269 at June 30, 2004 12,219 13,385
Inventories 8,702 6,233
Prepaid expenses and other current assets 909 656
----------- ---------
Total current assets 25,194 25,231
Property and equipment at cost 10,033 9,372
Less accumulated depreciation and amortization 8,603 7,924
----------- ---------
Net property and equipment 1,430 1,448
Goodwill 3,176 3,176
Other intangibles, net 276 423
Other assets 1,291 1,293
----------- ---------
Total assets $31,367 $31,571
=========== ========
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
STOCK AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $5,727 $5,689
Accrued warranty reserve 1,994 2,111
Other accrued liabilities 2,317 3,720
----------- ---------
Total current liabilities 10,038 11,521
Commitments and contingencies
Long term liabilities:
Subordinated convertible note 3,000 3,000
Other long term liabilities 1,537 1,422
Redeemable convertible preferred stock -- --
Total shareholders' equity 16,792 15,628
----------- ---------
Total liabilities
and shareholders' equity $31,367 $31,571
=========== =========
(a) Based on audited information included on Form 10-K for
fiscal year ended June 30, 2004.
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