Exhibit 99.1
Adept Technology, Inc. Reports First Quarter Results;
Results Reflect Continued Restructuring Recovery
LIVERMORE, Calif.--(BUSINESS WIRE)--Oct. 27, 2004--Adept
Technology, Inc. (OTCBB:ADTK) today announced results of its
operations for its first quarter fiscal 2005 which ended October 2,
2004. Net revenues from continuing operations were $11.3 million, an
increase of $646,000 or 6% over the comparable period in 2004. Gross
margin for the first quarter 2005 was $5.5 million, an increase of
$1.6 million or 43% from the same period of the prior year. During the
quarter ended October 2, 2004, the company reported pre-tax income
from continuing operations of $52,000 compared with a pre-tax loss
from continuing operations of $1.4 million for the same quarter a year
ago. In total, Adept reported net income of $40,000 for the three
months ended October 2, 2004, versus a net loss of $1.3 million, or
$0.08 per share, for the same period a year ago. The results compared
with the same quarter in 2004 are highlighted in the table below:
Income
(loss)
Revenue from Net
Time Period from Gross Continuing Income
Continuing Margin Operations (Loss)
Operations Before
Income
Taxes
- ---------------------------- ----------- ------- ----------- --------
Current quarter: Q1-05 $11,293 $5,466 $52 $40
- ---------------------------- ----------- ------- ----------- --------
Prior year's quarter: Q1-04 $10,647 $3,829 $(1,394) $(1,260)
- ---------------------------- ----------- ------- ----------- --------
Change from Q1-04 to Q1-05 6% 43% 104% 103%
- ---------------------------- ----------- ------- ----------- --------
"Robotic revenues were higher year on year, but slightly lower
than expected, reflecting the traditional European summer business
cycle and a general softening in the domestic manufacturing
marketplace," said Robert Bucher, CEO of Adept Technology, Inc. "Adept
Cobra robot shipments remained strong. We expect new products, such as
the standalone Adept i-Series robots and the simple-to-configure Adept
Cobra PLC robots, introduced earlier this year, to increase new
customer activity and market share as the year progresses. The quarter
saw gross margin improvement as Adept software sales of both vision
and motion control were made to major Integrator and OEM accounts."
Bucher continued, "Revenue increased from both product upgrades
and the purchase of remanufactured robots as customers took advantage
of these Adept service programs. Adept also established a fast-track
delivery program for its customers, a direct outcome of successful
product outsourcing that should be completed by the end of the second
fiscal quarter. The September quarter also saw the establishment of
our Adept Germany factory, supplying standard products direct to local
European customers. Focus on manufacturing quality standards and
processes, and implementation of a worldwide QA network resulted in
reduced warranty and service costs in the first quarter. Adept still
remains cautious in our recovery, and is carefully controlling
operating expenses, lowering our breakeven level of operations, and
increasing product margin. The resulting productivity, efficiency, and
financial strength will allow Adept to continue investment in product
marketing and advanced technology engineering programs."
Details of the Quarter
Statement of Operations Highlights - Three months ended October 2,
2004
-- Revenue from continuing operations for the first quarter of
2005 increased 6% over the comparable quarter in 2004. The
quarter benefited from the sale of a vision software license
for $1.1 million with associated cost of sales that were
minimal. Revenues were also driven by our advanced line of
Adept Cobra robots, in particular the Adept i-Series robots
with the controller built into the robot arm, and growth in
demand for upgrading existing installed equipment to the
current technology.
-- Gross margin from continuing operations was 48.4% in the first
quarter of fiscal 2005 compared to 36.0% in the same quarter
of fiscal 2004. The improvement in gross margin reflects the
lower cost structure and improved competitive positioning of
our advanced line of Adept Cobra robots and smart amp based
products as well as the positive impact of the vision software
license sale.
-- Research & Development (R&D) expense from continuing
operations in the first quarter of fiscal 2005 decreased 6%
from the comparable quarter in 2004. This decrease is
primarily the result of reduced headcount and decreased
project spending resulting from the completion of previously
implemented cost-cutting measures.
-- Selling, General & Administrative (SG&A) expense from
continuing operations in the first quarter of 2005 increased
17.9% from the same quarter in 2004. The increase is primarily
due to increases in sales and marketing expenses for sales
development activities, higher expenses for audit work and
legal review relating to corporate governance developments as
well as the company's public reporting requirements, and an
increase in bad debt reserves.
-- Restructuring expenses for the first quarter of fiscal 2005
reflect a reversal of $43,000 of previously accrued
restructuring charges as we subleased an unused field sales
office.
-- Amortization of other intangibles from continuing operations
for the first quarter of fiscal 2005 was $49,000 as compared
with $178,000 for the same period of the prior year.
-- 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 and the results of its
operations have been removed from continuing operations for
the first quarter of fiscal 2004. The after tax gain from
discontinued operations for that quarter was $147,000.
Balance Sheet Highlights - October 2, 2004
-- Adept's cash and short-term investment balance at October 2,
2004 was $5.2 million as compared to $5.0 million at June 30,
2004.
-- Net accounts receivable at October 2, 2004 was $10.3 million,
a decrease of $3.1 million or 23% from the balance at June 30,
2004. Trade accounts receivable days sales outstanding (DSO)
for the first quarter of fiscal 2005 was 93 days compared to
90 days at June 30, 2004. DSO remains within the company's
normal range.
-- Inventories at October 2, 2004 were $7.5 million, an increase
of 20% 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.
Lead times are now generally down to between two and four
weeks for our core product.
Business Trends and Financial Outlook
-- The company expects its cash and short-term investment balance
to be between $3 and $5 million at January 2, 2005, the end of
its second quarter of fiscal 2005.
-- Our European factory, focus on additional software OEM sales,
and product cost reduction from subassembly outsourcing are
anticipated to continue to improve margins as revenue
improves. In addition, the company is pursuing a strategy to
increase the mix of software sales, but expects that there
will be significant variability in the percentage mix of
software sales from quarter to quarter for the foreseeable
future. The company expects revenue from continuing operations
for the second quarter of 2005 to be between $11.0 million and
$12.5 million. At that revenue level, gross margin is expected
to be in the mid-40% range. Operating expenses (R&D and SG&A)
from continuing operations for the second quarter are expected
to be approximately $5 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, October 27, 2004 at 5:00p.m. Eastern
Time to review the company's financials and operations for the first
quarter of fiscal 2005. The call will include statements regarding the
company's anticipated financial performance in the second 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 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 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, October
27, 2004 to Wednesday, November 3, 2004. Listeners should call
719-457-0820 or 888-203-1112 and use CODE No. "802023."
About Adept Technology, Inc.
Adept Technology designs, manufactures and markets factory
automation components for the telecommunications, 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, 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 Statement
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;
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 and regulatory requirements
associated with the company's international operations; the company's
limited cash resources, continuing operating losses and negative cash
flow which could impair 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 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 which are
not easily reduced; the risks associated with sole or single sources
of supply and lengthy procurement lead times; 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; the company's
ability to sell its products through systems integrators 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 additional risk factors relating to Adept's
business, see Adept's annual report on Form 10-K for the fiscal year
ended June 30, 2004, including the discussion in Management's
Discussion and Analysis of Financial Condition and Results of
Operations contained therein.
ADEPT TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three months ended
-------------------------
October 2, September 27,
2004 2003
----------- -------------
(unaudited) (unaudited)
Net revenues $11,293 $10,647
Cost of revenues 5,827 6,818
----------- -------------
Gross margin 5,466 3,829
Operating expenses:
Research, development and engineering 1,661 1,766
Selling, general and administrative 3,710 3,147
Restructuring expenses (43) -
Amortization of other intangibles 49 178
----------- -------------
Total operating expenses 5,377 5,091
----------- -------------
Operating income (loss) 89 (1,262)
Interest income (expense), net (37) (132)
----------- -------------
Income (loss) from continuing operations
before income taxes 52 (1,394)
Provision for income taxes 12 13
----------- -------------
Income (loss) from continuing operations 40 (1,407)
Gain from discontinued operations, net of
tax - 147
----------- -------------
Net income (loss) $40 $(1,260)
=========== =============
Basic income (loss) per share from:
continuing operations $0.00 $(0.09)
=========== =============
discontinued operations $0.00 $0.01
=========== =============
Basic net income (loss) per share $0.00 $(0.08)
=========== =============
Diluted income (loss) per share from:
continuing operations $0.00 $(0.09)
=========== =============
discontinued operations $0.00 $0.01
=========== =============
Diluted net income (loss) per share $0.00 $(0.08)
=========== =============
Basic number of shares used in
computing per share amounts from:
continuing operations 29,903 15,304
=========== =============
discontinued operations 29,903 15,304
=========== =============
Diluted number of shares used in
computing per share amounts from:
continuing operations 30,355 15,395
=========== =============
discontinued operations 30,355 15,395
=========== =============
Note: Amounts for prior periods have been reclassified to conform to
present year's presentation
ADEPT TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 2, June 30,
2004 2004(a)
----------- ----------
(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short term
investments $5,223 $4,957
Accounts receivable, less allowance for
doubtful accounts of $1,538 at
October 2, 2004 and $1,269 at June 30, 2004 10,325 13,385
Inventories 7,491 6,233
Prepaid expenses and other current assets 1,051 656
----------- ----------
Total current assets 24,090 25,231
Property and equipment at cost 9,562 9,372
Less accumulated depreciation and amortization 8,171 7,924
----------- ----------
Net property and equipment 1,391 1,448
Goodwill 3,176 3,176
Other intangibles, net 374 423
Other assets 1,294 1,293
----------- ----------
Total assets $30,325 $31,571
=========== ==========
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
STOCK AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $4,643 $5,689
Accrued warranty reserve 1,966 2,111
Other accrued liabilities 3,456 3,720
----------- ----------
Total current liabilities 10,065 11,521
Commitments and contingencies
Long term liabilities:
Restructuring charges - -
Subordinated convertible note 3,000 3,000
Other long term liabilities 1,446 1,422
Redeemable convertible preferred stock - -
Total shareholders' equity (deficit) 15,814 15,628
----------- ----------
Total liabilities and shareholders' equity
(deficit) $30,325 $31,571
=========== ==========
(a) Based on audited information included on Form 10-K for fiscal year
ended June 30, 2004.
CONTACT: Adept Technology, Inc.
Robert Strickland, 925-245-3406
investor.relations@adept.com