Adept Technology Reports Second Quarter Fiscal 2004 Results.Business Editors LIVERMORE, Calif.--(BUSINESS WIRE)--Jan. 21, 2004 Adept Technology, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ADTK), a leading manufacturer of flexible automation for the automotive, life sciences, electronics and semiconductor industries, today reported financial results for its second quarter ended December 27, 2003. Net revenues for the quarter ended December 27, 2003 were $11.5 million, an increase of 6.8% from net revenues of $10.7 million for the quarter ended December 28, 2002. Gross margin for the quarter was 37.9% versus 27.7% for the same quarter a year ago. The improvement in gross margin continues to reflect higher standard margins due to increased content of higher margin products and services and lower fixed manufacturing expenses resulting from facilities consolidation and 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). of the company's lease obligations for its Livermore facilities. 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. for the quarter were $5.8 million, a decrease of 40.6% compared to $9.7 million for the quarter ended December 28, 2002. Adept reported a net loss of $1.6 million, or $0.07 per share, for the quarter ended December 27, 2003, versus a net loss of $6.7 million, or $0.45 per share, for the quarter ended December 28, 2002. Robert Bucher, Adept's Chairman and Chief Executive Officer since November 2003, commented, "During the second quarter, we saw a significant increase in shipments from our advanced line of Smart robots which generated improved gross margins from the prior quarter as the revenue mix shifted towards these higher margin products. Going forward, we intend to further stabilize stabilize See peg. our business by further focusing our sales and engineering activities on these high performance products along with an increased emphasis on Adept's customer service and support activities." Net revenues for the six months ended December 27, 2003 were $23.3 million, an increase of 10.8% from net revenues of $21.0 million for the six months ended December 28, 2002. Gross margin for the six months ended December 27, 2003 was 37.4% versus 23.7% for the six months ended December 28, 2002. Operating expenses for the six months ended December 27, 2003 were $11.3 million, a decrease of 46.3% as compared to $21.0 million for the six months ended December 28, 2002. Adept reported a net loss of $2.8 million, or $0.15 per share, for the six months ended December 27, 2003, versus a net loss of $15.8 million, or $1.08 per share, for the six months ended December 28, 2002. The figures above include amortization charges of $0.4 million for the six months ended December 27, 2003 and amortization and 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. of $1.5 million for the six months ended December 28, 2002. "We have made a number of significant decisions to redirect re·di·rect tr.v. re·di·rect·ed, re·di·rect·ing, re·di·rects To change the direction or course of. n. A redirect examination. re our business efforts and have simplified our product offerings by focusing on our strengths and intellectual property," continued Mr. Bucher. "We currently plan to continue focusing our efforts on (i) our Smart line of distributed controls-based robots, (ii) improving our software application and tools and (iii) supporting our existing customer installed base and augmenting our service revenues. We will continue our wafer-handling robot program (Adept AWARD), which we expect will extend our expertise into the semiconductor capital equipment market. To maximize our overall efficiencies, we have also made the decision to expand our manufacturing outsource program and close our Orange County manufacturing facility in order to consolidate operations at our Livermore facility. We expect to complete the Orange County manufacturing consolidation by the end of the third quarter of fiscal 2004." Adept's cash and short-term investment balance at December 27, 2003 was $8.0 million. On November 18, 2003, the Company completed a private placement of approximately 11.1 million shares of common stock to several accredited investors Accredited Investor A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. Also known as "qualified purchaser". for a total purchase price of $10.0 million. The investors also received warrants to purchase up to an aggregate of 5.5 million shares at an exercise price of $1.25 per share, with certain proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. anti-dilution protections. Under the terms of these warrants, Adept may call the warrants, thereby forcing a cash exercise, in certain circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after its common stock has closed at or above $2.50 for twenty consecutive trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. . The financing was led by Special Situations Funds. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the financing after estimated costs and expenses were approximately $9.4 million. Concurrent with the completion of the financing, the Company's preferred stockholder converted its preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. which it acquired in 2001 into approximately 3.1 million shares of Adept common stock and surrendered its remaining shares of preferred stock to the Company. Per the terms of Adept's promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. with its preferred stockholder, Adept repaid the $1.0 million promissory note out of the proceeds from the financing. Additionally, the Company reached a settlement regarding the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with the landlord of its San Jose San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. facility regarding its lease obligations for that facility. Under the terms of a settlement agreement effective January 16, 2004, Adept will pay the landlord of its San Jose facility approximately $1.625 million within 10 business days of the effective date of the settlement agreement. There will be no negative income statement impact arising from Adept's payment of the settlement amount as Adept had previously recorded adequate reserves, during fiscal 2003, for the remaining unpaid rent associated with the lease obligations of its San Jose facility. Business Highlights -- Adept's PLC Server robotic ro·bot·ic adj. Relating to, characteristic of, or employing robots. interface is approved by Rockwell Automation for participation in its prestigious Encompass ENCOMPASS Enhanced Consequence Management Planning and Support System (DARPA) program. -- Adept reaches settlement agreement with San Jose facility landlord to terminate and settle all past and existing lease obligations. -- Adept completes a $10.0 million private placement led by Special Situations Funds. -- Adept announces new 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. and other management team changes. Adept's Outlook The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not reflect the potential impact of any mergers, acquisitions or other business combinations that may be completed after the date of this release. -- The company expects net revenues for the third quarter of fiscal 2004 to be flat to up slightly from second quarter fiscal 2004 net revenues of approximately $11.5 million. -- The company expects a slight improvement in its gross margin percentage for the third quarter of fiscal 2004. -- Operating expenses in the third quarter of fiscal 2004 are expected to remain relatively flat. -- The cash balance as of the end of the third quarter of fiscal 2004 is expected to be approximately $6.0 million. -- Depreciation and amortization is expected to be approximately $0.7 million in the third quarter of fiscal 2004. -- The company expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. a charge in the third quarter of fiscal 2004 in connection with the consolidation of its Orange County manufacturing facility. Investor Conference Call Robert Bucher, Chairman and Chief Executive Officer and Michael Overby, Vice President and Chief Financial Officer will host an investor conference call today, January 21, 2004 at 5:00 p.m. Eastern Time to review the company's financials and operations for the second quarter of fiscal 2004. The call will include statements regarding the company's anticipated financial performance in the third quarter of fiscal 2004. 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:
This press release contains certain forward-looking statements including statements regarding cash balances, expenses including restructuring charges, 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; 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; integration risks associated with our recently initiated 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 acquisitions, including integration risks associated with our previous acquisitions; the risks associated with product defects; the potential delays associated with the development and introduction of new products or software releases; decreased acceptance of the company's new or current products in the marketplace; or 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. For a discussion of additional 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, 2003, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Adept's quarterly report on Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended September 27, 2003, 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 contained therein. Adept Technology, Inc. designs, manufactures and markets intelligent production automation solutions to its customers in many industries including the food, electronics/communications, automotive, appliance, semiconductor, original equipment manufacturer, or 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 , and life sciences industries. Adept utilizes its comprehensive product portfolio of high precision mechanical components, solid state controllers and application development software (not generally sold separately) to deliver automation solutions that meet its customer's increasingly complex manufacturing requirements. Adept was incorporated in California in 1983. More information is available at www.adept.com.
ADEPT TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three months ended Six months ended
-------------------- ---------------------
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2003 2002 2003 2002
--------- --------- ---------- ---------
(unaudited) (unaudited)
Net revenues $11,480 $10,748 $23,297 $21,023
Cost of revenues 7,130 7,773 14,575 16,032
--------- --------- ---------- ---------
Gross margin 4,350 2,975 8,722 4,991
Operating expenses:
Research, development
and engineering 1,857 3,071 3,719 6,593
Selling, general and
administrative 3,755 6,477 7,202 12,920
Restructuring expenses -- -- -- 1,136
Amortization of other
intangibles 178 199 356 348
--------- --------- ---------- ---------
Total operating expenses 5,790 9,747 11,277 20,997
--------- --------- ---------- ---------
Operating loss (1,440) (6,772) (2,555) (16,006)
Interest income (expense),
net (131) 30 (263) 209
--------- --------- ---------- ---------
Loss before income taxes (1,571) (6,742) (2,818) (15,797)
Provision for income taxes 6 -- 19 31
--------- --------- ---------- ---------
Net loss (1,577) (6,742) (2,837) (15,828)
========= ========= ========= =========
Basic and diluted net loss
per share: $ (0.07) $ (0.45) $ (0.15) $ (1.08)
========= ========= ========= =========
Basic and diluted number
of shares used in
computing per share
amounts 21,794 15,074 18,594 14,701
========= ========= ========= =========
ADEPT TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 27, June 30,
2003 2003*
------------- -----------
(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short
term investments $8,011 $3,234
Accounts receivable, less allowance
for doubtful accounts of $1,493 at
December 27, 2003 and $1,124 at
June 30, 2003 12,585 10,948
Inventories 8,217 7,122
Prepaid expenses and other current
assets 1,094 717
------------- -----------
Total current assets 29,907 22,021
Property and equipment at cost 11,401 11,751
Less accumulated depreciation and
amortization 9,179 8,591
------------- -----------
Net property and equipment 2,222 3,160
Goodwill 7,671 7,671
Other intangibles, net 820 1,176
Other assets 1,492 1,753
------------- -----------
Total assets $42,112 $35,781
============= ===========
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
STOCK AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $6,692 $6,094
Other accrued liabilities 6,360 5,624
Accrued restructuring charges 2,872 3,122
------------- -----------
Total current liabilities 15,924 14,840
Commitments and contingencies
Long term liabilities:
Restructuring charges 166 383
Subordinated convertible note 3,000 3,000
Other long term liabilities 3,063 4,141
Redeemable convertible preferred stock -- 25,000
Total shareholders' equity (deficit) 19,959 (11,583)
------------- -----------
Total liabilities and
shareholders' equity (deficit) $42,112 $35,781
============= ===========
*Based on audited information included on Form 10-K for fiscal
year ended June 30, 2003.
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