Toggle SGML Header (+)


Section 1: 10-Q (10-Q)

prcp-10q_20190331.htm
10-Q false Q3 2019 PERCEPTRON INC/MI 0000887226 --06-30 Accelerated Filer true false 0 P3M P15M P45D P90D P12M P15M 0 P3Y P1Y P1Y P3Y P1Y P2Y P8Y P3Y P1Y P3M P1Y P1Y P1Y P1Y P1Y P6Y7M6D P6Y7M6D P5Y4M24D 0000887226 2018-07-01 2019-03-31 xbrli:shares 0000887226 2019-05-06 iso4217:USD 0000887226 2019-03-31 0000887226 2018-06-30 iso4217:USD xbrli:shares 0000887226 2019-01-01 2019-03-31 0000887226 2018-01-01 2018-03-31 0000887226 2017-07-01 2018-03-31 0000887226 2017-06-30 0000887226 2018-03-31 0000887226 us-gaap:CommonStockMember 2018-12-31 0000887226 us-gaap:CommonStockMember 2017-12-31 0000887226 us-gaap:CommonStockMember 2018-06-30 0000887226 us-gaap:CommonStockMember 2017-06-30 0000887226 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0000887226 us-gaap:CommonStockMember 2017-07-01 2018-03-31 0000887226 us-gaap:CommonStockMember 2019-03-31 0000887226 us-gaap:CommonStockMember 2018-03-31 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-06-30 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-01 2019-03-31 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-07-01 2018-03-31 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000887226 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000887226 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000887226 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000887226 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0000887226 us-gaap:AdditionalPaidInCapitalMember 2017-06-30 0000887226 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000887226 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0000887226 us-gaap:AdditionalPaidInCapitalMember 2018-07-01 2019-03-31 0000887226 us-gaap:AdditionalPaidInCapitalMember 2017-07-01 2018-03-31 0000887226 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000887226 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0000887226 us-gaap:RetainedEarningsMember 2018-12-31 0000887226 us-gaap:RetainedEarningsMember 2017-12-31 0000887226 us-gaap:RetainedEarningsMember 2018-06-30 0000887226 us-gaap:RetainedEarningsMember 2017-06-30 0000887226 us-gaap:AccountingStandardsUpdate201409Member us-gaap:RetainedEarningsMember 2018-07-01 2019-03-31 0000887226 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000887226 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0000887226 us-gaap:RetainedEarningsMember 2018-07-01 2019-03-31 0000887226 us-gaap:RetainedEarningsMember 2017-07-01 2018-03-31 0000887226 us-gaap:RetainedEarningsMember 2019-03-31 0000887226 us-gaap:RetainedEarningsMember 2018-03-31 0000887226 us-gaap:AccountingStandardsUpdate201409Member 2018-07-01 2019-03-31 0000887226 us-gaap:AccountingStandardsUpdate201409Member prcp:MeasurementSolutionsAndValueAddedServicesMember 2018-07-01 2019-03-31 0000887226 us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2018-06-30 0000887226 us-gaap:AccountingStandardsUpdate201409Member 2018-07-01 0000887226 2018-04-01 2018-06-30 0000887226 us-gaap:CustomerRelationshipsMember 2019-03-31 0000887226 us-gaap:TradeNamesMember 2019-03-31 0000887226 us-gaap:ComputerSoftwareIntangibleAssetMember 2019-03-31 0000887226 us-gaap:OtherIntangibleAssetsMember 2019-03-31 0000887226 us-gaap:CustomerRelationshipsMember 2018-06-30 0000887226 us-gaap:TradeNamesMember 2018-06-30 0000887226 us-gaap:ComputerSoftwareIntangibleAssetMember 2018-06-30 0000887226 us-gaap:OtherIntangibleAssetsMember 2018-06-30 0000887226 srt:MinimumMember 2018-07-01 2019-03-31 0000887226 srt:MaximumMember 2018-07-01 2019-03-31 prcp:Segment 0000887226 srt:AmericasMember 2019-01-01 2019-03-31 0000887226 srt:AmericasMember 2018-07-01 2019-03-31 0000887226 srt:EuropeMember 2019-01-01 2019-03-31 0000887226 srt:EuropeMember 2018-07-01 2019-03-31 0000887226 srt:AsiaMember 2019-01-01 2019-03-31 0000887226 srt:AsiaMember 2018-07-01 2019-03-31 0000887226 prcp:MeasurementSolutionsMember 2019-01-01 2019-03-31 0000887226 prcp:MeasurementSolutionsMember 2018-07-01 2019-03-31 0000887226 prcp:ThreeDScanningSolutionsMember 2019-01-01 2019-03-31 0000887226 prcp:ThreeDScanningSolutionsMember 2018-07-01 2019-03-31 0000887226 prcp:ValueAddedServiceMember 2019-01-01 2019-03-31 0000887226 prcp:ValueAddedServiceMember 2018-07-01 2019-03-31 0000887226 us-gaap:TransferredAtPointInTimeMember 2019-01-01 2019-03-31 0000887226 us-gaap:TransferredAtPointInTimeMember 2018-07-01 2019-03-31 0000887226 us-gaap:TransferredOverTimeMember 2019-01-01 2019-03-31 0000887226 us-gaap:TransferredOverTimeMember 2018-07-01 2019-03-31 0000887226 2019-04-01 2019-03-31 0000887226 2019-07-01 2019-03-31 0000887226 2020-07-01 2019-03-31 0000887226 2021-07-01 2019-03-31 0000887226 2022-07-01 2019-03-31 0000887226 2023-07-01 2019-03-31 0000887226 us-gaap:OtherCurrentAssetsMember 2019-03-31 0000887226 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-03-31 0000887226 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-07-01 2019-03-31 0000887226 2018-07-01 0000887226 us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2019-03-31 0000887226 us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2019-03-31 0000887226 us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2019-01-01 2019-03-31 0000887226 us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2019-01-01 2019-03-31 0000887226 us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2018-07-01 2019-03-31 0000887226 us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2018-07-01 2019-03-31 0000887226 prcp:BankGuaranteesMember 2019-03-31 0000887226 prcp:BankGuaranteesMember 2018-06-30 0000887226 us-gaap:PreferredStockMember 2019-03-31 0000887226 prcp:BankGuaranteesMember us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2019-03-31 0000887226 prcp:BankGuaranteesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000887226 us-gaap:MutualFundMember us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2019-03-31 0000887226 us-gaap:MutualFundMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000887226 us-gaap:BankTimeDepositsMember us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2019-03-31 0000887226 us-gaap:BankTimeDepositsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000887226 us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2019-03-31 0000887226 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000887226 us-gaap:PreferredStockMember us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2019-03-31 0000887226 us-gaap:PreferredStockMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-31 0000887226 prcp:BankGuaranteesMember us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2018-06-30 0000887226 prcp:BankGuaranteesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:MutualFundMember us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:MutualFundMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:BankTimeDepositsMember us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:BankTimeDepositsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:PreferredStockMember us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:PreferredStockMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-06-30 0000887226 us-gaap:MutualFundMember 2019-03-31 0000887226 us-gaap:FairValueInputsLevel1Member us-gaap:MutualFundMember 2019-03-31 0000887226 prcp:BankTimeDepositsAndGuaranteesMember 2019-03-31 0000887226 us-gaap:FairValueInputsLevel2Member prcp:BankTimeDepositsAndGuaranteesMember 2019-03-31 0000887226 us-gaap:PreferredStockMember 2019-03-31 0000887226 us-gaap:FairValueInputsLevel3Member us-gaap:PreferredStockMember 2019-03-31 0000887226 us-gaap:FairValueInputsLevel1Member 2019-03-31 0000887226 us-gaap:FairValueInputsLevel2Member 2019-03-31 0000887226 us-gaap:FairValueInputsLevel3Member 2019-03-31 0000887226 us-gaap:MutualFundMember 2018-06-30 0000887226 us-gaap:FairValueInputsLevel1Member us-gaap:MutualFundMember 2018-06-30 0000887226 prcp:BankTimeDepositsAndGuaranteesMember 2018-06-30 0000887226 us-gaap:FairValueInputsLevel2Member prcp:BankTimeDepositsAndGuaranteesMember 2018-06-30 0000887226 us-gaap:PreferredStockMember 2018-06-30 0000887226 us-gaap:FairValueInputsLevel3Member us-gaap:PreferredStockMember 2018-06-30 0000887226 us-gaap:FairValueInputsLevel1Member 2018-06-30 0000887226 us-gaap:FairValueInputsLevel2Member 2018-06-30 0000887226 us-gaap:FairValueInputsLevel3Member 2018-06-30 0000887226 us-gaap:LandAndBuildingMember 2019-03-31 0000887226 us-gaap:LandAndBuildingMember 2018-06-30 0000887226 us-gaap:MachineryAndEquipmentMember 2019-03-31 0000887226 us-gaap:MachineryAndEquipmentMember 2018-06-30 0000887226 us-gaap:FurnitureAndFixturesMember 2019-03-31 0000887226 us-gaap:FurnitureAndFixturesMember 2018-06-30 0000887226 prcp:InLineAndNearLineMeasurementSolutionsMember srt:MinimumMember 2018-07-01 2019-03-31 0000887226 prcp:InLineAndNearLineMeasurementSolutionsMember srt:MaximumMember 2018-07-01 2019-03-31 0000887226 prcp:LaborAndTravelRelatedMember 2018-07-01 2019-03-31 0000887226 prcp:TricamSensorsMember 2018-07-01 2019-03-31 0000887226 prcp:ScanworksMember 2018-07-01 2019-03-31 0000887226 prcp:WheelworksMember 2018-07-01 2019-03-31 0000887226 prcp:OffLineMeasurementSolutionsMember srt:MinimumMember 2018-07-01 2019-03-31 0000887226 prcp:OffLineMeasurementSolutionsMember srt:MaximumMember 2018-07-01 2019-03-31 0000887226 prcp:LoanAgreementMember 2019-03-31 xbrli:pure 0000887226 prcp:LoanAgreementMember 2018-07-01 2019-03-31 0000887226 prcp:LoanAgreementMember 2017-12-04 2017-12-04 iso4217:EUR 0000887226 prcp:Coord3Member 2019-03-31 iso4217:BRL 0000887226 prcp:ForeignCreditLinesAndOverdraftFacilitiesMember prcp:BrazilSubsidiaryMember 2019-03-31 0000887226 prcp:ForeignCreditLinesAndOverdraftFacilitiesMember prcp:BrazilSubsidiaryMember 2018-06-30 0000887226 prcp:ForeignCreditLinesAndOverdraftFacilitiesMember prcp:BrazilSubsidiaryMember srt:MinimumMember 2019-03-31 0000887226 2016-01-01 2016-03-31 0000887226 2016-07-01 2019-03-31 0000887226 2017-12-31 0000887226 prcp:TradeSecretsCaseMember 2017-12-31 0000887226 prcp:TradeSecretsCaseMember 2019-01-01 2019-01-31 0000887226 country:CN 2017-07-01 2018-03-31 0000887226 country:US 2017-07-01 2018-03-31 0000887226 us-gaap:EmployeeStockOptionMember srt:MinimumMember prcp:Tranche1Through4Member prcp:ShareBasedCompensationAwardPlan2004Member 2018-07-01 2019-03-31 0000887226 us-gaap:EmployeeStockOptionMember srt:MaximumMember prcp:Tranche1Through3Member prcp:ShareBasedCompensationAwardPlan2004Member 2018-07-01 2019-03-31 0000887226 us-gaap:EmployeeStockOptionMember srt:MinimumMember prcp:ShareBasedCompensationAwardPlan2004Member 2018-07-01 2019-03-31 0000887226 us-gaap:EmployeeStockOptionMember srt:MaximumMember prcp:ShareBasedCompensationAwardPlan2004Member 2018-07-01 2019-03-31 0000887226 prcp:ShareBasedCompensationAwardPlan2004Member us-gaap:EmployeeStockOptionMember 2018-07-01 2019-03-31 0000887226 prcp:ShareBasedCompensationAwardPlan2004Member us-gaap:EmployeeStockOptionMember 2019-01-01 2019-03-31 0000887226 prcp:ShareBasedCompensationAwardPlan2004Member us-gaap:EmployeeStockOptionMember 2017-07-01 2018-03-31 0000887226 prcp:ShareBasedCompensationAwardPlan2004Member us-gaap:EmployeeStockOptionMember 2018-01-01 2018-03-31 0000887226 prcp:ShareBasedCompensationAwardPlan2004Member us-gaap:EmployeeStockOptionMember 2019-03-31 0000887226 us-gaap:RestrictedStockMember 2019-01-01 2019-03-31 0000887226 us-gaap:RestrictedStockMember 2018-07-01 2019-03-31 0000887226 us-gaap:RestrictedStockMember 2018-01-01 2018-03-31 0000887226 us-gaap:RestrictedStockMember 2017-07-01 2018-03-31 0000887226 us-gaap:RestrictedStockMember 2019-03-31 0000887226 us-gaap:RestrictedStockUnitsRSUMember 2018-06-30 0000887226 us-gaap:RestrictedStockUnitsRSUMember 2018-07-01 2019-03-31 0000887226 us-gaap:RestrictedStockUnitsRSUMember 2019-03-31 prcp:Target 0000887226 prcp:OperatingIncomeBasedPerformanceSharesMember 2018-07-01 2019-03-31 0000887226 prcp:RevenueBasedPerformanceSharesMember srt:MinimumMember prcp:Tranche1Through3Member 2018-07-01 2019-03-31 0000887226 prcp:RevenueBasedPerformanceSharesMember srt:MaximumMember prcp:Tranche1Through3Member 2018-07-01 2019-03-31 0000887226 prcp:OperatingIncomeBasedPerformanceSharesMember srt:MinimumMember prcp:Tranche1Through3Member 2018-07-01 2019-03-31 0000887226 prcp:OperatingIncomeBasedPerformanceSharesMember srt:MaximumMember prcp:Tranche1Through3Member 2018-07-01 2019-03-31 0000887226 us-gaap:PerformanceSharesMember srt:MaximumMember 2018-07-01 2019-03-31 0000887226 us-gaap:PerformanceSharesMember 2017-07-01 2018-06-30 0000887226 us-gaap:PerformanceSharesMember 2019-01-01 2019-03-31 0000887226 us-gaap:PerformanceSharesMember 2018-01-01 2018-03-31 0000887226 us-gaap:PerformanceSharesMember 2017-07-01 2018-03-31 0000887226 us-gaap:PerformanceSharesMember 2019-03-31 0000887226 us-gaap:PerformanceSharesMember 2018-07-01 2019-03-31 0000887226 us-gaap:PerformanceSharesMember 2018-06-30 0000887226 prcp:TradeSecretsCaseMember 2018-01-01 2018-01-31 iso4217:CAD 0000887226 srt:MaximumMember 2017-07-01 2017-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number:  0-20206

 

PERCEPTRON, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Michigan

(State or Other Jurisdiction of

Incorporation or Organization)

 

38-2381442

(I.R.S. Employer

Identification No.)

47827 Halyard Drive, Plymouth, Michigan

(Address of Principal Executive Offices)

 

48170-2461

(Zip Code)

 

(734) 414-6100

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes

No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit  such files).

 

Yes

No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

 

 

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes

No

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

PRCP

NASDAQ Global Market

 

 

As of May 6, 2019, there were 9,644,469 shares of common stock ($0.01 par value per share) are outstanding.

1


PERCEPTRON, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

For the Quarter Ended March 31, 2019

 

 

 

Page

Number

COVER

 

1

 

 

 

INDEX

 

2

 

 

 

PART I.  FINANCIAL INFORMATION

 

 

Item 1.  Financial Statements

 

3

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

26

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

 

35

Item 4.  Controls and Procedures

 

35

 

 

 

PART II.  OTHER INFORMATION

 

 

Item 1A.  Risk Factors

 

36

Item 6.     Exhibits

 

37

 

 

 

SIGNATURES

 

38

 

2


PERCEPTRON, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

June 30,

 

(In Thousands, Except Per Share Amount)

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

5,429

 

 

$

5,830

 

Short-term investments

 

 

741

 

 

 

877

 

Receivables:

 

 

 

 

 

 

 

 

Billed receivables, net of allowance for doubtful accounts of $528 and $404,

   respectively

 

 

24,979

 

 

 

31,797

 

Unbilled receivables

 

 

6,634

 

 

 

-

 

Other receivables

 

 

424

 

 

 

346

 

Inventories, net of reserves of $1,931 and $2,115, respectively

 

 

11,905

 

 

 

13,829

 

Other current assets

 

 

2,280

 

 

 

1,327

 

Total current assets

 

 

52,392

 

 

 

54,006

 

 

 

 

 

 

 

 

 

 

Property and Equipment, Net

 

 

6,529

 

 

 

6,613

 

Goodwill

 

 

7,699

 

 

 

7,985

 

Intangible Assets, Net

 

 

3,165

 

 

 

3,820

 

Long-Term Investments

 

 

725

 

 

 

725

 

Long-Term Deferred Income Tax Asset

 

 

658

 

 

 

1,055

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

71,168

 

 

$

74,204

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Line of credit and short-term notes payable

 

$

17

 

 

$

175

 

Accounts payable

 

 

6,642

 

 

 

7,592

 

Accrued liabilities and expenses

 

 

4,237

 

 

 

4,256

 

Accrued compensation

 

 

1,636

 

 

 

3,155

 

Current portion of taxes payable

 

 

369

 

 

 

526

 

Income taxes payable

 

 

630

 

 

 

768

 

Reserves for restructuring and other charges

 

 

-

 

 

 

675

 

Deferred revenue

 

 

6,155

 

 

 

8,691

 

Total current liabilities

 

 

19,686

 

 

 

25,838

 

 

 

 

 

 

 

 

 

 

Long-Term Taxes Payable

 

 

194

 

 

 

450

 

Long-Term Deferred Income Tax Liability

 

 

1,748

 

 

 

1,717

 

Other Long-Term Liabilities

 

 

573

 

 

 

601

 

Total Liabilities

 

$

22,201

 

 

$

28,606

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

 

Preferred stock, no par value, authorized 1,000 shares, issued none

 

 

-

 

 

 

-

 

Common stock, $0.01 par value, authorized 19,000 shares, issued and outstanding

   9,644 and 9,554, respectively

 

 

96

 

 

 

96

 

Accumulated other comprehensive loss

 

 

(2,957

)

 

 

(2,098

)

Additional paid-in capital

 

 

48,915

 

 

 

48,110

 

Retained earnings (deficit)

 

 

2,913

 

 

 

(510

)

Total Shareholders' Equity

 

$

48,967

 

 

$

45,598

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

71,168

 

 

$

74,204

 

 

The notes to the consolidated financial statements are an integral part of these statements.

3


PERCEPTRON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

(In Thousands, Except Per Share Amounts)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net Sales

 

$

15,632

 

 

$

21,397

 

 

$

58,627

 

 

$

61,099

 

Cost of Sales

 

 

10,485

 

 

 

13,475

 

 

 

37,338

 

 

 

38,120

 

Gross Profit

 

 

5,147

 

 

 

7,922

 

 

 

21,289

 

 

 

22,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

4,415

 

 

 

4,700

 

 

 

13,992

 

 

 

13,621

 

Engineering, research and development

 

 

1,812

 

 

 

2,132

 

 

 

6,090

 

 

 

5,662

 

Severance, impairment and other charges

 

 

-

 

 

 

(3

)

 

 

(609

)

 

 

603

 

Total operating expenses

 

 

6,227

 

 

 

6,829

 

 

 

19,473

 

 

 

19,886

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (Loss) Income

 

 

(1,080

)

 

 

1,093

 

 

 

1,816

 

 

 

3,093

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income and (Expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(16

)

 

 

(53

)

 

 

(72

)

 

 

(137

)

Foreign currency (loss) gain, net

 

 

(127

)

 

 

63

 

 

 

(178

)

 

 

(16

)

Other income, net

 

 

28

 

 

 

24

 

 

 

33

 

 

 

49

 

Total other (expense) and income

 

 

(115

)

 

 

34

 

 

 

(217

)

 

 

(104

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income Before Income Taxes

 

 

(1,195

)

 

 

1,127

 

 

 

1,599

 

 

 

2,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Benefit (Expense)

 

 

130

 

 

 

(107

)

 

 

(225

)

 

 

(45

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss) Income

 

$

(1,065

)

 

$

1,020

 

 

$

1,374

 

 

$

2,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.11

)

 

$

0.11

 

 

$

0.14

 

 

$

0.31

 

Diluted

 

$

(0.11

)

 

$

0.11

 

 

$

0.14

 

 

$

0.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

9,627

 

 

 

9,539

 

 

 

9,601

 

 

 

9,468

 

Dilutive effect of stock options

 

 

-

 

 

 

152

 

 

 

110

 

 

 

74

 

Diluted

 

 

9,627

 

 

 

9,691

 

 

 

9,711

 

 

 

9,542

 

 

The notes to the consolidated financial statements are an integral part of these statements.


4


PERCEPTRON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

(In Thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net (Loss) Income

 

$

(1,065

)

 

$

1,020

 

 

$

1,374

 

 

$

2,944

 

Other Comprehensive (Loss) Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(93

)

 

 

884

 

 

 

(859

)

 

 

2,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive (Loss) Income

 

$

(1,158

)

 

$

1,904

 

 

$

515

 

 

$

5,234

 

 

The notes to the consolidated financial statements are an integral part of these statements.

5


PERCEPTRON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

(UNAUDITED)

 

 

 

Nine Months Ended

 

 

 

March 31,

 

(In Thousands)

 

2019

 

 

2018

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

Net income

 

$

1,374

 

 

$

2,944

 

Adjustments to reconcile net income to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,692

 

 

 

1,701

 

Stock compensation expense

 

 

533

 

 

 

791

 

Asset impairment and related inventory write-down

 

 

-

 

 

 

(59

)

Deferred income taxes

 

 

186

 

 

 

(593

)

Loss on disposal of assets

 

 

15

 

 

 

14

 

Allowance for doubtful accounts

 

 

124

 

 

 

121

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Receivables

 

 

1,216

 

 

 

3,594

 

Inventories

 

 

339

 

 

 

(3,237

)

Accounts payable

 

 

(783

)

 

 

(1,010

)

Accrued liabilities and expenses

 

 

(1,406

)

 

 

(105

)

Deferred revenue

 

 

(462

)

 

 

(431

)

Other assets and liabilities

 

 

(2,200

)

 

 

(1,136

)

Net cash provided by operating activities

 

 

628

 

 

 

2,594

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(2,199

)

 

 

(4,569

)

Sales of short-term investments

 

 

2,431

 

 

 

3,686

 

Capital expenditures

 

 

(809

)

 

 

(481

)

Capital expenditures - intangibles

 

 

(311

)

 

 

(322

)

Net cash used for investing activities

 

 

(888

)

 

 

(1,686

)

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

Payments on lines of credit and short-term borrowings, net

 

 

(155

)

 

 

(137

)

Proceeds from stock plans

 

 

329

 

 

 

471

 

Cash payment for shares surrendered upon vesting of restricted stock

   units to cover taxes

 

 

(55

)

 

 

(19

)

Net cash provided by financing activities

 

 

119

 

 

 

315

 

 

 

 

 

 

 

 

 

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

 

 

(150

)

 

 

271

 

 

 

 

 

 

 

 

 

 

Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash

 

 

(291

)

 

 

1,494

 

Cash, Cash Equivalents and Restricted Cash, July 1

 

 

5,996

 

 

 

3,943

 

Cash, Cash Equivalents and Restricted Cash, March 31

 

$

5,705

 

 

$

5,437

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

73

 

 

$

211

 

Cash paid during the period for income taxes

 

$

553

 

 

$

605

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

 

June 30, 2018

 

Cash and Cash Equivalents

 

$

5,429

 

 

$

5,830

 

Restricted Cash included in Short-term Investments

 

 

276

 

 

 

166

 

Total Cash, Cash Equivalents and Restricted Cash

 

$

5,705

 

 

$

5,996

 

 

 

 

 

 

 

 

 

 

The notes to the consolidated financial statements are an integral part of these statements.

 

 

 

6


PERCEPTRON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

(In Thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

96

 

 

$

95

 

 

$

96

 

 

$

94

 

Issued

 

 

-

 

 

 

1

 

 

 

-

 

 

 

2

 

Ending balance

 

 

96

 

 

 

96

 

 

 

96

 

 

 

96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated Other Comprehensive (Loss) Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 

(2,864

)

 

 

(1,315

)

 

 

(2,098

)

 

 

(2,721

)

Other comprehensive (loss) income

 

 

(93

)

 

 

884

 

 

 

(859

)

 

 

2,290

 

Ending balance

 

 

(2,957

)

 

 

(431

)

 

 

(2,957

)

 

 

(431

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional Paid-In Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 

48,753

 

 

 

47,336

 

 

 

48,110

 

 

 

46,688

 

Stock-based compensation

 

 

39

 

 

 

137

 

 

 

533

 

 

 

533

 

Stock plans

 

 

123

 

 

 

455

 

 

 

272

 

 

 

707

 

Ending balance

 

 

48,915

 

 

 

47,928

 

 

 

48,915

 

 

 

47,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained Earnings (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 

3,978

 

 

 

(2,302

)

 

 

(510

)

 

 

(4,226

)

Adoption of ASC 606 - modified

   retrospective transition method

 

 

-

 

 

 

-

 

 

 

2,049

 

 

 

-

 

Net (loss) income

 

 

(1,065

)

 

 

1,020

 

 

 

1,374

 

 

 

2,944

 

Ending balance

 

 

2,913

 

 

 

(1,282

)

 

 

2,913

 

 

 

(1,282

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity

 

$

48,967

 

 

$

46,311

 

 

$

48,967

 

 

$

46,311

 

 

The notes to the consolidated financial statements are an integral part of these statements.

7


PERCEPTRON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.Accounting Policies

Perceptron, Inc. (“Perceptron” “we”, “us” or “our”) develops, produces and sells a comprehensive range of automated industrial metrology products and solutions to manufacturers for dimensional gauging, dimensional inspection and 3D scanning.  Our products provide solutions for manufacturing process control as well as sensor and software technologies for non-contact measurement, scanning and inspection applications. We also offer value added services such as training and customer support.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and within the rules and regulations of the Securities and Exchange Commission (“SEC”).  Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.  Our Consolidated Financial Statements include the accounts of Perceptron and our wholly-owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.  In our opinion, these statements include all normal recurring adjustments necessary for a fair presentation of the financial statements for the periods presented.  The results of operations for any interim period are not necessarily indicative of the results of operations for a full fiscal year.  The accompanying unaudited Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements in our 2018 Annual Report on Form 10-K for the fiscal year ended June 30, 2018.

Use of Estimates

Management is required to make certain estimates and assumptions under U.S. GAAP during the preparation of these Consolidated Financial Statements.  These estimates and assumptions may affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

Reclassification

 

Certain prior period amounts have been reclassified in the Consolidated Statements of Cash Flow due to the adoption of Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18).

2.New Accounting Pronouncements  

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 Leases (ASU 2016-2), which establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.  ASU 2016-02, as amended, is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted.  In January 2018, the FASB issued Accounting Standards Update No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, which permits an entity to elect an optional transition practical expedient to not evaluate land easements under Topic 842.  A modified retrospective transition approach was originally required for lessees with capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements.  In July 2018, the FASB issued ASU 2018-11 Leases (Topic 842): Targeted Improvements, which created an optional transition method to adopt ASU 2016-02. The optional method is a modified retrospective approach whereby an entity can initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to their opening balance of retained earnings.  In March 2019, the FASB issued ASU 2019-01 Leases (Topic 842): Codification Improvements, which clarified three specific issues related to Topic 842. We have commenced a detailed analysis of ASU 2016-02 (as amended) and have noted that not all of the items that we have been including in prior Annual Reports on Form 10-K as a “lease” meet the definition of a lease under Topic 842.  Furthermore, we have determined that we will use the modified retrospective approach as our transition method.  We believe that our Consolidated Balance Sheet will be impacted as we record a ROU and lease liability for all leases that meet the new definition.  In addition, our disclosures will be enhanced as we provide the required level of detail related to our leasing activities.

8


In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (ASU 2016-13), which requires the measurement of all expected credit losses for financial assets held at the reporting date to be based on historical experience, current conditions as well as reasonable and supportable forecasts.  In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (ASU 2018-19).  ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of ASU 2016-13.  ASU 2016-13, as amended, is effective for fiscal years beginning after December 15, 2019 including interim periods within those fiscal years, with early adoption permitted.  We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In February 2018, the FASB issued Accounting Standards Update 2018-02—Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  ASU 2018-02 is effective for Perceptron on July 1, 2019 and is not expected to have a significant impact on our consolidated financial statements or disclosures.

In July 2018, the FASB issued Accounting Standards Update No. 2018-09 Codification Improvements (ASU 2018-09), which clarifies, corrects and makes minor improvements on a wide variety of Topics in the Codification.  The amendments make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications.  The transition and effective dates are based on the facts and circumstances of each amendment, including some amendments that will be effective upon issuance of the update and many of them will be effective for annual periods beginning after December 31, 2018.  For the amendments that were effective upon issuance of the Update, there was no material impact to our consolidated financial statements or disclosures.  We are currently evaluating the impact of the remaining amendments of ASU 2018-09 on our consolidated financial statements and disclosures.

In August 2018, the FASB issued Accounting Standards Update No. 2018-13 – Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirement for Fair Value Measurement (ASU 2018-13), which changes the disclosures related to, among other aspects of fair value, unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurement and the narrative description of measurement uncertainty.  ASU 2018-13 is effective for Perceptron on July 1, 2020.  We are currently evaluating the impact of the adoption of ASU 2018-13 on our disclosures.

In August 2018, the FASB issued Accounting Standards Update No. 2018-15 – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (ASU 2018-15), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs incurred to develop or obtain inter-use software.  ASU 2018-15 is effective for Perceptron on July 1, 2020.  We are currently evaluating the impact of the adoption of ASU 2018-15 on our consolidated financial statements and disclosures.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP.  The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services.  ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than were required under previous U.S. GAAP.  In March 2016, the FASB issued the final guidance to clarify the principal versus agent guidance (i.e., whether an entity should report revenue gross or net).  In April 2016, the FASB issued final guidance to clarify identifying performance obligation and the licensing implementation guidance.  In May 2016, FASB updated implementation of certain narrow topics within ASU 2014-09.  Finally, in December 2016, the FASB issued several technical corrections and improvements, which clarified the previously issued standards and corrected unintended application of previous guidance.  These standards (collectively “ASC 606”) were effective for annual periods beginning after December 15, 2017 (as amended in August 2015, by ASU 2015-14, Deferral of the Effective Date), and interim periods therein, using either of the following transition methods:  (i) a full retrospective approach reflecting the applications of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures).  

We adopted the new standard effective July 1, 2018 using the modified retrospective transition method only for the contracts that were open as of June 30, 2018 with the cumulative effect recorded to the opening balance of retained earnings as of the date of adoption. Results for reporting periods beginning July 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under ASC 605, Revenue Recognition.  Under ASC 606, certain of our services are recognized over time instead of at a point in time upon completion of those services as recognized under superseded guidance.  Additionally, for our contracts with multiple performance obligations in which the payment terms do not correspond with

9


performance, we are no longer required to limit the revenue recognized for satisfied performance obligations to the amount for which payment is not delayed until the satisfaction of additional performance obligations.  Instead, we record revenue for each of the performance obligations as control transfers to the customer, which generally accelerates the revenue recognized for such contracts compared to revenue recognized under superseded guidance.  We also capitalize amounts related to certain commissions paid which qualify as costs to obtain a contract.  The revenues associated with our Measurement Solutions and Value Added Services that were impacted beginning at July 1, 2018, which were included in the modified transition method adjustment, aggregated to $3.8 million. The net impact on retained earnings associated with these revenues was an increase of $2,049,000.  We have also implemented new business processes and internal controls in order to recognize revenue in accordance with the new standard.  See Note 5 Revenue from Contracts with Customers for the further details regarding the impact of the adoption of this Standard.

The following table summarizes the cumulative effect of the changes to our unaudited Consolidated Balance Sheet as of July 1, 2018 from the adoption of ASC 606: