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Perceptron Reports 2nd Quarter Fiscal 2014 Financial Results

February 18, 2014

Perceptron, Inc. announced its results for the second quarter of its fiscal year 2014 that ended December 31, 2013.

In a release on February 12, the Company noted that net sales in the second quarter of fiscal year 2014 were $12.5 million with a net loss of $407,000, or ($0.05) per diluted share, compared to net sales of $13.2 million and net income of $184,000, or $0.02 per diluted share in the 2013 second fiscal quarter. Bookings during the quarter were $17.0 million, or approximately 40.5 percent higher than in the second quarter of fiscal year 2013 and were strong in all geographic regions. Backlog grew to a record $40.4 million, surpassing the previous record quarterly backlog of $35.9 million achieved in the first quarter of fiscal year 2014.

Net sales in the first half of fiscal year 2014 were $24.9 million with a net loss of $995,000, or ($0.11) per diluted share, compared to net sales of $25.4 million and net income of $839,000, or $0.10 per diluted share in the first half of fiscal 2013. Included in the six months ended December 31, 2012, was a $26,000 gain, net of taxes, from the discontinued operations of the Company's Commercial Products Business Unit that was sold in August 2012.

Jeff Armstrong, President and Chief Executive Officer, commented, "Reported results for the second quarter and first half of fiscal 2014 were not reflective of Perceptron's strong competitive position or our longer-term prospects. In fact, with backlog at a record $40.4 million, we expect significantly higher sales in the second half of our 2014 fiscal year compared to the first six months of the year as we deliver on scheduled shipments and begin to partially work down that record backlog. In particular, we have a large number of shipments and installations scheduled in Europe, a challenge we believe our team is prepared to handle successfully. Sales for the full fiscal year are expected to be in the same range as fiscal 2013 and we also expect a profitable fiscal year 2014."

Armstrong added, "Our confidence in our full-year outlook is driven by the positive reception our products continue to receive in our core automotive markets. Over the past several months, we have been recognized by several auto manufacturers for the contributions our systems make to improving the quality of their vehicles while enabling lower production costs."

Sales of $12.5 million in the current second quarter decreased $700,000 compared to sales of $13.2 million in the second quarter a year ago. The $500,000 sales increase in Europe was offset by small declines in the Americas and Asia. The strength of the Euro this quarter compared to the same quarter a year ago increased sales by approximately $280,000. The Company's sales levels fluctuate from quarter to quarter due to requested delivery schedules from our customers.

Bookings in all geographic regions were strong in the second quarter of fiscal 2014 and represented significant increases in the Americas and Asia when compared to the same quarter a year ago. Europe's bookings decreased $600,000 when compared to the high second quarter fiscal year 2013 bookings of $6.0 million. The stronger Euro in the current quarter mitigated the bookings decrease by approximately $420,000.

The $40.4 million backlog at December 31, 2013, represented a record level quarterly backlog for the Company. Backlog was $10.7 million or 36.0 percent higher than the second quarter a year ago and reflected increases in all geographic regions, with the most significant increases occurring in Asia and Europe.

The gross margin percentage was comparable at 39.7 percent of sales in the second quarter this year to 39.3 percent last year. In quarters where sales are soft, the gross margin percentage is normally lower due to the fixed nature of certain of the Company's cost of goods sold. Gross margin was $5.0 million in the current quarter and decreased by approximately $223,000, or 4.3 percent, compared to the second quarter of last year due to the lower level of sales in the quarter.

Selling, general, and administrative (SG&A) expenses increased $142,000 or 4.1 percent compared to the second quarter of fiscal 2013. The effect of the stronger Euro relative to the U.S. dollar in the second quarter this year compared to the quarter last year represented approximately one third of the increase. Higher recruiting and relocation costs, and higher salary costs contributed to the increase.

Engineering, research and development expenses increased $49,000, or 3.1 percent, over the second quarter last year. The increase primarily resulted from higher salary and salary related costs.

The Company's financial position remained strong at December 31, 2013, with cash and short-term investments at $34.0 million, no debt and shareholders' equity at $6.70 per diluted share.

Perceptron develops, produces, and sells non-contact 3D machine vision solutions for measurement, inspection, and robot guidance in industrial applications.

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