EXHIBIT 99.1
(PERCEPTRON LOGO)
Contact: John J. Garber
Vice President of Finance and CFO
734 414-6100
PERCEPTRON ANNOUNCES FIRST QUARTER RESULTS FOR FISCAL YEAR 2006
Plymouth, Michigan, November 8, 2005 - Perceptron, Inc. (NASDAQ: PRCP) today
announced net sales of $12.8 million and net income of $269,000 or $0.03 per
diluted share, for the first quarter ended September 30, 2005, which included a
net non-cash stock-based compensation expense of $150,000, or $0.02 per diluted
share, related to the adoption of a new accounting pronouncement, Statement of
Financial Accounting Standard 123 (revised), (SFAS 123R). This compared with net
sales of $12.2 million and net income of $965,000, or $0.10 per diluted share,
for the quarter ended September 30, 2004.
The sales increase of approximately $600,000 compared to the same quarter one
year ago was due to higher sales in Europe of $5.9 million, up $1.9 million,
that was partially offset by lower sales in North America of $6.4 million, down
$1.3 million, compared to one year ago. The incremental change in both
geographic regions was primarily due to the number and timing of new vehicle
programs and the Company's Automated Systems' sales associated with those
programs. The relationship of the U.S. dollar to the Euro was the same for both
periods and had no impact on sales reported in Europe this quarter compared to
one year ago. Sales in Asia were $500,000 for both periods.
The Company had new order bookings during the quarter of $15.0 million,
comprised of $10.1 million in North America, $4.5 million in Europe, and
$400,000 in Asia, compared with new order bookings of $14.1 million in the
fourth quarter of fiscal 2005 and $6.7 million for the same period one year ago.
The level of new orders and mix of business among many customers this quarter
reflect strong demand for the Company's products and services, and the outlook
for new orders, particularly in the second quarter of fiscal 2006, remains good.
The Company's backlog rose to $20.2 million as of September 30, 2005 compared
with $18.0 million as of June 30, 2005.
The gross profit margin percentage this quarter was 43.8% compared to 49.2% in
the first quarter of fiscal 2005, and 47.2% for fiscal 2005 as a whole. The
quarter-to-quarter margin variability is due to a number of factors including
the percentage of revenue recognized on various contracts during the quarter in
accordance with the Company's revenue recognition policy. During the first
quarter we also made new investments in personnel in our value-added services
business to stimulate growth in that segment.
Selling, general and administrative expenses were $495,000 higher than the first
quarter of fiscal 2005 primarily due to an increase in salary, benefit and
consulting costs of approximately $250,000 that was mainly the result of
previously announced new investments to support plans for sales growth, a charge
to the allowance for doubtful accounts of $8,000 compared with a $74,000 credit
one year ago, non-cash stock-based compensation expense of $67,000 and higher
costs of $59,000 for compliance with requirements of the Sarbanes Oxley Act.
Research and development expenses were also $169,000 higher than for the same
period one year ago due principally to increased spending on new product
development and non-cash stock-based compensation expense of $63,000.
As mentioned above, effective July 1, 2005, the Company was required to adopt a
new accounting pronouncement, SFAS 123R, that required the Company to record
non-cash stock-based compensation expense for its stock compensation plans.
Previously, the Company generally did not record non-cash stock-based
compensation following the requirements of Accounting Principles Board Opinion
25. Under SFAS 123R, the Company recorded in the first quarter of fiscal 2006
$185,000 of non-cash stock-based compensation related to the amortization of the
fair value of previously granted stock options that had not vested as of June
30, 2005 and, to a smaller extent, the amortization of the fair value of the
Company's Employee Stock Purchase Plan.
47827 Halyard Drive o Plymouth, Michigan 48170 o Phone 734-414-6100 o Fax
734-414-4700
Page 2 of 4
Alfred A. Pease, Chairman, President and Chief Executive Officer, commented,
"The operating results for the first quarter included incremental selling
expenses related to investing additional resources in Asia and Europe to achieve
our sales growth. We were pleased with the level of new orders in the first
quarter, and are optimistic concerning our future growth plans.
"We expect revenues for the second quarter of FY 06 to be comparable to the
second quarter of FY 05 and earnings for the quarter to be lower than last year
principally due to the previously announced new investments being deployed and
the impact of SFAS 123R. Our core business remains strong, and we remain
committed to our growth investments that we expect to yield returns by the end
of FY 06 and beyond. We had $20.8 million of cash, no debt and shareholders'
equity was $54.4 million, or $5.86 per diluted share, as of September 30, 2005."
Perceptron, Inc. will hold a conference call/webcast chaired by Alfred A. Pease,
President & CEO today at 10:00 a.m. (EST). Investors can access the call at
http://phx.corporate-ir.net/playerlink.zhtml?c=110185&s=wm&e=1157825 or by
dialing 800 967-7185 (domestic callers) or 719 457-2634 (international callers).
If you are unable to participate during the live webcast, the call will be
digitally rebroadcast for seven days, beginning at 2:00 p.m. today and running
until 11:59 p.m. on Tuesday, November 15, 2005. You can access the rebroadcast
by dialing 888 203-1112 (domestic callers) or 719 457-0820 (international
callers) and entering the passcode of 4892483. A replay of the call will also be
available in the "Company-News" section of the Company's website at
www.perceptron.com for approximately one year following the call.
ABOUT PERCEPTRON
Perceptron produces information-based process improvement solutions for industry
as well as technology components for non-contact measurement and inspection
applications. Automotive and manufacturing companies throughout the world rely
on Perceptron's process management solutions to help them improve quality,
shorten product launch times and reduce overall manufacturing costs.
Headquartered in Plymouth, Michigan, Perceptron has approximately 225 employees
worldwide, with operations in the United States, Germany, France, Spain, Brazil,
Japan and Singapore. For more information, please visit www.perceptron.com.
SAFE HARBOR STATEMENT
Certain statements in this press release may be "forward-looking statements"
within the meaning of the Securities Exchange Act of 1934, including the
Company's expectation as to fiscal 2006 and future revenue, new orders, gross
profit and net income levels and the timing of revenue and net income increases
from the Company's plans to make important new investments, largely for
personnel, for new product and geographic growth opportunities in the U.S.,
Europe, Eastern Europe, and Asia. The Company assumes no obligation for updating
any such forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
statements. Actual results could differ materially from those in the
forward-looking statements due to a number of uncertainties in addition to those
set forth in the press release, including, but not limited to, the dependence of
the Company's revenue on a number of sizable orders from a small number of
customers, the dependence of the Company's net income levels on increasing
revenues, continued pricing pressures from the Company's customers, the timing
of orders and shipments which can cause the Company to experience significant
fluctuations in its quarterly and annual revenue, order bookings, backlog and
operating results, timely receipt of required supplies and components which
could result in delays in anticipated shipments, continued access to third party
components for our ScanWorks systems, the ability of the Company to successfully
compete with alternative and similar technologies, the timing, number and
continuation of the Automotive industry's retooling programs, including the risk
that the Company's customers postpone new tooling programs as a result of
economic conditions or otherwise, the ability of the Company to develop and
introduce new products, the ability of the Company to expand into new markets in
Eastern Europe and Asia, the ability of the Company to attract and retain key
personnel, especially technical personnel, the quality and cost of competitive
products already in existence or developed in the future, rapid or unexpected
technological changes and the effect of economic conditions, particularly
economic conditions in the domestic and worldwide Automotive industry, which has
from time to time been subject to cyclical downturns due to the level of demand
for, or supply of, the products produced by companies in this industry. The
ability of the Company to develop and introduce new products is subject to a
number of uncertainties, including general product demand and market acceptance
risks, the ability of the Company to resolve technical issues inherent in
47827 Halyard Drive o Plymouth, Michigan 48170 o Phone 734-414-6100 o Fax
734-414-4700
Page 3 of 4
the development of new products and technologies, the ability of the Company to
identify and satisfy market needs, the ability of the Company to identify
satisfactory distribution networks, the ability of the Company to develop
internally or identify externally high quality cost effective manufacturing
capabilities for the products, general product development and commercialization
difficulties, and the level of interest existing and potential new customers may
have in new products and technologies generally. The ability of the Company to
expand into new geographic markets is subject to a number of uncertainties,
including the timing of customer acceptance of the Company's products and
technologies, the impact of changes in local economic conditions, the ability of
the Company to attract the appropriate personnel to effectively represent,
install and service the Company's products in the market and uncertainties
inherent in doing business in foreign markets, especially those that are less
well developed than the Company's traditional markets, such as the impact of
fluctuations in foreign currency exchange rates, foreign government controls,
policies and laws affecting foreign trade and investment, differences in the
level of protection available for the Company's intellectual property and
differences in language and local business and social customs. The Company's
expectations regarding future bookings and revenues are projections developed by
the Company based upon information from a number of sources, including, but not
limited to, customer data and discussions. These projections are subject to
change based upon a wide variety of factors, a number of which are discussed
above. Certain of these new orders have been delayed in the past and could be
delayed in the future. Because the Company's products are typically integrated
into larger systems or lines, the timing of new orders is dependent on the
timing of completion of the overall system or line. In addition, because the
Company's products have shorter lead times than other components and are
required later in the process, orders for the Company's products tend to be
given later in the integration process. A significant portion of the Company's
projected revenues and net income depends upon the Company's ability to
successfully develop and introduce new products and expand into new geographic
markets. Because a significant portion of the Company's revenues are denominated
in foreign currencies and are translated for financial reporting purposes into
U.S. Dollars, the level of the Company's reported net sales, operating profits
and net income are affected by changes in currency exchange rates, principally
between U.S. Dollars and Euros. Currency exchange rates are subject to
significant fluctuations, due to a number of factors beyond the control of the
Company, including general economic conditions in the United States and other
countries. Because the Company's expectations regarding future revenues, order
bookings, backlog and operating results are based upon assumptions as to the
levels of such currency exchange rates, actual results could differ materially
from the Company's expectations.
- Financial Tables Follow -
47827 Halyard Drive o Plymouth, Michigan 48170 o Phone 734-414-6100 o Fax
734-414-4700
Page 4 of 4
PERCEPTRON, INC.
SELECTED FINANCIAL DATA
(In Thousands Except Per Share Amounts)
<Table>
<Caption>
CONDENSED INCOME STATEMENTS THREE MONTHS ENDED
SEPTEMBER 30,
2005 2004
------------ ------------
Net Sales $ 12,760 $ 12,244
Cost of Sales (Note 1) 7,177 6,216
------------ ------------
Gross Profit 5,583 6,028
Selling, General and Administrative Expense (Note 1) 3,292 2,797
Engineering, Research and Development Expense (Note 1) 1,872 1,703
------------ ------------
Operating Income 419 1,528
Interest Income, net 147 91
Foreign Currency and Other 48 68
------------ ------------
Income Before Income Taxes 614 1,687
Income Tax Expense 345 722
------------ ------------
Net Income (Note 1) $ 269 $ 965
============ ============
Earnings Per Share
Basic $ 0.03 $ 0.11
Diluted $ 0.03 $ 0.10
Weighted Average Common Shares Outstanding
Basic 8,830 8,727
Diluted 9,276 9,394
</Table>
<Table>
<Caption>
CONDENSED BALANCE SHEETS SEPTEMBER 30, JUNE 30,
2005 2005
------------ ------------
Cash and Cash Equivalents $ 20,794 $ 20,374
Receivables, net 20,928 22,305
Inventories, net 6,561 5,884
Other Current Assets 1,785 1,935
Property and Equipment, net 7,694 7,687
Other Non-Current Assets, net 5,996 5,205
------------ ------------
Total Assets $ 63,758 $ 63,390
============ ============
Current Liabilities $ 9,403 $ 9,398
Shareholders' Equity 54,355 53,992
------------ ------------
Total Liabilities and Shareholders' Equity $ 63,758 $ 63,390
============ ============
</Table>
Note 1: Effective July 1, 2005, the Company was required to adopt Statement of
Financial Accounting Standards No. 123 (revised), Share-Based Payment, which
requires the recording of non-cash, stock-based compensation expense. The total
non-cash expense was $185,000 and is reflected in the following line items:
$55,000 in cost of sales, $67,000 in selling, general and administrative expense
and $63,000 in engineering, research and development expense. The net income
impact was $150,000 or $0.02 per diluted share.
47827 Halyard Drive o Plymouth, Michigan 48170 o Phone 734-414-6100 o Fax
734-414-4700