PRCP - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to the Perceptron, Inc. Fiscal Third Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

conference recorded. this reminder, a is being As I'd your host, to turn over to the conference Mr. now like Bill Roeschlein, Interim Chief Financial Officer of Perceptron. Thank you.

You begin. may

Bill Roeschlein

And XXXX. Interim My Chief investor Perceptron's is Bill the for welcome Officer. I'm webcast name third morning. Perceptron's and the fiscal discuss results company's call of quarter Financial Roeschlein to financial Good and to

quarter After at Joining earnings the issued and Interim Board me of Chairman the Perceptron XX-Q Form the on on company's yesterday, Executive release call the Officer. which Freeland, its on closed today third investors.perceptron.com. is Jay available market Chief is website

We will questions. then with prepared for open remarks begin and the call up the call our

begin Private made are some true Actual information Act. constitute we inform forward-looking as statements call, materials Securities to Any the today. differ forward-looking discussing responsibility you of materially. of meaning to Litigation today Before under that believed be of Reform may the it's we today's based my the will information on results be

of latest For our results the of a section discussion of the filings Risk Factors SEC. refer the factors differ, with please to could and to quarterly actual annual cause that some

note that financial discussed press find end now June to references to turn our for years, reconciliations you of be fiscal measures comments the Unless XXth. historical to which like Jay. release on US call non-GAAP in otherwise the today. I'd and dollars, can during issued With noted, please in Additionally, call are over years that, will

Jay Freeland

a time everyone XX Due COVID-XX most, years bit the on the in company, perseverance the pandemic, team is world. I'd I've in like their difficult to challenging differently, call of to for during by dedication our witnessed Bill. set start market been thanking the most I've the like a business. conditions Thanks, today's facing around and Perceptron very

of through continued team it. operate all this However, has to

to our welfare health, for back recovered We is while all has employees. the only had continuing have say provide pleased and within everything on we've safety to Thus one fully contract of this work. delivered the far, We're employee at employee our control, and virus.

ensure challenge. leadership during this employee amazing proven efforts execute of of to crisis, the On an working well ability our with I'm every as disruption. behalf has put their remotely, the grateful for to been as employees entire Our this almost by team. forth during ability throughout the the period, operations continuity

Italy shuttered to the to Turning shuttered March response operations shelter-in-place of XX, pandemic, down our Michigan and shut operations from XX, March COVID-XX operations. a discussion resulting in XX. we our In on February on orders on China operations

within States. $X.X performed which for a employee here as be cost loan onsite did And of a alleviate our are Protection in our utilized of facilities customers. salaries continue social levels Our many Throughout of currently XX% our and received million qualifying the to where has completely to at of being down, been facility now Currently, to functions with employees distancing in in shifts level remotely. maintain service, help proper critical The levels. in functions and SBA's those the to our Program, Most operational. environment. that crisis, available with capacity applied we short provided Paycheck workforce. previously teams utilization anticipate across various running approximately most and were and programs all discussions the facilities, remotely other Germany facilities, to cover need to at given working manufacturing operating to open well-controlled we operate staggered the but of help the May, again the are not also shut At are function work June, allow activity and facilities a increase operating support expenses end the from announced, and all the during United we've to our

they Not to their we or we goals operations layoffs shuttered large have surprisingly, through in virtually a product team entire to been to ensure the of in first and Notably, of world, while less number we impact on successful been of revenue basis. to soon during products operations experienced date, those my cancellations. May to have total of services of the quarter. our situation and on and resulting regard. on-site and has avoid did, material deliveries that crisis during facilities, their X% customers customers our us a time this order Most represent combined One is impossible any India not our Brazil a conditions have not have reopened, than installations To fourth the a started this as were ready begin not reopen allowing as the where furloughs June. as delivering around should Around half have improve. deliver meaningful

new opportunities into pushed fiscal business QX of QX. and We have handful get seen a

team customers able sales continue interfacing remotely has the through been with this. of However, all to

to for return So, we We conditions, to Visibility more monitor beyond cautiously pipeline improve the should coming which are to macroenvironment, QX but continue over the normal current we'll is remain fiscal to the promising. market starting visibility and QX looks with fiscal the weeks. difficult, conditions. optimistic QX see and respect a

the strategic company. identifying Every for the on remains for the us best five The for focused follows. remain priorities as we on are strategic Perceptron most options ahead, table. Looking option long-term critical

is we the company's continue Our financial to stabilize that performance. top priority ensuring

we clear. progress of us none had in I we hurdle have planned us believe measurable made period its for of creating we all pandemic, this strengthening a underway. taken global for This strategic the during for us until While sustain the higher have pandemic. regard, to that allows more transitional steps to refocus to was on Perceptron this previously exit work operations a necessary the

to strategic second Perceptron's further efforts portfolio. technology Our core enhance involves priority

represent than remain achievement our given a been Our disruption. even have the related while within programs internal all COVID-XX or On dates, working successfully existing less meeting engineering balance, teams their delivery milestones, original development extraordinary month remotely. of their

priority third leader within extending as position vertical. a Our the Perceptron's is market automotive

crisis, a the execution and remains development the sector. this is across even manufacturing near-term automotive While within it critical the opportunity created uncertainty of initiative with was during untapped the the There substantial currently chain. that backseat to small share our OEM wallet time. remain a well level at over very supply processes grow opportunity the of We market, relatively within an as a piece as large creating of took

to well. restarted such This Perceptron's efforts our also the fourth of managing heavy paused on markets, base critical into crisis, growth to aerospace. area but additional is initiative Our through diversify our construction as industry, and focus keep focus revenue as here have is

priority is select and to leaders right company for final and both the strategic for the fifth CEO the Our CFO roles.

committed lead candidates identifying remains to phase board to next through our Our of world-class growth. us

and that there pool potential consultants very search candidates our with spoken of remains for the positions have deep believe a in We question.

for In our changes the fact, companies door leadership in organizational talent. may other as favor in to pandemic-related open volatility us add work

continues material business uncertainty and return execution a or pandemic-related some with Again, to ahead business far. necessary backlog position for our us, to have as cancellations of appropriate we all to of business orders normalcy. While markets, on stable weigh conditions our we actions taken no pipeline have the to thus level

call of the this for our demand, I base to plan, will we exit as company execute growth over turn we positioning period. Bill. Given will this continue transitional the stable to on now

Bill Roeschlein

million $X.X XX% followed in third million by XX% or from from $X.X basis, the $X year. $X.X or declining sales or were prior the in QX from $X the geography, million, of the effects sequential year. million declined On by bookings Asia, the each declined a a or $X.X bookings Thank a Currency or Europe XX% quarter by in fiscal Asia million declined million a Europe million of quarter the $XX.X from basis, the a $X million, XX% and $XXX,XXX or basis, basis declined while $X.X fiscal mix $X.X in approximately revenue the million, basis, gross or prior by basis XXX the Total each XX%. sequentially year-over-year mix, Americas Americas million On a margin X%. the impacted XX.X%, prior basis, modest most $X.X On quarter. down and third the year-over-year million, XX% Total and $X.X by on due Americas or previous geography, XX% were costs. down a million, due million, sales from quarter down XX% $X.X third Asia $X.X was percentage-wise, sequential Asia sales Europe in declined of percent profit increased $X.X fiscal came million decline sales basis down as both million which bookings or from were declining manufacturing or current $XX.X you, Gross year-over-year prior contributed sales QX previous to quarter the changes the fixed the XX% of year-over-year declined points in in up gross and Jay. and quarter revenue sequential changes down and On year. On the XXX negatively while to impacted Europe of the decline the margin for and quarter declining for sequentially points increased lower bookings in QX million. region. a majority of $X.X from million. a

a compared expenses, were decrease the approximately quarter, quarter approximately R&D previous Selling, a in and administrative from operating expenses $XXX,XXX quarter, year. year. a decrease QX to expenses a to fiscal third in $XXX,XXX Turning quarter $X.X $XXX,XXX million engineering and of $XXX,XXX the of of decrease $X general the prior of and and from prior were the decrease QX previous the of million of from the

from the million increase and with the to quarter diluted million restructuring $XXX,XXX, million, expenses we The February. impact share impairment per We the related diluted the loss previous and million charges in announced net of We be $X.X Adjusted expect of with majority from severance compared excludes prior-year compared for to goodwill million previously which $X.XX QX able $X.XX benefit $X.X was a of $X.X in levels. $X an XX% down the per in $X of be future. quarter of $X.XX a quarter for roughly or net Severance, $X.X charges, in comparable operating were the net in and the or or quarter. of in was period. the was impairment expect $X.XX certain increase where to or diluted million per fourth and share diluted of total utilize QX to geographies to $X.X intangibles other operating from million severance loss year. of other tax loss quarter share reflective share quarter, losses in of Net per the our the prior X% had the costs impairment

and cash cash to we credit, Economic borrowings like Program the globally. into your the and million quarter-end, who I operator Paycheck entered Protection had and $XX.X to of loan Subsequent under in $X.X questions. to to up back turn in Security Act. call Coronavirus equivalents now would Relief of the we unsecured As lines Aid for open the an our pursuant had total quarter, call the on will million outstanding that, the With

Operator

Thank you. [Operator Instructions].

comes with Our question. Capital from Please first your of the Greg with Craig-Hallum Palm line proceed question Group.

Gregory Palm

terms Morning. of have in of order and not first, if both first pretty you like are closures, facility sounds Yeah. but were that weeks impact the March. customers impact. the I'm Thanks. few at was significant Hope demand, guys activity, you doing a I guess yourself how tracking things color, through well. I'm curious sure of

that sure at not quantify if to I'm you're So, all. able

Jay Freeland

some analysis even morning, ever customers of Greg. question this one we to shutdown disclosed us shut, you're were They're like the ahead were. think to right, I sort No going companies sort that that, – of their they of track this the definitely not as of And something it don't going even to Good quantify most looks the quarter. region what because of everybody officially we've next the what during the through frankly impact. business. real, was to course the of globally the from going But in they were I'm were probably just See, as world we to next. our quite facilities seeing the before that was to had all and same pauses were assess was trying impact was an do, going

course in And brought a tend quarter, be a to during the will So, third we the I that in halt the month pretty loaded clearly heavily closures particularly to March. say, of quarter. quick of

that about our the loaded. just not tend talked before, orders think be customer's I decision-making many we're by of back-end driven that's we've space And process either. but the uncommon to in and in

date. already there in that the QX. were deals number are on of are QX QX in new sort had Those for fiscal that the come all then, for the customer for planned to at of some that's business into the to minute pipeline year programs what have at already There tracking anticipated QX closure that ones of up. we OEM on we clearly cash we for the – meaningful a active. have are moving seem where against pipeline and be QX when which that that fine. the is look you real So, just those seeing underway, on deals the of particularly have are bulk that are in dates track demand base, pushes last fiscal we that, you large along you still be expended threaded coming based When is at tracking who well all next – as expect And our us were would – closure that at the level, ones have orders then, the QX as is, demand for of appear anticipated some customers pace from look

expended, confident how feel our with on For we QX. And where that's QX internal and is for based handicapped for there have history. estimates newer programs our less we

develop, programs just point. Where is quarter could there sending we were to gaps, it's obviously, to starting we is too to at pushed history customers starting a it marker variation get don't So, see But another we're is. a if the or will would be this uncertainty and QX those spend some those to just this and on, percentage anticipated some signals. perfect right are for just soon customers basis the very because potential small a new two, know, the top regular that bit a a ones customers, have QX, QX just activity gauge with where on which on stay be we up QX and the to at percentage, are then smaller of our point mindset and ramps and the to of trying where know

Gregory Palm

June will the of put beginning Is a And Okay, that's that demand from in to pipeline what sounds least, we the words implying you activity, but the at confidence your that's that really improved levels, like your guess, are helpful. quarter-end, sort year? I get I mouth, whether want orders it's it sort of on of monthly don't or since you're sequentially fiscal to as true? that continue kind basis next of April. of that now near-term gives seeing sort improve and into

Jay Freeland

definitely strong too we an say adjective. maybe probably is of deals Improved I would come some new pipeline. saw the into that

QX planning them. we there even fiscal QX or customer improvement. in but So, if of are that starting month? month improving weren't we see I'd until say, Then some look that yes, were at already to pipe planning close that we're sequentially, way on is Many in to deals We in to anyway. say, the the Again, and demand. weren't QX, close based them to

all we're feel weeks the The We've at POs order obviously, got is, until obviously, enough not anything will good or we pipeline dates. based about plan – had what of on to pipe. we two there. I feel they that's thing. a bank And had through order the the even the make month based know now. how to trying seen right won't good should based close? those we've good sight what track closure do quarter line when slip. out question on we timing on, or in our And same the now, murky, is, So, to pushed they offset go. our on, I on everything a that we've hearing still purchase we're QX, said, And, where pretty everybody's real we're But really continue was. we two. in as still Like we're of have everything is the to anticipated purchase though decide, we expected coming meaningful timelines. about across deals to the start really It's We what handicap the their we one supply couple what going should next quarter again, watching QX,

Gregory Palm

pandemic? Any you yourself about witnessed more this? positioned environment? okay. do during the how Yeah, start guess, from we meaningful see the What of competitive And you've that importantly, all I to changes when emerge

Jay Freeland

say I'd across environment. not we've the Yeah, change sort to seen competitive so quiet, any speak, went in board. it's When quiet it the of

of keep themselves anybody might that? did We've the any, advantage to seen not order at have look anything help anything seen to price? the you I'd period drop take like not price afloat what with the they know practice. say, call, And that where deals competing, it's Or We drop where and did in consistent generally from marketplace. and been always in we it's seen would behavior compete relatively parties past on It's we've been we're what same quiet. against, irrational we the and

Gregory Palm

conversations thought curious, social inspection to could more meaningful business? for automation driver the Yeah, you've that some helping since. tell? your replace I customers and soon solutions, for too think key okay. your know With you I'm if of that a distancing was do pandemic, any tools. is to with driver I've Or become manual automation had a don't it always

Jay Freeland

Yeah.

literally, But tell. their right reopen as XXX% ways think cases, refining agree with to idea. in now, In some they're concept, it's early too they that restroom I is like I I it's facilities. to the their think, – everybody

that are the play to elsewhere, in term. selling distancing that step strategic in a early been past or productivity, would process that term the advantage soon too still to a need. of productivity And tell decision-making creates able in which know if So, the or to those have so, think this I can over come long-term social think in if fewer creating help consistent I by variables long to eliminate in the still that's long idea it real The process into the customers people the a over on we it's just become little labor involved all being having apply as relates to your it's otherwise, a whole

Gregory Palm

Yep.

Okay. strategic of search [Technical Last but on me. some with have you where mentioned announcement process us for we update fall, you CEO, for one the know briefly to can priorities Thinking near-term options. today CFO, company's the I are the last Difficulty]? back

Jay Freeland

the up comments, starting this push the in shoring pause this process. term nearest other diversification hit say, was, search are will the verticals at during a call, would best financials and the during I the rolled on I of noted sort as ones So, the and itself track. into whole path pandemic, slow of I

You you was and one to this a And worry pay fire have to there obviously, many. attention quarter. try fire too about not to when you have large

and giving the is time up flexibility, quarter This opening end back again. more people as start typically now

And You none and have start Perceptron strategically to about priorities test do those look all at thinking of again. continue business long-term. more the changed, the for we options

Gregory Palm

right. All going good me. forward. luck That's Alrighty. And it Thanks. for

Jay Freeland

Greg. Thanks,

Operator

[Operator Thank Instructions]. you.

question Sherbetchyan B. Sarkis proceed next Riley comes with your from Our question. Please FBR. line with of

Sarkis Sherbetchyan

morning, and Bill. Thank you. Jay Hi. Good

Jay Freeland

Good morning.

Bill Roeschlein

morning, Sarkis. Good

Sarkis Sherbetchyan

Hey, so just wanted to last off there. the question touch upon what you with ended over

were other the revenue base the diversifying You pillars comments, through so efforts here. restarted the of strategic one the mentioned verticals key here, in and prepared is

take to verticals, accomplish these targeting timeline approach? team's a buy build or your And what that? would would that be you the for So, potential other

Jay Freeland

Right.

And I'll color give bit little with it. it's more say So, go a I both. you would to

billion and in call big billion in aerospace, of but vertical anywhere, next do largest we is both at all around The is the entire heavy this And most to are roughly piece still zero by that, metrology those. total, $X.XX the opportunity we're metrology, look automotive So, so the billion. and $X two small it, $X and world, ones metrology a if market essentially they're just It's year. of measures. industry per you

metrology have we those, And play in they automation two I no meaningful real as paths. have it's One real what develop think already and different relates more have when going scale opportunity forms about the We, time call you're We're and of very today get and well. technology an why obviously, question. lack as organization. we where to To they it market, variety obviously, I'd in to both there, is out. the they great manufacturers more needs list, the automotive So, major of on And our of to over a embedded company talk time the that's they're that's, they're needs, in all accuracy as their automotive, team with made by, needs. knows facilities size world. utilizing we're the period. productivity and And around the continue very goes have metrology. to And the inside successful

a there knowledge and As verticals. is team, other two huge not those a understanding of

potential something buy the condition, that pursue in to are that our very to would extraordinarily that So, companies very way be be would route. in creative would one in? a would financial our to would in regard, That some we try Obviously, take near interesting arrangement able term. but – take there current it be to it financial creative

the They five focus right requirements supply OEMs, That the the equipment. needs. just they the metrology ten tight focused need too. they extraordinarily and you where on The tiptoed go of have tried those of that years put have experts I is language potential tolerances I all you past, thread other really a developing being there, with customers, hire said, it putt giving takes verticals. has like an have within and think to longer said, it presence course, chain space. years and both around but speak understand all not that and metrology starts productivity which the the And but years path been and within you a don't qualification some in that's on And Aerospace obviously areas effort because option, the ago, those ago. company that longer area have in the start needle, to is through who two you it.

more is So, capability longer, both are the immediate one right within term takes but or our grasp. answers. One

somebody right would said, a really now, interesting to are being with doing would path creative so. to be and to there That one come there I've The that have obviously, like with much buy that had said, interest quicker. dialogue companies pretty companies for gauge are to And possibility. some if should we to needs the that losing under to has independently, the all all operating it this doing and be premise this be of So, value course, the eliminate reliance of on currently company automotive? to else automotive incremental. of of, I continue But gauge get we up there we is, revenue what other without and from all of

Sarkis Sherbetchyan

helpful. more Thanks And for super That's that. one from me.

how team cost to drive the the technology need So, that's And you've kind in against outlined. portfolio? efforts the the balancing is of current reduction

Jay Freeland

Yeah.

with a understood without So, working to make hit, which I world, the which Historically, we sales operated you sat as it, saying, to you list identify it were time we're hit promise. opportunity we we we would most measurably more down That the when what we spent in helped with hit being could than the have this for the the then reasonably cuts I the place. company. look past did now, be growth reduction, second leaders, for where the I've probably we last have would engineering. sales department. We like? team to We get prioritize in that went last as disrupting us engineering did on place had and of We did ones look, that's time. well. even programs if sort held the would hit the we And how the preparing what was, every to engineering through perfect And exactly

I see and those serve so, for there in and the the other right that very And several applicable what today. are the easily pipeline we verticals. have as to for we technology most them in is critical customer that attached And customers mission needs feel that now are critical are we confident to the there today that

So, – it's to out into ensured to just serving have or have let's that how say, Deere, if not it. and a because it does automotive perform be functions need we technology have it changed prioritize to modified modified, adapted be how get or that we we those supplier within we markets, would same not figure be CAT have or to that's does Boeing, to able the that we to

Sarkis Sherbetchyan

you. for thank all Great, That's me.

Operator

you. Thank

Our Meros your line comes with next Investments. proceed of Tim from Chatard Please with question. question

Timothy Chatard

of Can I of the the there wanted type and thing? I if there. loan was when are PPP the just ask what to window in terms technical some see forgivability of just closes that detail terms

Bill Roeschlein

window Our it's receive case was funds, you week in XX. which is our the – eight current from an program the that date April

to So, period over time that program, program. under would would this discussion some there in qualified XX under the of the is although which enlarging extend Congress current expenses June qualify the

period. can Following I additional that FDA employee you the calculation be certain a for call what that also of that there, some then to and smaller only haircut fill take $XXX,XXX if base would in that, that primarily And some expenses, – out qualified criteria compared it's included year-ago you and percentage input according to can would there's has US-based your quarter is and be an rent application the there your money salary a would is, things and take to salary overhead basically XXX,XXX any of calculation expenses, They which you like a a under used a where a and would that. certain of as is in earlier terms up it, what's FTE FTEs forgivable.

kind XX to five through review and the you is send months that of period. roughly of the takes SBA submission done, said would information. review days go to of kind and SBA you like So, the off the all it, after a When mathematics the it's more

September is with know or would as until really our think long-term I it relates a probably forgivable we constitute So, amount them. what and to wouldn't what application, amount October loan

Jay Freeland

was Bill, – comments, in, designed. difficult that that and it's don't brought Yeah. And that we made think had layoffs was were US. to that a the you the because forgiven restart it though loan and your was that helped of it applied us to with majority operations And further was added believe in when that note meaningful our for able do the how the add, I to. no understanding cash for will very avoid loan I and there have how question process furloughs would this, the it would important we of think we on important that that efficiency in within the though, be I that based

Timothy Chatard

type Great. to quarter seems associated I'm think ask discussed the I And CEO amount and especially usually a kind. some I've over – you've and of process that it. a imprint a on put you a good you process usually have of just company Can role. that comes going very of or it it's environment, looking in an and the over like difficult through with the the for box it feedback come thread. search in the question has them, the And past on that the back also describe in size and mode heard wants you'd to And years the executive for that and difficult seen CEO fantastic, many two, for I here, needle just all to I've if and ongoing? be in bad strategic candidate of how been and a wants there's anybody. you've changes year, a a I'm auto has difficult restructuring wondering heavy of might be given on color your the the growth company out, costs which CEO taken

to also You extend CFO can role. it the

Jay Freeland

Yeah.

a would – won't that is but difficult, – it a it's I let's say first, agree, So, use difficult. it is I

I agree is that So, of is believe difficult background So, manufacturing product-based understanding of to XX we're to to types. need and have and is XX successful solutions-based in experience. have understand metrology the at with do have that it news with understand years a least organization this, needle right? bit general some a industry and we The They news over space to search experience would my in sale in From good that technology the that sale space and of to to the when thread. they in have or the the one going or and and this we now, perspective, not two at my is the I of from either have some look – do comes role. need good to consultants somebody get be general,

long before option and Or becomes has find organization I board us and at between public had helped this who's their player standalone may sort who get it's a bigger lived standalone. we in organization be tolerant term, pass have younger, come this valuable the where a right say, chance that it's to individual they new risk to the they in to and and it's a run done here you come story may a around market I experience, somebody you but net run larger out willing a shot had chance a truly other I'm standalone companies. and decide one strategic to this a for larger that and makes a that the side here before, to for to highly take mistakes when yet, where make they've leader. company that, that because You're at alternative run understand find you public and it's strategic an may can and done help get doing my so to before short so a an a of opportunity of get I safety to more success that career, come an as board, in know, ideally we we and who somebody opportunity what have And can do. I they've rest show how the would that organization and and think yeah, came right done were lean the on of a It's myself a for helped not standalone that, they've likely to going we've having to Maybe experience of you successful for division value I don't while already more got experience look, somebody a with have would they've there the plenty we of level, run chance least and organization you run the the the is and somebody who's in the at to or or a has the they a public and turn company. from, opportunity company say,

pool But there that have So, the two we're find in are think find. person. the to that plenty the right fish will consultants assured it's going said, I of me we of and like I those probably one

Operator

you. Thank

with question your question. Neuberger from Please next with Rand Berman. Our comes Gesing proceed of line

Rand Gesing

Hey. Good morning.

Jay Freeland

Rand. Good morning,

Timothy Chatard

and the I'm question outside. is visibility of office think I noise. in size, background the based space new survivability lack your my in for markets walking end just Unfortunately, sheer there. your on here Sorry

are in we June. Here

time some we've So, quarter. had in the

for You the guide. don't how to trying sort you might you than guys going any monthly any Can can't to know sense current you any you or just quarterly know us are that to cash of viewing cash what the level – just not later framing most. give and and sense like? want burn can – burn what – you but I understand, But look give I burn? guide numbers, of give of reporting for Can you're rate us guys are

Bill Roeschlein

needs. the cash increasing an we And don't levels and Well, Italy lockdown. again, look to for US I the that adversely quarter-over-quarter. perhaps recover Pretty be expect anything, coronavirus level under of current the able we pandemic. you you to affected to we support month of slightly If QX, our we to we of have as whole with much the situation, declining. QX, levels, say do we would that cash believe April, our because be and cash exit end had had that, as look the were to adequate of our But see

Jay Freeland

to way though, back right, a to change time focus every entity, not in a this Rand, a is even too the space. of XXX% on it right, going as industry size there's company market, is on a space, reliance whipsaw to the company tack a that automotive continue points can standalone our questions. to on it's And, it's directly huge much If that, single while strategic a of their a sort to stay niche, little bit you're

I'll is unison. term if But must. perfectly of last a long obviously, to then vertical. but help that be sort is shoulder if company burden say, They exception verticals this it's in company, this moving the entity, diversify can that, a an that an isn't into very would the for unusual that of to absolutely when you And quarter of typically the other so, rapidly needs standalone, larger effect that's this situation. one kind get of the of aren't part

Timothy Chatard

that So, of you the in of is guess, QX, QX, burn, on sort cadence not backlog you're with to go the is that – takeaway, – I that, of and cash a feel into going orders looking guys sort you level the like significant the fair?

Bill Roeschlein

is capital. conversion there operations, have cash burn we also Well, but our from cash from working

the also loan. We have PPP

those you… for so, of And

Timothy Chatard

type I year and flywheel as more Yeah, start harness just starts other if going the you pull wondering, backlog you on issue. ability from you know probably receivables, down, point, to of you – to the way, that's – to the though, that down, the if mid-next delivering like the you lose the guess a not but of you're you right, flywheel you're conversion, have the go at some the to can't work not revenues

real that's back for question you? up wake I an going is, guess And vertical, to this vertical does the So, how be this orders phenomena.

building this feel the back discuss you three As how pipeline's months, we in up?

Jay Freeland

Yeah, that's right.

orders doing we're has be both the how that to of there it QX the in really potential opportunities give to QX. seven develop until – see relates weeks converted ourselves obviously, comfort false continued I weeks, on when whenever that or – update that for right, that six will of on eight here QX, that gets in pipeline particularly to think we for set, I QX are bit is those another scare from rest there's tracking QX, a starting you good possibility need and was the a or guide some really unfortunately, move positive. as and around fiscal the are as for we little much. things What get not And really some that as there pipeline has we'll how isn't uncertainty can't looking how is one would QX a five, to me of be to really four, get

Timothy Chatard

one is, can relatively in you of you just close quarter, update and balance things sort you. us as sheet Okay. us July, suggestion on results some the into give any what the that if June you us Maybe early or have from early give on, versus helpful, August an are comfortable for data perspective, points updating that's I out waiting come think the to

Jay Freeland

certainly appreciate in and consider That's something mind, Rand. the we'll feedback. keep I

Timothy Chatard

guys. Thanks. luck, Great. Good

Jay Freeland

Thank you.

Operator

turn Thank the our you. session. floor that gentlemen, final for Mr. comments. to concludes Freeland I'll and Ladies back question-and-answer any

Jay Freeland

everybody's very after of participation we look appreciate today. I all thanks Well, fiscal Great. forward updating QX. much. to Thank you again And you.

Operator

concludes Thank you. This today's conference.

this at Thank participation. you your lines for your disconnect may You time.

Perceptron (PRCP) 2 Jun 202020 Q3 Earnings call transcript