Press Release

Perceptron Announces Fiscal 2020 First Quarter Results

Perceptron reports $17.9 million in quarterly revenue with strong 39.7% gross margins and 5.7% operating margins despite prolonged global economic uncertainty

Company Release - 11/11/2019 4:15 PM ET

PLYMOUTH, Mich., Nov. 11, 2019 (GLOBE NEWSWIRE) -- Perceptron, Inc. (NASDAQ: PRCP), a leading global provider of 3D automated metrology solutions and coordinate measuring machines, today announced first quarter results for its 2020 fiscal year (period ended September 30, 2019). 

       
FINANCIAL HIGHLIGHTS (in millions, except per share data) 
       
 Three Months Ended September 30, 
 2019 2018 Change 
   (As Revised)   
Net Sales$  17.9 $  21.4 $  (3.5)
Net Income  0.6   1.0   (0.4)
       
Diluted Income per Share$  0.06 $  0.10 $  (0.04)
       

First quarter fiscal 2020 results:

  • First quarter consolidated net sales were $17.9 million, a decrease of 16.4% from the first quarter of fiscal year 2019
  • Consolidated gross profit was $7.1 million and gross margin was 39.7%
  • First quarter operating income totaled $1.0 million
  • Net income for the first quarter of fiscal 2020 was $0.6 million
  • First quarter diluted earnings per share was $0.06
  • Bookings totaled $17.2 million
  • Backlog was $37.7 million
  • Cash and short-term investments totaled $4.7 million at September 30, 2019             

Full year fiscal 2020 outlook and guidance:

  • Double-digit forecasted increase in bookings
  • Low to mid-single digit forecasted revenue growth
  • Mid-single digit forecasted operating income margins

“During the quarter, continued growth in our new product launches supported improvement in our operating profitability, exceeding our expectations despite some revenue and bookings delays. Prolonged uncertainty around global economic conditions surrounding our major industrial customers has resulted in cautious order activity that we believe may rebound later in the year,” said David Watza, President and CEO of Perceptron. “Despite these challenges, our order in-take for the first quarter was up 5.6% over the same period in the prior year on a constant currency basis. In this uncertain environment, we believe that we are maintaining our market share and see increasing opportunities to grow our bookings at double digit rates and capture additional market share over time. However, given the continued challenging economic environment, we have reduced visibility into timing of orders for the next few quarters.

We continue to aggressively pursue revenue growth, although progress will ultimately be determined by timing of customer orders and delivery expectations. Our focus on cost reductions and operational efficiency across the organization should continue to deliver mid-single digit operating margins through fiscal 2020. Should we see more stability in the global trade outlook and business environment, we believe these cost and operational measures should result in accelerating profitable growth.”

Jay Freeland, Perceptron’s Chairman of the Board, comments “Amidst the prolonged uncertainty in our largest industry vertical, we see a building opportunity set for our technology. We are well positioned to benefit from the increasing consumer demand trends toward electric and autonomous vehicles due to our continued product development efforts. We continue to see broad, significant interest in our technology across all regions, both from current and prospective customers, and we are already seeing strong evidence that our investments to update and expand our suite of metrology solutions over the past several years have further positioned us to meet customers’ demand with top-of-the-line solutions.

Perceptron’s new AccuSite® Optical Tracking product continues to resonate with customers and industry experts as evidenced by our recent selection as a PACE Award finalist.

“We believe that our established development path will generate new business opportunities within our existing customer relationships and enable us to further grow into adjacent markets,” concluded Watza. “Our confidence in the long-term growth potential of Perceptron remains strong.  We believe there are significant upside and value creation opportunities ahead for Perceptron and will continue to aggressively execute the Company’s strategic plan with the ultimate goal of maximizing value for Perceptron’s shareholders.”

       
Highlights of Operations      
       
INCOME STATEMENT KEY METRICS (in millions, except per share data) 
       
 Three Months Ended September 30, 
 2019 2018 Change 
   (As Revised)   
Americas Sales$  6.2 $  8.3 $  (2.1)
Europe Sales7.1 8.8  (1.7)
Asia Sales4.6 4.3 0.3 
Total Net Sales$  17.9 $  21.4 $  (3.5)
       
Gross Profit$  7.1 $  8.3 $  (1.2)
Gross Profit as a percent of sales39.7% 38.8%   
Operating Income$  1.0 $  1.5 $  (0.5)
Operating Income as a percent of sales5.7% 7.0%   
Net Income$  0.6 $  1.0 $  (0.4)
Diluted Income per Share$  0.06 $  0.10 $  (0.04)
       

Perceptron generated first quarter net sales for fiscal 2020 in the amount of $17.9 million, decreasing $3.5 million, or 16.4%, versus the same quarter in the prior year, which included an unfavorable currency impact of $0.5 million.   The Americas region decline was due to decreases in In-Line and Near-Line Measurement Solutions. The decrease in the Europe region was due to softness across all product lines.

In the first quarter of fiscal 2020, gross profit as a percentage of sales was up 90 basis points compared to the prior year period, primarily due to the mix of the Company’s revenue, impact of new products and benefit of cost saving initiatives.

During the first quarter of fiscal 2020, SG&A, Engineering and R&D expenses were down $0.7 million, primarily as a result of decreased legal fees, employee-related costs through cost savings initiatives, commissions and amortization expense.

       
 Three Months Ended September 30, 
BOOKINGS (in millions)2019 2018 Change 
       
Geographic Region      
Americas$  6.9 $  3.6 $  3.3 
Europe7.5 9.3 (1.8)
Asia2.8 4.0 (1.2)
Total Bookings$  17.2 $  16.9 $  0.3 
       


          
BACKLOG (in millions)9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
          
Geographic Region         
Americas$  12.3 $  11.6 $  7.9 $  9.0 $  13.0
Europe  18.6   18.2   19.5   21.6   18.5
Asia  6.8   8.6   8.3   7.5   7.7
Total Backlog$  37.7 $  38.4 $  35.7 $  38.1 $  39.2
          


First quarter bookings were $17.2 million, an increase of 1.8% compared to the first quarter of fiscal 2019.  The $3.3 million increase in our Americas region is primarily due to an increase in our In-Line and Near-Line Measurement Solutions. The $1.8 million decrease in our Europe region is primarily due to a decrease in 3D Scanning Solutions.  The $1.2 million decrease in our Asia region is due to decreases in both our Off-Line and our In-Line and Near-Line Measurement Solutions. First quarter bookings included an unfavorable currency impact of $0.5 million.

Revenue in the first quarter of fiscal 2020 exceeded bookings by $0.7 million, which caused a decrease in backlog to $37.7 million.

FINANCIAL POSITION

Cash and short-term investment balance totaled $4.7 million at September 30, 2019, down from $6.0 million at June 30, 2019 and $8.0 million at September 30, 2018.  At September 30, 2019, and June 30, 2019, we did not have any bank debt outstanding, nor did we have any bank debt outstanding at September 30, 2018.

Quarterly Investor Call and Webcast

Perceptron, Inc., will hold its first quarter fiscal 2020 investor conference call/webcast, chaired by David L. Watza, President and CEO, on November 12, 2019, at 8:30 AM (EDT). Investors can access the call at:

Webcastinvestors.perceptron.com on the Event page
Conference Call833-535-2207 (domestic callers) or
 412-317-5405 (international callers)
Conference ID10136469

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 2020 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 2020 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 2019.  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. 


      
PERCEPTRON, INC.
SELECTED FINANCIAL DATA
(Unaudited, In Thousands Except Per Share Amounts)
      
Condensed Income StatementsThree Months Ended 
 September 30, 
 2019  2018 
    (As revised) 
Net Sales$17,850  $21,442 
Cost of Sales10,808  13,150 
Gross Profit7,042  8,292 
Operating Expenses     
Selling, General and Administrative Expense4,243  4,635 
Engineering, Research and Development Expense1,828  2,198 
Operating Income971  1,459 
Other Income and (Expenses), net     
Interest Expense, net(24) (27)
Foreign Currency and Other, net(178) (202)
Income Before Income Taxes769  1,230 
Income Tax Expense(143) (276)
      
Net Income$626  $954 
      
Income Per Common Share     
Basic$0.06  $0.10 
Diluted$0.06  $0.10 
      
Weighted Average Common Shares Outstanding     
Basic9,661  9,560 
Diluted9,664  9,772 
      

*During fourth quarter of fiscal 2019, the Company identified an error related to the accounting for our deferred tax liabilities associated with certain amortizable intangible assets acquired in 2015. The error relates to not appropriately reducing the associated deferred tax liabilities for the tax effect of amortization of the intangible assets since 2016. The error was immaterial to our previously issued financial statements, but the cumulative correction would have had a material effect on the 2019 financial statements. Accordingly, the results for the quarter ended September 30, 2018 throughout this earnings announcement have been adjusted to incorporate the revised amounts, where applicable. The revision reduced income tax expense and increased net income by approximately $62,000 for the three months ended September 30, 2018, in the Condensed Income Statements for that period. These changes are reflected in this earnings announcement in the columns labeled as revised.

    
PERCEPTRON, INC.
SELECTED FINANCIAL DATA
(In Thousands)
    
Condensed Balance SheetsSeptember 30, June 30,
 2019 2018
 (Unaudited)  
Cash and Cash Equivalents$3,998 $4,585
Short-Term Investments  722   1,431
Receivables, net  35,136   33,043
Inventories, net  10,056   10,810
Other Current Assets  2,304   1,529
Total Current Assets  52,216   51,398
    
Property and Equipment, net  6,457   6,538
Goodwill and Other Intangible Assets, net  3,487   3,557
Right of Use Assets  3,850   -
Other Long-Term Assets  85   -
Long-Term Deferred Income Tax Asset  424   620
Long-Term Investments  725   725
Total Non-Current Assets  15,028   11,440
    
Total Assets$67,244 $62,838
    
Accounts Payable$7,248 $7,397
Deferred Revenue  7,305   6,649
Reserve for Restructuring and Other Charges  -   44
ST Operating Lease Liability  514   -
Other Current Liabilities  6,261   6,111
Total Current Liabilities  21,328   20,201
    
Long-Term Taxes Payable  44   114
Long-Term Deferred Income Tax Liability  35   41
Long-Term Operating Lease Liability  3,384   -
Other Long-Term Liabilities  541   556
Total Long-Term Liabilities  4,004   711
    
Total Liabilities  25,332   20,912
    
Shareholders' Equity  41,912   41,926
Total Liabilities and Shareholders' Equity$  67,244 $  62,838
    


Contact:
Investor Relations
investors@perceptron.com

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Source: Perceptron, Inc.