Adept Technology Reports Second Quarter Fiscal Year 2013 Results

Wed Feb 6, 2013 4:01pm EST

* Reuters is not responsible for the content in this press release.

PLEASANTON, Calif., Feb. 6, 2013 (GLOBE NEWSWIRE) -- Adept Technology, Inc. (Nasdaq:ADEP), a
leading provider of intelligent vision-guided and autonomous mobile robotic solutions, today
announced financial results for its fiscal 2013 second quarter ended December 29, 2012.

Second Quarter Fiscal 2013 Results

Revenue for the second quarter of fiscal 2013 was $10.8 million, below $15.2 million in revenue
for the second quarter of fiscal 2012, and slightly below $11.4 million in revenue for the
previous first quarter of fiscal 2013. Adept reported a GAAP net loss of $5.2 million, or $0.49
per share in the second quarter of fiscal 2013, compared to a net loss of $1.2 million, or $0.13
per share in the second quarter of fiscal 2012, and a net loss of $3.1 million, or $0.29 per share
in the first quarter of fiscal 2013.

Gross margin was 31.8% of revenue in the second quarter of fiscal 2013, compared to 43.0% of
revenue in the second quarter of fiscal 2012 and 41.4% in the previous quarter. Gross margin
percentage in the second quarter of fiscal of 2013 was down largely due to reserves for excess and
obsolete inventory of $875,000, compared to $87,000 in the second quarter of fiscal 2012, and
$75,000 in the first quarter of fiscal 2013. Operating expenses in the second quarter of fiscal
2013 were $8.8 million, compared to $7.5 million for the same period last year and $7.4 million in
the first quarter of fiscal 2013.  Operating expenses in the second quarter include $392,000in
restructuring expenses incurred in connection with a reduction in force in early November, and a
$1.7 million charge for the impairment of intangible assets and goodwill recorded in the
acquisition of InMoTx in January, 2011. The Company's operating loss for the second quarter of
fiscal 2013 was $5.3 million, which compares to an operating loss of $1.0 million for the second
quarter of fiscal 2012 and an operating loss of $2.7 million in the first quarter of fiscal 2013.

Adept's adjusted, non-GAAP EBITDA in the second quarter of fiscal 2013 was a loss of $2.4 million,
compared with an adjusted EBITDA loss of $79,000 in the second quarter of fiscal 2012, and
adjusted EBITDA loss of $2.4 million in the first quarter of fiscal 2013. A discussion of this
non-GAAP measure and reconciliation to the applicable GAAP measure is included below. Adept ended
the quarter with cash and cash equivalents of $6.9 million, and during the quarter paid off the
Company's line of credit borrowings.

"Over the last quarter we narrowed our focus, restructured our team, and implemented aggressive
actions to achieve major cost reductions, substantially lowering the breakeven of the business.
These efforts will give the company the opportunity to both invest key strategic resources in our
future growth opportunities, while simultaneously becoming cash flow positive," said John
Dulchinos, Adept's chief executive officer. "At the same time we achieved a major milestone in the
business with the introduction and first installation of Lynx, our revolutionary autonomous mobile
robot platform. Going forward our focus will be on scaling our Lynx platform through existing and
new channels to market," Dulchinos concluded.

Recent Highlights

* Launched groundbreaking Lynx fully autonomous mobile robot platform and Enterprise Manager
mobile robot fleet management software solution at Automate 2013
* Completed delivery and installation of Lynx mobile robot wafer cassette transfer application
solution to customer in semiconductor industry
* Introduced FlexiBowl automated flexible robotic parts feeding system at Automate 2013
* Featured in 60 Minutes story entitled "March of the Machines" discussing the benefits of
reshoring using flexible automation
* Completed restructuring of company's operations that are expected to result in annual savings of
approximately $6 million.  These savings will be fully realized by the fourth quarter of fiscal

Quarterly Conference Call

John Dulchinos, president and chief executive officer, and Michael Schradle, chief financial
officer, will host an investor conference call today, February 6, 2013 at 5:00 P.M. Eastern Time,
to review the Company's financial and operating performance for the fiscal 2013 second quarter.
The call may also include statements regarding the Company's anticipated operational activities
during the remainder of fiscal 2013. 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 or providing anticipated financial performance information except as is
included in this press release. The call can be accessed by dialing 1-877-941-2332. Participants
are asked to call the assigned number approximately 10 minutes before the conference call begins.
In addition, the conference call will be available over the Internet at
 in the Investor Relations section of the website. For those who are not available to listen to
the live broadcast, the call will be archived at
 and a telephonic playback of the conference call will also be available for seven days following
the call.  Replay listeners should call 303-590-3030 and enter the passcode 4572765#.

Company Profile

Adept is a global, leading provider of intelligent and mobile robot solutions and services that
enable customers to achieve increased productivity and quality in their assembly, handling,
packaging, testing and logistics processes. With a comprehensive portfolio of intuitive
application software, integrated vision and sensing, real-time motion controllers and
high-reliability robots and autonomous vehicles, Adept provides specialized, cost-effective
robotic systems and services to high-growth markets including Medical, Electronics, Food and
Semiconductor; as well as to traditional industrial markets including Machine Tool Automation and
Automotive Components. More information is available at

The Adept Technology logo is available at

All trade names are either trademarks or registered trademarks of their respective holders.

Use of Non-GAAP Financial Information

In addition to presenting GAAP net income (loss), we present non-GAAP adjusted EBITDA (loss),
which we define as earnings before interest expense, income taxes, depreciation and amortization,
goodwill impairment, merger and acquisition related expenses, stock compensation expense, and
restructuring charges as a relevant measure of performance approximating operating cash flow, a
metric commonly used among technology companies. We believe that this provides meaningful
supplemental information to our investors regarding our ongoing operating performance, and it has
been used as a basis for Adept's incentive compensation programs for our management team. 

Adjusted EBITDA (loss) should be considered in addition to, and not as a substitute for, GAAP
measures of financial performance. For more information on our adjusted EBITDA (loss) please see
the table captioned "Reconciliation of GAAP net loss to Adjusted EBITDA (loss)" below. While we
believe that adjusted EBITDA (loss) is useful as described above, it is incomplete and should not
be used to evaluate the full performance of the Company or its prospects. Although historically
infrequent, unpredictable and significantly variable and thus included in this adjustment, mergers
and acquisitions expenses may occur in the future if additional acquisitions are pursued. Further,
while we have incurred restructuring expense in the past, this is not a routine aspect of our
operating activities and varies in amount and effect. Additionally, stock-based compensation has
been, and will continue to be, a recurring expense as an important incentive component of employee
compensation. GAAP net loss is the most complete measure available to evaluate all elements of our
performance. Similarly, our Consolidated Statement of Cash Flows, as presented in our filings with
the Securities and Exchange Commission, provides the full accounting for how we have decided to
use resources provided to us from our customers and shareholders.

Forward-Looking Statements 

This press release contains forward-looking statements including, without limitation, statements
about our expectations about the impact of our restructuring and resulting cost reductions,
opportunities in our core markets, our strategic initiatives to enter potential new markets, and
our ability to grow our customer base, revenues, and cash flow. Such statements are based on
current expectations and projections about the Company's business. These statements are not
guarantees of future performance and involve numerous risks and uncertainties that are difficult
to predict. The Company's actual results could differ materially from those expressed in
forward-looking statements for a variety of reasons, including but not limited to factors
affecting our fluctuating operating results that are difficult to forecast or outside our control:
the effect of the current state of the manufacturing sector and other businesses of our customers;
the timing and impact of the Company's decisions to engage in restructuring actions and other
expense-related matters; the impact of integrating our acquired businesses and strategic plans on
our cash resources and requirements of our credit facility; the impact of the acquired companies
on the Company's operations, the Company's inability to react quickly to changes in demand for our
products; risks of acceptance of the Company's new or current products in the marketplace; the
costs of international operations, sales and foreign suppliers and the impact of foreign currency
exchange; the cyclicality of capital spending of the Company's customers and lack of long-term
customer contracts; the highly competitive nature of and rapid technological change within the
intelligent automation industry; the lengthy sales cycles for the Company's products; the
Company's increasing investment in markets that are subject to increased regulation; risks
associated with sole or single sources of supply, including suppliers located in Japan; potential
delays associated with the development and introduction of new products; and the need to complete
acquisitions to expand operations.

For a discussion of risk factors relating to Adept's business, see Adept's SEC filings, including
the Company's annual report on Form 10-K for the fiscal year ended June 30, 2012, which includes
the discussion in Management's Discussion and Analysis of Financial Condition and Results of
Operations and Risk Factors.


 ADEPT TECHNOLOGY, INC.                                                                                                                       
 CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                        
 (in thousands)                                                                                                                               
                                                                                                                   December 29,  June 30,   
                                                                                                                   2012          2012       
 Current assets:                                                                                                                            
 Cash and cash equivalents                                                                                         $   6,948     $  8,722   
 Accounts receivable, less allowance for doubtful accounts of $739 at December 29, 2012 and $629 at June 30, 2012  9,366         11,905     
 Inventories                                                                                                       7,730         7,954      
 Other current assets                                                                                              539           514        
 Total current assets                                                                                              24,583        29,095     
 Property and equipment, net                                                                                       1,954         2,292      
 Goodwill                                                                                                          1,493         2,967      
 Other intangible assets, net                                                                                      1,219         1,686      
 Other assets                                                                                                      127           121        
 Total assets                                                                                                      $ 29,376      $  36,161  
 LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY                                                               
 Current liabilities:                                                                                                                       
 Accounts payable                                                                                                  $ 4,663       $  6,183   
 Line of credit                                                                                                    −             5,500      
 Accrued payroll and related expenses                                                                              1,796         2,006      
 Accrued warranty                                                                                                  1,128         1,243      
 Other accrued liabilities                                                                                         1,944         2,040      
 Total current liabilities                                                                                         9,531         16,972     
 Long-term liabilities:                                                                                                                     
 Deferred income tax, long-term                                                                                    495           399        
 Other long-term liabilities                                                                                       375           446        
 Total liabilities                                                                                                 10,401        17,817     
 Redeemable convertible preferred stock                                                                            7,608         −          
 Total stockholders' equity                                                                                        11,367        18,344     
                                                                                                                   $ 29,376      $ 36,161   
 Total liabilities, redeemable convertible preferred stock and stockholders' equity                                

 ADEPT TECHNOLOGY, INC.                                                                                                         
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                
 (in thousands, except per share data)                                                                                          
                                                                    Three Months Ended           Six Months Ended             
                                                                    December 29,  December 31,  December 29,  December 31,  
                                                                    2012          2011          2012          2011          
 Revenues                                                          $ 10,808      $ 15,152      $  22,178     $ 31,771      
 Cost of revenues                                                   7,375         8,644         14,036        17,989        
 Gross margin                                                       3,433         6,508         8,142         13,782        
 Operating expenses:                                                                                                        
 Research, development and engineering                              1,909         2,210         4,039         4,406         
 Selling, general and administrative                                4,630         4,776         9,787         10,172        
 Restructuring charges                                              392           423           395           423           
 Amortization of intangibles                                        116           116           233           233           
 Impairment of intangible assets and goodwill                       1,708         −             1,708         −             
 Total operating expenses                                           8,755         7,525         16,162        15,234        
 Operating loss                                                     (5,322)       (1,017)       (8,020)       (1,452)       
 Interest expense, net                                              (40)          (58)          (49)          (113)         
 Currency exchange gain (loss)                                      262           (121)         (104)         (221)         
 Loss before income taxes                                           (5,100)       (1,196)       (8,173)       (1,786)       
 Provision from income taxes                                        115           12            102           41            
 Net loss                                                           $ (5,215)     $ (1,208)     $ (8,275)     $ (1,827)     
 Basic and diluted net loss per share                               $ (0.49)      $ (0.13)      $ (0.79)      $ (0.20)      
 Shares used in computing basic and diluted per share amounts       10,652        9,467         10,452        9,317         

 ADEPT TECHNOLOGY, INC.                                                                                         
 Reconciliation of GAAP Net Loss to Adjusted EBITDA (Loss)                                                      
 (in thousands)                                                                                                 
                                               Three Months ended  Three Months ended   Three Months ended   
                                               December 29, 2012   September 29, 2012   December 31, 2011    
 Net loss                                      $  (5,215)          $  (3,060)           $ (1,208)            
 Interest expense, net                         40                  9                    58                   
 Income taxes                                  115                 (13)                 12                   
 Depreciation                                  246                 243                  218                  
 Amortization of intangibles                   116                 117                  116                  
 Stock compensation expense                    246                 336                  302                  
 Restructuring charges                         392                 3                    423                  
 Impairment of intangible assets and goodwill  1,708               −                    −                    
 Adjusted EBITDA (loss)                        $  (2,352)          $ (2,365)            $ (79)               

CONTACT: Michael Schradle
         Chief Financial Officer
         Bonnie McBride
         Avalon IR

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