EX-99.2 4 b55934csexv99w2.htm EX-99.2 UNAUDITED PRO FORMA FINANCIALS OF COGNEX CORPORATION exv99w2
 

EXHIBIT 99.2
PRO FORMA FINANCIAL INFORMATION

 

 

COGNEX CORPORATION
INTRODUCTORY INFORMATION

On May 9, 2005, Cognex Corporation acquired all of the outstanding shares of DVT Corporation, a provider of low-cost, easy-to-use vision sensors, for approximately $112 million, net of cash acquired. The purchase price consisted of $100 million in cash paid at closing (net of $5 million of acquired cash), $11 million in cash deposited into an escrow account at closing, and $1 million in transaction costs. The acquisition is accounted for under the purchase method of accounting.

The $112 million purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as follows: $8 million to tangible net assets, $38 million to distribution networks to be amortized over eleven to twelve years, $5 million to customer relationships to be amortized over twelve years, $4 million to completed technologies to be amortized over six years, $1 million to trade names, trademarks, and non-competition agreement to be amortized over four years, $18 million to deferred tax liability, and the remainder of $74 million to goodwill. The Company obtained third-party valuations of the acquired intangible assets. The allocation of the purchase price is subject to future refinement.

The unaudited pro forma statements of income for the three months ended April 3, 2005 and the twelve months ended December 31, 2004 were prepared as if the acquisition had taken place on January 1, 2004. The unaudited pro forma balance sheet as of April 3, 2005 was prepared as if the acquisition had taken place on April 3, 2005.

The unaudited pro forma financial information is intended to provide information about the continuing impact of the acquisition by showing how it might have affected historical financial statements if it had been consummated at an earlier date. This information is not necessarily indicative of future operations or the actual results that would have occurred had the acquisition been consummated at the beginning of the earliest period presented. This information should be read in conjunction with the accompanying notes to the unaudited pro forma financial information.

 

 

COGNEX CORPORATION
UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED APRIL 3, 2005
(In thousands, except per share amounts)

                                             
    Historical     Pro Forma  
    Cognex     DVT     Adjustments                 Results  
Revenue
   $ 43,198     $ 7,708                         $ 50,906  
 
                                            
Cost of revenue
     13,790       1,592     $ 153     (A)             15,535  
 
                                    
 
                                            
Gross margin
     29,408       6,116       (153 )                 35,371  
 
                                            
Research, development and engineering expenses
     6,315       1,021                           7,336  
 
                                            
Selling, general and administrative expenses
     17,508       3,179       822     (B)             21,625  
 
                     99     (C)                
 
                     69     (D)                
 
                     (52 )   (E)                
 
                                    
 
Income from operations
     5,585       1,916       (1,091 )                 6,410  
 
                                            
Other income
     1,569       (1 )     (552 )   (F)             1,016  
 
                                    
 
                                            
Income before provision for income taxes
     7,154       1,915       (1,643 )                 7,426  
 
                                            
Provision for income taxes
     1,860       632       (404 )   (G)             2,088  
 
                                    
 
                                            
Net income
   $ 5,294     $ 1,283     $ (1,239 )               $ 5,338  
 
                                    
 
                                            
Net income per diluted share
   $ .11                                 $ .11  
 
                                        
 
                                            
Diluted weighted average shares outstanding
     47,181                                   47,181  
 
                                        

The accompanying notes are an integral part of the pro forma financial information.

 

 

COGNEX CORPORATION
UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2004
(In thousands, except per share amounts)

                                             
    Historical     Pro Forma  
    Cognex     DVT     Adjustments                 Results  
Revenue
   $ 201,957     $ 28,239                         $ 230,196  
 
                                            
Cost of revenue
     57,371       5,997     $ 613     (A)             63,981  
 
                                    
 
                                            
Gross margin
     144,586       22,242       (613 )                 166,215  
 
                                            
Research, development, and engineering expenses
     27,063       3,503                           30,566  
 
                                            
Selling, general, and administrative expenses
     70,674       13,359       3,286     (B)             87,887  
 
                     395     (C)                
 
                     278     (D)                
 
                     (105 )   (E)                
 
                                    
 
                                            
Income from operations
     46,849       5,380       (4,467 )                 47,762  
 
                                            
Other income
     6,311       3       (2,207 )   (F)             4,107  
 
                                    
 
                                            
Income before provision for income taxes
     53,160       5,383       (6,674 )                 51,869  
 
                                            
Provision for income taxes
     15,416       1,777       (1,653 )   (G)             15,540  
 
                                    
 
                                            
Net income
   $ 37,744     $ 3,606     $ (5,021 )               $ 36,329  
 
                                    
 
                                            
Net income per diluted share
   $ .80                                 $ .77  
 
                                        
 
                                            
Diluted weighted average shares outstanding
     47,358                                   47,358  
 
                                        

The accompanying notes are an integral part of the pro forma financial information.

 

 

COGNEX CORPORATION
UNAUDITED PRO FORMA BALANCE SHEET
APRIL 3, 2005
(Dollars in thousands)

                                             
    Historical     Pro Forma  
    Cognex     DVT     Adjustments                 Results  
ASSETS
                                            
 
Current assets:
                                            
Cash, cash equivalents, and short-term investments
   $ 272,306     $ 4,218     $ (115,048 )   (H)           $ 161,476  
Accounts receivable
     29,303       5,530                           34,833  
Inventories
     17,799       1,933                           19,732  
Deferred income taxes
     9,617       703       (1,714 )                 8,606  
Prepaid expenses and other
     11,695       581                           12,276  
 
                                    
 
                                            
Total current assets
     340,720       12,965       (116,762 )                 236,923  
 
                                    
 
Long-term investments
     122,149                                   122,149  
Property, plant, and equipment
     23,573       749                           24,322  
Deferred income taxes
     21,074               (16,132 )   (H)             4,942  
Intangible assets
     6,800       1,742       47,590     (H)             54,390  
 
                     (1,742 )   (I)                
Goodwill
     6,764       888       75,463     (H)             82,227  
 
                     (888 )   (I)                
Other assets
     3,632                                   3,632  
 
                                    
 
 
   $ 524,712     $ 16,344     $ (12,471 )               $ 528,585  
 
                                    
 
                                            
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                            
 
                                            
Current liabilities:
                                            
Accounts payable
   $ 3,855     $ 1,332                         $ 5,187  
Accrued expenses
     44,544       1,280     $ 1,261     (H)             47,085  
Customer deposits
     3,301                                   3,301  
Deferred revenue
     6,585                                   6,585  
 
                                    
 
                                            
Total current liabilities
     58,285       2,612       1,261                   62,158  
 
                                    
 
                                            
Shareholders’ equity:
                                            
Common stock
     93                                   93  
Additional paid-in capital
     195,734       10,981       (10,981 )   (I)             195,734  
Retained earnings
     285,308       2,751       (2,751 )   (I)             285,308  
Accumulated other comprehensive loss
     (14,708 )                                 (14,708 )
 
                                    
 
                                            
Total shareholders’ equity
     466,427       13,732       (13,732 )                 466,427  
 
                                    
 
 
   $ 524,712     $ 16,344     $ (12,471 )               $ 528,585  
 
                                    

The accompanying notes are an integral part of the pro forma financial information.

 

 

COGNEX CORPORATION

NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION

(A)   The pro forma adjustment to “Cost of revenue” represents the amortization over six years of $3,680,000 of acquired completed technologies.

(B)   The pro forma adjustment to “Selling, general, and administrative expenses” represents the amortization over a weighted-average period of 11.6 years of $38,060,000 of acquired distribution networks.

(C)   The pro forma adjustment to “Selling, general, and administrative expenses” represents the amortization over twelve years of $4,740,000 of acquired customer relationships.

(D)   The pro forma adjustment to “Selling, general, and administrative expenses” represents the amortization over four years of $1,110,000 of acquired trade names, trademarks, and non-competition agreement.

(E)   The pro forma adjustment to “Selling, general, and administrative expenses” represents the elimination of the amortization of the pre-existing intangible assets of DVT.

(F)   The pro forma adjustment to “Other income” represents reduced tax-exempt interest income resulting from the net cash outlay in connection with the acquisition.

(G)   The pro forma adjustment to “Provision for income taxes” represents the tax benefit associated with items (A), (B), (C), (D), and (E) above.

(H)   The pro forma balance sheet adjustments represent the consideration paid and the allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed of DVT (including additional accruals related primarily to transaction costs), with the remainder allocated to goodwill.

(I)   The pro forma balance sheet adjustments represent the elimination of the pre-existing intangible assets and capital structure of DVT.