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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2014

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File No. 0-27122

 

 

ADEPT TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   94-2900635

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

5960 Inglewood Drive, Pleasanton, California   94588
(Address of Principal Executive Offices)   (Zip Code)

(925) 245-3400

(Registrant’s Telephone Number, Including Area Code)

 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨    Accelerated filer   x
Non-accelerated filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

The number of shares of the Registrant’s common stock outstanding as of October 31, 2014 was 13,100,161.

 

 

 


Table of Contents

ADEPT TECHNOLOGY, INC.

 

          Page
   PART I – FINANCIAL INFORMATION   
Item 1.    Condensed Consolidated Financial Statements      3
   Condensed Consolidated Balance Sheets      3
   Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)      4
   Condensed Consolidated Statements of Cash Flows      5
   Notes to Condensed Consolidated Financial Statements      6
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations    12
Item 3.    Quantitative and Qualitative Disclosures about Market Risk    15
Item 4.    Controls and Procedures    15
   PART II – OTHER INFORMATION   
Item 1.    Legal Proceedings    16
Item 1A.    Risk Factors    16
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds    16
Item 3.    Defaults Upon Senior Securities    16
Item 4.    Mine Safety Disclosures    16
Item 5.    Other Information    16
Item 6.    Exhibits    16
Signatures       16

 

2


Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements

ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

 

     September 27,
2014
    June 30,
2014
 
     (unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 4,772      $ 7,600   

Restricted cash

     188        194  

Accounts receivable, less allowance for doubtful accounts of $619 and $610 at September 27, 2014 and June 30, 2014, respectively

     11,098        10,974   

Inventories

     11,248        10,296   

Other current assets

     789        545   
  

 

 

   

 

 

 

Total current assets

     28,095        29,609   

Property and equipment, net

     986        1,082   

Goodwill

     1,493        1,493   

Other intangible assets, net

     735        796   

Other assets

     95        90   
  

 

 

   

 

 

 

Total assets

   $ 31,404      $ 33,070   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 6,512      $ 7,709   

Accrued payroll and related expenses

     1,986        2,235   

Accrued warranty expenses

     901        897   

Deferred revenue

     457        644   

Accrued income tax, current

     63        10   

Other accrued liabilities

     701        848   
  

 

 

   

 

 

 

Total current liabilities

     10,620        12,343   

Long-term liabilities:

    

Deferred income tax, long-term

     430        430   

Long-term obligations

     78        130   
  

 

 

   

 

 

 

Total liabilities

     11,128        12,903   

Stockholders’ equity:

    

Common stock, $0.001 par value: 19,000 shares authorized, 13,072 shares issued and 13,067 shares outstanding at September 27, 2014, and 13,056 shares issued and 13,051 shares outstanding at June 30, 2014

     189,738        189,427   

Treasury stock, at cost, 5 shares at September 27, 2014 and June 30, 2014

     (42     (42

Accumulated deficit

     (169,286     (169,368

Accumulated other comprehensive income (loss)

     (134     150   
  

 

 

   

 

 

 

Total stockholders’ equity

     20,276        20,167   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 31,404      $ 33,070   
  

 

 

   

 

 

 

See accompanying notes

 

3


Table of Contents

ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)

(in thousands, except per share amounts)

 

     Three Months Ended  
    

September 27,

2014

   

September 28,

2013

 

Revenues

   $ 14,402      $ 13,571   

Cost of revenues

     7,959        7,309   
  

 

 

   

 

 

 

Gross margin

     6,443        6,262   

Operating expenses:

    

Research, development and engineering

     1,496        1,555   

Selling, general and administrative

     4,802        4,888   

Amortization of other intangible assets

     61        61   
  

 

 

   

 

 

 

Total operating expenses

     6,359        6,504   
  

 

 

   

 

 

 

Operating income (loss)

     84        (242 )

Interest expense, net

     —          (5 )

Foreign currency exchange gain (loss)

     78        (96 )
  

 

 

   

 

 

 

Income (loss) before income taxes

     162        (343 )

Provision for income taxes

     80        55   
  

 

 

   

 

 

 

Net income (loss)

     82        (398 )

Effects of redeemable convertible preferred stock:

    

Accretion of preferred stock to redemption value

     —          (24 )

Dividends allocated to preferred stockholders

     —          (80 )
  

 

 

   

 

 

 

Net income (loss) attributable to common stockholders

   $ 82      $ (502 )
  

 

 

   

 

 

 

Net income (loss) per share attributable to common stockholders:

    

Basic

   $ 0.01      $ (0.05 )
  

 

 

   

 

 

 

Diluted

   $ 0.01      $ (0.05 )
  

 

 

   

 

 

 

Shares used to compute net income (loss) per share attributable to common stockholders:

    

Basic

     13,059        10,855   
  

 

 

   

 

 

 

Diluted

     13,488        10,855   
  

 

 

   

 

 

 

Comprehensive loss:

    

Net income (loss)

   $ 82      $ (398 )

Foreign currency translation adjustment

     (284     313   
  

 

 

   

 

 

 

Total comprehensive loss

   $ (202   $ (85 )
  

 

 

   

 

 

 

See accompanying notes

 

4


Table of Contents

ADEPT TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

     Three Months Ended  
     September 27,
2014
    September 28,
2013
 

Operating activities

    

Net income (loss)

   $ 82      $ (398 )

Non-cash adjustments to reconcile net income (loss) to net cash provided by (used in)operating activities:

    

Deferred income taxes

     —          (67

Depreciation and amortization

     262        275   

Loss on disposal of property and equipment

     —          61   

Stock-based compensation

     201        526   

Net changes in operating assets and liabilities:

    

Accounts receivable, net

     (490     1,447   

Inventories

     (1,301     (756 )

Other current assets

     (253     (46 )

Accounts payable

     (1,137     (536 )

Other

     (506     (365 )
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     (3,142     141   
  

 

 

   

 

 

 

Investing activities

    

Purchase of property and equipment

     (6     (51 )

Restricted cash

     6        (93 )
  

 

 

   

 

 

 

Net cash used in investing activities

     —          (144 )
  

 

 

   

 

 

 

Financing activities

    

Principal payments on capital lease

     —          (8 )

Proceeds from employee stock incentive program and employee stock purchase plan

     111        239   
  

 

 

   

 

 

 

Net cash provided by financing activities

     111        231   
  

 

 

   

 

 

 

Effect of foreign exchange rates on cash and cash equivalents

     203        45   
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (2,828 )     273   

Cash and cash equivalents, beginning of period

     7,600        6,274   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 4,772      $ 6,547   
  

 

 

   

 

 

 

Cash paid during the period for:

    

Interest

   $ —        $ 1   

Taxes

     18        23   

Supplemental disclosure of non-cash investing and financing activities:

    

Transferred from inventory to property and equipment

     116        50   

Accretion of redeemable convertible preferred stock to redemption value

     —          24   

Undistributed dividends allocated to redeemable convertible preferred stock

     —          80   

See accompanying notes

 

5


Table of Contents

ADEPT TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

Adept (“Adept” or the “Company”) is a global, robotics-based automation supplier of industrial (fixed) and mobile robots to enable customers to improve speed, quality and efficiency of their production environments. The Company operates in two segments: Robotics and Services and Support. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Financial Statements included in Items 7 and 8, respectively, in the Company’s Annual Report on Form 10-K for the year ended June 30, 2014 filed with the Securities and Exchange Commission (“SEC”) on August 25, 2014.

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and the applicable rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The June 30, 2014, condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, considered necessary to state fairly the Company’s financial position as of September 27, 2014, and the results of operations, comprehensive income (loss), and cash flows for the three months ended September 27, 2014 and September 28, 2013. The interim results for the three months ended September 27, 2014, are not necessarily indicative of the results that may be expected for the year ending June 30, 2015, or for any other future annual or interim period.

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. The primary estimates underlying the Company’s financial statements include revenue recognition, product warranty, inventory valuation, allowance for doubtful accounts receivable, assumptions used in the fair value of the Company’s equity awards, useful lives of property and equipment and intangible assets, and contingent liabilities. Actual results could differ from those estimates.

There have been no material changes to the Company’s critical accounting policies during the three months ended September 27, 2014, as compared to the critical accounting policies described in the Company’s Annual Report on Form 10-K for the year ended June 30, 2014.

Recent Accounting Pronouncements

The Company does not believe that the adoption of recently issued accounting pronouncements will have a material impact on its consolidated financial statements.

2. Balance Sheet Detail

Cash and cash equivalents-The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted cash consists of deposit accounts held to secure a leased facility and a credit card facility.

Inventories-Inventories are stated at the lower of standard cost, which approximates actual cost on a first-in, first-out basis, or market. The components of inventory are as follows (in thousands):

 

     September 27, 2014      June 30, 2014  
     (unaudited)         

Raw materials

   $ 6,684       $ 6,408   

Work-in-process

     1,553         1,614   

Finished goods

     3,011         2,274   
  

 

 

    

 

 

 

Total inventory

   $ 11,248       $ 10,296   
  

 

 

    

 

 

 

 

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Table of Contents

Property and equipment-Property and equipment are recorded at cost. The components of property and equipment are summarized as follows (in thousands):

 

     September 27, 2014     June 30, 2014  
     (unaudited)        

Machinery and equipment

   $ 4,035      $ 3,991   

Computer equipment

     5,446        5,456   

Software development costs

     2,688        2,688   

Demonstration equipment

     1,649        1,605   

Office furniture and equipment

     967        1,052   
  

 

 

   

 

 

 
     14,785        14,792   

Less accumulated depreciation

     (13,799 )     (13,710
  

 

 

   

 

 

 

Net property and equipment

   $ 986      $ 1,082   
  

 

 

   

 

 

 

Other intangible assets-Other intangible assets subject to amortization were as follows (in thousands):

 

     September 27, 2014 (unaudited)      June 30, 2014  
     Gross Assets      Accumulated
Amortization
    Impairment of
Intangible
Assets
    Net
Carrying
Amount
     Gross
Assets
     Accumulated
Amortization
    Impairment of
Intangible
Assets
    Net
Carrying
Amount
 

Developed Technology/ Patents

   $ 1,930       $ (1,037   $ (158   $ 735       $ 1,930       $ (976   $ (158   $ 796   

Customer Base

     340         (340     —          —           340         (340     —          —     

Trademarks/ Tradenames

     231         (154     (77     —           231         (154     (77     —     
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total

   $ 2,501       $ (1,531   $ (235   $ 735       $ 2,501       $ (1,470   $ (235   $ 796   
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

A summary of future amortization as of September 27, 2014 is as follows (in thousands):

 

     2015      2016      2017      2018      Total  

Developed Technology/Patents

   $ 184       $ 245       $ 245       $ 61       $ 735   

Warranty-The estimated cost of product warranty is provided for at the time revenue is recognized. Changes in the Company’s warranty liability:

 

     Three Months Ended  
(unaudited)    September 27,
2014
    September 28,
2013
 

Balance at beginning of period

   $ 897      $ 1,070   

Provision for warranties issued

     223        237   

Warranty claims

     (219     (251
  

 

 

   

 

 

 

Balance at end of period

   $ 901      $ 1,056   
  

 

 

   

 

 

 

3. Stock-Based Compensation

The Company has adopted equity incentive plans that provide for the grant to employees, consultants and directors of stock-based awards, including stock options, restricted shares, and restricted stock units of Adept common stock. Option awards granted have an exercise price equal to or greater than the market price of the Company’s stock on the date of grant and generally have ten-year contractual terms. The Company also has an employee stock purchase plan (“ESPP”) that allows employees to purchase a limited number of shares of its common stock at a discount of 15% of the market value at certain plan-defined dates that are established at six-month intervals. As of September 27, 2014, there were options to purchase approximately 252,000 shares of common stock available for grant under all option plans and approximately 314,000 shares available for issuance under the ESPP.

Employee grants under the option plans generally vest, and are expensed, monthly in equal installments over a four year period, except for performance awards which vest when achievement of the performance criteria occurs, begin to be expensed when achievement of the performance criteria is probable, and are expensed over the service period or when the criteria is met. For performance awards, the Company estimates the service period based on its analysis of when the vesting criteria (typically some or all of the following components: share price, annual revenue amounts, earnings per share, net cash, and/or new customers) will occur. Restricted stock grants made under performance programs are subject to vesting quarterly over two years following the end of the relevant fiscal year of performance.

 

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Table of Contents

Annual option grants of 6,000 shares to non-employee directors vest in full on the date of the annual meeting of stockholders following the meeting at which the director is elected and the annual grant is made, and the initial option grant of 10,000 shares to non-employee directors vests in the amount of 50% of the grant on the first annual meeting of stockholders following the initial appointment or election of the director and the remaining 50% vests at the second annual meeting of stockholders of the Company following the initial appointment or election of the director.

Employee option grants are subject to a change of control plan adopted by the Company in 2014 for equity awards that provides for acceleration and vesting in full of options in connection with a change of control transaction under certain circumstances. All stock compensation has been accounted for as an equity instrument, and the Company recognizes the fair value of stock-based compensation as an expense ratably over the service period of the individual equity instruments.

The Company recorded $0.2 million and $0.5 million of stock-based compensation expense for the three months ended September 27, 2014 and September 28, 2013, respectively. The Company did not record an income-tax benefit for the stock compensation expense because of the extent of its net operating loss carry-forwards. The Company utilized the Black-Scholes option pricing model for estimating the fair value of the stock-based compensation. The weighted average grant-date fair values of the options granted to employees and non-employee directors under the equity incentive plans were $6.37 and $1.98 for the three months ended September 27, 2014 and September 28, 2013, respectively. There were no shares purchased under the ESPP for the three months ended September 27, 2014 and September 28, 2013. The weighted average grant-date fair values were calculated using the following assumptions:

 

     Three Months Ended  
     September 27,
2014
    September 28,
2013
 

Average risk free interest rate

     1.66     0.75

Expected life (in years)

     4.66        5.75   

Expected volatility

     78     77

Dividend yield

     0     0

The dividend yield of zero is based on the fact that the Company has never paid cash dividends on its common stock, is restricted from paying cash dividends by its credit facility, and has no present intention to pay cash dividends on its common stock. Expected volatility is based on the historical volatility of Adept’s common stock over the period commensurate with the expected life of the options. The risk-free interest rate is based on the observed and expected life of options and is indexed to the Treasury Constant Maturity rate. The expected life in years is based on the historic time to post-vesting exercise and forfeitures of the options. Stock-based compensation expense was based on the Company’s historical experience of option cancellations prior to vesting. The Company has generally assumed an annualized forfeiture rate of 5% for each period for its options. The Company adjusts stock-based compensation expense if the actual forfeiture rate is different than estimated.

A summary of stock option activity under the option plans is presented below:

 

Options    Shares
(in thousands)
    Weighted-
Average
Exercise Price
Per Share
     Weighted-
Average
Remaining
Contractual
Term (years)
     Aggregate
Intrinsic
Value
(in thousands)
 

Outstanding at June 30, 2014

     1,158      $ 5.87         

Granted

     126      $ 10.37         

Exercised

     (24   $ 4.70         

Forfeited or Expired

     (9   $ 5.38         
  

 

 

   

 

 

       

Outstanding at September 27, 2014

     1,251      $ 6.35         8.27       $ 3,627   
  

 

 

   

 

 

    

 

 

    

 

 

 

Vested/Expected to Vest

     1,216      $ 6.29         8.24       $ 3,571   
  

 

 

   

 

 

    

 

 

    

 

 

 

Exercisable

     857      $ 5.01         7.87       $ 3,064   
  

 

 

   

 

 

    

 

 

    

 

 

 

In 2014, the Company granted restricted stock units (“RSUs”) for up to 112,500 shares of common stock to its Chief Executive Officer (“CEO”). The RSUs vest upon the earlier of the CEO’s separation from service or a change in control. The number of shares issuable upon vesting and settlement of the RSUs, if any, will be determined based on the Company’s stock price on the vesting date and, in the case of a separation from service, the extent to which certain performance criteria has been met. No compensation expense has been recognized on these RSUs as the fair value is not determinable.

As of September 27, 2014 , there was approximately $1.6 million of total unrecognized compensation cost related to non-vested stock options and restricted stock awards granted and outstanding, the cost of which is expected to be recognized through fiscal 2017.

4. Redeemable Convertible Preferred Stock

In 2013, the Company issued 8,000 shares of its Series A redeemable convertible preferred stock (the “redeemable convertible preferred stock”), par value $0.001 per share, at a price of $1,000 per share, subject to the terms of its Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock for net proceeds of $7.6 million. Dividends on the redeemable convertible preferred stock accrued at the prime rate plus 3% up to a maximum amount of 4%. In February 2014, all of the outstanding redeemable convertible preferred stock plus accrued dividends through the date of conversion was converted into 1.7 million shares of common stock of the Company.

 

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Table of Contents

5. Bank Credit Facility

In 2014, the Company entered into a Loan and Security Agreement (the “Agreement”) with a bank. Under the Agreement, the Company may borrow an amount not to exceed the lesser of (i) $10.0 million and (ii) $2.5 million plus 80% of eligible domestic and foreign subsidiary accounts receivable. The Agreement specifies the criteria for determining eligible accounts receivable and sets forth ongoing conditions precedent to the Company’s ability to borrow under the Agreement. Amounts borrowed under the Agreement may be repaid and reborrowed until its maturity on June 9, 2016, at which time all advances shall be immediately due and payable in full. Amounts borrowed under the Agreement shall bear interest at the prime rate plus 0.75%. Adept and certain of its subsidiaries have granted the bank a security interest in substantially all of their respective assets (excluding intellectual property) to secure the outstanding obligations under the Agreement.

The Agreement contains customary representations and warranties by the Company and customary affirmative and negative covenants, including, among other requirements, requirements as to permissible use of proceeds, restrictions on Adept’s ability to dispose of assets, make acquisitions, be acquired, undergo a change of control, incur indebtedness, grant liens, transfer funds to subsidiaries, make distributions to its stockholders, make investments, or enter into certain transactions with affiliates, subject to specified exceptions. Further, the Agreement contains a financial covenant that requires the Company to achieve certain minimum EBITDA levels specified in the Agreement.

The Agreement contains customary events of default that entitle the bank to accelerate Adept’s obligations and require repayment of the outstanding indebtedness, increase the applicable interest rate by an additional 4.00% per annum, and enforce the bank’s security interest against the collateral. These events of default include, among others, Adept’s breach of payment obligations or covenants, material misrepresentations, events constituting a material adverse change, and bankruptcy and insolvency defaults.

At September 27, 2014, the Company had no borrowings under the Agreement.

6. Legal Proceedings

From time to time, the Company is party to various legal proceedings or claims, either asserted or unasserted, which arise in the ordinary course of its business. The Company has reviewed pending legal matters and believes that the resolution of these matters will not have a material adverse effect on its business, financial condition, or results of operations.

Adept has in the past received communications from third parties asserting that it has infringed upon certain patents and other intellectual property rights of others, or seeking indemnification against alleged infringement. While it is not feasible to predict or determine the likelihood or outcome of any actual or potential actions from such assertions against the Company or other matters, the Company believes the ultimate resolution of these matters will not have a material adverse effect on its financial position, results of operations, or cash flows.

In March 2014, the Commercial Court of Lorient, France held that Adept did not fulfill certain obligations relating to a contract between Adept and a sub-contractor, requiring Adept to pay the sub-contractor 362,000 euros. Adept reached agreement to settle this matter and, in 2014, accrued $159,000 relating to the settlement.

7. Income Taxes

The Company provides for income taxes during interim reporting periods using the discrete period method. The Company also maintains a liability to cover the cost of additional tax exposure items pertaining to the filing of federal and state income tax returns, as well as filings in foreign jurisdictions. Each of these filing jurisdictions may audit the tax returns filed and propose adjustments. Adjustments may arise from a variety of factors, including different interpretations of statutes and regulations.

The Company recorded a tax provision of $0.1 million for each of the three months ended September 27, 2014 and September 28, 2013, respectively, primarily due to foreign tax of certain foreign entities and a nominal amount of state minimum taxes.

The Company had gross unrecognized tax benefits of approximately $7.4 million as of each of September 27, 2014 and June 30, 2014, respectively. Approximately $6.0 million of the unrecognized tax benefit as of each period has been offset by a full valuation allowance. If all of these unrecognized tax benefits were recognized, approximately $0.4 million, as of both September 27, 2014 and June 30, 2014, would benefit the income tax provision. In addition, the Company does not expect any material changes to the estimated amount of the liability associated with its uncertain tax positions within the next twelve months.

The Company files income tax returns in the U.S. federal jurisdiction, California and various state and foreign tax jurisdictions in which it has a subsidiary or branch operation. The tax years 1999 to 2014 remain open to examination by the U.S. and state tax authorities, and the tax years 2010 to 2014 remain open to examination by the foreign tax authorities. Adept’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of September 27, 2014, accrued interest and penalties associated with unrecognized tax benefits was not material.

 

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8. Net Loss per Share

The computation of diluted net income (loss) per share attributable to common stockholders for the three months ended September 27, 2014 and September 28, 2013, does not include 0.3million and 0.7 million, respectively, of unvested restricted shares and options to purchase shares as these common stock equivalents were anti-dilutive.

9. Segment Information

The Company discloses certain information regarding operating segments, geographic areas of operations and major customers. This reporting is based upon the Company’s operating segments for which separate financial information is (i) available and (ii) evaluated regularly by the Chief Executive Officer who is the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has two operating segments: Robotics and Services and Support.

Segment operating income is comprised of income before unallocated research, development and engineering expenses, unallocated selling, general and administrative expenses, interest income, and other expenses. Management does not fully allocate research, development and engineering expenses and selling, general and administrative expenses when making capital spending and expense funding decisions or assessing segment performance. All goodwill is carried in the Robotics segment. Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources between segments. There is no inter-segment revenue recognized. Transfers of materials or labor between segments are recorded at cost.

The operating results for the Company’s identified segments are presented as follows (in thousands):

 

     Three Months Ended  
(unaudited)    September 27,
2014
    September 28,
2013
 

Revenues:

    

Robotics

   $ 11,283      $ 10,357   

Services and Support

     3,119        3,214   
  

 

 

   

 

 

 

Total revenues

   $ 14,402      $ 13,571   
  

 

 

   

 

 

 

Segment operating income:

    

Robotics

   $ 905      $ 1,176   

Services and Support

     1,213        1,358   
  

 

 

   

 

 

 

Segment operating income

     2,118        2,534   

Unallocated research, development and engineering and general and administrative expenses

     (1,973     (2,715

Amortization of intangible assets

     (61     (61
  

 

 

   

 

 

 

Operating income (loss)

     84        (242

Net interest expense

       (5

Foreign currency exchange gain (loss)

     78        (96
  

 

 

   

 

 

 

Income (loss) before income taxes

   $ 162      $ (343
  

 

 

   

 

 

 

Management also assesses the Company’s performance, operations and assets by geographic areas. Revenue and long-lived tangible assets are summarized as follows (in thousands):

 

     Three Months Ended  
(unaudited)    September 27,
2014
     September 28,
2013
 

Revenues:

     

United States

   $ 2,349       $ 2,933   

Europe

     8,279         6,313   

Asia

     3,230         3,953   

All other countries

     544         372   
  

 

 

    

 

 

 

Total

   $ 14,402       $ 13,571   
  

 

 

    

 

 

 

 

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(unaudited)    September 27, 2014      June 30, 2014  

Long-lived tangible assets:

     

United States

   $ 709       $ 795   

All other countries

     372         377   
  

 

 

    

 

 

 

Total long-lived tangible assets

   $ 1,081       $ 1,172   
  

 

 

    

 

 

 

Adept’s revenues are reported by geographic region based on the ship-to location of the customer order.

10. Leases

Adept leases facilities in the United States, Germany, France, Singapore and China. Adept records lease expense on a straight-line basis over the related lease term. Rent expense for each of the three months ended of September 27, 2014 and September 28, 2013 was $0.5 million. Future minimum lease payments under non-cancelable operating leases with original terms in excess of one year as of September 27, 2014 are as follows (in thousands):

 

Fiscal Year

  

2015

   $ 1,500   

2016

     1,400   

2017

     500   

2018

     200   

2019

     —     

Thereafter

     —     
  

 

 

 

Total minimum lease payments

   $ 3,600   
  

 

 

 

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

 

    the economic environment affecting us and the markets we serve;

 

    the timing and impact of our restructuring actions and other expense-related matters;

 

    sources of revenues and anticipated revenues, including the contribution from new products and markets;

 

    our expectations regarding our cash flows and capital requirements and the impact of the timing of receipts and disbursements and requirements of our credit facility;

 

    our new management team;

 

    marketing and commercialization of our products under development and services;

 

    our ability to attract customers and the market acceptance of our products;

 

    our ability to establish relationships with suppliers, systems integrators and OEMs for the supply and distribution of our products;

 

    plans for future products and services and for enhancements of existing products and services; and

 

    plans for future acquisitions of products, technologies and businesses.

In some cases, you can identify forward-looking statements by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “expect,” “believe,” “estimate,” “predict,” “potential,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions, which may or may not prove to be correct, and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these statements. We discuss many of these risks in greater detail in Item 1A – Risk Factors in our Annual Report on Form 10-K filed with the SEC on August 25, 2014. Statements made in this report represent our estimates and assumptions only as of the date of this report.

In this report, unless the context indicates otherwise, the terms “Adept,” “we,” “us,” and “our” refer to Adept Technology, Inc., a Delaware corporation, and its subsidiaries.

OVERVIEW

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. Through sales to system integrators, distributors, OEM partners and end-user companies, we sell our products and services into a few broad industries where we believe we can provide the best solutions for particular applications. We operate in two segments: Robotics and Services and Support.

Strategy

We develop innovative and proprietary products and solutions that meet the needs of our customers and that are based on our core expertise in industrial robots, vision guidance and autonomous vehicle technologies. In pursuit of our strategy, we intend to:

 

    Accelerate the launch of our mobile robot products into the global market— Our global markets for mobile products include flexible manufacturing, semiconductor, logistics and warehousing, and food.

 

    Revitalize our core fixed robot business, including expanding our channels and accelerating our regional selling and marketing approach— Our global markets for our fixed products include small flexible manufacturing, food and packaging within our capacity range of 7.5 pounds and below.

 

    Grow our services business— Offer our customers a broader selection of support solutions.

Our Actions in Support of our Strategy

 

    We intend to integrate strategic relationships from core markets that will drive volume and visibility.

 

    We intend to have collaborative new product development for innovative products.

 

    We intend to continue to accelerate our service and support revenues with existing and new product offerings.

 

    We have set specific sales objectives to leverage the cost of selling our products as we grow.

 

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    We intend to scale our engineering resources, supply chain, and operations worldwide.

 

    We continue to foster our culture by providing employees with clear direction, a focus on accountability and execution, and bottom line results.

This discussion should be read with the unaudited condensed consolidated financial statements and related disclosures included in this Quarterly Report on Form 10-Q and in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2014, included in our Annual Report on Form 10-K as filed with the SEC on August 25, 2014.

Revenues

Revenues by segment are shown below (in thousands, except %):

 

     Three Months Ended  
(unaudited)    September 27,
2014
    %
Change
    September 28,
2013
 

Robotics

      

Revenues

   $ 11,283        9   $ 10,357   

Percentage of total revenues

     78       76 %

Services and Support

      

Revenues

     3,119        (3 )%      3,214   

Percentage of total revenues

     22       24 %
  

 

 

     

 

 

 

Total Revenues

   $ 14,402        6   $ 13,571   
  

 

 

     

 

 

 

Total revenues were $14.4 million and $13.6 million for the three months ended September 27, 2014 and September 28, 2013, respectively, representing an increase of 6%. Robotics segment revenues were $11.3 million and $10.4 million for the three months ended September 27, 2014 and September 28, 2013, respectively, representing an increase of 9%. Services and support segment revenues were $3.1 million and $3.2 million for the three months ended September 27, 2014 and September 28, 2013, respectively, representing a decrease of 3%.

Revenue by geography is shown below (in thousands, except %):

 

     Three Months Ended  
(unaudited)    September 27,
2014
    %
Change
    September 28,
2013
 

United States

      

Revenues

   $ 2,349        (20 )%    $ 2,933   
  

 

 

     

 

 

 

Percentage of total revenues

     16       22 %
  

 

 

     

 

 

 

Europe

      

Revenues

     8,279        31     6,313   

Percentage of total revenues

     58       46 %

Asia

      

Revenues

     3,230        (18 )%      3,953   

Percentage of total revenues

     22       29 %

Other countries

      

Revenues

     544        46     372   

Percentage of total revenues

     4       3 %
  

 

 

     

 

 

 

Total International Revenues

     12,053        13     10,638   
  

 

 

     

 

 

 

Percentage of total revenues

     84       78 %
  

 

 

     

 

 

 

Total Revenues

   $ 14,402        6   $ 13,571   
  

 

 

     

 

 

 

US revenues were $2.3 million and $2.9 million for the three months ended September 27, 2014 and September 28, 2013, respectively, representing a decrease of 20%. The decrease in fiscal 2014 was primarily due to lower service revenues and sales to the medical and research markets, offset to some extent, by sales in other markets. The Company continues to implement its efforts to improve market share in the US. International revenues were $12.1 million and $10.6 million for the three months ended September 27, 2014 and September 28, 2013, respectively, representing an increase of 13%. The increase in fiscal 2014 was primarily due to higher service revenues and sales in the automotive, packaging and research markets, offset to a lesser extent by a decrease in sales to the consumer electronics and solar markets.

 

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Gross margin

Gross margin was 44.7% and 46.1% for the three months ended September 27, 2014 and September 28, 2013, respectively. The decrease in gross margin was primarily due to product and region mix.

We may experience significant fluctuations in our gross margin percentage from period to period due to changes in volume, changes in availability of components, changes in product configuration, increased price-based competition, fluctuations in foreign currency exchange rates, changes in sales mix of products and/or changes in operating costs.

Operating Expenses

Total operating expenses were $6.4 million and $6.5 million for the three months ended September 27, 2014 and September 28, 2013, respectively, representing a decrease of 2%. Average headcount during the quarter increased 9% compared to 2013.

Research, Development and Engineering Expenses. Research, development and engineering (“R&D”) expenses were $1.5 and $1.6 million for the three months ended September 27, 2014 and September 28, 2013, respectively, representing a decrease of 4%. The decrease was primarily the result of lower stock compensation and incentive bonus costs in the three months ended September 27, 2014. R&D costs are expensed as incurred, with the exception of software development costs incurred subsequent to establishing technological feasibility and up to the general release of the software products that are capitalized. Technological feasibility is demonstrated by the completion of a working model or a detailed program design. Capitalized costs are amortized on a straight-line basis over either two or three years, whichever term is the estimated life of the software product.

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses were $4.8 and $4.9 million for the three months ended September 27, 2014 and September 28, 2013, respectively, representing a decrease of 2%. SG&A expenses consist primarily of employee compensation, professional fees arising from legal, auditing and other consulting services, indirect costs for service, as well as tradeshow participation and other marketing costs.

Amortization . For each of the three months ended September 27, 2014 and September 28, 2013, amortization of other intangible assets expense was $0.1 million.

Foreign Currency Exchange Gain (loss)

Adept’s foreign subsidiaries’ balance sheet accounts are translated at current period ending exchange rates and statements of operations are translated at the average rate for the period. Translation gains and losses are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity. Foreign currency exchange gains (loss) were $0.1 million and $(0.1) million for the three months ended September 27, 2014 and September 28, 2013, respectively. As Adept conducts business on a global basis it is exposed to adverse or beneficial movements in foreign currency exchange rates. The dollar/euro and the dollar/yen markets currently present the largest exchange rate risk for Adept.

Provision for Income Taxes

Adept typically provides for income taxes during interim reporting periods based upon an estimate of our annual effective tax rate. We also maintain a liability to cover the cost of additional tax exposure items on the filing of federal and state income tax returns as well as filings in foreign jurisdictions. Each of these filing jurisdictions may audit the tax returns filed and propose adjustments. Adjustments arise from a variety of factors, including different interpretations of statutes and regulations. The liability method is used to account for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is expected to be realized on a more-likely-than-not basis. Deferred tax expense results from the change in the net deferred tax asset or liability between periods.

The provision for income taxes was $0.1 million for each of the three months ended September 27, 2014 and September 28, 2013, respectively, which related primarily to taxes in non-U.S. jurisdictions and state minimum taxes.

Liquidity and Capital Resources

As of September 27, 2014, cash and cash equivalents were $4.8 million, a decrease of $2.8 million from June 30, 2014. Cash used in operating activities for the three months ended September 27, 2014 was $3.1 million, representing net income adjusted for non-cash depreciation, amortization and stock based compensation expenses, offset by the use of $3.5 million of cash for working capital purposes. Cash provided by financing activities was $0.1 million from proceeds received from the exercise of stock options.

 

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Bank Line of Credit

In 2014, the Company entered into a Loan and Security Agreement (the “Agreement”) with a bank. Under the Agreement, the Company may borrow an amount not to exceed the lesser of (i) $10.0 million and (ii) $2.5 million plus 80% of eligible domestic and foreign subsidiary accounts receivable. The Agreement specifies the criteria for determining eligible accounts receivable and sets forth ongoing conditions precedent to the Company’s ability to borrow under the Agreement. Amounts borrowed under the Agreement may be repaid and reborrowed until its maturity on June 9, 2016, at which time all advances shall be immediately due and payable in full. Amounts borrowed under the Agreement shall bear interest at the prime rate plus 0.75%. Adept and certain of its subsidiaries have granted the bank a security interest in substantially all of their respective assets (excluding intellectual property) to secure the outstanding obligations under the Agreement.

The Agreement contains customary representations and warranties by the Company and customary affirmative and negative covenants, including, among other requirements, requirements as to permissible use of proceeds, restrictions on Adept’s ability to dispose of assets, make acquisitions, be acquired, undergo a change of control, incur indebtedness, grant liens, transfer funds to subsidiaries, make distributions to its stockholders, make investments, or enter into certain transactions with affiliates, subject to specified exceptions. Further, the Agreement contains a financial covenant that requires the Company to achieve certain minimum EBITDA levels specified in the Agreement.

The Agreement contains customary events of default that entitle the bank to accelerate Adept’s obligations and require repayment of the outstanding indebtedness, increase the applicable interest rate by an additional 4.00% per annum, and enforce the bank’s security interest against the collateral. These events of default include, among others, Adept’s breach of payment obligations or covenants, material misrepresentations, events constituting a material adverse change, and bankruptcy and insolvency defaults.

At September 27, 2014, the Company had no borrowings under the Agreement.

Adept has no off balance sheet arrangements and believes that its current cash and cash equivalents, together with funds available pursuant to its credit facility, provide sufficient liquidity for operations in fiscal year 2015. Based on operating needs, strategic activities and other factors, we may further utilize the line of credit in the future or seek alternative credit or other financing in the future to pursue additional expansion opportunities or make other investments in our growth.

New Accounting Pronouncements

See Notes to condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate sensitivity: There have been no significant changes to our market interest rate risk assessment as discussed in our 2014 Annual Report on Form 10-K.

Foreign currency exchange rate sensitivity: We transact our revenue primarily in U.S. dollars, Euros, and to a lesser extent, ChineseRMBs and Japanese Yen. The U.S. dollar is our reporting currency. The U.S. dollar is our functional currency except for our international subsidiaries in China, France and Germany, and Singapore where the Chinese Yuan, Euro, and Singapore dollar are the functional currencies, respectively.

As of September 27, 2014, we had not entered into foreign exchange forward contracts to hedge balance sheet exposures and inter-company balances against future movements in foreign exchange rates.

We maintain certain cash balances denominated in the Chinese Yuan, Euro, and Singapore dollar. If foreign exchange rates were to weaken against the U.S. dollar immediately and uniformly by 10% from the exchange rates at September 27, 2014, the fair value of these foreign currency amounts would decline by an amount which is not material.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We are committed to maintaining disclosure controls and procedures designed to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures and implementing controls and procedures.

Based on management’s evaluation, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 27, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company is party to various legal proceedings or claims, either asserted or unasserted, which arise in the ordinary course of its business. The Company has reviewed pending legal matters and believes that the resolution of these matters will not have a material adverse effect on its business, financial condition, or results of operations.

Adept has in the past received communications from third parties asserting that it has infringed upon certain patents and other intellectual property rights of others, or seeking indemnification against alleged infringement. While it is not feasible to predict or determine the likelihood or outcome of any actual or potential actions from such assertions against the Company or other matters, the Company believes the ultimate resolution of these matters will not have a material adverse effect on its financial position, results of operations, or cash flows.

In March 2014, the Commercial Court of Lorient, France held that Adept did not fulfill certain obligations relating to a contract between Adept and a sub-contractor, requiring Adept to pay the sub-contractor 362,000 euros. Adept reached agreement to settle this matter and, in 2014, accrued $159,000 relating to the settlement.

 

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors previously disclosed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

 

ITEM 5. OTHER INFORMATION

None.

 

ITEM 6. EXHIBITS

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

ADEPT TECHNOLOGY, INC.
By:  

/s/ SETH HALIO

  Seth Halio
  Chief Financial Officer
By:  

/s/ ROB CAIN

  Rob Cain
  President and Chief Executive Officer

Date: November 4, 2014

 

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INDEX TO EXHIBITS

The following exhibits are filed as part of this report or incorporated by reference herein, as noted below.

 

    3.1    Certificate of Incorporation of Adept-Delaware (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K12G3 filed with the Securities and Exchange Commission on November 10, 2005).
    3.2    Certificate of Amendment of Certificate of Incorporation of Adept-Delaware (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K12G3 filed with the Securities and Exchange Commission on November 10, 2005).
    3.3    Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.3 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).
    3.4    Amended and Restated Bylaws of Adept-Delaware (incorporated by reference to Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).
    4.1    Specimen of Common Stock Certificate of Adept-Delaware (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K12G3 filed with the Securities and Exchange Commission on November 10, 2005).
    4.2    Specimen of Preferred Stock Certificate of Adept Delaware (incorporated by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).
    4.3    Form of Registration Rights Agreement, dated as of November 18, 2003 by and among the Registrant and the investors party thereto (incorporated by reference to Exhibit 4.5 to the Registrant’s Registration Statement on Form S-2 (No. 333-112360) filed on January 30, 2004).
    4.4    Letter Agreement by and between Adept Technology, Inc. and Hale Capital Partners, LP, dated March 27, 2013 (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2013).
    4.5    Registration Rights Agreement, dated as of September 5, 2012, by and among Adept Technology, Inc. and Hale Capital Partners, LP (incorporated by reference to Exhibit 4.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).
    4.6    Side Letter Agreement, dated as of September 5, 2012 by and among Adept Technology, Inc. and Hale Capital Partners, LP (incorporated by reference to Exhibit 4.6 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 2012).
  31.1+    Certification by the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  31.2+    Certification by the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  32.1+    Certification by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1-    The following financial information from the Company’s quarterly report on Form 10-Q for the period ended September 27, 2014 is formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of September 27, 2014 and June 30, 2014 (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended September 27, 2014 and September 28, 2013 (iii) Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 27, 2014 and September 28, 2013 and (iv) Notes to Condensed Consolidated Financial Statements.

 

+ Filed with this Quarterly Report on Form 10-Q
- Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections

 

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