PRCP - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. And welcome to the Perceptron's First Quarter Fiscal Year 2020 Financial Results Webcast and Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Mike Houston of Investor Relations. sir. ahead, go Please

Mike Houston

of much, Form the morning webcast Perceptron financial the quarter's first the very yesterday, investors.perceptron.com. market you issued website which Perceptron to welcome. is for company's this quarter the for joining conference release results XXXX. Chad. you After and closed and Good earnings Thank discuss fiscal XX-Q Thank call on and available

Laura and Pecoraro, of on President the are Perceptron Interim the CEO Freeland, Jay me and Joining members Chairman Vice Finance. call team. today

We the and with teams then Perceptron's open questions. will to call begin prepared the remarks call up

we the call, the be to material before Securities Any Act. Private under today made is of inform will today. we my information be discussing Litigation based to Reform However, responsibility believed begin statements upon today's information that constitutes true forward-looking some of you are of meaning that as forward-looking it the

filings uncertainties from actual on release reference transcript XXth. the information Unless which and the made for of review information this forward-looking will are the to years for years and risks not be results third comments US Perceptron call in provided. and responsible Please otherwise parties. independent to is dollars on for cause may differ end SEC by fiscal that noted, materially June

I will to call the Jay. over Jay? now turn

Jay Freeland

XXXX. will on thoughts fiscal remainder Laura the with some and comments, a conclude quarter Thanks for Mike. development our financials. a I'll followed After And start outlook the the of call the my today on I'll change by couple by discussing detailed comments the of my then leadership highlights. review product provide

duties now to Board release, Interim appointed all CEO in Chairman. of has by my in morning's this press you the As probably have me addition as seen

Board's for as as the Dave to his before we're as juncture in life. for this tenure he's at CEO, company's during the that. critical during time well From CFO perspective, a everything grateful done as Perceptron are We

we but for and we have our shareholders amazing and underperformed We have people, have our value not technology amazing delivered set. opportunity

uncertainty of both global as economy. as Additionally, well the in industry, automotive the we're period in broader a

Our Perceptron uncertainty our company, get to near-term need or time north, preserves is an already. our four optimal blocks your a curve should benefit of ahead creation vision what for subsides. to the to also the path for company context to Not needs rapidly better and and environment and bend. to shareholders the core vision with reposition understand long-term We three do value possible, amazing west. and be at when blocks just but the anticipate leverage of around so we adjust to also but what strengths in forward. prepared ourselves what's for this four is the three that same the company the east need well or to from a the revitalized We

and anticipate are Perceptron and for And under at will valuable done. comprehensive The review Board. vision stronger measurably your strategy company more we're be when the I

of shared organization create a looking reflected within and We're sense team for the purpose. the the in current change momentum Perceptron's We're value price. the the and for who can accelerate is the develop under direction Board. permanent will is CEO for underway morning's mentioned leaders time also drive As already in who release, search maximize looking the that leader share underlying this same a press and the new not a of forward at

a the that and customer-centric, someone for complex manufacturing company new looking savvy, this organization, global to lead vision into, understands sell a technically has We're the we led environments and has in who direction. is passion

I transformation fully Perceptron. be right talented In assure and search appreciate, match the mission. This anyone will leaders and the will we has those company skills have embrace I integrated who who take, believe long you personally fully will we can and how engaged respect, doesn't for the predict very the into that senior driving until not meantime, can't that launching I I the deeply person leader While and find settle in.

easy, in change of strength core share in me growth bookings leadership improved to gives the While drive is ability period. and this never during our confidence executives market even gains results, our interim

of taking. this all also I'd our for Board company dedicated the to are and out less we're than served that fully point incredibly one but whom years X.X support have path

softer talk minutes. reflecting Let several started financials continues we're about and which quarter over a for and expected uncertainty $XX facing are were order me the market. just We our automotive that first orders with results. Bookings shift saw intake. the gears few delayed than year we a million, now were trend seeing we reflects the in quarter, get We quarter expecting this last mixed

but had We also The of on. not rather automotive of function mentioned. orders planning content were reduction is just uncertainty won than a we content gaps, a reflection few that smaller a I value the value competitive in

factor, automotive China in QX now challenging despite down sales the That overall large below to continues profit Sales was operating the The in That our a of the and income profit delayed decline, quarter a million XXXX. anticipate which under quarter the of working were or quarter wrapping is since the and that fiscal expecting. ago. China lighter between production Americas. over sales highest QX, remains were $X current we we revenue. hard first in economy target. on just approximately programs was being up are tensions said is XX% than to XX.X% represents adjust orders. from in X.X% that Last first couple of of we are our but gross global percentage years the and and as the trade continuing certainly one The were horizon. without XXXX even US what's were $XX Profitability also sales year's volume but million, was stronger $XX the just million included some Gross

autonomous delays for historically electronic of driver investment causing key which vehicles models, been the industry in a new We also trend automotive believe that has automatic business. is shifting towards our or and

launches, timing frequency the headwinds investments us of allow very macro will subject several and new we in benefit made much Regardless the the value last years over our have while to from However, program customer we we to shifts and recognize remains changes. proposition these of timing, Perceptron believe customers technology industry remains intact. order Perceptron's

efficiency, value Our integrated and substantial quality customer solutions, which improved drive product launch our shortened downtime cycles reduce for customers. and

ago the our finalist I and get we also the of a global was for as selected for the large customers. we product are from nice AccuSite award weeks that a innovation, orders PACE development a side On traction product new several note development starting business, to from for our have recognition AccuSite few team.

line was to AutoGauge solution, near expansion array measure line. the AutoGauge of Our of broad an developed parts product our ACF

recently While by a manufacturer. this enable to industries win global product will us appliance our announced as automotive at penetrate evidenced beyond

traditional for company will solution have guidance we assembly. guide to automotive this our expanded to auto high simpler enable traditional our of requirements platform for robot the the the focus. to Finally, to another guidance that robot will move This been enable augment and applications create opportunity same beyond on continue robot beyond has not do precise applications end focus guidance

traditional three overwhelmingly ago. headquarters house customers. in new the and company customer was than main with and Feedback our development The three Plymouth on we XX its potential More representing annual event. held at base, weeks customer representing product have takeaways our attended approximately customers open from half positive our half

interest First, AccuSite absolute position leading receiving customers our Perceptron meaningful was measurement. of puts and from in most a in

advantage AutoGauge a robot accuracy of AccuSite's a Near-Line to manufactured of products maintaining many fundamental strong develop ability elements is as our deep measurement In-Line industry remains ACF dedicated continue up by us. for valuable team our open well leading create should business in to as underlying of And while These the customer third, improve we applications. Perceptron's alternative smaller, Second, unique measurement assemblies. a our industrial as environment seen an business, to enabling new as relationships. competitive

the changing will the EV landscape our vehicles belief to opportunities are automotive. down turn path further autonomous beyond I towards sectors new within to want automotive and we road reaffirm I Before to over the development its and the call that Laura, lead and on

enterprise and believe and growth and we profitable execute we promising will enhanced position should continue while which business opportunities new Executing optimizing our shareholders, As employees entire Perceptron, exciting to company its along our of to on review will sustainable this our products, value. lead provide thorough shareholders plan, and with value deliver talented creation. the the lasting for we most our for

company's to Laura more the provide the on performance. color turn call . financial over now I'll to

Laura Pecoraro

Thanks Jay.

by decreases $X.X Solutions on regions Americas quarter A an the $X.X our were fiscal -Line of and million, and region Europe increase Measurement a quarter million million Year-Line In increase and constant basis, First $XX.X million our of offset XXXX. of $X.X to partially bookings was in compared first X.X% respectively. Asia in currency

the Bookings fiscal unfavorable our bookings included the quarter First in million in of backlog short first million. currency quarter of an million. of caused to XXXX by impact which $X.X revenue decrease fell $XX.X $X.X

uncertain will the remarks. challenging, update Our environment Jay in have QX the mentioned to bookings us continuation which our global closing economic of of earlier, and potential specifically his led address guidance more

of X.X% million of million. XX.X% this $XX.X first QX quarter quarter quarter the to in by sequential in the Sales $XX.X from first million, which Revenue decrease XXXX year. decrease $X.X exceeded bookings a to first in were fiscal backlog the last the past caused from

foreign unfavorable impact of exchange year's Our million and due first dollar first RMB had dollar sales fluctuation. an compared euro $X.X prior currency primarily to the to quarter results when quarter, rate

the year. $X.X in The due sales product QX Our all sales. $X.X quarter to Europe in of $X.X Sales by In-Line, in an decrease had was increase This million, Near-Line, lines. which of the softness the our XX.X% million partially quarter in in to million $X.X primarily up region offline were of Asia year. was first offset decrease of compared last from across to increase a due to million was an product decrease sales same prior

were up which of as XXXX compared first and down XX.X% initiative. Gross primarily a percent fiscal new same Sales primarily of in impact to $X.X $X.X basis in-line Americas quarter The for is the profit mix points our the including region to quarter. of our the for the cutting cost decrease is product increase as system. was our million XXXX. due to due period was year of XX to sales This fiscal million

for discussed above have in our past, levels gross longer-term the XX%. is aspiration quarterly we consistent As margin

to fixed and We our we'll continue expand the actions seen our of additional margins. to opportunities the identify both and to expenses we've have benefits taken variable reduce

fiscal our Now to $X.X first let's expense quarter decrease related the million decreased include $X.X R&D due in This expense. operating Engineering items. of employee approximately turn which expenses was line to XXXX. million the to primarily

costs, This quarter. change administrative $X.X and due employee decrease million for general fees, were to million to year's expenses decrease a Selling, is year of was for primarily legal income of level. $X.X amortization in $X.X expense. decrease lower related a compared from first in QX. operating volume quarter, the income last down was the commission due The sales to and Operating QX $X prior million, million

down ended million, of XX, credit on at borrowings Cash our XXXX. at and $X.X $X periods. first and at the no four XX, from had at short-term balance the end of $X September million of line outstanding the million investment quarter $X June We mention any XXXX million

to I'll remarks. the over back Jay now hand closing for call his

Jay Freeland

headwinds opportunities are extremely company. a the potential believe in and the creation Laura. and discussed growth ahead call, Thanks I earlier remain We significant Despite value long-term board there upside the Perceptron. the for of in confident I

As in evaluation of near this we our structure. a I thorough conduct term and the will press organizational cost stated morning's release, in

a technology strengths And business shareholders. the partnerships. value importantly, of and including We to divestiture we creation most leverage our core eye for drive and to potential options, strategic take critical its employees talented will strategic Perceptron's various will substantial

outlook Before call, the fiscal of I for XXXX. our like Q&A would to to the rest portion of moving guidance review the and

targeting are the fiscal double-digit in We over results. growth bookings XXXX

year I'd their mid dedication for We single fiscal the for growth single-digit fiscal continued percentage the the mid-single of to are to also to range range. margin an like our looking compared Perceptron team in to the operating success. XXXX global thank for low revenue full in XXXX, company's be digit to

I call the And over for Q&A. will turn the to operator now

Operator

[Operator Instructions]

of Our Please B Chris first go question FBR. Van ahead, sir. Horn will come Riley from

ChrisVanHorn

Good for morning, everyone. my Thanks call. taking

of working just any the you're that you the when ranges provided? what are could outlook the takes kind highlight, initiatives So that you really of quickly, have that maybe guidance touch to you at potential look in and and included the you on on puts the

JayFreeland

Yes.

of additional have of for say we do reflected initiatives underway already initiatives and the the have course that those that first operating place So the on it I'll and of comes we'll process the, initiatives year, Certainly are place. when will are to numbers. through some the the in margin the and taken the company, profitability have place rest that in taking take

in; And in Laura So that the there some with that right I is out --that we not baked there would potential have the is numbers. baked come future upside has that is guidance into now. not have put initiatives there

week we've of revenue obviously given On obviously, it uncertainty uncertainty guidance into Could possible. end closely side, watching this low taken a they of and to direction it's drift report that's there. and Automotive trend sure. in negative we it and kind the the countries, issue could, could we single-digit, orders a just right see slightly, it. marketplace. see very the Thursday and this that Germany moving now. on the the it do China situation down up in for a both is double-digit, The of in we're piece economic range where double-digit be could obviously, be Germany's orders of is The see

uncertainty on outside it that's I of So that. sort can't the for of what company. specific put more the a number gives

what the there feel I in already of think there's both earlier pause deep look bid of that opportunity working number is are QX on the that say bit we leads uncertainty from that's there's specific set the the now, visibility and plenty and that about there. a little get the you the have when when team of on more a good the causes ones We at that giving right digit process. been and still we stages where of guidance double ones the obviously and is too out QX

ChrisVanHorn

of cancellations? it that order for changing just launches of When from to delays, there wholesale you comes seeing you being around a And right, your they are most the timing are the kind product sentiment are decisions on thank the or a to kind Okay, pushed of are just changing customers detail. uncertainty altogether? them

JayFreeland

Yes the more of I say would it's first. former

where to pause right when chasing. of some not the any of some to that of investment That's little the unusual. they and will go type We before on are push happens. reduction we're set uncertainty that cancellations. that We've of periods block you particularly seen to that's it seeing as the expenditure. comes into first get I've quarter I seen see a seeing tons had or of two will what bit a projects to we for were scope of not say we the

a [ph] [ASCO] dealing customers' And not two you that of is do now but going they're it a do, be to respects some in production structure a uncertainty. So and partial cancellation program. part cancellation tranches, of have could that way with know full the the may specific and They decided it's --that later. part just

That's a this ton --we're flat-out point. of I environment. say not at But in can't seen we've of not that type cancellations just

ChrisVanHorn

good. margins really it. looked And gross obviously Okay, got then

and the cost-cutting mix little front if specifically any and around of then on cost-cutting then on us improvement? what that the side on detail more what then you're mentioned you again a mix, maybe for give seeing and think commentary split the I and was you could sort

LauraPecoraro

Yes. I broadly the entire it cost-cutting on side, is say organization. would across really the

we We're time. We committed is the not stone side very unturned. That the quarter. those efforts. really to. The closes definitely we're continue then lot gross in going leaving margin any of very that have products something this in Mix, shipments. are would and on XX% really to new the played part that margin profitability continuing we gross continues, see a the big a We hope this also

hardware. to the right. when everybody And keeping We also a materially focused side tendency installation when we're on on we're busy do the well have

under goes quarters So if good don't like. the That's for and the we what us. installation hardware those absorb out; look are very QX

JayFreeland

functionality set add team I'll it And when but development as the team new and engineering and the cost is reduction of the focus the the products, customer, the well. improving must the development not years. Chris, and has Yes particularly that a include feature two new comes piece a the over of just that, product to it last been cycle to for

base has fact the that allows technology nice years I supply pure that can changed of you took always that that by to your out cost changes done times design three improve component ago single take they've are done product technology allow the to there. two much are mindset a or is take technology job the itself There's out take changes now or a room out cost. think because There you just component that in to There that the costs. that.

that ways mix towards the there. gross ensure They of margin. And products become that. new also do drive it of continue path lots part XX% there's as the helps we that deeper those So to all then a

ChrisVanHorn

understood. any strategic Okay, have Jay, announced of in milestones specifics maybe, see that a you'd significant sort head this of me, and out for that you you like Last timing play obviously pretty evaluation your how around here to you work? or how do have would you

JayFreeland

feel things I of is started our play I that to be from done table But interest is positioning right has will in we best of and the the a structurally respects strategy many core? I best? look positioning on And What What months company now. a not have the what Chris. as putting standpoint. that vision and a will in which just say would is us mind. obviously long-term a ago. market maneuver. comfortable that say are do Where's everything specific much Board attached a Perceptron already that can several we strategic Some And do review is helps at the taking of that underway out, dates not near-term understand the

best are for shareholder, could areas. best for our and different base; what's So the come And employee we a opportunities they out variety just real customer accelerate on the our best there need to for there base, focus those. what's what's of in

certainly updates I in more forward. This with is and two This tell and specific not two-year to a move call those tend you that. have need progress will we increments. provide month things in each will though. So meaningful process we go as increments they to three

start a are person find that not to is does strategy permanent So months months, nine right. going we long for however takes wait even that searching the on what's and committed mean to to it on long sit though CEO term six this because months, to three executing Board we're that

Operator

Our of from Capital ahead. will come next question Please Greg go Hallum Palm Craig Group.

DannyEggerichs

Guys. Hi. Danny This fiscal I going kind just off is year outlook. on of comments actually Greg a little today. on you for guided down orders Eggerichs the bit. your guess earlier

it You mentioned achieve your into you that are digits could and it digits. I what you and profitability high those, there? ended up margin that double given guidance confidence be operating slipping guidance? reiterated confident that able guess possibly you're If slip how ranges those is your margin in could into single low trajectory, that to

JayFreeland

Yes.

feel how little and have and QX, a wouldn't a if cycles out out we obviously The about if work that work little less out, push just the our gets we put based of -- think range a pretty with have few on revenue otherwise that confident our bit out. to is concern with you you orders I the pushed push installation customers the delivery to customers. from they Obviously, project again.

organization. done nice before cost as the a that about relates newer of the out in think I to products. We the taking some improvement the structure product in talked cost job has it particularly team fixed

always place to organization a at differently cost it the there mix but been there will things assumptions ever margin. with you've the and gross gross structure And Mix I That say margin the So do it we of comfortable that fixed that around to business shift and fall you obviously should even you're helps opportunity if structure said to through. gross allow certain because looking that bake helps help set being changes margin. major on have your more a efficiently. cost that without done are there's not improve fixed

both part so strategic as a be of And board senior going that as the leadership through we going review through well. a we'll and that's team are as

DannyEggerichs

the see kind of And kind options thought partnerships. table earlier mentioned release that you All Is board divestiture then the strategic now any in right. I getting of with sale of everything there. or this any morning the Great. reviewing the you of a of mentioned that hinted with and that company? has guess partnerships to you're just Perceptron. what I'm the there press Is language comment in interest with outright best on the management of included kind that trying change

JayFreeland

consider give I always traded that to of said, are possibility and do I'll know you're Board that doesn't that That So feel today, I'm possibility moving relative a be we obviously was end answer, well. will the may are say, plenty look, to go publicly apologize. different the you generally make the looking to a the understands owner, we what Perceptron. things company, vague different shareholders. sense to public the right that Yes its of have the that standpoint. is being that what we so want there. it some as for divestitures relative Yes, transaction structure company. at we partnership are will a and of there could with forward. Danny, if mean certainly the a probably sure a the we transaction I looking where responsibility result We of structure as There And like from has would a The right it of at go strategy to

be in We automated of XD There that in a we not we technology measurement In-Line, We that are automotive. have a Near-Line. do lot currently. are ton industries should in amazing

all say the those, on organization. focus for so those table. all the opportunity give this that and so the changing of will there I And for the of And strategy is

an period. for be should it that's this As going of organization through sort

at be so all we critical our a cycle right it's to in As looking those now we need and point said, options. life

DannyEggerichs

sense. some further And commentary me. end guess market. last makes then on automotive for that one I it, Got

from if that or seen you've all any you strikes? there. seen I GM have through if don't Specifically, impacts at anything the come you've know seen

JayFreeland

we've something that of X been yes, say but or impact finger and financial on know specific when you would cancelled. seen put we type Obviously, can't I yet have Y I particularly from their that it to the quicker. GM GM flow impact Ford that among We're the concern. pleased customer free cash can the creates strike had went for some transition a year, has Yes. one obviously say, the program is much delayed, many. --it the

probably and I they through the to and witnessed they different were a think guess they I saw in result move their decided going went that fashion, as process.

me So, and concerned, would I'm yes, look can't take; at of it Look, customers. to lots we seeing it. we it. puts I about concerned But company. the anything as overall I makes lots say of the particularly have relates profile that be of substantially

multiple So at before impacts it deals the takes flying off you top-line. table feeling the substantial start

Operator

turn the our question-and-answer Freeland back over like to Jay to This I conference would session. concludes

remarks. go For any closing Please sir. ahead,

Jay Freeland

company on joining to call. around for Great. at And thanks dedication making for end I of the your of Thank everyone look you the this second thanks the you and to team us all Perceptron forward updating world quarter. successful. again today's to

Operator

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

You may now disconnect.

Mike Houston	IR, Lambert, Edwards & Associates, Inc
Jay Freeland	Chairman and Interim CEO
Laura Pecoraro	Vice President, Finance
Chris Van Horn	B Riley FBR.
Danny Eggerichs	Craig Hallum Capital Group, LLC

Perceptron (PRCP) 12 Nov 192020 Q1 Earnings call transcript