-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N0ATPTH82AE3suM9CX+0fvZI8HiG0lH8GQ+jIVTKR2RQzTeHUzDJh81q38//5TtA e6Y4sEGwQdi0Wp7FFz5nVg== 0000950135-97-002237.txt : 19970512 0000950135-97-002237.hdr.sgml : 19970512 ACCESSION NUMBER: 0000950135-97-002237 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970330 FILED AS OF DATE: 19970509 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COGNEX CORP CENTRAL INDEX KEY: 0000851205 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 042713778 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17869 FILM NUMBER: 97598792 BUSINESS ADDRESS: STREET 1: ONE VISION DR CITY: NATICK STATE: MA ZIP: 01760 BUSINESS PHONE: 5086503000 MAIL ADDRESS: STREET 1: ONE VISION DRIVE CITY: NATICK STATE: MA ZIP: 01760 10-Q 1 COGNEX CORPORATION 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 30, 1997 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 0-17869 ------- COGNEX CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-2713778 (State or other jurisdiction of (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) 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 X No --- --- As of April 27, 1997, there were 41,095,466 shares of Common Stock, $.002 par value, of the registrant outstanding. Total number of pages: 11 Exhibit index is located on page 9 ================================================================================ 2 INDEX PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Income for the three months ended March 30, 1997 and March 31, 1996 Consolidated Balance Sheets at March 30, 1997 and December 31, 1996 Consolidated Statement of Stockholders' Equity for the three months ended March 30, 1997 Consolidated Statements of Cash Flows for the three months ended March 30, 1997 and March 31, 1996 Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K Signatures 3 PART I: FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS COGNEX CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)
THREE MONTHS ENDED MARCH 30, MARCH 31, 1997 1996 --------- --------- (UNAUDITED) Revenue .................................................. $28,143 $34,887 Cost of revenue .......................................... 7,695 9,206 ------- ------- Gross margin ............................................. 20,448 25,681 Research, development and engineering expenses ........... 5,179 4,766 Selling, general and administrative expenses ............. 7,419 6,345 ------- ------- Income from operations ................................... 7,850 14,570 Investment income ........................................ 1,333 792 Other income ............................................. 157 219 ------- ------- Income before provision for income taxes ................. 9,340 15,581 Provision for income taxes ............................... 2,849 4,752 ------- ------- Net income ............................................... $ 6,491 $10,829 ======= ======= Net income per share ..................................... $ .15 $ .25 ======= ======= Weighted-average common and common equivalent shares outstanding .......................................... 43,945 44,057 ======= =======
The accompanying notes are an integral part of these consolidated financial statements. 1 4 COGNEX CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
MARCH 30, DECEMBER 31, 1997 1996 --------- ----------- (UNAUDITED) ASSETS Current assets: Cash and investments ...................................................... $ 141,834 $ 134,000 Accounts receivable, less reserves of $989 and $968 in 1997 and 1996, respectively ........................................................... 17,903 18,809 Revenue in excess of billings ............................................. 4,802 3,379 Inventories ............................................................... 7,968 7,013 Deferred income taxes ..................................................... 2,520 2,642 Prepaid expenses and other ................................................ 4,034 3,545 --------- --------- Total current assets .................................................. 179,061 169,388 --------- --------- Property, plant and equipment, net ............................................. 28,924 28,331 Other assets ................................................................... 3,308 3,534 --------- --------- $ 211,293 $ 201,253 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable .......................................................... $ 3,849 $ 3,652 Accrued expenses .......................................................... 7,785 7,007 Accrued income taxes ...................................................... 2,650 2,029 Customer deposits ......................................................... 3,525 2,596 Deferred revenue .......................................................... 844 1,287 --------- --------- Total current liabilities ............................................. 18,653 16,571 --------- --------- Deferred income taxes .......................................................... 338 393 Other liabilities .............................................................. 1,601 1,600 Stockholders' equity: Common stock, $.002 par value - Authorized: 120,000,000 shares, issued: 41,126,959 and 40,914,166 shares in 1997 and 1996, respectively ....................... 82 82 Additional paid-in capital ................................................ 79,139 77,569 Cumulative translation adjustment ......................................... 121 95 Retained earnings ......................................................... 112,323 105,832 Treasury stock, at cost, 85,113 and 80,918 shares in 1997 and 1996, respectively ..................................................... (964) (889) --------- --------- Total stockholders' equity ............................................ 190,701 182,689 --------- --------- $ 211,293 $ 201,253 ========= =========
The accompanying notes are an integral part of these consolidated financial statements. 2 5 COGNEX CORPORATION CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Dollars in thousands)
COMMON STOCK ADDITIONAL CUMULATIVE TREASURY STOCK TOTAL ------------------- PAID-IN TRANSLATION RETAINED -------------- STOCKHOLDERS' SHARES PAR VALUE CAPITAL ADJUSTMENT EARNINGS SHARES COST EQUITY ------ --------- ---------- ----------- -------- ------ ---- ------------- Balance at December 31, 1996.............. 40,914,166 $82 $77,569 $ 95 $105,832 80,918 $(889) $182,689 Issuance of stock under stock option plans................................. 212,793 724 724 Tax benefit from exercise of stock options............................... 846 846 Common stock received for payment of stock option exercises................ 4,195 (75) (75) Translation adjustment.................. 26 26 Net income.............................. 6,491 6,491 ---------- --- ------- ---- -------- ------ ----- -------- Balance at March 30, 1997 (unaudited)..... 41,126,959 $82 $79,139 $121 $112,323 85,113 $(964) $190,701 ========== === ======= ==== ======== ====== ===== ========
The accompanying notes are an integral part of these consolidated financial statements. 3 6 COGNEX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
THREE MONTHS ENDED MARCH 30, MARCH 31, 1997 1996 --------- --------- (UNAUDITED) Cash flows from operating activities: Net income ................................................................ $ 6,491 $ 10,829 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ........................................... 1,357 1,153 Tax benefit from exercise of stock options .............................. 846 626 Change in deferred income tax provision ................................. 67 (42) Change in other current assets and current liabilities .................. 586 6,716 --------- --------- Net cash provided by operating activities ................................. 9,347 19,282 --------- --------- Cash flows from investing activities: Investments ............................................................... (443) (1,535) Purchase of property, plant and equipment ................................. (2,551) (2,010) Cash assumed in acquisition of Isys Controls, Inc. ........................ 918 Other ..................................................................... 3 29 --------- --------- Net cash used in investing activities (2,991) (2,598) --------- --------- Cash flows from financing activities: Issuance of stock under stock option plans ................................ 649 283 --------- --------- Net cash provided by financing activities ................................. 649 283 --------- --------- Effect of exchange rate changes on cash ........................................ 386 111 --------- --------- Net increase in cash and cash equivalents ...................................... 7,391 17,078 Cash and cash equivalents at beginning of period ............................... 48,423 23,911 --------- --------- Cash and cash equivalents at end of period ..................................... 55,814 40,989 Investments .................................................................... 86,020 68,264 --------- --------- Cash and investments ........................................................... $ 141,834 $ 109,253 ========= =========
The accompanying notes are an integral part of these consolidated financial statements. 4 7 COGNEX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION As permitted by the rules of the Securities and Exchange Commission applicable to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996, as filed with the Securities and Exchange Commission on March 24, 1997. In the opinion of the management of Cognex Corporation, the accompanying consolidated financial statements contain all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the Company's financial position at March 30, 1997, and the results of operations and changes in stockholders' equity and cash flows for the three months ended March 30, 1997. The results disclosed in the Consolidated Statements of Income for the three months ended March 30, 1997 are not necessarily indicative of the results to be expected for the full year. Certain amounts reported in prior periods have been reclassified to be consistent with the current period's presentation. NET INCOME PER SHARE Net income per share is calculated based on the weighted-average number of common and dilutive common equivalent shares outstanding during the period. Primary and fully diluted net income per share are not materially different for each of the periods presented. Dilutive common equivalent shares consist of stock options, calculated using the treasury stock method. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings per Share," which is effective for fiscal years ending after December 15, 1997, including restatement of all prior period earnings per share (EPS) data presented. SFAS No. 128 requires the presentation of basic and diluted EPS. Basic EPS, which replaces primary EPS, excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted EPS is computed similarly to fully diluted EPS under existing rules. The Company will adopt SFAS No. 128 for the fiscal year ending December 31, 1997 and has not yet determined the impact of adoption. 5 8 COGNEX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INVENTORIES Inventories consist of the following:
(In thousands) MARCH 30, DECEMBER 31, 1997 1996 -------- ----------- (UNAUDITED) Raw materials............................... $3,662 $3,861 Work-in-process............................. 2,649 1,710 Finished goods.............................. 1,657 1,442 ------ ------ $7,968 $7,013 ====== ======
6 9 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Revenue for the quarter ended March 30, 1997 totaled $28,143,000, representing a 19% decrease from the quarter ended March 31, 1996, and a 6% increase from the quarter ended December 31, 1996. Sales to customers based in the United States, which represented 45% of revenue in the first quarter of 1997, decreased $2,676,000, or 17%, from the first quarter of 1996, yet increased $658,000, or 6%, from the fourth quarter of 1996. Following a similar trend, sales to customers based in Japan decreased $4,374,000, or 28%, from the first quarter of 1996, yet increased $1,243,000, or 13%, from the fourth quarter of 1996. The decrease in worldwide revenue from the first quarter of 1996 is due primarily to decreased volume from Original Equipment Manufacturer (OEM) customers. Sales to OEM customers decreased $5,871,000, or 25%, from the first quarter of 1996. However, sales to OEM customers increased $2,185,000, or 14%, from the fourth quarter of 1996 due primarily to increased volume from certain key OEM customers in the semiconductor and electronics industries. The growth in revenue experienced in the first quarter of 1997 over the fourth quarter of 1996 is anticipated to continue for the next several quarters, as OEM customers begin to replenish their depleted inventories and prepare to meet higher anticipated demand for their products. Gross margin as a percentage of revenue for the quarter ended March 30, 1997 was 73% compared to 74% for the quarter ended March 31, 1996 and 71% for the quarter ended December 31, 1996. The decrease in gross margin as a percentage of revenue from the first quarter of 1996 is due primarily to a shift in product mix to lower margin products, as well as price discounts given to some of the Company's larger customers for attaining certain volume thresholds. The increase in gross margin as a percentage of revenue from the fourth quarter of 1996 resulted primarily from manufacturing efficiencies, due to increased production plans resulting from higher sales, as well as an increase in business with certain key OEM customers, who purchase higher margin products from the Company. Gross margins as a percentage of revenue for 1997 are expected to remain consistent with the results experienced in the current quarter. Research, development and engineering expenses for the quarter ended March 30, 1997 increased 9% to $5,179,000 from $4,766,000 for the quarter ended March 31, 1996. The increase in aggregate expenses is due primarily to higher personnel-related costs to support the Company's investment in the research and development of new and existing products. Expenses as a percentage of revenue were 18% for the first quarter of 1997 compared to 14% for the first quarter of 1996. The increase in expenses as a percentage of revenue is due primarily to a lower revenue base in the first quarter of 1997. Selling, general and administrative expenses for the quarter ended March 30, 1997 increased 17% to $7,419,000 from $6,345,000 for the quarter ended March 31, 1996. The increase in aggregate expenses is due primarily to a 49% increase in sales and marketing personnel, both domestically and internationally, to support the Company's expanding worldwide operations. Expenses as a percentage of revenue were 26% for the first quarter of 1997 compared to 18% for the first quarter of 1996. The increased level of expenses as a percentage of revenue is expected to continue for the remainder of 1997, as additional resources are committed to further penetrate the factory floor market. 7 10 Investment income for the quarter ended March 30, 1997 increased 68% to $1,333,000 from $792,000 for the comparable period in 1996. This increase in investment income is due primarily to an increased investment base. The Company's effective tax rate was 30.5% for the quarters ended March 30, 1997 and March 31, 1996. LIQUIDITY AND CAPITAL RESOURCES The Company's cash requirements during the quarter ended March 30, 1997 were met through cash generated from operations. Cash and investments increased $7,834,000 from December 31, 1996 primarily as a result of $9,347,000 of cash generated from operations, partially offset by $2,551,000 of capital expenditures. Cash generated from operations consists of net income, adjusted primarily for the effects of depreciation and amortization, the tax benefit from the exercise of stock options, and changes in current assets and current liabilities. Capital expenditures for the quarter ended March 30, 1997 totaled $2,551,000 and consisted primarily of expenditures for computer hardware, expenditures related to a 50,000 square-foot expansion of the Company's corporate headquarters, and expenditures related to the implementation of a new business system. Future cash requirements related to the new business system approximate $1,500,000, the majority of which is expected to be paid out through 1997 with anticipated funding from cash generated from operations. The Company believes that the existing cash and investments balance, together with cash generated from operations, will be sufficient to meet the Company's planned working capital and capital expenditure requirements through 1997, including potential business acquisitions. 8 11 PART II: OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 11 - Calculation of Weighted-Average Common and Common Equivalent Shares Outstanding Exhibit 27 - Financial Data Schedule (electronic filing only) (b) Reports on Form 8-K None 9 12 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. DATE: May 9, 1997 COGNEX CORPORATION /s/ John J. Rogers, Jr. ------------------------------------ John J. Rogers, Jr. Executive Vice President, Chief Financial Officer, and Treasurer (duly authorized officer, principal financial and accounting officer) 10 EX-11 2 CALCULATION OF WEIGHTED-AVERAGE & COMMON EQUIVLANT 1 EXHIBIT 11 COGNEX CORPORATION CALCULATION OF WEIGHTED-AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING
THREE MONTHS ENDED MARCH 30, MARCH 31, 1997 1996 ---------- ---------- (UNAUDITED) Weighted-average common shares outstanding................................ 40,920,611 40,326,678 Weighted-average options outstanding...................................... 7,723,545 7,167,555 Shares assumed to be purchased............................................ (4,698,760) (3,437,712) ---------- ---------- Primary weighted-average common and common equivalent shares outstanding.. 43,945,396 44,056,521 Dilutive effect of weighted-average shares................................ 181,054 ---------- ---------- Fully diluted weighted-average common and common equivalent shares outstanding............................................................. 44,126,450 44,056,521 ========== ==========
11 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF COGNEX CORPORATION FOR THE QUARTER ENDED MARCH 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS. 0000851205 COGNEX CORPORATION 3-MOS DEC-31-1997 JAN-01-1997 MAR-30-1997 55,814,000 86,020,000 18,892,000 989,000 7,968,000 179,061,000 39,715,000 10,791,000 211,293,000 18,653,000 0 0 0 82,000 190,619,000 211,293,000 28,143,000 28,143,000 7,695,000 7,695,000 0 0 0 9,340,000 2,849,000 6,491,000 0 0 0 6,491,000 .15 .15
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