conference date: August 29, 2012
for quarter ending: June 30, 2012 (Q4 fiscal 2012)
This is my first set of notes on Adept Technology.
(at the time this is written)
Overview: This industrial robotics company has promising technology and significant revenue but is not yet showing a profit.
Basic data (GAAP):
Revenue was $17.0 million, down 3% sequentially from $17.5 million but up 1% from $16.8 million in the year-earlier quarter.
Net income was negative $0.36 million, improving sequentially from negative $1.5 million, and improving from negative $0.69 million year-earlier.
Diluted Earnings Per Share (EPS) were negative $0.04, improving sequentially from negative $0.16, and improving from negative $0.08 year-earlier.
Picked up a variety of new business in the quarter, including four additional cells to Earthbound Farms, and a deal with a major semiconductor wafer manufacturer in Singapore. Introduced new semiconductor handling solutions using mobile robots and the ClamPAC robotic Packaging Automation Cell for clamshell type packaging. Other packaging solutions will be delivered later in the year. Total available markets for these products are very large.
Core business revenues (disk drive market) were essentially flat. There was a decline of orders in the last month of the quarter, probably due to the macroeconomy, which could lead to short-term revenue declines.
$2.9 million of revenue was for services and support.
Expanding salesforce to commercialize newly developed products.
EBITDA was negative $0.34 million. 41.5% gross margin, hurt by Euro. 52% of sales were in Europe in the quarter.
Cash and equivalents ended at $8.7 million, up $2.7 million in the quarter. $3.1 million was raised by a stock offering in June.
Cost of revenue was $9.9 million, leaving gross margin of $7.0 million. Research and development cost was $2.0 million, selling, general, and administrative $5.4 million, amortiztion of intangibles $0.1 million, and $0.04 million restructuring. Operating income was negative $0.5 million. Other expense was $0.4 million. Income tax benefit $0.6 million.
$66.2 million full fiscal year 2012 revenue.
Orders going forward? The quarter ended softer on orders than expected. Core business was strong in Europe and U.S. Packaging business was slightly down on less expensive systems shipped.
Average deal sizes, given new lines of business? Average order size should be substantially larger than in our traditional business, and that has been true so far. In fact two to five times larger. We should be able to push costs as a percent of revenue down on the larger orders.
Expenses going forward should be flat, with any savings going into increased R&D.
The new, more modular packaging product line should allow us to gain customers with standard solutions instead of customized. We are just beginning these businesses so there is lumpiness in orders at this stage.
End markets in Europe? There is limited visibility. Europe has been strong for us in 2012, in automotive, industrial, and solar, but orders did slow at the end of the quarter. Summers are usually slow anyway because of European vacation schedules. We believe any slowness will be temporary. Our robots offer a strong value proposition, so we see greater purchases in the future.
New product ramps? We are working with great lead customers in mobile robots and packaging. We have a three year objective to grow these to half company revenues in that time, but cannot predict exact timing of ramp.
Number of packaging customers? Earthbound Farms is our primary customer, they are helping us identify concerns, they are using our systems in production. No other actual customers, but "a number" are in the sales process.
End of year backlog? Does not disclose.
Any idea of getting to profitability? Does not give forward looking guidance, working towards profitability.
Solar automation? Solar has been a lumpy market. It has been a weak segment due to oversupply.
Adept Technology (ADEP) main page (more summaries, stories & analysis)