Adept Technology Reports Fiscal Year 2014 Second Quarter Results

  • 35% Increase in Revenues, 27% for First Six Months of Fiscal Year 2014;
  • Operating Income of $0.1 Million;
  • Adjusted EBITDA of $1.1 Million, $1.6 Million for First Six Months

PLEASANTON, Calif., Feb. 6, 2014 (GLOBE NEWSWIRE) -- Adept Technology, Inc. (Nasdaq:ADEP), a leading provider of intelligent robots, autonomous mobile solutions and services, today announced financial results for its fiscal 2014 second quarter.

Fiscal 2014 Second Quarter Highlights

  • Revenue of $14.6 million increased 35.0% compared with the 2013 second quarter.
  • Gross margin of 46.9% expanded significantly over the 2013 second quarter gross margin of 31.8%.
  • Operating income was $0.1 million, a $5.5 million improvement over the 2013 second quarter operating loss.
  • Adjusted EBITDA was $1.1 million, compared with the 2013 second quarter adjusted EBITDA loss of $2.4 million.

The 2013 second quarter included charges for restructuring, impairment of intangible assets and goodwill and adjustments to the excess and obsolete inventory reserve totaling $3.0 million.

Commenting on fiscal 2014 second quarter results, Rob Cain, President and CEO, noted, "This quarter represents the first time since the third quarter of fiscal year 2010 that Adept generated operating income, a clear testament to the progress we are making. The business continues to improve and we are very focused on improving our bottom line while growing the top line. We are investing in the markets where we see significant opportunities to grow the top line, including mobile, food and service."

Second Quarter Fiscal 2014 Results

Revenues for the second quarter of fiscal 2014 were $14.6 million, compared with $10.8 million reported in the 2013 second quarter, and $13.6 million in the 2014 first quarter. Gross margin for the second quarter was 46.9%, compared with 31.8% in the second quarter of fiscal 2013 and 46.1% in the first quarter of 2014. Operating expenses in the second quarter of fiscal 2014 were $6.7 million, compared to $8.8 million in the second quarter of 2013 and $6.5 million in the first quarter. The Company's operating income for the second quarter was $0.1 million, compared with operating losses of $5.3 million in the 2013 second quarter and $0.2 million in the 2014 first quarter.

In the 2014 second quarter, Adept reported GAAP net income attributable to common shareholders of $0.1 million, or $0.01 fully diluted net income per share. This compares with a net loss of $5.3 million, or a loss of $0.50 per share, in the 2013 second quarter, and net loss of $0.5 million, or $0.05 per share, in the 2014 first quarter. Adept's non-GAAP adjusted EBITDA was $1.1 million in the 2014 second quarter, compared with an adjusted EBITDA loss of $2.4 million in the 2013 second quarter, and an adjusted EBITDA of $0.5 million in the 2014 first quarter. A discussion of this non-GAAP measure and reconciliation to the applicable GAAP measure is included below.

Adept's cash and cash equivalents at December 28, 2013 totaled $5.3 million, compared to cash and cash equivalents of $6.3 million at June 30, 2013. The decrease in cash was primarily due to cash used in operating activities of $1.3 million, offset by cash provided by stock plans of $0.6 million.

Quarterly Conference Call (February 6, 2014)

Rob Cain, President and Chief Executive Officer, and Seth Halio, Chief Financial Officer, will host an investor conference call Thursday, February 6, 2014 at 5:00 P.M. Eastern Time, to review the Company's financial and operating performance for the fiscal 2014 second quarter. The call may also include statements regarding the Company's anticipated operational activities for the remainder of fiscal 2014. 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 1-877-941-6009. International callers can dial 1-480-629-9819. 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 www.adept.com in the Investor Relations section of our website. A webcast archive will also be available following the call's conclusion until the Company reports its financial results for its fiscal 2014 third quarter.

Company Profile

Adept is a global, leading provider of intelligent robots, autonomous mobile solutions and services that enable customers to achieve precision, speed, quality and productivity in their assembly, handling, packaging, testing, and logistical processes. With a comprehensive portfolio of high-performance motion controllers, application development software, vision-guidance technology and high-reliability robot mechanisms with autonomous capabilities, Adept provides specialized, cost-effective robotics 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 www.adept.com. 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 (to the extent otherwise applicable) interest expense, income taxes, depreciation and amortization, intangibles and 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. 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 income (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 income (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 stabilization, the impact of our restructuring and resulting cost reductions, opportunities in our 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; our limited liquidity due to historical operating losses and negative cash flow, the effect of the current state of the manufacturing sector and other businesses of our customers; the effectiveness and unintended consequences of our restructuring actions and other expense-related matters; changes in our management team; the impact of our acquired businesses and strategic plans on our cash resources and on the Company's operations, the Company's inability to accurately forecast or react quickly to changes in demand for our products; seasonality of results, particularly in Europe; risks of technical and commercial acceptance of the Company's new or current products; 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 outsourced manufacturing and single sources of supply; potential delays associated with the development and introduction of new products; and potential costs of regulatory compliance.

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, 2013, which includes the discussion in Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors.


(in thousands)
  December 28,
June 30,
Current assets:    
Cash and cash equivalents  $ 5,332 $ 6,274
Restricted cash 95 --
Accounts receivable, net 11,594 10,848
Inventories  8,003 8,135
Other current assets  658 477
Total current assets  25,682 25,734
Property and equipment, net  1,170 1,525
Goodwill 1,493 1,493
Intangible assets, net 918 1,040
Other assets  212 241
Total assets  $ 29,475 $ 30,033
Current liabilities:    
Accounts payable  $ 5,445 $ 7,069
Accrued payroll and related expenses  2,034 1,986
Accrued warranty expenses 1,084 1,070
Deferred revenue 496 1,314
Accrued income tax, current 156 --
Other accrued liabilities  707 815
Total current liabilities  9,922 12,254
Long-term liabilities:    
Deferred income tax, long-term 207 155
Long-term obligations  217 284
Total liabilities  10,346 12,693
Total stockholders' equity and redeemable convertible preferred stock 19,129 17,340
Total liabilities and stockholders' equity and redeemable convertible preferred stock $ 29,475 $ 30,033
(in thousands, except per share data)
  Three months ended Six months ended
  December 28,
December 29,
December 28,
December 29,
Revenues $ 14,588 $ 10,808 $ 28,159 $ 22,178
Cost of revenues 7,749 7,375 15,058 14,036
Gross margin 6,839 3,433 13,101 8,142
  46.9% 31.8% 46.5% 36.7%
Operating expenses:        
Research, development and engineering 1,851 1,909 3,406 4,039
Selling, general and administrative 4,778 4,630 9,666 9,787
Restructuring and impairment charges -- 2,100 -- 2,103
Amortization of other Intangible assets 61 116 122 233
Total operating expenses 6,690 8,755 13,194 16,162
Operating income (loss) 149 (5,322) (93) (8,020)
Interest and other income (expense), net -- (40) (5) (49)
Foreign currency exchange gain (loss) 157 262 61 (104)
Income (loss) before income taxes 306 (5,100) (37) (8,173)
Provision for  income taxes 102 115 157 102
Net income (loss)  204  (5,215) (194) (8,275)
Effects of redeemable convertible preferred stock:        
Accretion of preferred stock to redemption value (24) (25) (48) (25)
Dividends allocated to redeemable convertible preferred stockholders (80) (80) (160) (80)
Net income (loss) attributable to common stockholders $ 100 $ (5,320) $ (402) $ (8,380)
Net income (loss) per share attributable to common stockholders:        
Basic  $0.01  $ (0.50)  $ (0.04)  $ (0.80)
Diluted $0.01  $ (0.50)  $ (0.04)  $ (0.80)
Number of shares used in computing net income (loss) per share attributable to common stockholders:        
Basic 11,025 10,652 10,940 10,452
Diluted 13,334 10,652 10,940 10,452
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (Loss)
(in thousands)
  Three months ended Six months ended
  December 28,
December 29,
December 28,
December 29,
Net income (loss) $ 204 $ (5,215) $ (194) $ (8,275)
Interest income (expense), net -- (40) (5) (49)
Income tax expense 102 115 157 102
Depreciation and amortization 273 362 548 722
Stock compensation expense 565 246 1,091 582
Restructuring and impairment charges -- 2,100 -- 2,103
Adjusted EBITDA (loss) $ 1,144 $(2,352) $ 1,607 $ (4,717)
CONTACT: Seth Halio
         Chief Financial Officer

The following information was filed by Adept Technology Inc (ADEP) on Thursday, February 6, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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