UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 14, 2003
COGNEX CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 0-17869 04-2713778
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
One Vision Drive
Natick, Massachusetts 01760-2059
(508) 650-3000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Item 7 EXHIBITS
(c) The following exhibit is being furnished herewith:
Exhibit
Number Title
99.1 News release, dated April 14, 2003, by Cognex Corporation
Item 9 REGULATION FD DISCLOSURE
The following information is being provided under Item 12 - Results of
Operations and Financial Condition. It is being furnished under Item 9 of this
Form 8-K in accordance with interim guidance issued by the SEC in release no.
33-8216. Such information, including the Exhibit attached hereto, shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934.
On April 14, 2003, Cognex Corporation issued a news release to report its
financial results for the first quarter ended March 30, 2003. The release is
furnished as Exhibit 99.1 hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COGNEX CORPORATION
/s/ Richard A. Morin
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Richard A. Morin
(Senior Vice President of Finance,
Chief Financial Officer, and Treasurer)
April 14, 2003
1
Exhibit 99.1
Cognex Corporation Announces First Quarter Results
Business Editors/High-Tech Writers
NATICK, Mass.--(BUSINESS WIRE)--April 14, 2003--
Overview of the Quarter
Cognex Corporation (NASDAQ: CGNX) today announced revenue for the
first quarter ended March 30, 2003 of $32,888,000, an increase of 51%
over the $21,780,000 in the first quarter of 2002, and a decrease of
3% from the $33,829,000 in the prior quarter. Cognex reported net
income for the first quarter of 2003 of $1,793,000, or $0.04 per
diluted share; this compares favorably to a net loss of $2,520,000, or
$0.06 per diluted share, reported for Q1-02 and to net income of
$424,000, or $0.01 per diluted share, reported for Q4-02.
"Although the current order trend is choppy on a week-to-week
basis, and visibility remains limited, I am happy to report that
bookings in the first quarter increased 37% year-on-year and 13% on a
sequential basis," said Dr. Robert J. Shillman, Cognex's Chief
Executive Officer and Chairman. "I am also pleased to say that our
Surface Inspection Systems Division (SISD) reported the highest order
level for any quarter in that division's seven-year history."
Dr. Shillman continued, "Our goal for 2003 is to be profitable at
the operating line in each quarter and, to achieve that goal, we are
continuing to closely monitor expenses. However, not all of our
actions have been of a defensive nature; we are taking proactive steps
as well. For example, we recently acquired the wafer identification
business of Siemens Dematic AG, which enhances Cognex's position as
the top supplier of wafer identification systems to semiconductor
manufacturers worldwide. And, earlier today, we announced our entry
into new business areas for machine vision that are outside of factory
automation, where we have historically focused. Cognex engineers have
developed innovative 2D and 3D vision technology that can be used in a
variety of high-volume commercial applications where vision can be
used very effectively. Our first product, named the CPS-1000, is
designed specifically for detecting and counting people as they pass
through access-controlled doorways. We expect that the CPS-1000 will
be the first in a large series of application-specific sensors that
Cognex will develop and market in the years ahead."
Details of the Quarter
Statement of Operations Highlights - First Quarter of 2003
-- Revenue for the first quarter of 2003 increased 51% from the
comparable quarter in 2002 primarily due to an increase in
sales to both Original Equipment Manufacturers (OEMs) and
end-user customers across a variety of industries and
geographic regions. On a sequential basis, revenue decreased
3% from the prior quarter, primarily due to lower sales to
customers in the semiconductor industry.
-- Gross margin was 64% in the first quarter of 2003 compared to
61% in the comparable quarter in 2002 and 67% in the prior
quarter. Cost of revenue for the first quarter of 2003 and the
fourth quarter of 2002 includes a benefit of $309,000 and
$528,000, respectively, from the sale of inventory that was
reserved for in the fourth quarter of 2001. Excluding this
benefit, the change in gross margin, both year-on-year and
sequentially, is primarily due to changes in sales volume and
revenue mix.
-- Research, Development & Engineering (R, D & E) spending in the
first quarter of 2003 decreased 6% from the comparable quarter
in 2002 and was essentially flat with the prior quarter. The
decrease in R, D & E spending year-on-year is primarily due to
cost-cutting measures implemented by the company, including
the workforce reduction announced by Cognex on August 1, 2002.
-- Selling, General & Administrative (S, G & A) spending in the
first quarter of 2003 increased 6% from the comparable quarter
in 2002. This increase is primarily due to higher marketing
costs, such as advertising, as well as the impact of foreign
exchange rates on the company's international operations. On a
sequential basis, S, G & A decreased 9% from the prior quarter
primarily due to lower sales commissions and professional fees
in the first quarter of 2003.
-- Investment and other income in the first quarter of 2003
decreased 49% year-on-year primarily due to lower yields on
investments as well as a lower average invested balance
(because the company used approximately $26,400,000 in cash to
repurchase Cognex stock during the third quarter of 2002). On
a sequential basis, investment and other income increased to
$1,294,000 in the first quarter of 2003 from a loss of $20,000
in the prior quarter. This increase is primarily due to a
charge of $1,768,000 in the fourth quarter of 2002 for the
write down of an investment to its estimated fair value.
Excluding this charge, investment and other income decreased
on a sequential basis, primarily due to lower yields on
investments.
Balance Sheet Highlights - December 31, 2002
-- Cognex's financial position remains very strong at March 30,
2003, with over $280,000,000 in cash and investments and no
debt. Cash and investments increased $4,525,000 from the end
of 2002 as a result of generating positive cash flow from
operations during the first quarter of 2003.
-- Days sales outstanding (DSO) for the first quarter of 2003 was
58 days, compared to 50 days in the prior quarter. DSO remains
within the company's targeted range.
-- Inventory at March 30, 2003 decreased 8% from the end of 2002
as Cognex continued to work down excess inventory.
Business Trends and Financial Outlook
-- In the first quarter of 2003, bookings increased on a
sequential basis and the company's book-to-bill ratio was
above 1.0. This increase was primarily due to higher orders
from OEM customers in Japan and end-user customers in Europe,
as well as an increase in orders for surface inspection
systems. As a result, Cognex expects revenue for the second
quarter of 2003 to increase on a sequential basis to between
$34 million and $37 million. At that revenue level, gross
margin is expected to be in the low to mid-60% range.
Operating expenses (R, D & E and S, G & A) for the second
quarter are expected to remain essentially flat on a
sequential basis. The effective tax rate for the second
quarter of 2003 is expected to be 28%. And, as a result of the
above, earnings for the second quarter are expected to be
between $0.05 and $0.07 per diluted share.
Analyst Conference Call and Simultaneous Webcast
Cognex Corporation will host a conference call to discuss its
results for the first quarter of 2003, as well as its financial
outlook, today at 5:00 p.m. eastern time. The telephone number to
listen to the live conference call is 800-500-0920 (or 719-457-2699 if
outside the United States). Internet users can listen to a real-time
audio broadcast of the conference call on Cognex's website at
http://www.cognex.com/investor/default.asp.
An audio replay of the conference call will begin at 8:00 p.m.
eastern time today and will be available until 11:00 p.m. eastern time
on April 20, 2003. To listen to the conference call replay, the
telephone number is 888-203-1112 (or 719-457-0820 if outside the
United States) and the access code is 741257. In addition, an archive
of the webcast will also be available on the company's website at
http://www.cognex.com/investor/default.asp.
About Cognex Corporation
Cognex Corporation designs, develops, manufacturers, and markets
machine vision systems, or computers that can "see". Cognex is the
world's leader in the machine vision industry, having shipped to date
more than 175,000 machine vision systems, representing over $1.3
billion in cumulative revenue, since the company's founding in 1981.
Cognex's Modular Vision Systems Division, headquartered in Natick,
Massachusetts, specializes in machine vision systems which are used
for automating the manufacture of a wide range of discrete items and
for assuring their quality. Cognex's Surface Inspection Systems
Division, headquartered in Alameda, California, specializes in machine
vision systems which are used for inspecting the surfaces of products
that are manufactured in a continuous fashion, such as metals, paper,
nonwovens and plastics. In addition to its corporate headquarters in
Natick, Massachusetts, Cognex also has regional offices located
throughout North America, Japan, Europe, and Southeast Asia. Visit
Cognex on-line at http://www.cognex.com.
Forward-Looking Statement
Certain statements made in this press release are forward-looking
statements. You can identify these forward-looking statements by our
use of the words "expects," "believes," "projects," "anticipates,"
"will" and similar words and other statements of a similar sense.
These statements are based on the company's current expectations and
estimates as to prospective events and circumstances, which may or may
not be in the company's control and as to which there can be no firm
assurances given. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those projected. The company cautions readers not to place undue
reliance upon any such forward-looking statements, which speak only as
of the date made. The company disclaims any obligation subsequently to
revise forward-looking statements to reflect events or circumstances
after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events. Further discussions of risk
factors are also available in the company's filings with the
Securities and Exchange Commission, including the company's Form 10-K
for the fiscal year ended December 31, 2002.
COGNEX CORPORATION
Statements of Operations
(In thousands, except per share amounts)
Three Months Ended
March 30, December 31, March 31,
2003 2002 2002
(unaudited) (unaudited) (unaudited)
Revenue $32,888 $33,829 $21,780
Cost of revenue 11,716 11,001 8,565
Gross margin 21,172 22,828 13,215
Percentage of revenue 64% 67% 61%
Research, development, and
engineering expenses 5,983 6,066 6,352
Percentage of revenue 18% 18% 29%
Selling, general, and
administrative expenses 13,871 15,326 13,025
Percentage of revenue 42% 45% 60%
Operating income (loss) 1,318 1,436 (6,162)
Percentage of revenue 4% 4% (28%)
Investment and other income 1,294 (20) 2,561
Income (loss) before taxes 2,612 1,416 (3,601)
Income tax provision (benefit) 819 992 (1,081)
Net income (loss) $1,793 $424 $(2,520)
Percentage of revenue 5% 1% (12%)
Net income (loss) per diluted common
and common equivalent share $0.04 $0.01 $(0.06)
Diluted weighted-average common and
common equivalent shares
outstanding 43,557 43,162 43,971
COGNEX CORPORATION
Balance Sheets
(In thousands)
March 30, December 31,
2003 2002
(unaudited) (unaudited)
Assets
Cash and investments $280,510 $275,985
Accounts receivable 21,510 18,981
Inventories 17,517 18,952
Property, plant, and equipment 26,556 27,405
Other assets 42,668 44,180
Total assets $388,761 $385,503
Liabilities and Stockholders' Equity
Current liabilities $32,421 $30,983
Stockholders' equity 356,340 354,520
Total liabilities and stockholders' equity $388,761 $385,503
COGNEX CORPORATION
Additional Revenue Information
(Dollars in thousands)
Three Months Ended
March 30, December 31, March 31,
2003 2002 2002
(unaudited) (unaudited) (unaudited)
Revenue $32,888 $33,829 $21,780
Revenue by division:
Modular Vision Systems Division 81% 82% 78%
Surface Inspection Systems Division 19% 18% 22%
Total 100% 100% 100%
Revenue by customer type:
End user 62% 62% 75%
Original equipment manufacturer 38% 38% 25%
Total 100% 100% 100%
Revenue by geography:
United States 31% 36% 44%
Japan 34% 34% 22%
Europe 24% 21% 29%
Other 11% 9% 5%
Total 100% 100% 100%
Revenue by industry:
Semiconductor 23% 32% 18%
Electronics 24% 18% 18%
Surface inspection 19% 18% 22%
Automotive 12% 12% 11%
Packaging 3% 3% 3%
Consumer products 2% 2% 5%
Other 17% 15% 23%
Total 100% 100% 100%
Revenue by product:
Vision sensors 26% 28% 26%
Surface inspection vision systems 19% 18% 22%
Other vision systems 41% 41% 31%
Service 14% 13% 21%
Total 100% 100% 100%
--30--SK/bo*
CONTACT: Cognex Corporation
Susan Conway, 508/650-3353