Analyst Conference Summary


Adept Technology

conference date: August 31, 2015 @ 2:00 PM Pacific Time
for quarter ending: June 30, 2015 (Q4 fiscal 2015)

Forward-looking statements

Overview: Revenue was constrained, but mobile robot business is growing rapidly, with large orders in the quarter.

Basic data (GAAP):

Revenue was $13.9 million, down 1% sequentially from $14.1 million but down 3% from $14.3 million year-earlier.

Net income was negative $1.4 million, down sequentially from negative $1.3 million and down from negative $0.4 million in the year-earlier quarter.

Diluted Earnings Per Share (EPS) were negative $0.10, flat sequentially from negative $0.10 and down from negative $0.03 year-earlier.


Fiscal Q1 revenue expected between $13.5 to $15 million.

Conference Highlights:

In the quarter signed four new distributors, 2 in North America and 2 is Asia.

Mobile business improved to generate 22% of revenue, up 88% y/y, with 61 customers.

Released the Hornet 565 parallel industrial robot. Brings high end features to value market, expects to create incremental revenue.

Sales were up 40% y/y in Asia, but down 15% in Europe (mainly due to exchange rates) and down 20% in the U.S.

Record new mobile Lynx orders in the quarter. 2 customers ordered over 25 units, and one customer ordered over 100 units to be delivered over 2 and one-half years. Expects to have 10 fleets in place by the end of fiscal 2016. Working on robots with higher capacities. But the sales cycle remains long and complicated.

Adjusted EBITDA negative $1.1 million.

39% gross margin, down due to Euro exchange rate and product mix.

Cash and equivalents balance ended at $8.5 million, up sequentially from $2.7 million. Debt was reduced to zero sequentially from $1.75 million. $8 million was raised through sale of common stock, resulting in 13.558 million shares outstanding at quarter end, but fully diluted will be 14.5 million going forward.

Cost of revenue was $8.5 million. Gross margin $5.4 million. Operating expenses were $7.0 million, consisting of: research and development $2.0 million; selling, general and administrative $4.9 million; amortization $61 thousand. Leading to operating income of negative $1.5 million. Foreign currency loss $76 thousand. Interest expense $35 thousand. Income tax benefit $240 thousand.

Stock compensation expense was $240 thousand.

Adding engineering resources, but trying to hold overall SG&A flat.


Initial demand or response to new Hornet? Launched at a show in China, got a strong amount of leads and a few orders from that. Doing soft launches in America and Europe. We are about on plan.

Incremental investment needed to drive application specific development of mobile robots? We are selling a software solution with hardware wrapped around it. Customers are happy, we are working on new features they want. We should not need incremental capital for development. Currently the high end can handle around 300 pounds. The robots can be introduced to a factory very quickly due to the software. The large orders we are seeing are from customers who have already tested the products.

100 unit order, application? It is for manufacturing. We target applications more than market verticals. It is moving materials in a manufacturing environment. The shipping should be relatively level quarter to quarter.

Growth in 2016? In America we need the right products and partners. HTE in the midwest is a good sign. Olympus Controls distribution should help with mobile in west coast and Dallas. The Hornet should help at value end of the market. Our entire fixed product line is being refreshed.

Any deliveries to the 3 fleet customers in the June quarter? The two 25 customers took some units, but not early enough to become fleets. The 100+ customer order came too late in the quarter. There were 3 longer-term customers that have reached the fleet level. 2 of these are through distributors.

eCobra products? Should be a game changer in North America, help in Europe. It allows customers to manage more robots at once.

Loss in fixed business? America is a price-sensitive market, so Hornet should help for packaging. New Lynx should help, also new 6-axis family.

Europe was 43% of sales in quarter.

Fully diluted share count going forward? About 14.5 million shares.

Competition in warehouses, new financed companies? We are watching startups. We had a major client test and there was no competition coming close. It is about our software. You can have a great concept, but clients want a machine that works out of the box, with service, etc.

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Copyright 2015 William P. Meyers