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Perceptron Inc. Reports Operating Results (10-Q)

November 13, 2009 | About:
10qk

10qk

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Perceptron Inc. (PRCP) filed Quarterly Report for the period ended 2009-09-30.

Perceptron, Inc. designs, manufactures and markets information based process measurement and guidance solutions which help customers improve performance. Perceptron's product offerings are designed to improve quality,increase productivity and decrease costs in the automotive and forest products workplace. Perceptron's design philosophy is to create systems which incorporate sophisticated proprietary software and hardware to minimize the need for customer application engineering. Perceptron Inc. has a market cap of $32.1 million; its shares were traded at around $3.61 with and P/S ratio of 0.5.

Highlight of Business Operations:

Overview — For the first quarter of fiscal 2010, the Company reported a net loss of $813,000, or $0.09 per diluted share, compared to a net loss of $32,000 or $0.00 per diluted share, for the first quarter of fiscal 2009. Specific line item results are described below.

Sales — Sales decreased 44.0% or $8.5 million to $10.8 million in the first quarter of fiscal 2010 compared to net sales of $19.3 million in the same period one year ago. The following tables show comparative data regarding the Company’s net sales by segment and geographic location.

Gross Profit — Gross profit was $3.9 million, or 36.3% of sales, in the first quarter of fiscal year 2010, as compared to $6.8 million, or 35.3% of sales, in the first quarter of fiscal year 2009. The Company achieved a gross profit margin percentage increase of 1.0% even though the quarter comparison showed a 44% reduction in sales. The gross margin percentage increase was primarily the result of the cost reduction actions taken by the Company in the second half of fiscal 2009 and the mix of sales between the IBU and the CBU segments. The effect of the weaker Euro in the first quarter of fiscal 2010 compared to 2009 reduced gross profit approximately $250,000 or approximately 2%. Also contributing to the lower margin in the fiscal 2009 quarter was a large project that had a sizable third party outsourcing content which resulted in a lower overall margin on the project than was typical for the Company.

Selling, General and Administrative (SG&A) Expenses — SG&A expenses were $3.7 million in the quarter ended September 30, 2009 compared to $4.5 million in the first quarter a year ago. The $819,000 decrease in SG&A expenses in fiscal 2010 was primarily due to lower personnel related costs and contract services resulting from the cost reduction actions taken by the Company in the second half of fiscal 2009. The weaker Euro in the fiscal 2010 quarter compared to fiscal 2009 did not have a material effect on the comparison.

The Company’s cash and cash equivalents were $17.4 million at September 30, 2009, compared to $22.7 million at June 30, 2009. The cash decrease of $5.2 million for the quarter ended September 30, 2009 resulted primarily from $3.2 million used to purchase short-term investments and $2.3 million used for operating activities. The use of cash for operations was not unexpected and the Company expects some use of cash over the next couple of quarters as working capital uses increase.

The $2.3 million of cash used for operations was related to changes in assets and liabilities of $1.3 million, the net loss of $813,000 and adjustments for non-cash items of $194,000. The $1.3 million change in assets and liabilities resulted primarily from a use of cash for changes in other current assets and liabilities of $1.1 million which reflected lower deferred revenue of approximately $890,000 resulting from the timing of revenue recognition, lower accrued compensation and other liabilities of approximately $530,000 related to the timing of payments, and a decrease in deposits and prepaid expenses of approximately $375,000. Also contributing to the $1.3 million change in assets and liabilities was a decrease in accounts payable of $559,000 related to the timing of payments that was mitigated by a reduction in receivables of $419,000 primarily related to cash collections during the quarter exceeding new sales in the quarter.

Read the The complete ReportPRCP is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC.

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