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Adept Technology, Inc (ADEP)

F4Q 2011 Earnings Call Transcript

August 24, 2011, 5:00 pm ET


Lisa Cummins - CFO

John Dulchinos - President, CEO


John Nelson - State of Wisconsin Investment Board

Frank Buressi - Stifel Nicolaus

Craig Samuels - Samuels Capital Management



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Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Adept Technology fiscal fourth quarter and year-end 2011 results conference call. During today's presentation, all participants will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions).

This conference is being recorded today, Wednesday, August 24, 2011. At this time I would like to turn the conference over to Lisa Cummins, Chief Financial Officer. Please go ahead, ma'am.

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Lisa Cummins

Good afternoon, everyone, and thank you for joining us. As we begin today's call, let me remind you that during the course of this conference call, we may make certain remarks regarding Adept's expectations as to future events and future financial and operational performance, plans and prospects of the company, all of which are based on the company's position as of today, August 24, 2011.

Any such forward-looking statements involve a number of risks and uncertainties and the company's actual results could differ materially from those expressed in any of these forward-looking statements for a variety of reasons, including the risks described in our press release and in our annual report on 10-K for the fiscal year ended June 30, 2010 as well as the risks described in the company's other SEC filings.

No one should assume that any forward-looking statements made by the company remain consistent with our expectations after the date that the forward-looking statements are made.

Certain financial information that we review on today's conference call is presented on a non-GAAP basis. The most directly comparable GAAP information and reconciliation between the non-GAAP and GAAP figures is provided in our fiscal fourth quarter 2011 press release, which has been furnished to the SEC on Form 8-K.

The press release and all financial, statistical or operational information referred to in this conference call including the GAAP reconciliation and explanations discussed above is available on the investor relations section of our website.

Following our introductory comments, we will open the call to take your questions. I would now like to turn the call over to John Dulchinos for some opening remarks.

John Dulchinos

Thank you, Lisa, and good afternoon, everyone. 2011 was a solid execution year for Adept, in which we made significant progress on our strategic roadmap while strengthening our competitive position and aligning the company for growth.

The year was marked by the acquisitions and integration of InMoTx and Mobile Robot, both of which substantially increased our available target market and brings differentiated technology and products that complement and extend our existing offerings.

For the year, revenues grew 11%, driven primarily by strengthening demand from our traditional markets such as industrial and automotive customers in Germany as well as packaging and solar in Asia along with our service business.

We also saw the first commercial contributions from our recently acquired Mobile Robot business.

As you know, in our last fiscal year, the disc drive market was very strong, comprising roughly $15.1 million or 29% of last year's revenues. In fiscal 2011, disc drive revenue has declined sharply as capital spending began its cross cycle. It constitutes only $5.5 million or 9.6% of our revenue.

If we back our disc drive for both years, as well as revenues from Mobile Robot and InMoTx for 2011 for an apples-to-apples comparison between the two years, our core market revenues actually increased 32% year-over-year.

We believe fiscal 2012 is poised to experience solid growth as well even without any revenues from the unpredictable disc drive market, which may or may not pick up in the second half of the fiscal year.

As the primary supplier disc drive customers in the world, we will benefit from any return to growth in capital spending, enhanced disc drive sales but do not rely on it to achieve our growth objective.

We feel confident in our strategic roadmap and how we will leverage our recent acquisitions with our existing core technologies to tap large, underserved markets with differentiated solutions.

Our Mobile Robot technology is gaining traction and we recently signed an agreement to be the exclusive supplier or autonomous mobile robots based on our MP400 robotic platform to Swisslog Healthcare Solutions to be used in hospitals, labs and clinics to provide on-demand delivery systems.

With the increasing financial strain on today's healthcare system, providers are eager to find ways to reduce repetitive duties, such as transporting items from one place to another to allow healthcare workers to focus on patient care.

Our autonomous mobile robot solutions are uniquely suited to carry out these monotonous tasks, increasing efficiency and improving the quality of care within the healthcare system.

This particular agreement is a validation of the maturity of our Mobile Robot technology for use in high traffic people environment and an excellent illustration of how our systems can replace existing below efficiency, labor-intensive logistics with autonomous flexible solutions, which are secure, traceable and deterministic.

This solution extends well beyond healthcare facilities to production facilities, clean rooms, laboratories, warehouses, distribution centers and even retail outlets, creating an enormous future opportunity for Adept.

We remain enthusiastic about this acquisition and believe our industry-leading, natural feature-based autonomous navigation and mapping, which we deliver today in our MP400 platform and our [motivity] core, is uniquely positioned within the commercial market.

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