Fiscal 2009 Third Quarter Results
The adjusted EBITDA loss was $2.6 million in the third quarter of fiscal 2009, compared with the adjusted EBITDA of $1.6 million in the third quarter of fiscal 2008 and an adjusted EBITDA loss of $3.2 million in the second quarter of fiscal 2009.
The gross margin was 38.2% of revenue in the third fiscal quarter of 2009, compared with 46.3% of revenue in the third quarter of 2008 and 42.2% in the second quarter of 2009. The company’s gross margins were negatively impacted by lower volumes which caused under-absorption of fixed manufacturing expenses, although the Quattro product margin remained steady throughout the quarter. The operating expenses for the third quarter of fiscal 2009 were $6.4 million, compared to operating expenses of $6.6 million in the same quarter of fiscal 2008 and $8.8 million in the second quarter of 2009.
During the third quarter of fiscal 2009, Adept implemented new expense reductions expected to result in quarterly savings of around $1 million starting in the fourth quarter of fiscal 2009, which began on March 29, 2009, with the full effect realized in the first quarter of fiscal 2010, which begins on July 1, 2009.
The company’s cash and short-term investment balance at March 28, 2009 was $8.7 million, as compared to $11.0 million reported as of December 27, 2008.
We experienced a significant slowdown in January and February of this year as a result of the worldwide recession, said John Dulchinos, Adept’s president and chief executive officer. We saw numerous customers idle production lines and delay capital investments in the first two months of the year, which had a significant impact on our revenue. We are encouraged by an increase in activity since then, including a 29% increase in Quattro orders during the quarter, indicating that our business may be stabilizing. Looking forward we continue to focus on managing our resources and returning to cash flow positive operations. We took steps during the quarter to reduce our operating expenses by $1 million per quarter, which should be fully reflected in our first fiscal quarter of 2010. We have now secured a $5 million line of credit and our balance sheet remains strong. With our realigned cost structure we are confident that we have sufficient cash to weather this downturn. With our new product offerings and solid design wins in our key markets of packaging and solar, we are also confident we are well positioned to return to growth and profitability once the economy begins to recover.
