Sales Over $20.0 Million for Fourth
Consecutive Quarter
Perceptron, Inc. (NASDAQ: PRCP), a leading global
provider of 3D automated metrology solutions and coordinate
measuring machines, today announced first quarter results for its
2019 fiscal year (period ended September 30, 2018).
FINANCIAL HIGHLIGHTS (in millions, except per
share data) |
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Three Months Ended September 30, |
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2018 |
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2017 |
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Change |
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Sales |
$ |
21.4 |
|
$ |
19.3 |
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$ |
2.1 |
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Net Income |
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0.9 |
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1.6 |
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(0.7 |
) |
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Diluted Income per
Share |
$ |
0.09 |
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$ |
0.16 |
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$ |
(0.07 |
) |
First quarter fiscal 2019 results compared to first quarter
fiscal 2018:
- First quarter consolidated net sales were $21.4 million, the
Company’s highest quarterly revenue ever for a first quarter and an
increase of 10.9% compared to the first fiscal quarter one year
ago
- Consolidated gross profit was $8.3 million and gross margin was
38.8%
- First quarter reported and recurring operating income totaled
$1.5 million
- Net income for the first quarter of fiscal 2019 was $0.9
million, down compared to $1.6 million in the prior year’s first
quarter, primarily driven by non-operational cost increases in
income taxes and foreign exchange losses as well as increased
investment in engineering, research and development
- First quarter diluted earnings per share was $0.09, compared to
$0.16 per share in the first fiscal quarter one year ago
- Bookings totaled $16.9 million
- Backlog was $39.2 million, including a decrease of $3.8 million
due to the Company’s adoption of new revenue recognition rules
- Cash and short-term investments totaled $8.0 million at
September 30, 2018
New revenue recognition rules:
- The Company adopted the new revenue recognition rules outlined
by Accounting Standards Update No. 2014-09 (“ASC 606”) on July 1,
2018, utilizing the modified retrospective transition
method
- As a result of these new rules, the Company recorded a positive
net transition adjustment to retained earnings in the amount of
$2.0 million this quarter
- Included in the net transition adjustment is a gross revenue
adjustment of $3.8 million, which reduced the backlog level by the
same amount
- Under prior revenue recognition rules, the Company would have
recognized $19.1 million in revenue in the first quarter of fiscal
2019
Second quarter and full year 2019 guidance:
- Revenue for the second quarter is expected to be in the range
of $18.5 million to $21.5 million
- The Company reaffirms guidance for revenue growth to be in the
mid-single digits
David Watza, President and CEO, commented, “We
are pleased to announce solid top-line growth for the first quarter
of fiscal 2019, which reflects our continued focus on improving
performance to deliver competitive products, as well as our
cost-cutting and efficiency efforts. As a result, our team achieved
record-setting first quarter results with over $21 million in net
sales.
“We remain confident in the strategic plan we
have established and continue to experience strength in key
automotive customer demand metrics, as evidenced by our record
first quarter net sales. We’ve maintained our focus on continuing
to deliver improvement efforts and new product developments for our
core automotive business and its adjacencies, including our
existing customers, potential new automotive customers and their
suppliers. We firmly believe that as we execute on the
strategic improvement plan for our core automotive business, our
implemented advancements will provide Perceptron with increased
penetration as well as additional opportunities in the future,”
Watza added.
“Looking ahead to our second quarter of fiscal
year 2019, we expect revenue in the range of $18.5 million to $21.5
million and maintain our target of mid-single digit growth in our
top-line results for the full year fiscal 2019. We continue
to see strong demand for our current products and solutions.
Additionally, recent success with new products as well as positive
customer feedback, provides the Company with increasing confidence
in our longer-term aspirations of sustained high-single digit
revenue growth and resulting double-digit earnings growth,” Watza
concluded.
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Highlights of Operations |
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INCOME STATEMENT KEY METRICS
(in millions, except per share data) |
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Three Months Ended September 30, |
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2018 |
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2017 |
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Change |
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Americas Sales |
$ |
8.3 |
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$ |
8.0 |
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$ |
0.3 |
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Europe Sales |
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8.8 |
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7.8 |
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1.0 |
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Asia Sales |
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4.3 |
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3.5 |
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|
0.8 |
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Total Net
Sales |
$ |
21.4 |
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$ |
19.3 |
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$ |
2.1 |
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Gross
Profit |
$ |
8.3 |
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$ |
7.7 |
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$ |
0.6 |
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Gross Profit as a
percent of sales |
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38.8% |
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39.9% |
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Operating
Income |
$ |
1.5 |
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$ |
1.5 |
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$ |
- |
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Operating Income as a
percent of sales |
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7.0 % |
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7.8 % |
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Net
Income |
$ |
0.9 |
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$ |
1.6 |
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$ |
(0.7 |
) |
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Diluted Income per Share |
$ |
0.09 |
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$ |
0.16 |
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$ |
(0.07 |
) |
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Recurring
Operating Income |
$ |
1.5 |
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$ |
1.5 |
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$ |
- |
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Recurring Operating Income as a percent of sales |
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7.0 % |
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7.8 % |
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Perceptron generated record-setting first
quarter net sales for the first quarter of fiscal 2019, increasing
$2.1 million, or 10.9%, versus the same quarter in the prior year
and reflecting increases in all regions, primarily due to the
adoption of the new revenue recognition rules. The Europe
region was up due to increases in Off-Line Measurement Solutions,
In-Line and Near-Line Measurement Solutions and 3D Scanning
Solutions, partially offset by a decrease in Value Added
Services. The year-over-year improvement in the Asia region
was due to increases in all product lines except flat sales in
Value Added Services. The increase in the Americas region was
primarily due to increases in the In-Line and Near-Line Measurement
Solutions.
In the first quarter of fiscal 2019, gross
profit as a percentage of sales was down compared to the prior year
period, primarily due to the mix of the Company’s revenue and the
timing of certain expenses in cost of goods sold under the prior
accounting rules in the first quarter of fiscal 2018 as well as
increased warranty costs in the first quarter of fiscal 2019.
During the first quarter of fiscal 2019,
SG&A, Engineering and R&D expenses were up $0.6 million,
primarily as a result of planned strategic investments in several
engineering, research and development initiatives, increased
employee-related costs, and an increase related to specialized
supplies utilized in development of our products, partially offset
by lower legal and audit fees.
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Three Months Ended September 30, |
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BOOKINGS (in millions) |
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2018 |
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2017 |
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Change |
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Geographic Region |
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Americas |
$ |
3.6 |
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$ |
9.6 |
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$ |
(6.0 |
) |
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Europe |
|
9.3 |
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9.4 |
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(0.1 |
) |
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Asia |
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4.0 |
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|
4.2 |
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(0.2 |
) |
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Total
Bookings |
$ |
16.9 |
|
$ |
23.2 |
|
$ |
(6.3 |
) |
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BACKLOG (in millions) |
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9/30/2018 |
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6/30/2018* |
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3/31/2018 |
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12/31/2017 |
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9/30/2017 |
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Geographic Region |
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Americas |
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$ |
13.0 |
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$ |
19.8 |
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$ |
20.2 |
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$ |
18.0 |
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$ |
21.1 |
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Europe |
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18.5 |
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19.0 |
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18.9 |
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19.6 |
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18.0 |
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Asia |
|
|
7.7 |
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8.7 |
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12.1 |
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|
10.9 |
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|
9.8 |
Total
Backlog |
|
$ |
39.2 |
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$ |
47.5 |
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$ |
51.2 |
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$ |
48.5 |
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$ |
48.9 |
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*
Prior to Transition Adjustment for Implementation of ASC 606
adopted on July 1, 2018; Impact of Transition is a reduction of
Total Backlog of $3.8 million |
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First quarter bookings were $16.9 million, a
decrease of 27.2% compared to the first quarter of fiscal 2018.
The principal driver of the bookings decline was the impact
of timing of customer programs. The decrease in booking
activity by product line was primarily due to decreases in In-Line
and Near-Line Measurement Solutions, Off-Line Measurement Solution
and Value Added Services, partially offset by increases in 3D
Scanning Solutions.
Revenue in the first quarter of fiscal 2019
exceeded bookings by $4.5 million, which contributed to a decrease
in backlog. The implementation of ASC 606, which was adopted
on July 1, 2018, also reduced backlog by $3.8 million. The
combined effect of these items reduced backlog to $39.2 million at
September 30, 2018.
FINANCIAL POSITION
Cash and short-term investment balance was $8.0
million at September 30, 2018, up from $6.7 million at June 30,
2018 and relatively flat compared to $8.1 million at September 30,
2017. At September 30, 2018 and June 30, 2018, the Company
did not have any bank debt outstanding, down from outstanding
balance of $0.4 million at September 30, 2017.
Quarterly Investor Call and
Webcast
Perceptron, Inc., will hold its first quarter
fiscal 2019 investor conference call/webcast, chaired by David L.
Watza, President and CEO, on November 8, 2018, at 10:00
AM (EST). Investors can access the call at:
Webcast |
investors.perceptron.com on the Event
page |
Conference Call |
877-317-6789 (domestic callers) or
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412-317-6789 (international callers) |
Conference ID |
10125531 |
A replay will be posted to the Company's website
after the conference call concludes.
About Perceptron®
Perceptron (NASDAQ: PRCP) develops, produces and
sells a comprehensive range of automated industrial metrology
products and solutions to manufacturing organizations for
dimensional gauging, dimensional inspection and 3D scanning.
Products include 3D machine vision solutions, robot guidance,
coordinate measuring machines, laser scanning and advanced analysis
software. Global automotive, aerospace and other manufacturing
companies rely on Perceptron's metrology solutions to assist in
managing their complex manufacturing processes to improve quality,
shorten product launch times and reduce costs. Headquartered in
Plymouth, Michigan, USA, Perceptron has subsidiary operations in
Brazil, China, Czech Republic, France, Germany, India, Italy,
Japan, Slovakia, Spain and the United Kingdom. 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 our expectation as to our fiscal
year 2019 and future results, operating data, new order bookings,
revenue, expenses, net income and backlog levels, trends affecting
our future revenue levels, the rate of new orders, the timing of
revenue and net income increases from new products which we have
recently released or have not yet released, the timing of the
introduction of new products and our ability to fund our fiscal
year 2019 and future cash flow requirements. Whenever
possible, we have identified these forward-looking statements by
words such as “target,” “will,” “should,” “could,” “believes,”
“expects,” “anticipates,” “estimates,” “prospects,” “outlook,”
“guidance” or similar expressions. 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 periodic
reports filed with the Securities and Exchange Commission,
including those listed in “Item 1A: Risk Factors” of our Annual
Report on Form 10-K for fiscal 2018. 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.
--- Financial Tables Follow ---
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PERCEPTRON, INC. |
SELECTED FINANCIAL DATA |
(Unaudited, In Thousands Except Per Share Amounts) |
|
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|
Condensed
Income Statements |
Three Months Ended |
|
September 30, |
|
|
2018 |
|
|
|
2017 |
|
|
$ |
21,442 |
|
|
$ |
19,269 |
|
Cost of
Sales |
|
13,150 |
|
|
|
11,619 |
|
Gross Profit |
|
8,292 |
|
|
|
7,650 |
|
Operating
Expenses |
|
|
|
Selling, General and
Administrative Expense |
|
4,635 |
|
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|
4,424 |
|
Engineering, Research
and Development Expense |
|
2,198 |
|
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|
1,733 |
|
Severance, Impairment
and Other Charges |
|
- |
|
|
|
(52 |
) |
Operating Income |
|
1,459 |
|
|
|
1,545 |
|
Other Income
and (Expenses), net |
|
|
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Interest Expense,
net |
|
(27 |
) |
|
|
(42 |
) |
Foreign Currency and
Other, net |
|
(202 |
) |
|
|
8 |
|
Income Before
Income Taxes |
|
1,230 |
|
|
|
1,511 |
|
Income Tax
(Expense) Benefit |
|
(338 |
) |
|
|
47 |
|
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Net
Income |
$ |
892 |
|
|
$ |
1,558 |
|
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Income Per
Common Share |
|
|
|
Basic |
$ |
0.09 |
|
|
$ |
0.16 |
|
Diluted |
$ |
0.09 |
|
|
$ |
0.16 |
|
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Weighted
Average Common Shares Outstanding |
|
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Basic |
|
9,560 |
|
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|
9,453 |
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Diluted |
|
9,772 |
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|
9,502 |
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PERCEPTRON, INC. |
SELECTED FINANCIAL DATA |
(In Thousands) |
|
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Condensed
Balance Sheets |
September 30, |
|
June 30, |
|
2018 |
|
2018 |
|
(Unaudited) |
|
|
Cash and Cash
Equivalents |
$ |
7,416 |
|
$ |
5,830 |
Short-Term
Investments |
|
548 |
|
|
877 |
Receivables, net |
|
33,715 |
|
|
32,143 |
Inventories, net |
|
11,664 |
|
|
13,829 |
Other Current
Assets |
|
1,858 |
|
|
1,327 |
Total Current Assets |
|
55,201 |
|
|
54,006 |
|
|
|
|
Property and Equipment,
net |
|
6,827 |
|
|
6,613 |
Goodwill and Other
Intangible Assets, net |
|
11,581 |
|
|
11,805 |
Long-Term Deferred
Income Tax Asset |
|
956 |
|
|
1,055 |
Long-Term
Investments |
|
725 |
|
|
725 |
Total Non-Current Assets |
|
20,089 |
|
|
20,198 |
|
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|
Total Assets |
$ |
75,290 |
|
$ |
74,204 |
|
|
|
|
Line of Credit and
Short-Term Notes Payable |
$ |
122 |
|
$ |
175 |
Accounts Payable |
|
7,764 |
|
|
7,592 |
Deferred Revenue |
|
7,142 |
|
|
8,691 |
Reserve for
Restructuring and Other Charges |
|
675 |
|
|
675 |
Other Current
Liabilities |
|
8,392 |
|
|
8,705 |
Total Current Liabilities |
|
24,095 |
|
|
25,838 |
|
|
|
|
Long-Term Taxes
Payable |
|
324 |
|
|
450 |
Long-Term Deferred
Income Tax Liability |
|
1,728 |
|
|
1,717 |
Other Long-Term
Liabilities |
|
604 |
|
|
601 |
Total Long-Term Liabilities |
|
2,656 |
|
|
2,768 |
|
|
|
|
Total Liabilities |
|
26,751 |
|
|
28,606 |
|
|
|
|
Shareholders'
Equity |
|
48,539 |
|
|
45,598 |
Total Liabilities and Shareholders' Equity |
$ |
75,290 |
|
$ |
74,204 |
|
|
|
|
Non-GAAP Financial Measures
While Perceptron’s results under Generally
Accepted Accounting Principles in the United States of America
(“U.S. GAAP”) provide significant insight into our operations and
financial position, Perceptron’s management supplements its
analysis of the business using “Recurring Operating Income”.
This is a non-GAAP financial measure. Management believes
that this non-GAAP financial measures, when taken together with the
corresponding GAAP measures, provides incremental insight into the
underlying factors and trends affecting our performance. However,
it should be viewed as supplemental data, rather than as a
substitute or an alternative to the comparable GAAP measure. The
table below presents reconciliation of the non-GAAP measure to
Operating Income.
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PERCEPTRON, INC. |
Additional Information Regarding Special Items
Impacting |
Reported GAAP Financial Measure |
(Unaudited, In Thousands) |
|
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Three Months Ended |
|
September 30, |
|
2018 |
|
2017 |
|
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|
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Operating
Income, as reported |
$ |
1,459 |
|
$ |
1,545 |
|
|
|
|
|
Severance, Impairment
and Other Charges |
|
- |
|
|
(52 |
) |
|
|
|
|
Excluding
special items, |
|
|
|
Operating Income would have been |
$ |
1,459 |
|
$ |
1,493 |
|
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|
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|
Contact:Investor Relationsinvestors@perceptron.com
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