Analyst Conference Summary

Adept Technology

conference date: November 8, 2012
for quarter ending: September 30, 2012 (Q1 fiscal 2013)

(at the time this is written)
Forward-looking statements

Overview: Really bad quarter as capitalists cut back on capital equipment expenditures.

Basic data (GAAP):

Revenue was $11.4 million, down sequentially from $17.0 million, and also down from $16.6 million year-earlier.

Net income was negative $3.1 million, down sequentially from negative $0.36 million, and down from negative $0.6 million in the year-earlier quarter.

Diluted Earnings Per Share (EPS) were negative $0.29, down sequentially from negative $0.04, and down from negative $0.07 per share year-earlier.


Not given.

Conference Highlights:

Problems with "global cuts in capital spending resulting in delayed orders and slowed customer deployments." Worst in Asia and Europe. Disappointed by results "particularly at this junction when we are relying on our core business to support the investments we are making in our new initiatives." This was an extension of the cautious ordering in the last month of the previous quarter.

Customers remain highly interested in our products. We do not believe the long-term prospects of the company are diminished. In the short term "we are taking aggressive actions to lower our operating costs."

Michael Schradle has been appointed CFO.

Robotics segment revenue was $8.9 million. Services and support segment $2.5 million.

In mobile robot business continued to work with GlobalFoundries, Adept's leading customer, to develop wafer handling. Gearing up for installation of the first robot. In January 2013 will release TCX mobile robot; OEM partners are eager to begin selling it.

Packing business has had longer order cycle than anticipated. Still working with EarthBound Farms. Launched new packaging products last week.

Solar sector has been soft, with little capital investment. Auto and consumer goods markets also soft.

EBITDA was negative $2.4 million. 41.4% gross margin.

Cash and equivalents balance ended at $12.8 million. $2.4 million was used in operating activities, $1.4 million was used to pay down debt, and $7.6 million was raised by a private stock placement. Debt ended at $4.0 million.

Cost of revenue was $6.7 million, leaving gross profit of $4.7 million. Operating expenses were $7.4 million, leading to operating profit of negative $2.7 million. Other expense was $0.4 million.


Core vs. initiatives revenue? Most of slowdown was in the core business, especially in international markets. New businesses were about 10% of total revenue.

How does downturn compare to past cycles? First half of fiscal years tend to be the seasonal low points in our business, and that seemed to have some effect. Slowdown began in June. The second quarter "will not be substantially different than the first quarter."

Cost reductions? We are finalizing the plan, so no dollar number, but objective is to align cost base to near-term revenue outlook. We want to keep our initiatives available, but it is critical to get our financial house in order.

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Copyright 2012 William P. Meyers