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8-K - PERCEPTRON INC/MI | v210513_8k.htm |
Contact:
Jack Lowry
Vice
President of Finance and CFO
734
414-6100
PERCEPTRON
ANNOUNCES PROFITABLE SECOND QUARTER RESULTS
REVENUES
INCREASE 38%
Plymouth, Michigan, February 8, 2011
– Perceptron, Inc. (NASDAQ: PRCP) today announced net sales of $16.3
million and net profit of $1.0 million, or $0.11 per diluted share, for its
fiscal 2011 second quarter ended December 31, 2010. Sales grew by
$4.5 million, or 38%, compared with sales of $11.8 million for the quarter ended
December 31, 2009. The second quarter of fiscal year 2010 had a net
loss of $414,000, or $0.05 per diluted share. For the first six
months of fiscal year 2011, net sales were $29.1 million, with net income of
$675,000, or $0.07 per diluted share. This compares with net sales of
$22.6 million and a net loss of $1.2 million, or $0.14 per diluted share, for
the six months ended December 31, 2009.
“The
Company had excellent financial results in the second quarter,” reported Jack
Lowry, Perceptron’s Chief Financial Officer. “It marks our return to
profitability after several quarters of operating losses. Operating
income for the Company, for the quarter, was $1.5 million, or 9.2% of
revenue. In addition to strong sales and profitability, our bookings
and backlog were also at high levels for the quarter. Our strong
performance was attributable to the Industrial Business Unit (IBU), which posted
its highest sales since the fourth quarter of fiscal year 2007. IBU’s
bookings were its best in five years and its backlog is the highest it has been
in over a decade.”
Perceptron
reports its financial information in two segments – the Industrial Business Unit
(IBU) and the Commercial Products Business Unit (CBU). Geographic and
segment information on sales, bookings and backlog for the second quarter and
the first six months of fiscal years 2011 and 2010 is provided in the tables
below:
SALES
|
||||||||||||||||||||||||
By Segment
|
Second Quarter Ending December 31
|
Six Months Ending December 31
|
||||||||||||||||||||||
(all numbers in millions)
|
Fiscal 2011
|
Fiscal 2010
|
Change
|
Fiscal 2011
|
Fiscal 2010
|
Change
|
||||||||||||||||||
IBU
|
$ | 15.3 | $ | 9.9 | $ | 5.4 | $ | 25.1 | $ | 18.0 | $ | 7.1 | ||||||||||||
CBU
|
1.0 | 1.9 | (0.9 | ) | 4.0 | 4.6 | (0.6 | ) | ||||||||||||||||
Total
Sales
|
$ | 16.3 | $ | 11.8 | $ | 4.5 | $ | 29.1 | $ | 22.6 | $ | 6.5 | ||||||||||||
By Location
|
||||||||||||||||||||||||
Americas
|
$ | 6.8 | $ | 4.9 | $ | 1.9 | $ | 12.7 | $ | 10.4 | $ | 2.3 | ||||||||||||
Europe
|
7.7 | 6.1 | 1.6 | 12.4 | 10.9 | 1.5 | ||||||||||||||||||
Asia
|
1.8 | 0.8 | 1.0 | 4.0 | 1.3 | 2.7 | ||||||||||||||||||
Total
Sales
|
$ | 16.3 | $ | 11.8 | $ | 4.5 | $ | 29.1 | $ | 22.6 | $ | 6.5 |
BOOKINGS
|
||||||||||||||||||||||||
By Segment
|
Second Quarter Ending December 31
|
Six Months Ending December 31
|
||||||||||||||||||||||
(all numbers in millions)
|
Fiscal 2011
|
Fiscal 2010
|
Change
|
Fiscal 2011
|
Fiscal 2010
|
Change
|
||||||||||||||||||
IBU
|
$ | 16.8 | $ | 12.0 | $ | 4.8 | $ | 30.8 | $ | 20.1 | $ | 10.7 | ||||||||||||
CBU
|
1.5 | 2.7 | (1.2 | ) | 2.4 | 4.4 | (2.0 | ) | ||||||||||||||||
Total
Bookings
|
$ | 18.3 | $ | 14.7 | $ | 3.6 | $ | 33.2 | $ | 24.5 | $ | 8.7 | ||||||||||||
By Location
|
||||||||||||||||||||||||
Americas
|
$ | 10.1 | $ | 6.2 | $ | 3.9 | $ | 14.5 | $ | 11.1 | $ | 3.4 | ||||||||||||
Europe
|
6.7 | 5.7 | 1.0 | 13.7 | 8.8 | 4.9 | ||||||||||||||||||
Asia
|
1.5 | 2.8 | (1.3 | ) | 5.0 | 4.6 | 0.4 | |||||||||||||||||
Total
Bookings
|
$ | 18.3 | $ | 14.7 | $ | 3.6 | $ | 33.2 | $ | 24.5 | $ | 8.7 |
Note: the
level of new order bookings fluctuate from quarter to quarter and are not
necessarily indicative of the
future operating performance of the Company.
47827
Halyard Drive • Plymouth, Michigan 48170 • Phone 734-414-6100 • Fax
734-414-4700
Page 2 of
6
February
8, 2011
BACKLOG
|
||||||||||||
By Segment
|
Second Quarter Ending December 31
|
|||||||||||
(all numbers in millions)
|
Fiscal 2011
|
Fiscal 2010
|
Change
|
|||||||||
IBU
|
$ | 22.5 | $ | 17.6 | $ | 4.9 | ||||||
CBU
|
1.6 | 1.8 | (0.2 | ) | ||||||||
Total
Backlog
|
$ | 24.1 | $ | 19.4 | $ | 4.7 | ||||||
By Location
|
||||||||||||
Americas
|
$ | 10.4 | $ | 6.3 | $ | 4.1 | ||||||
Europe
|
9.4 | 9.1 | 0.3 | |||||||||
Asia
|
4.3 | 4.0 | 0.3 | |||||||||
Total
Backlog
|
$ | 24.1 | $ | 19.4 | $ | 4.7 |
Note: the
level of backlog at any particular point in time is not necessarily
indicative of the future operating performance of the Company.
Second Quarter
Results
Sales
increased over the second quarter of fiscal 2010 by $4.5 million, or
38%. The increase was driven by the IBU, which had its highest
quarterly sales since the fourth quarter of fiscal year 2007. Higher
sales occurred in both Automated Systems and Technology Components
products. CBU sales declined by $900,000, or 47%. The
timing of the roll out of new customer programs impacted CBU sales in the
quarter. In the second quarter last year, CBU had one established
customer and was doing last time sales to a discontinued
customer. This year CBU has one established customer and three new
customers in various stages of new product development.
The
overall increase in sales occurred in all three geographic
regions. The sales increase was led by a $1.9 million, or 39%
increase in the Americas. Europe’s sales increased by $1.6 million,
or 26%, in dollars. Europe’s sales in euros, however, increased by
38%. The euro was weaker against the dollar in the second quarter of
this year compared to last year, and it had the effect of reducing Europe’s
sales in dollars by approximately $770,000. Asia’s sales increased to
$1.8 million from $800,000 in the second quarter last year.
Overall,
bookings increased by $3.6 million, or 24.5%, compared to the second quarter of
fiscal year 2010. IBU’s bookings increased by approximately $4.8
million, or 40%, compared to the second quarter of fiscal year
2010. The increase in IBU bookings occurred in both Automated
Systems, led by the increase in new orders for systems upgrades, and in
Technology Components. The $1.2 million, or 44%, decrease in CBU
bookings compared to the second quarter of fiscal 2010 was due to the decline in
new orders in the plumbing market.
The
Company’s backlog on December 31, 2010 increased by $4.7 million, or 24%, from
the backlog on December 31, 2009. The IBU backlog at December 31,
2010 improved by $4.9 million, or 28%, over the backlog from a year earlier, and
has now been above $20 million for two consecutive quarters. CBU’s
backlog decreased by $200,000 from the same period last year, primarily due to a
reduction in the level of new orders in the plumbing market.
Gross
profit increased by 48%, to $7.1 million from $4.8 million in the second quarter
of fiscal 2010. The gross profit margin percentage this quarter was
43.6% compared to 40.9% in the second quarter of fiscal year
2010. The increase in the gross profit percentage was principally
related to CBU sales which had discounted margins last year related to reducing
its inventory with a discontinued customer. Higher IBU sales also
contributed to the increase.
Selling,
general, and administrative (SG&A) expenses were approximately $300,000, or
8% lower than in the second quarter of fiscal 2010. The SG&A cost
decline was primarily due to a decrease in CBU’s sales and marketing costs from
reduced salary and related personnel costs and to a lesser extent from sales
promotions. North American G&A costs also decreased primarily from lower
depreciation expense. The euro was weaker against
the dollar in the second quarter this year than in the second quarter of fiscal
2010, and had the effect of decreasing the comparative costs between the periods
by approximately $100,000, or 2.5%.
Page 3
of 6
February
8, 2011
Engineering,
research and development expenses were $2.0 million this year compared to $1.6
million in the second quarter a year ago. The approximately $400,000
increase was primarily due to higher costs for outside contractors working on
Helix product development and spending on engineering materials in the second
quarter this year.
Year-to-Date
Results
Total
sales for the first six months of fiscal year 2011 increased by $6.5 million, or
29%, compared to the first six months of fiscal year 2010. The $7.1
million, or 39%, increase in IBU sales was attributable to higher sales of both
Automated Systems and Technology Components products. CBU’s sales
decreased by $600,000, or 13%, compared to the first six months of fiscal 2010
due primarily to lower sales in the mechanics market that were partially offset
by sales in the general construction market. Year-to-date, the Asian
region had the largest increase in sales, with an increase of $2.7 million to
$4.0 million on last year’s base of $1.3 million. The growth
principally occurred in China and results from the Company’s continued
investment in the China market. Sales in the Americas increased $2.3
million, or 22%, on the strength of increases in IBU sales in North
America. European sales increased $1.5 million, or 14%, in dollars,
but increased by €1.9 million, or 26%, in euros. The weaker euro in
fiscal 2011 had the effect of reducing European sales in dollars by
approximately $1.3 million.
Overall,
bookings increased by $8.7 million, or 36%. All of the increase
occurred in IBU. The $10.7 million, or 53%, increase in bookings for
IBU was primarily due to increased orders of Automated Systems products and, to
a lesser extent, higher Technology Component products. The $2.0
million, or 45%, decrease in bookings in CBU was primarily due to lower bookings
in the plumbing market and to a lesser extent, lower bookings in the mechanics
market.
Gross
profit was $11.8 million, or 40.7% of sales compared to $8.7 million, or 38.7%
of sales in the first half of fiscal year 2010. The increase in gross
profit dollars was primarily due to higher sales in the quarter. The
increase in the gross profit margin percentage reflected the change in the mix
of sales between IBU and CBU. The effect of the lower euro against
the dollar in the first half of fiscal 2011, compared to the prior year,
decreased gross profit by approximately $800,000.
SG&A
expenses were $7.1 million compared to $7.6 million in the same six month period
one year ago. The decrease of approximately $500,000, or 7%, was
primarily due to a decrease in CBU’s sales and marketing costs related to sales
promotions and to a lesser extent reduced salary and personnel related
costs. North American G&A costs also decreased, primarily from
depreciation expense.
Engineering
R&D expenses were $4.1 million compared to $3.3 million for the six-month
period a year ago. The increase of approximately $800,000, or 25%,
was primarily due to the use of outside contractors on the development of IBU’s
new Helix™ metrology solution and to a lesser extent spending on engineering
material costs for new product development.
The
Company’s balance sheet at December 31, 2010 strengthened compared to the
balance sheet at June 30, 2010. As of December 31, 2010 the Company
had $22.4 million in cash and short term investments, no debt, and shareholders’
equity of $55.5 million, or $6.17 per basic share. During the first
six months of fiscal year 2011 the Company’s cash and short term investments
balance increased by approximately $2.3 million, despite repurchasing
approximately $350,000 of the Company’s stock.
Harry T.
Rittenour, President and Chief Executive Officer, remarked, "We are very pleased
with the performance of our Industrial Business Unit in the second quarter,
which exceeded our expectations. We had several large orders that we
were able to ship before the end of the quarter that helped to increase
sales. This included both Automated Systems products and Technology
Components products. IBU’s second quarter bookings and backlog
at December 31, 2010 were also at high levels. CBU experienced low
sales in the second quarter primarily due to a lack of sales in the plumbing
market and low sales in the mechanics market, that were partially offset by
initial sales into the construction market. Although CBU bookings in
the second quarter were low, they did improve slightly over the first
quarter.
Page 4
of 6
February
8, 2011
“In
October 2010, we announced that the Board had approved a $5.0 million stock
repurchase plan because we believed that our stock was undervalued in the
market. On November 22, 2010 we began repurchasing shares in the open
market under a Rule 10b5-1 repurchase plan. With one or two
exceptions, we have repurchased shares each trading day since that
time. As of December 31, 2010 we had repurchased approximately 69,000
shares for approximately $350,000, or an average of $5.03 per
share.”
Mr.
Rittenour added, “In IBU, we are continuing our hardware and software
development efforts on Helix, our innovative 3D metrology
solution. We currently have a beta system being tested by a North
American customer and are demonstrating the new system for customers in our
Munich and Plymouth offices. Every customer we show Helix to is
excited about the potential value it will bring to current, as well as future
applications. We expect to install a beta system at one of our key
European customers in the fourth quarter of this fiscal year. We
expect our first sales from Helix to occur in fiscal year 2012.
“In
addition to the excitement being generated by Helix, we are pleased with the
progress we are making in finding applications for our IBU products in new
industries. Over the next few months we will be setting up plant
production floor tests with our measurement equipment to validate new
applications. In automotive, a key North American OEM recently
upgraded all of their AutoGauge systems to run our Argus automated variation
analysis and visualization software. They were willing to pay for the
upgrades because they believe that Argus will turn measurement data into
easy-to-understand, actionable information that will allow them to spend their
time solving problems instead of searching for the source of them. We
also recently announced that our automated gauging solutions have been selected
by a leading German automotive manufacturer for deployment on a new premium
vehicle program. A total of 20 dimensional gauging stations will be
strategically distributed throughout the entire manufacturing process in order
to fully leverage Perceptron’s central server database architecture and powerful
cross-gauge analysis capability. Our IBU business remains strong and
growing in China, and we expect more opportunities as the automotive industry
matures and expands. Japanese automotive OEM interest in our inline
measurement systems is increasing and we expect to be able to meet their
requirements more completely once we fully release our Helix
solutions.
“In CBU,
our construction market partner recently released their PS90 and PS91 Optical
Inspection Devices at the World of Concrete show in Las
Vegas. Initial press reviews are very positive about the
product. In the plumbing market, we are in development of two new
products to expand the capabilities of products previously
launched. We anticipate showcasing these at the largest European
plumbing show of the year in March. In the mechanics market, we also
have a series of refreshed and new products in development. We expect initial
shipment of each of these new products in the fourth quarter of this fiscal
year. We also anticipate a small, first shipment of our new and
unique product in the electrical market segment in the third quarter of this
fiscal year. We plan to announce our partner in this market segment
at that time.”
Mr.
Rittenour concluded, “Our second quarter results provide us with a good basis
for profitability this year. We have a strong backlog of orders in
IBU. While a strong IBU backlog generally suggests strong sales in future
quarters, we expect that, based on customer delivery requirements, IBU’s sales
in the second half of fiscal 2011 will be less than the $25.1 million achieved
during the first half of the year. We expect CBU’s sales to begin to
improve in the third and fourth quarters, but anticipate that sales for the year
will be in a similar range to CBU’s sales in fiscal year 2010. We are
encouraged by the improvements we have seen in IBU’s business and anticipate
improved sales in CBU as we add new products for each of our customers and they
continue their new product launch plans.”
Perceptron,
Inc. will hold its second quarter earnings conference call/webcast chaired by
Harry T. Rittenour, President and Chief Executive Officer, on Wednesday,
February 9, 2011 at 10:00 AM (EST). Investors can access the call
at:
Page 5
of 6
February
8, 2011
Webcast
|
http://www.visualwebcaster.com/event.asp?id=76467
|
Conference
Call
|
888
401-4690 (domestic callers) or
|
719
457-0349 (international callers)
|
|
Conference
ID
|
6791615
|
If you
are unable to participate during the live webcast, the call will be digitally
rebroadcast for seven days, beginning at 2:00 PM on Wednesday, February 9,
2011.
Rebroadcast
|
888
203-1112 (domestic callers) or
|
719
457-0820 (international callers)
|
|
Passcode
|
6791615
|
A replay
of the call will also be available on the Company’s website at www.perceptron.com
for approximately one year following the call.
About Perceptron®
Perceptron
develops, produces, and sells non-contact measurement and inspection solutions
for industrial and commercial applications. The Company’s IBU
Products provide solutions for manufacturing process control as well as sensor
and software technologies for non-contact measurement, scanning, and inspection
applications. Automotive and manufacturing companies throughout the
world rely on Perceptron’s metrology solutions to help them manage their complex
manufacturing processes to improve quality, shorten product launch times and
reduce overall manufacturing costs. IBU also offers Value Added
Services such as training and customer support services. Perceptron’s
CBU develops and manufactures a variety of handheld visual inspection devices
and add-on accessories that are sold to and marketed through strategic
partners. Headquartered in Plymouth, Michigan, Perceptron has
approximately 220 employees worldwide, with operations in the United States,
Germany, France, Spain, Brazil, Japan, Singapore, China and
India. For more information, please visit www.perceptron.com.
Safe Harbor
Statement
Certain
statements in this press release may be “forward-looking statements” within the
meaning of the Securities Exchange Act of 1934, including the Company’s
expectation as to its fiscal year 2011 and future new order bookings, revenue,
expenses, income and backlog levels, trends affecting its future revenue levels,
the rate of new orders, the timing of revenue and income from new products which
we have recently released or have not yet released, the timing of the
introduction of new products, and the impact of repurchases on the Company’s
common stock. When we use words such as “will,” “should,” “believes,”
“expects,” “anticipates,” “estimates” or similar expressions, we are making
forward-looking statements. We claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 for all of our forward-looking
statements. While we believe that our forward-looking statements are
reasonable, you should not place undue reliance on any such forward-looking
statements, which speak only as of the date made. Because these
forward-looking statements are based on estimates and assumptions that are
subject to significant business, economic and competitive uncertainties, many of
which are beyond our control or are subject to change, actual results could be
materially different. Factors that might cause such a difference
include, without limitation, the risks and uncertainties discussed from time to
time in our reports filed with the Securities and Exchange Commission, including
those listed in “Item 1A – Risk Factors” of the Company’s Annual Report on Form
10-K for fiscal 2010. Other factors not currently anticipated by
management may also materially and adversely affect our financial condition,
liquidity or results of operations. Except as required by applicable
law, we do not undertake, and expressly disclaim, any obligation to publicly
update or alter our statements whether as a result of new information, events or
circumstances occurring after the date of this report or
otherwise. The Company's expectations regarding future bookings and
revenues are projections developed by the Company based upon information from a
number of sources, including, but not limited to, customer data and
discussions. These projections are subject to change based upon a
wide variety of factors, a number of which are discussed
above. Certain of these new orders have been delayed in the past and
could be
delayed in the future. Because the Company's Industrial Business Unit
segment products are typically integrated into larger systems or lines, the
timing of new orders is dependent on the timing of completion of the overall
system or line. In addition, because the Company's Industrial
Business Unit segment products have shorter lead times than other components and
are required later in the process, orders for the Company's Industrial Business
Unit segment products tend to be issued later in the integration
process. The Company’s Commercial Business Unit segment products are
subject to the timing of firm orders from its customers, which may change on a
monthly basis. In addition, because the Company’s Commercial Business
Unit segment products require short lead times from firm order to delivery, the
Company may purchase long lead time components before firm orders are in
hand. A significant portion of the Company’s projected revenues and
net income depends upon the Company’s ability to successfully develop and
introduce new products, expand into new geographic markets and successfully
negotiate new sales or supply agreements with new customers. Because
a significant portion of the Company’s revenues are denominated in foreign
currencies and are translated for financial reporting purposes into U.S.
Dollars, the level of the Company’s reported net sales, operating profits and
net income are affected by changes in currency exchange rates, principally
between U.S. Dollars and euros. Currency exchange rates are subject
to significant fluctuations, due to a number of factors beyond the control of
the Company, including general economic conditions in the United States and
other countries. Because the Company’s expectations regarding future
revenues, order bookings, backlog and operating results are based upon
assumptions as to the levels of such currency exchange rates, actual results
could differ materially from the Company’s expectations.
Page 6
of 6
February
8, 2011
SELECTED
FINANCIAL DATA
(In
Thousands Except Per Share Amounts)
(Unaudited)
Condensed Income Statements
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
Sales
|
$ | 16,341 | $ | 11,751 | $ | 29,094 | $ | 22,564 | ||||||||
Cost
of Sales
|
9,221 | 6,944 | 17,256 | 13,828 | ||||||||||||
Gross
Profit
|
7,120 | 4,807 | 11,838 | 8,736 | ||||||||||||
Selling,
General and Administrative Expense
|
3,650 | 3,966 | 7,072 | 7,630 | ||||||||||||
Engineering,
Research and Development Expense
|
1,972 | 1,554 | 4,090 | 3,283 | ||||||||||||
Operating
Income (Loss)
|
1,498 | (713 | ) | 676 | (2,177 | ) | ||||||||||
Interest
Income, net
|
56 | 71 | 101 | 128 | ||||||||||||
Foreign
Currency and Other Income (Expense)
|
(10 | ) | (33 | ) | 211 | 177 | ||||||||||
Income
(Loss) Before Income Taxes
|
1,544 | (675 | ) | 988 | (1,872 | ) | ||||||||||
Income
Tax Benefit (Expense)
|
(517 | ) | 261 | (313 | ) | 645 | ||||||||||
Net
Income (Loss)
|
$ | 1,027 | $ | (414 | ) | $ | 675 | $ | (1,227 | ) | ||||||
Earnings
(Loss) Per Share
|
||||||||||||||||
Basic
|
$ | 0.11 | $ | (0.05 | ) | $ | 0.08 | $ | (0.14 | ) | ||||||
Diluted
|
$ | 0.11 | $ | (0.05 | ) | $ | 0.07 | $ | (0.14 | ) | ||||||
Weighted
Average Common Shares Outstanding
|
||||||||||||||||
Basic
|
8,992 | 8,902 | 8,985 | 8,895 | ||||||||||||
Diluted
|
9,155 | 8,902 | 9,139 | 8,895 |
Condensed Balance Sheets
|
December 31,
|
June 30,
|
||||||
2010
|
2010
|
|||||||
Cash
and Cash Equivalents
|
$ | 10,430 | $ | 9,789 | ||||
Short-term
Investments
|
11,930 | 10,278 | ||||||
Receivables,
net
|
15,950 | 16,739 | ||||||
Inventories,
net
|
6,835 | 6,551 | ||||||
Other
Current Assets
|
4,221 | 4,165 | ||||||
Total
Current Assets
|
49,366 | 47,522 | ||||||
Property
and Equipment, net
|
6,016 | 5,931 | ||||||
Long-term
Investments
|
2,192 | 2,192 | ||||||
Deferred
Tax Asset
|
9,603 | 9,008 | ||||||
Total
Non-Current Assets
|
17,811 | 17,131 | ||||||
Total
Assets
|
$ | 67,177 | $ | 64,653 | ||||
Current
Liabilities
|
$ | 11,723 | $ | 11,177 | ||||
Shareholders'
Equity
|
55,454 | 53,476 | ||||||
Total
Liabilities and Shareholders' Equity
|
$ | 67,177 | $ | 64,653 |