Adept Technology : Adept Reports Financial Results for Its Fourth Quarter and Fiscal Year 2006
10/13/2006 | 08:30am US/Eastern
Adept Technology, Inc. (Nasdaq:ADEP), a leading provider of control
software, precision robotics and automation services, today reported
financial results for its fiscal fourth quarter and year ended June 30,
2006 and announced the restatement of its fiscal 2006 quarterly reports.
Fourth quarter 2006 revenues were $14.9 million, a 4% increase compared
with revenues of $14.4 million for the fourth quarter of 2005. Revenues
for the full year ended June 30, 2006 were $57.6 million, up 14% from
revenues of $50.5 million for fiscal 2005. Fourth quarter 2006 net
income was $984,000, or $0.14 per basic share outstanding, compared with
net income of $903,000, or $0.15 per basic share, for the fourth quarter
of 2005. Net income for the full year 2006 was $538,000, or $0.08 per
basic share outstanding, compared with net income of $1.3 million, or
$0.21 per basic share for the prior year. Net income for 2006 includes
non-cash stock compensation expense of $1.2 million, associated
primarily with the valuation of stock options, as required by FAS 123R.
No stock compensation expense was included in 2005 earnings.
Additionally, net income reflects a gain on currency exchange of $86,000
for the full fiscal year 2006 compared with a gain on currency exchange
and other income of $584,000 in fiscal 2005.
Gross margin for fiscal 2006 was 47.3%, compared with gross margin of
45.9% in the previous year. Operating income for fiscal 2006 was
$566,000, compared with operating income of $874,000 in fiscal 2005.
Operating income for fiscal 2006 includes stock compensation expense of
$1.2 million while fiscal 2005 operating income does not.
Cash, cash equivalents and short-term investments as of June 30, 2006
were $14.1 million, as previously reported, compared with $5.3 million
as of June 30, 2005. The increase in 2006 includes $10.0 million
received during the fourth quarter of fiscal 2006 from the previously
announced private placement of Adept's common
stock with Crosslink Capital.
Rob Bucher, chief executive officer of Adept, commented, ?Fiscal
2006 was a solid operational year and a year of significant achievements
in Adept's strategy to deliver revenue growth
and position the company to take advantage of new market opportunities
on a global basis. We continue to deliver on our plans to make strategic
investments in our products, realign our sales structure around key
vertical markets and build a strong new revenue stream from selling
services to our installed base. Despite the reductions in income
reflected in the restatements of our fiscal 2006 interim results,
operational streamlining and more favorable product mix yielded
improvements in our margins and operational model from 2005.?
Business Highlights in Fiscal 2006
During fiscal 2006, Adept made significant achievements in a number of
Continued profitability in fiscal 2006, with no debt.
Successful relisting on NASDAQ in November 2005, enabling Adept to
gain financial market visibility essential to the Company's
efforts to deliver continued enhanced growth and shareholder value.
Continued leadership in the SCARA Precision Assembly Robot market.
Adept remained the number one provider in Europe and the U.S.,
recording nearly 50% served market share according to recent
statistics from the International Federation of Robots.
Record deliveries of robots and controllers. Adept shipped nearly
1,300 multi-axis SCARA and Viper robot mechanisms during the year, an
increase of 31% from 2005. The Company also shipped nearly 3,000 Smart
Servo robot controllers, primarily for disk drive makers and
manufacturers in Asia, an increase of 114% year over year.
Successful establishment of a worldwide service and support business
to drive revenue growth and leverage the Company's
installed base. With a core focus on remanufacturing and refurbishment
of legacy Adept robot systems, Adept recorded a 27% revenue increase
in this business year-over-year and has begun extending upgrade
packages to non-Adept brand robots.
The implementation of a new vertical market-driven sales focus to
identify and exploit the sweet spots for Adept's
current and future solutions, in particular lab automation and medical
device manufacturing in the U.S., industries that are expected to
invest significantly in automation in the next few years.
Revenue growth in ?evergreen?
service markets, international markets and with multinational
companies within Adept's new vertical
market focus. This growth offset continued weakness in traditional
U.S. manufacturing markets, such as automotive and automotive supply.
Opening of new testing and support facilities in Europe. This
initiative goes hand in hand with the Company's
internationalization of its operations over the last fewyears,
bringing service, manufacturing and delivery capabilities closer to
Adept's offshore customers. This
contributed to record robot sales in Germany and France, with most
Cobra products delivered directly from Germany.
Establishment of sales and marketing programs and infrastructure in
Asia in fiscal 2006, positioning Adept to take advantage of emerging
markets opportunities for SCARA robots and Adept motion and vision
software in India and China and other Asian markets.
Successful execution on a strategy to expand Adept's
product portfolio into the 6-axis marketplace, using third-party
mechanisms married to Adept SmartControl. This marketplace is
estimated to be ten times larger than the SCARA market. Adept's
initial focus is on flexible assembly markets in Europe.
New engineering investment in control platforms and vision
applications to support today's markets,
address traditional market competition and extend Adept into new
opportunities for precision movement combined with specialized machine
As the Company previously announced, in the course of conducting the
year end consolidation of its financial results and the audit of those
results, Adept discovered errors in a number of accounts, primarily
involving intercompany eliminations associated with its consolidation of
international subsidiaries, as well as the translation of foreign
currency account balances. As a result of its review of these errors,
the Company delayed the filing of its Annual Report on Form 10-K for
fiscal 2006 and will restate its interim financial statements for each
of its first three quarterly periods of fiscal 2006, but does not expect
to restate its financial statements for any prior fiscal year. Later
today Adept will file with the SEC its Annual Report on Form 10-K for
its fiscal year 2006, meeting its extended SEC filing deadline. The
Company also expects to file its amended Form 10-Qs for each of its
first three quarters in fiscal 2006 as soon as possible after filing its
To correct the errors found in its accounts and prepare reliable
financial statements, the Company determined that it was necessary to
essentially re-perform the consolidation of its financial statements for
the interim periods of fiscal 2006. The consolidations completed to
address these errors resulted in adjustments to cost of sales, foreign
currency exchange gain/(loss), net income/(loss), earnings/(loss) per
share, cash, receivables, inventory, accounts payable, accrued
liabilities and stockholders' equity, certain
of which adjustments were material to one or more of the interim
financial statements for the quarterly periods of fiscal 2006. As will
be further discussed in Adept's Annual Report
on Form 10-K and amended Quarterly Reports on Form 10-Q/A, the
restatements will not revise previously reported revenue for any period,
but result in income before income taxes for fiscal 2006 of $615,000
(versus the $800,000 previously indicated as expected by the Company),
as compared with $1.3 million in the prior year. The restatements also
result in the reduction of previously reported net income for the
quarter ended September 30, 2005 by approximately ($516,000) creating a
net loss of approximately ($356,000) for that quarter compared to
previously reported net income; an increase in the previously reported
net loss for the quarter ended December 31, 2005 by approximately
($252,000) to approximately ($262,000) for that quarter; and a reduction
of the previously reported net income for the quarter ended March 31,
2006 of approximately ($1.1 million) to approximately $172,000.
?It is very disappointing, in light of the
investments and achievements we made in our products, markets and
international capabilities in fiscal 2006, that our accounting and
financial systems did not keep pace,?
continued Bucher. ?We are committed to
investing the resources and attention required to effectively manage the
financial functions of the company in keeping with our ambition to grow
on a global basis.?
The Company will hold a conference call with management to discuss its
fiscal 2006 results within the next few days and will provide prior
notice of the call.
About Adept Technology, Inc.
Adept Technology, Inc. designs, manufactures and markets robotic
systems, motion control and machine vision technology for global markets
including automotive, consumer electronics, consumer goods, disk drive,
food, industrial tooling, medical devices, and pharmaceutical. Adept
robots, controllers, and software are used for small parts assembly,
material handling and packaging. Adept intelligent automation product
lines include industrial robots, configurable linear modules, machine
controllers for robot mechanisms and other flexible automation
equipment, machine vision, and systems and applications software.
Founded in 1983, Adept Technology is the largest U.S.-based manufacturer
of industrial robots. More information is available at www.adept.com.
This press release may contain certain forward-looking statements
including statements regarding growth, revenues, cash, results of our
review of our historical financial statements, the financial impact and
extent of the restatements and the timing of the filing of restated
financials that involve a number of risks and uncertainties. The Company's
actual results could differ materially from those expressed in any of
the above forward-looking statements for a variety of reasons, including
but not limited to:customers' ability
to pay invoices in a timely manner; the risk that some customers may
become insolvent; future economic, competitive and market conditions
including those in Europe and Asia and those related to the Company's
strategic markets; risks of acceptance of the Company's
new or current products in the marketplace; the financial and operating
risks and regulatory requirements associated with international
operations; the cyclicality of capital spending of the Company's
customers and lack of long-term customer contracts; dependence on the
continued growth of the intelligent automation market; rapid
technological change and competition within the intelligent automation
industry; the lengthy sales cycles for the Company's
products; the Company's significant fixed
costs which are not easily reduced;risks associated with sole or
single sources of supply and lengthy procurement lead times; risks
associated with the seasonality of the Company's
products;risks associated with product defects;potential
delays associated with the development and introduction of new products
or software releases; the Company's ability
to sell its products through systems integrators and original equipment
manufacturers who may also promote competing products; risks associated
with variations in our gross margins based on factors not always in
Adept's control; potential securities class action litigation if Adept's
stock price remains volatile or operating results suffer; the potential
failure to develop and enhance an effective system of internal controls
and disclosure controls resulting in inaccurately reporting our
financial results; and costsof being a public company as
a result of legislation requiring greater general and administrative
costs to be incurred and higher insurance costs.
For a discussion of risk factors relating to Adept's business, see
Adept's annual report on Form 10-K for the fiscal year ended June 30,
2006 which will be filed later today and quarterly report on Form 10-Q
for the quarter ended April 1, 2006 including the discussion in
Management's Discussion and Analysis of Financial Condition and Results
of Operations and Factors Affecting Future Operating Results contained
ADEPT TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended June 30,
(in thousands, except per share data)
Cost of revenues
Research, development and engineering
Selling, general and administrative
Restructuring charges (reversals)
Amortization of other intangible assets
Total operating expenses
Operating income (loss)
Currency exchange gain
Interest income (expense), net
Income (loss) from continuing operations before income taxes
Provision for (benefit from) income taxes
Income (loss) from continuing operations
Loss from discontinued operations
Net income (loss)
Basic income (loss) per share from:
Basic income (loss) per share
Diluted income (loss) per share from:
Diluted income (loss) per share
Basic number of shares used in computing per share amounts from:
Diluted number of shares used in computing per share amounts from:
ADEPT TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $467 in
2006 and $754 in 2005