A couple of years ago I wrote my initial article on Perceptron (PRCP) and surmised that Helix would be a major catalyst for growth. Helix™ is an innovative and versatile 3D metrology platform that enables manufacturers to perform their most challenging measurement tasks with unparalleled ease and precision. It combines more than 25 years of laser-triangulation and 3D metrology experience with recent technological advances to create the most unique and powerful solution in the market. Harry Rittenour, Perceptron's President and CEO, states, "Our Helix™ solution is the most significant development in sensor technology in the past 15 years, and represents a quantum leap in 3D metrology. Nothing comparable exists in the market today. Helix™ will provide our customers with a powerful tool for overcoming the challenges they face on a daily basis and a means to successfully implement their most far-reaching and innovative strategies for the future."
At the time I wrote the initial story the technology was still in development stage, but my premise was that Helix would ultimately drive future revenue growth at the company and ultimately drive the stock higher.
After the release of Perceptron's latest earnings report last week, it is clear that Helix is beginning to have a major impact on both the company's top and bottom lines. Net sales in the fourth quarter of fiscal year 2013 were $20.7 million, while income from continuing operations was $4.0 million, or $0.46 per diluted share. In the fourth quarter of fiscal 2012, Perceptron reported net sales of $12.8 million and a loss from continuing operations of $1.3 million, or $0.16 per diluted share. For the full fiscal year 2013, net sales were $60.9 million and income from continuing operations was $6.1 million, or $0.71 per diluted share. This compares with net sales of $57.4 million and income from continuing operations of $2.8 million, or $0.34 per diluted share, in fiscal year 2012. Helix is not only beginning to produce growing revenues, but is responsible for higher gross margins, which were 48.1% for the quarter.
During the company's conference call, management spoke about how Helix was being widely accepted across the automotive industry and has allowed it to gain new customers in Asia and Europe. Their bookings for the 4th quarter were actually higher than their quarterly sales and they are expecting fiscal year 2014 to show continued growth in both revenues and earnings. They continue to work closely with their customers to offer further enhancements to the Helix 3-D family of products and even spoke about the future potential for Helix outside of the automotive industry, but that is still a few years down the road.
The company's financial position has improved enough that they paid a special dividend of $0.25 a share in November of last year and announced in May of this year that they will pay a regular yearly dividend with the first being $0.15 a share. This dividend will attract new shareholders that are looking for both growth and income. Even after these dividend payouts the company still has $26 million in cash on the balance sheet, which is almost $3 a share with zero long-term debt.
I have been listening to the company's conference calls for the last 12 years and would say that at no other time has management been as bullish about both the near term and long-term prospects for the company as they are now. While the stock is up over 75% since my initial article was written, it still trades at a trailing P/E of 15 and while the company did not give specific earnings guidance for fiscal 2014, they clearly anticipate continued growth in both revenues and earnings.
I continue to like the stock based on the rapidly improving earnings picture, the solid balance sheet and regular yearly dividend. It also has a relatively small float of 8 million shares, which should allow for EPS figures to show dramatic growth on relatively small improvements to net income. The small float also will allow nice price appreciation on relatively small increase in demand for the stock.
I am not much of a technical analyst but according to STOCKTA.COM the stock's recent price action is overall considered very bullish.
I personally am looking for the stock to trade above $15 by the end of 2014 and that may be conservative.