Perceptron Inc. (PRCP, Financial) filed Quarterly Report for the period ended 2009-03-31.
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 qualityincrease 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 $34.86 million; its shares were traded at around $3.93 with a P/E ratio of 30.23 and P/S ratio of 0.48.
The decrease in Automated Systems sales was primarily due to the turbulent times in the automotive industry which resulted in decreased new systems sales and to a lesser extent decreased spare parts sales. The decline occurred in each geographic region, with $2.5 million in Europe. The Technology Product sales decrease was primarily the result of lower WheelWorks® and ScanWorks® sales that are primarily sold to the automotive industry. An increase in sales of the Companys commercial products in the United States partially mitigated the decrease in Technology Products. The increase in sales of the Companys commercial products was primarily due to products the Company began shipping this fiscal year, in particular the BK5500 sold to Snap-on and the microEXPLORER Digital Inspection Camera sold to Ridge Tool. The decrease in all three geographic regions reflected decreased sales in both product segments. The sales comparison in Europe also included the impact of the weaker Euro exchange rate during the third quarter of fiscal 2009 compared to the fiscal 2008 quarter that reduced sales approximately $800,000, of which approximately $670,000 related to Automated Systems and approximately $130,000 related to Technology Products.
Gross Profit Gross profit was $4.7 million, or 35.2% of sales, in the third quarter of fiscal year 2009, compared to $7.7 million, or 42.2% of sales, in the third quarter of fiscal year 2008. The decrease of $3.0 million in gross profit this quarter was primarily due to lower Automated Systems sales in fiscal 2009 compared to the fiscal 2008 quarter. The weaker Euro also negatively impacted the gross profit by approximately $475,000. The gross margin percentage decline in the current quarter was related to the lower Automated Systems sales level in the current quarter with relatively fixed labor costs and lower WheelWorks® and ScanWorks® sales. Also impacting the gross profit percentage were several new system orders that had billing terms that required a greater percentage of revenue to be deferred than orders in the comparable quarter of fiscal 2008.
Selling, General and Administrative (SG&A) Expenses SG&A expenses were $4.1 million in the quarter ended March 31, 2009 compared to $5.6 million in the third quarter a year ago. The decrease of $1.5 million in the current quarter was primarily related to approximately $900,000 of higher costs recorded in the fiscal 2008 quarter of which $600,000 was related to the retirement of the Companys CEO and $300,000 was related to audit and contract services related to the fiscal 2008 implementation of Sarbanes Oxley Act Section 404 requirements relating to the audit of the Companys internal controls. Contributing to the decrease in expenses in the fiscal 2009 quarter were lower employee related costs of approximately $300,000 primarily related to the work force reduction the Company implemented during the third quarter of fiscal 2009, legal fees of approximately $230,000, and advertising and promotion expenses of $180,000. The weaker Euro also had the effect of reducing expenses by approximately $200,000 in the fiscal 2009 quarter compared to the fiscal 2008 quarter. Mitigating these reductions in expenses was higher bad debt expense of approximately $500,000 in the fiscal 2009 quarter compared to the fiscal 2008 quarter, primarily related to one customer and to a lesser extent increased exposure in some receivables in Europe.
Engineering, Research and Development (R&D) Expenses Engineering and R&D expenses were $1.9 million in the quarter ended March 31, 2009 compared to $2.1 million in the third quarter a year ago. The $254,000 decrease was primarily due to lower employee related costs related to the work force reduction the Company implemented during the third quarter of fiscal 2009 and lower contract services.
Impairment on Long-Term Investment During the third quarter of fiscal 2009 the Companys long-term investments were exchanged for preferred stock of the issuers and the Company determined that these investments had been other-than-temporarily impaired. Based on an independent valuation, the Company wrote down these investments $728,000 and reclassified $767,000 from other comprehensive income for a total other-than-temporary charge of $1.5 million. In the fiscal 2008 quarter ended December 31, 2007, the Company determined that one of its investments in auction rate securities had been other-than-temporarily impaired and based on fair values provided by the Companys broker, recorded a $2.6 million other-than-temporary decline in the market value of this investment. See Note 4 of the Notes to the Consolidated Financial Statements, Short-Term and Long-Term Investments.
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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 qualityincrease 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 $34.86 million; its shares were traded at around $3.93 with a P/E ratio of 30.23 and P/S ratio of 0.48.
Highlight of Business Operations:
Overview For the third quarter of fiscal 2009, the Company reported a net loss of $2.7 million, or $0.31 per share, compared to net income of $211,000 or $0.02 per diluted share, for the third quarter of fiscal 2008. During the quarter, the Company recorded several significant charges that had a material negative effect on net income. These included a $1.5 million non-cash other-than-temporary decline in the Companys long-term investments, a $1.0 million restructuring charge, a $500,000 provision for bad debts and penalties and interest of $100,000 on an unfavorable Brazilian tax appeal recorded in Selling General and Administrative Expenses and Interest Income, net. Specific line item results are described below.The decrease in Automated Systems sales was primarily due to the turbulent times in the automotive industry which resulted in decreased new systems sales and to a lesser extent decreased spare parts sales. The decline occurred in each geographic region, with $2.5 million in Europe. The Technology Product sales decrease was primarily the result of lower WheelWorks® and ScanWorks® sales that are primarily sold to the automotive industry. An increase in sales of the Companys commercial products in the United States partially mitigated the decrease in Technology Products. The increase in sales of the Companys commercial products was primarily due to products the Company began shipping this fiscal year, in particular the BK5500 sold to Snap-on and the microEXPLORER Digital Inspection Camera sold to Ridge Tool. The decrease in all three geographic regions reflected decreased sales in both product segments. The sales comparison in Europe also included the impact of the weaker Euro exchange rate during the third quarter of fiscal 2009 compared to the fiscal 2008 quarter that reduced sales approximately $800,000, of which approximately $670,000 related to Automated Systems and approximately $130,000 related to Technology Products.
Gross Profit Gross profit was $4.7 million, or 35.2% of sales, in the third quarter of fiscal year 2009, compared to $7.7 million, or 42.2% of sales, in the third quarter of fiscal year 2008. The decrease of $3.0 million in gross profit this quarter was primarily due to lower Automated Systems sales in fiscal 2009 compared to the fiscal 2008 quarter. The weaker Euro also negatively impacted the gross profit by approximately $475,000. The gross margin percentage decline in the current quarter was related to the lower Automated Systems sales level in the current quarter with relatively fixed labor costs and lower WheelWorks® and ScanWorks® sales. Also impacting the gross profit percentage were several new system orders that had billing terms that required a greater percentage of revenue to be deferred than orders in the comparable quarter of fiscal 2008.
Selling, General and Administrative (SG&A) Expenses SG&A expenses were $4.1 million in the quarter ended March 31, 2009 compared to $5.6 million in the third quarter a year ago. The decrease of $1.5 million in the current quarter was primarily related to approximately $900,000 of higher costs recorded in the fiscal 2008 quarter of which $600,000 was related to the retirement of the Companys CEO and $300,000 was related to audit and contract services related to the fiscal 2008 implementation of Sarbanes Oxley Act Section 404 requirements relating to the audit of the Companys internal controls. Contributing to the decrease in expenses in the fiscal 2009 quarter were lower employee related costs of approximately $300,000 primarily related to the work force reduction the Company implemented during the third quarter of fiscal 2009, legal fees of approximately $230,000, and advertising and promotion expenses of $180,000. The weaker Euro also had the effect of reducing expenses by approximately $200,000 in the fiscal 2009 quarter compared to the fiscal 2008 quarter. Mitigating these reductions in expenses was higher bad debt expense of approximately $500,000 in the fiscal 2009 quarter compared to the fiscal 2008 quarter, primarily related to one customer and to a lesser extent increased exposure in some receivables in Europe.
Engineering, Research and Development (R&D) Expenses Engineering and R&D expenses were $1.9 million in the quarter ended March 31, 2009 compared to $2.1 million in the third quarter a year ago. The $254,000 decrease was primarily due to lower employee related costs related to the work force reduction the Company implemented during the third quarter of fiscal 2009 and lower contract services.
Impairment on Long-Term Investment During the third quarter of fiscal 2009 the Companys long-term investments were exchanged for preferred stock of the issuers and the Company determined that these investments had been other-than-temporarily impaired. Based on an independent valuation, the Company wrote down these investments $728,000 and reclassified $767,000 from other comprehensive income for a total other-than-temporary charge of $1.5 million. In the fiscal 2008 quarter ended December 31, 2007, the Company determined that one of its investments in auction rate securities had been other-than-temporarily impaired and based on fair values provided by the Companys broker, recorded a $2.6 million other-than-temporary decline in the market value of this investment. See Note 4 of the Notes to the Consolidated Financial Statements, Short-Term and Long-Term Investments.
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