MAY 16, 2007--Adept Technology (Livermore, CA, USA;www.adept.com), a provider of intelligent vision-guided robotics and global robotics services, has announced financial results for its FY2007 third quarter, ended March 31, 2007. Revenues were $12.6 million, down 16% year-over-year from $15.1 million in the third quarter of FY2006 due to ongoing weakness in certain of the company's traditional markets over the past several months. On a sequential basis, sales in the FY2007 third quarter grew 14% from the $11.1 million reported in the second quarter of FY2007.
Adept has been investing in new products and infrastructure to take advantage of specific high-growth vertical markets globally, including data management, life sciences, packaging, and semiconductor/solar, and to increase sales in Europe and Asia, while transitioning its US revenue base away from slowing industrial markets. Gross margin in the third quarter of FY2007 was 45.7% of revenue, compared with 45.3% of revenue in the third quarter of FY2006 and 35.1% of revenue in the second quarter of FY2007. Improvements in gross margin in the third quarter of FY2007 compared with the previous quarter were the result of improved absorption of manufacturing expenses, increased standard margin on Viper robots due to the availability of MotionBLOX 60 functionality and lower manufacturing costs on remanufactured robots.
Operating expenses were $8.3 million and included a $1.9 million noncash expense associated with the settlement of a dispute by Crosslink Capital Partners with the company, emanating from an investment of $10 million made by Crosslink in the company in June 2006. Under the terms of the settlement of its dispute with the company, described in the 8-K filed by the company on May 14, 2007, Crosslink will receive an additional 225,000 shares of Adept stock; the parties exchanged mutual releases waiving claims associated with Crosslink Capital Partners' investment in the company; and Crosslink will continue to maintain its representation on Adept's Board of Directors. Excluding the noncash $1.9 million settlement expense, fiscal third quarter operating expenses were $6.5 million, essentially flat with $6.6 million in the second quarter of FY2007.
Including the noncash $1.9 million settlement expense, Adept recorded an operating loss of $2.6 million in the third quarter of FY2007, compared with an operating income of $0.2 million in the same quarter of the previous year. Net loss was $2.4 million or $0.32 per basic and diluted share for the third quarter of FY2007, compared with net income of $0.2 million, or $0.03 per basic and $0.02 per diluted share, for the same period of the prior year. Adept's cash and short-term investment balance at March 31, 2006 was $11.0 million, as compared to $11.7 million at December 31, 2006.
During the FY2007 third quarter, Adept
* Shipped and saw installation of its first QUATTRO robot, targeted at the high-speed Packaging industry;
* Signed new OEM customers for medical device and surgical assist applications in the Life Sciences market;
* Shipped record levels of product to European customers from its manufacturing and distribution center in Dortmund, Germany, executing on Adept's strategy to create a more local relationship with European customers and thereby improve market share;
* Announced a portfolio of UL and Class 1 clean room products to address the stringent environmental product requirements in the Life Sciences and Data Management verticals;
* Improved service revenues and margins by focusing on inventory used in remanufactured robots and evergreen part sales; and
* Signed new distributors in both Australia and South America to increase market coverage as part of the company's reallocation of sales productivity resources.
