PRCP - Earnings call transcript Q3 2018

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Operator

Good morning, ladies and gentlemen and welcome to Perceptron’s Third Quarter of Fiscal Year 2018 Investor Call. Please note that this call is being recorded. I will now direct the call to Michelle Wright, Corporate Controller and Chief Accounting Officer. Go ahead, Ms. Wright.

Michelle Wright

Jasmine. much, very you Thank Good morning welcome. and Thank for joining our today. call you

delighted available on We issued interested in third a your Perceptron. continued with investors.perceptron.com. fiscal XXXX, are is our results quarter our website by the Late of the from which year release yesterday, at we

We Form night. our also last filed XX-Q

Chief with call Perceptron the Officer. today On is David Executive from me Watza, President and

information the need the discussing statements I based from begin, responsible for Act. as to provided. the forward-looking cause material today to that by believe we SEC we and that Reform not of may our information information the inform Perceptron upon parties. results the is this and Before of some that of true independent see filings differ be to forward-looking that will constitutes Litigation third uncertainties are Private today. actual under meaning you we be of information materially we release made call on Please transcripts Securities make forward-looking for Any the risks

then years U.S. our non-GAAP Plus, press noted, Finally, now the which reconciliation our of Unless be discuss that are to our Dave will this we provided on fiscal will will comments years, after in a end yesterday’s release, discussing to otherwise June for over we for references will XXth. more in open come in back will measures be financial call. dollars. and turn to which detail call the we I Q&A. for in I his Dave? comments, results

David Watza

you about exciting strong We our customers make update. new financial We our continue our and we has who to business update our time today’s on Michelle, products, on eager quarter, improvements. appreciate to for and which results. the you, Thank you I’m to another us everyone thank you employees, and had our taking learn to joined

well objectives growth changes as The results long-term impact yesterday clear step release the quarter, contained and improving This are continued our press their results. diversification close in we to we Perceptron reductions. toward and of market our the through this in as indicators strategic took another making business after positive cost are issued ongoing

with even fiscal excited we made about this I’m the more have pleased our am vision. I evolution year, progress the of While

Before I like talk to a press release. our I’d quarter highlights about of included review our the future, third few in

This the in quarter journey improving meaningful margins represented step operations at Perceptron. our of and another

third and of the us. and X new for quarter. of exceeded as year quarter for backlog out included Our each robust Also were we quarter on for we result Bookings of in this $XX.X quarter third records. customer that record bookings several build note, our all-time the which best we million, of revenue last fiscal momentum. a was in well this is a million, Revenue $XX.X metrics, bookings, are million clearly have and quarters, a all were as to want for proud X third $XX

at we In keep quarters $XX very $XX.X we of momentum. metric ended on that and million, had million Backlog consecutive this building first quarter the over highest to with the want another revenue. time the of is addition, we ever, our backlog have proud two are

in a in we region the to me led few results, Europe quarter our as prior demand addition year. you our million were third $X.X above XX.X% same or quarter Bookings let provide customer in bookings In solid with recorded growth details these numbers. the in more the on by

backlog we continue $X.X while million. slightly the range quarter levels in shortly, of possible. million. very these third extremely Currency strong prior quarter and over their level for best quarter, the of three-month fiscal services will strong same up at to would $X.X this $X.X million bookings past XX.X%. year-over-year last this million with the XXXX as discussed our bookings year. $XX.X clear advances $XX of Asia the year This resulting to $XX These Michelle than for intake due bookings importance region. significant higher dollar these was our loyalty our slightly, efforts all of the prior to is by our is had in into in demand at as totaled Americas to third period versus Overall, which in our million, million the be in increase delivering as as a Both down in I we’re bookings compared continue In period, has for year. previously are increased primarily an backlog of of Asia, $XX.X not this year-to-date, strength continued or the collected is Year-to-date region. Both the team’s prior’s a region Europe for I’m $XX.X of the more Americas, the our detail the and in million, to million euro-U.S. favorable million bookings experienced the seeing $XX.X year’s revenues for this regions the emphasize the last the well ever. the million team the our all our our metrics of impact proud Revenue when this was period in on to for see. $X.X but customers. rate. in changes behind quarter bookings bookings company region Americas $XX.X growth. line growth In are quarter million We totaled on quarter-end in total ended exchange year nine-month profitable of and top indicators year’s efforts, compared order results quarter highest $XX.X go in XX.X% improvements focusing the strong products and million. Without

for ways good for guidance In release, quarter this our to looking offered about always million. we year, million improve past results. to the press quarter we of we so upon that While of fourth team these and a revenue progress is $XX feel $XX have the our far

line our still we For mid-single-digit year full fiscal anticipate XXXX, growth. top

sustained that these are and high-single-digit results represent growth, and revenue exceeds than grows third for aspirations longer Our aspirations. of income in another XX% The significant step revenues, revenues. profit toward our gross of operating faster quarter revenue XX% over term

Next, like I to talk would about toward progress strategic our plan. our executing

I there to four plan. are mentioned As have previously, strategic main our elements

and investment continuous engineering hardware First, technologies. in further competitive in to our our expand capabilities advantages software

which broadening our enable growth Second, to customers, is our expand to and addressable to achieve offering us product intended opportunities our automotive aspirations.

our and product marketing. development, growth throughout continue capital, free tenaciously that such prudent And growth Third, management efficiencies sales including practices lean the of the to we areas enables This the business fourth, in greater engineering, and cash of pursuing reinvest we us of as organization. maximize business. fund flows cost working can the

of about us objectives. metrics. I in with these conference spoke will shipments on and progress few both We will are Helix third scheduled our Helix that of next improve our We AccuSite, call, have several new Now, systems evo elaborate product. evo our the second I strategic shipped In our we and each weeks. accuracy our quarters, our products believe product product financial help and for on last these AccuSite the products, we of our making absolute

floor In AccuSite their now ability offset and from accuracy to solutions our significantly the our improves for production We our allow our containment measurements that making our time-consuming with our rapidly more costly as process, CMMs. have quality produced. in a do system customers with As earlier customers reminder, our available the past, away launch to provide improving product to accurate measurements. multiple and customers valuable and correlations, their result, data part first a high

We with we the continuously will these development are them. to improve and very of two products, pleased new work

developments the plans of for products existing portfolio. coming calendar we on addition sight our have In the new the year, technologies in product to and more addition, line of new including

we customers. before, development invest research our broaden will to continuously enable the solutions which As and and efforts, I we and in offer to engineering our us will products mentioned

about the that this you yielding investment quarter and This engineering research is was in will increased purposeful. area development and our this spending as You see, can see And by results. $XXX,XXX.

help are revenue confident our will that marketplace compete ability of it achieve ambition growth. in and us the We expand to our

Positive momentum our of changes the in cost this our year’s practices look XXX clearly are adds to the we basis strategic savings, nine increase is The evident you results. impacting months points fiscal recent implement to relates experienced element through period. current at nine nine pursuing to months lean the of that clearly our the improvement we of year-end in the improvement prior fiscal period compared months it As additional plan, throughout organization. our margin tenaciously when look to as margin results most third as year margin saw

flows to of business. ready." The Be working "Change As our and I to our plan, management in element team the reinvest tell cash strategic allow capital areas growth prudent is coming. us members, last of maximize

Our cash and believe prior of flows invest which in flows $X.X growth, for especially was use year-to-date million strong year-to-date the period. our us our development, a of to in $X.X and million The allow compared will from to shareholders. to operations returns source cash engineering research a drive we long-term

comments few on committed and talented have I Now, team. our a

applicable I quotes, do. tell people to people our team. to make doesn’t they quote favorite to can Jobs We which tell to is sense smart is late my this them hire think of what smart very to “It what is, attributed One do.” hire and so Steve us

have educated. the with of and and approximately highly them world employees been Many many for core around our than them highly years We large a of a Company experienced XXX competencies. have are percentage the are

the have the Steve that few going products is as said as it this well the So, over overcome in me people years, the are past team we and has happen. execute we product in I created we developed team to be And needed challenges several the quote when this the right that Jobs’ team that road it we reminds before, make in the past, the Company. map, them faced steps that of will believe continue next It are have strategic our said for have hire to as I future. this firmly to plan. the makes the changes I new

across identify customers our to costs potential team internal and globe reduce efficiencies. new continues Our to increase add new and existing to opportunities the our value customers,

technologically small advancing back and from that you to macro remind call we in to the the want turn I I Michelle, very a industries. Before are huge a supplier view

leading the We with have name in along an automotive brand technology strong and industry. the excellent reputation

automotive if not We our in base that also well, employee as anyone than space. knows have an the better, industry

stakeholders. that strategic Michelle, execute years, road, plan it now its lead beyond opportunities down over will confident further believe as will sectors the the path the on Company and we for are continue you. opportunities to we automotive. provide within few profitable growth We to our sustainable next that automotive are development to firmly the I new and and

Michelle Wright

Dave. Thanks,

For the the that had last a and strong several quarters, as deliver financial results We on in seeking are has strong third and efficiencies been profitability, everyday improvements quarterly we company on our focus XXXX. fiscal actively of quarter to goal.

let get So, share into and details me with the you. them

of As sales sales quarter the were $XX.X Dave mentioned, $XX.X quarter in last to million million year. in previously compared the of third

is timing subject that the top customer are Our recognition dependent and to. revenue rules we line on complex

the timing mismatches follow when continue Specifically, the exchange X, to U.S. prior between and quarter, required we Improving we primarily the those of the ASU goods we $X.X some compared quarter, will recognition third And starting FX impact revenue timing sales to third disconnects under XXXX, fluctuations. some had on dollar-euro rate an can favorable July can ongoing as rules XXX sales we analyze cost following rules, believe that items be In control a GAAP year’s cause will is to of cease. million the are sold. currently we to due that target. under

region highest and to Solutions. due $XX.X in Our $X.X is XX% million to Sales quarter. from all-time for million, from the in quarter previous an million, Solutions, This for Measurement had decline Off-Line of reduced primarily by of partially of primarily increase and same quarter Europe offset March third was Measurement $X.X to by this Solutions Scanning ties million second Near-Line million last up in sales region In-Line were it’s In-Line quarter XD sales Americas $X.X record Asia XXXX. This Solutions. and of the results, which our our year. $X.X region the Sales due in to and for increase Measurement Near-Line million and up back the $X.X was set

region For were nine Europe XXXX, in were Asia the from for over of region million, fiscal which increase our same of basis increased was XX.X% X.X% slightly. fiscal XXXX. percent sales our and $XX.X while nine months quarter the on our during up year-over-year a sales fiscal an a decreased months the of the first Americas Gross in period of profit sales our XXXX. of first XX.X%, as Sales the

from same and for just mix gross basis-point and profit of certain fiscal cost a first the have nine levels volume, profit increase we We we increase in in representing profit quarter totaled made sales. the disclosed fiscal goal timing sold. was increase the expenses higher this in As period goods X.X% believe primarily XX%. due the to that past, last as our gross towards year is in progress consistent our quarter XXX margin revenue sales of aspirations months for for a the The XXXX quarter for this the of gross XX.X%,

the several have in progress to that be to continue we choppiness these we to significant the fund expand quarters, our our quarterly our need in past are to the efforts. recognize of margins of development And proud margins results. there we we’re some we able continue so will While cognizant are made in

Next, $XXX,XXX $X.X to let’s line million Engineering in which fiscal operating items. to expenses, expense XXXX. quarter third increased includes turn of R&D, our about the the

year’s long-term this as As revenue marketing as generate products. were is investments Sales as shareholders. sentiments, which we have creating Dave of $X.X compared the third investment deliberate on highly I new when Dave’s to XXXX, the in as future to expenses higher relates well past especially new and are the expenses several focused echo year’s focused quarter, of $XXX,XXX We’ve compared the these as expect our products, the $XXX,XXX absolutely we’ve for margins in developing to months. better that third we confidence are quarter discussed, previously new and investment been $X.X exciting it introduced increase well, quarter. a last deliver to million we third bit returns million on G&A up here quarter. And an as prior for were to approximately products

decrease XX including a increase public utilizing covers with company in our due that largely As to Reported we’re recurring in countries, a This accounts. fixed quarter operating recurring reminder, that area. $X.X operating ‘XX. was by our finance this employee-related which a in increases that doubtful for in income increase allowance costs as and to and These contractors incentive The bank fees. outside loss were the have million. compares means offset partially the an is costs, increases small and footprint primarily million of and are as a well third for fiscal reported $X.X for the quarter we compensation of

a first increase of of of million, compared first is XXXX, of fiscal the first increase of compared the XXX% XXXX, in Recurring XXX%. months income months was nine for fiscal income to million the XXXX. $X.X our nine was months an nine to reported of the For operating which fiscal $X.X million months an XXXX $X.X first nine operating

we As and we financial in impairments were this not that completed amounts have $X.X therefore had substantially million. original the disclosed tax line improvement of severance, you quarter. any other for charges during may we material expense plan remember, with last quarter our We and do the quarter,

especially as when jurisdictions. As tax previously pretax we tax we rate we assets discussed, some valuation not established any in the expense our we each effective income that of against have to against have our income. several tax in impacts have period, deferred This net allowances tax have recognize locations full do

make estimate Jobs in the not update And evaluating transition Tax of an reasonable on process liability. able the from the to Act, tax. this Cuts the the still the of time, effect Perceptron we’re we’re at impact and As to of

analysis complete end fiscal Our to goal by year. remains the our of our

questions, couple Before open a I items. of the I last to call for want touch on

at First, from and $X.X from and cash XXXX. at $X XX, XXXX, XX, at million short-term investments million XXXX December down March XX, were up $X.X March million

line our million current $X.X March to had the Bank on Comerica, of Under at million outstanding with credit compared at of $X.X Second, previous outstanding outstanding we line March December $X.X XXXX. million credit we XX, had with Chemical our end of at XXst.

Finally, million use of cash of use was XXXX in million this the XXXX compared the use quarter. in quarter third in The suppliers $X.X a operations a build flow for prior primarily was year's inventory QX $X.X of paying from third to that earlier started our year.

than to we and longer As cycle. last a time receivable we year. the typical be why continues remained higher system make on last in for be of quarter, needed discussed accounts of end inventory is our our several going at to main focus purchases that fourth strong inventory reason based This our Cash therefore is to the collection levels quarter, life we cash ours. Furthermore, generation primary expect a this than levels. current in

right believe fourth backlog are bookings, financial us I that full as August of our to the quarter you in when and shown continue revenue, on We end join we XXXX, path we the invite and of year fiscal by our at to discuss metrics, profitability. XXXX. including

So the who operator open the call the turn questions. your with will Jasmine? for call that, to back I will

Operator

[Operator Group. Instructions] Greg comes Capital of The first Craig-Hallum question Palm from

Greg Palm

Revenue guided with Thanks. quarter starting nicely above Good the range morning. provided that last Maybe itself. just quarter. the you was

than maybe of FX quarter? the maybe alluded what surprised was upside I that, outperformed in timing, or maybe on some that based the you But some think, Michelle, areas in was to other there.

David Watza

to Yes. the strong and was well. would pretty Off-Line say, strong be pretty In-Line continues I our as

Greg Palm

to in you've the or sort base, that of seen? sort there, specifically customer ones is same that of any historically areas new Assuming same that’s maybe Off-Line just

David Watza

well say, would would in customers. is main, say, the we're in I Asia, I Off-Line pretty doing Yes. similar there. And the

Greg Palm

few the just for guess, new competitive is So, And or market focus demand starting are nice the thing specifically focus in the introductions, in wins of a seeing, demand do a landscape? guidance, is adoption product execution? quarter. the just that don’t few first, the spend up this terms of of just market a And maybe with of areas? a you there? better is and some minutes how bigger I guess, the what's Why you robotic a like some you becoming maybe that size result Company the improvement I Okay. newer opportunity additional on just

David Watza

a lot Greg, there's there. in

a have that us As for challenging get market you area. in you to it a for we’re tell Historically and we a really focus strong go because our by we’ve And path our And the really of market lot a have over to we’ve good of feedback after getting done being don’t that just received comments of and know, more of good And we renewed very done robot years see that lot guidance in address. more into. the the it’s XX some certain being a will we things regions. market in I we demos. well customers on

encouraged very that path. I’m So, by

Greg Palm

of of in has focus maybe of what current market. I’m you of how specifically maybe potential sort from Could doing give examples sort what that about changed you’re your examples us the couple historically either done you’ve curious more area? in or maybe

David Watza

customers asking getting from giving now we launch comments talking products products innovator. what showing been certain robot our and and When customers, we’re know about. customers point the And products of that we’re the feedback. new us a near-adjacent gone asking gauging, an us the the and seen, thing some there we believe think just that you’ve got very certain that have in market, investment automotive our our have we’re it. with strong in sectors you’re field like seeing should So, going within we’ve are -- and we’re back as in-line And of the what about as develop great demoed us helping essentially They’re you -- strategic are we’re very after guidance, customers it’s haven’t now just for we of established strong that us we’ve general. call product we a our to. that AccuSite launched that’s products all And doing using market conjunction they like. that our about after frankly, customers And these that, launched is, in for been and products what very I’m We in-line recently look in an while.

Greg Palm

last asking last when like sounds It customers it’s sign I of on your kind mean, guess, now getting new base? few are been to for customer the that feedback just the solutions. from you a more Helix the Any a call. it’s good and I you’re one months coming evo. you since

David Watza

giving last can you tell what X.X would better things was market. the I we call results a very lot that and measure know, you it’s What plants as product people was. can’t. more for -- designed old a better This is, is other in product, it than the the for results, little our we the Helix customers it’s Yes. consistent And one strong bit

very we’re So, we’re excited getting good feedback about it. customers. the from And

Operator

question-and-answer the would Watza Dave like This closing I to session. over concludes remarks. turn for conference any our back to

David Watza

you, Thank attention you, again, Jasmine. and for to our business. your Thank time Great.

very excited very in and too. issued. to you Thank few and future, our full-year be, months on you fourth you are much. when a progress are think results look We our quarter our we We should updating forward about

Operator

for today’s attending has conference you Thank now presentation. concluded. The

You may disconnect. now

Perceptron (PRCP) 8 May 182018 Q3 Earnings call transcript