-----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, T0y9IHKtOAWCru+yAbLLpXDfI8KKuslpGuwJeKMOlrdF6rnWDXZVcWFXhSyNlU7l Daar6xoEcyn60nVlO1yYeg== 0001157523-04-009355.txt : 20041018 0001157523-04-009355.hdr.sgml : 20041018 20041018162830 ACCESSION NUMBER: 0001157523-04-009355 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041018 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041018 DATE AS OF CHANGE: 20041018 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17869 FILM NUMBER: 041083472 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 8-K 1 a4743575.txt COGNEX 8-K ================================================================================ 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): October 18, 2004 COGNEX CORPORATION (Exact name of registrant as specified in its charter) ------------------------------------------------------------------------------- Massachusetts 0-17869 04-2713778 ------------- ------- ---------- (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation or organization) Identification No.) One Vision Drive Natick, Massachusetts 01760-2059 (Address, including zip code, of principal executive offices) (508) 650-3000 (Registrant's telephone number, including area code) (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ Item 2.02 Results of Operations and Financial Condition On October 18, 2004, Cognex Corporation issued a news release to report its financial results for the third quarter ended October 3, 2004. The release is furnished as Exhibit 99.1 hereto. The information in this Current Report on Form 8-K, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in such filing. Item 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit No. Description - ----------- ----------- 99.1 News release, dated October 18, 2004, by Cognex Corporation SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COGNEX CORPORATION Dated: October 18, 2004 By: /s/ Richard A. Morin ------------------------ Richard A. Morin Senior Vice President of Finance, Chief Financial Officer, and Treasurer EX-99.1 2 a4743575ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Cognex Corporation Announces Third Quarter Results; Machine Vision Company Reports Increases in Quarterly Revenue and Net Income NATICK, Mass.--(BUSINESS WIRE)--Oct. 18, 2004-- Overview of the Quarter Cognex Corporation (NASDAQ: CGNX) today announced revenue for the third quarter ended October 3, 2004 of $55,412,000, and net income of $11,655,000, or $0.25 per diluted share. These results compare very favorably with both the comparable quarter in 2003 and with the prior quarter, as shown in the table below: Earnings per Time Period Revenue Net Income Diluted Share - ---------------------------------------------------------------------- Current quarter: Q3-04 $55,412,000 $11,655,000 $0.25 - ---------------------------------------------------------------------- Prior year's quarter: Q3-03 $38,704,000 $5,138,000 $0.11 - ---------------------------------------------------------------------- Increase from Q3-03 to Q3-04 43% 127% 119% - ---------------------------------------------------------------------- Prior quarter: Q2-04 $54,467,000 $10,878,000 $0.23 - ---------------------------------------------------------------------- Increase from Q2-04 to Q3-04 2% 7% 9% - ---------------------------------------------------------------------- For the nine months ended October 3, 2004, Cognex reported revenue of $158,048,000, a 46% increase over revenue of $108,214,000 reported for the same nine-month period a year ago. And, net income for the nine months ended October 3, 2004 increased 204% to $31,100,000, or $0.66 per diluted share, from $10,237,000, or $0.23 per diluted share, for the comparable period in 2003. "I am pleased with the results we reported for the third quarter of 2004," said Dr. Robert J. Shillman, Cognex's Chief Executive Officer and Chairman. "Quarterly revenue and profits increased on both a sequential basis as well as year-on-year. And, our reported net income for the quarter of $11,655,000 is in excess of 20% of revenue, which is a long-standing goal for Cognex." Dr. Shillman continued, "We would normally celebrate this quarter's superb results, but the significant softening in bookings that we experienced during the quarter from our OEM customers in the semiconductor and electronics industries has dampened our spirits. And, the slowdown in those industries will not be entirely offset by the increasing demand from our customers in other market segments. In view of that, our fourth quarter results will likely be quite good, but not as high as our earlier internal estimates." Details of the Quarter Statement of Operations Highlights - Third Quarter of 2004 -- Revenue for the third quarter of 2004 increased 43% over the comparable quarter in 2003, and 2% on a sequential basis. The increase year-on-year is due to higher sales to capital equipment customers as well as end-users in the semiconductor and electronics industries. On a sequential basis, the increase is due to higher sales to customers who make capital equipment for the semiconductor industry. -- Gross margin was 73% in the third quarter of 2004 compared to 66% in the comparable quarter in 2003 and 71% in the prior quarter. Cost of revenue for the second and third quarters of 2004 as well as the third quarter of 2003 includes a benefit of $234,000, $422,000, and $296,000, respectively, relating to an inventory reserve recorded in the fourth quarter of 2001. Excluding this benefit, gross margin would have been 72% in the third quarter of 2004, 65% in the third quarter of 2003, and 70% in the prior quarter. The increase in gross margin, both year-on-year and sequentially, is due to higher sales volume as well as product mix. -- Research, Development & Engineering (R, D & E) spending in the third quarter of 2004 increased 5% from the comparable quarter in 2003, and was essentially flat on a sequential basis. The increase year-on-year is due to the accrual of anticipated company bonuses for 2004. -- Selling, General & Administrative (S, G & A) spending in the third quarter of 2004 increased 32% from the comparable quarter in 2003, and 3% on a sequential basis. The increase in S, G & A, both year-on-year and sequentially, is due to higher employee-related costs, including higher commissions resulting from the higher revenue level, the accrual of anticipated company bonuses for 2004, as well as investments in additional end-user sales personnel and marketing activities. Also adding to the year-on-year increase in S, G & A spending is the impact of foreign exchange rates on the company's international operations. -- The company reported a foreign currency loss of $502,000 in the third quarter of 2004, and a net gain of $73,000 for the first nine months of the year. The third quarter loss compares to a gain of $828,000 in the comparable quarter of 2003 and a loss of $50,000 in the prior quarter. The company recognizes foreign currency gains and losses on the revaluation and settlement of accounts receivable balances that are reported in one currency and collected in another. -- Investment and other income was $1,043,000 in the third quarter of 2004 compared to $1,145,000 in the comparable quarter of 2003 and $1,031,000 in the prior quarter. The decrease in investment and other income year-on-year is due to lower yields on cash and investment balances as well as lower realized gains on investments. Investment and other income increased slightly on a sequential basis due to the net effect of higher cash and investment balances offset by lower realized gains on investments. -- The effective tax rate was 29% in the third quarter of 2004 as compared to 31% in the comparable quarter of 2003 and 29% in the prior quarter. The decrease in the effective tax rate year-on-year is due to more of the company's profits being earned and taxed in lower tax jurisdictions in 2004 than in 2003. Balance Sheet Highlights - October 3, 2004 -- Cognex's financial position remains strong at October 3, 2004, with over $380,000,000 in cash and investments and no debt. Cash and investments increased nearly $80,000,000 from the end of 2003, the net result of positive cash flow from operations and cash received from the exercise of employee stock options, less dividend payments of approximately $9,000,000. -- Days sales outstanding (DSO) for the third quarter of 2004 was 60 days, and remains within the company's targeted range. -- Inventories at October 3, 2004 increased by 8% from the end of 2003, and inventory turns in the third quarter were equal to a rate equivalent to 4.2 times per year. Business Trends and Financial Outlook -- For the third quarter of 2004, bookings decreased by 22% on a sequential basis, and the company's book-to-bill ratio was below 1.0 for the quarter. This decrease in bookings was due partially to the expected decrease in the end-user market during the seasonally soft summer months, and more significantly to a dramatic slowdown in orders from customers who make capital equipment for the semiconductor and electronic industries. As a result, Cognex expects revenue for the fourth quarter of 2004 to decrease on a sequential basis to between $42 million and $46 million. At that revenue level, gross margin is expected to be in the high 60% to 70% range. For the fourth quarter, operating expenses (R, D & E and S, G & A) are expected to be relatively flat on a sequential basis. The effective tax rate for the fourth quarter of 2004 is expected to be 29%. As a result of the above, earnings for the fourth quarter are expected to be between $0.10 and $0.14 per diluted share. Analyst Conference Call and Simultaneous Webcast Cognex Corporation will host a conference call to discuss its results for the third quarter of 2004, as well as its financial outlook, today at 5:00 p.m. eastern time. The telephone number for the live call is 800-770-5589 (or 973-935-2039 if outside the United States). A replay will begin tonight at approximately 7:00 p.m. eastern time and will run continuously for 72 hours. The telephone number for the replay is 877-519-4471 (or 973-341-3080 if outside the United States) and the access code is 5230486. Internet users can listen to a real-time audio broadcast of the conference call, as well as an archive replay of the call, on Cognex's website at http://www.cognex.com/investor/default.asp. About Cognex Corporation Cognex Corporation designs, develops, manufactures, and markets machine vision systems, or computers that can "see." Cognex is the world's leader in the machine vision industry, having shipped more than 225,000 machine vision systems, representing over $1.6 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 that 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 that are used for inspecting the surfaces of products manufactured in a continuous fashion, such as metals, papers 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 and its attachments, which do not relate solely to historical matters, are forward-looking statements. You can identify these forward-looking statements by use of the words "expects," "anticipates," "estimates," "believes," "projects," "intends," "plans," "will," "may," "shall" and similar words. These forward-looking statements, which include statements regarding business trends and the company's financial outlook, involve risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include: (1) global economic conditions that impact the capital spending trends of manufacturers in a variety of industries; (2) the cyclicality of the semiconductor and electronics industries; (3) the inability to achieve significant international revenue; (4) fluctuations in foreign exchange rates; (5) the loss of, or significant curtailment of purchases by, any one or more principal customers; (6) the reliance upon certain sole source suppliers to manufacture and deliver critical components for the company's products; and (7) the other risks detailed in the company's reports filed with the SEC, including the company's Form 10-K for the fiscal year ended December 31, 2003. You should not place undue reliance upon any such forward-looking statements, which speak only as of the date made. The company disclaims any obligation to update forward-looking statements after the date of such statements. COGNEX CORPORATION Statements of Operations (In thousands, except per share amounts) Three Months Ended Nine Months Ended Oct. 3, July 4, Sept. 28, Oct. 3, Sept. 28, 2004 2004 2003 2004 2003 --------------------------------------------------- (unaudited) (unaudited) Revenue $55,412 $54,467 $38,704 $158,048 $108,214 Cost of revenue 14,886 15,905 13,190 45,580 36,905 --------------------------------------------------- Gross margin 40,526 38,562 25,514 112,468 71,309 Percentage of revenue 73% 71% 66% 71% 66% Research, development, and engineering expenses 6,552 6,655 6,246 20,105 18,492 Percentage of revenue 12% 12% 16% 13% 17% Selling, general, and administrative expenses 18,099 17,568 13,761 51,981 40,954 Percentage of revenue 33% 32% 36% 33% 38% --------------------------------------------------- Operating income 15,875 14,339 5,507 40,382 11,863 Percentage of revenue 29% 26% 14% 26% 11% Foreign currency gain (loss) (502) (50) 828 73 (963) Investment and other income 1,043 1,031 1,145 3,348 4,054 --------------------------------------------------- Income before taxes 16,416 15,320 7,480 43,803 14,954 Income tax provision 4,761 4,442 2,342 12,703 4,717 --------------------------------------------------- Net income $11,655 $10,878 $5,138 $31,100 $10,237 Percentage of revenue 21% 20% 13% 20% 9% =================================================== Net income per diluted common and common equivalent share $0.25 $0.23 $0.11 $0.66 $0.23 Diluted weighted- average common and common equivalent shares outstanding 46,415 47,241 44,890 47,424 44,120 Cash dividends per common share $0.08 $0.06 $0.06 $0.20 $0.06 =================================================== COGNEX CORPORATION Balance Sheets (In thousands) October 3, December 31, 2004 2003 --------------------------- (unaudited) Assets Cash and investments $382,193 $303,502 Accounts receivable 37,495 26,697 Inventories 16,715 15,519 Property, plant, and equipment 23,835 24,980 Other assets 57,259 61,835 --------------------------- Total assets $517,497 $432,533 =========================== Liabilities and Stockholders' Equity Current liabilities $60,035 $47,287 Other liabilities 248 252 Stockholders' equity 457,214 384,994 --------------------------- Total liabilities and stockholders' equity $517,497 $432,533 =========================== COGNEX CORPORATION Additional Information Schedule (Dollars in thousands) Three Months Ended Nine Months Ended Oct. 3, July 4, Sept. 28, Oct. 3, Sept. 28, 2004 2004 2003 2004 2003 -------------------------------------------------- (unaudited) (unaudited) Revenue $55,412 $54,467 $38,704 $158,048 $108,214 ================================================== Revenue by division: Modular Vision Systems Division 88% 85% 82% 87% 81% Surface Inspection Systems Division 12% 15% 18% 13% 19% -------------------------------------------------- Total 100% 100% 100% 100% 100% ================================================== Revenue by geography: Japan 41% 41% 35% 41% 35% United States 30% 31% 35% 30% 33% Europe 24% 22% 24% 24% 24% Other 5% 6% 6% 5% 8% -------------------------------------------------- Total 100% 100% 100% 100% 100% ================================================== Revenue by industry: Semiconductor capital equipment 32% 29% 21% 32% 19% Electronics capital equipment 14% 15% 14% 14% 15% Surface inspection 12% 15% 18% 13% 19% Electronics other 9% 12% 9% 10% 9% Automotive 9% 8% 11% 8% 12% Semiconductor other 5% 6% 5% 5% 4% Other 19% 15% 22% 18% 22% -------------------------------------------------- Total 100% 100% 100% 100% 100% ================================================== Revenue by product: PC-based vision systems 51% 50% 46% 50% 45% Vision sensors 27% 27% 29% 28% 27% Surface inspection vision systems 9% 11% 13% 10% 14% Service 13% 12% 12% 12% 14% -------------------------------------------------- Total 100% 100% 100% 100% 100% ================================================== Number of new customer accounts: End user 229 257 226 677 655 Original equipment manufacturer 26 32 30 95 89 -------------------------------------------------- Total 255 289 256 772 744 ================================================== CONTACT: Cognex Corporation Susan Conway, 508-650-3353 -----END PRIVACY-ENHANCED MESSAGE-----