Exhibit 99.1
Adept Technology, Inc. Reports Third
Quarter Results; Vertical Market Sales Efforts in Consumer and Telecom
Post First Design Wins
LIVERMORE, Calif.--(BUSINESS WIRE)--May 4, 2005--Adept Technology,
Inc. (OTCBB:ADEO) 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
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 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 and service
business units, fully replacing less profitable component and
semiconductor revenue. After taking into account the restructuring
reversal of last year, these improved margins from new product
developments and investments and a change in sales focus, resulted in
operating income 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 and outsourcing.
"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 and OEM
channels. Backlog continued to be strong, driven by expansion and
upgrade of consumer, telecommunication, 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 for China and Southeast
Asia 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 Highlights - Three and nine months ended
April 2, 2005
-- Revenue from continuing operations 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, 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 restructuring charges resulting from favorable
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 on Adept's $3 million
convertible note, whereas the prior year charges also included
interest on borrowings under an accounts receivable 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 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 for that quarter was $7.0 million.
Balance Sheet Highlights - April 2, 2005
-- Adept's cash and short-term 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 (DSO)
at March 31 was 81 days compared to 90 days at June 30, 2004,
and reflects significant collection of past due receivables.
-- 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 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 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
(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 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, May 4,
2005 to Wednesday, May 11, 2005. Listeners should call 719-457-0820 or
888-203-1112 and use CODE No. "9287964."
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 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;
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 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 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; 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 Adept's business, see
Adept's annual report on Form 10-K for the fiscal year ended June 30,
2004 and quarterly report on Form 10-Q for the quarters ended October
2, 2004 and January 1, 2005, including the discussion in Management's
Discussion and Analysis 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.
CONTACT: Adept Technology, Inc.
Robert Strickland, 925-245-3413 (voice)
925-245-3510 (fax)
investor.relations@adept.com