-----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, LQQ8WyBjoDSJUhb7o1Z57ICBtOW/oU0OjJaz7X8vOo7+wgiHfhXsSBf5k5cUpGsm 4F507nm5gJeClkwzjEumKw== 0001157523-05-008814.txt : 20051017 0001157523-05-008814.hdr.sgml : 20051017 20051017170924 ACCESSION NUMBER: 0001157523-05-008814 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051017 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051017 DATE AS OF CHANGE: 20051017 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: 051141402 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 a4996374.txt COGNEX CORPORATION 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 17, 2005 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 17, 2005, Cognex Corporation issued a news release to report its financial results for the quarter and nine months ended October 2, 2005. 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 17, 2005, 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 17, 2005 By: /s/ Richard A. Morin ------------------------ Richard A. Morin Senior Vice President of Finance, Chief Financial Officer and Treasurer EX-99.1 2 a4996374ex991.txt COGNEX CORPORATION EXHIBIT 99.1 Exhibit 99.1 Cognex Corporation Announces Third Quarter Results NATICK, Mass.--(BUSINESS WIRE)--Oct. 17, 2005--Cognex Corporation (NASDAQ:CGNX) today announced revenue for the third quarter ended October 2, 2005 of $58,256,000, and net income of $10,858,000, or $0.22 per diluted share. These most recent quarterly results are compared to the company's historical results for the third quarter of 2004 and for the second quarter of 2005 in the table below. Also provided in the table below are revenue, net income and earnings per share for the nine months ended October 2, 2005, as compared to the company's historical results for the same period in 2004. Revenue Net Income Earnings per Diluted Share - ---------------------------------------------------------------------- Quarter Comparisons - ---------------------------------------------------------------------- Current quarter: Q3-05 $58,256,000 $10,858,000 $0.22 - ---------------------------------------------------------------------- Prior year's quarter: Q3-04 $55,412,000 $11,655,000 $0.25 - ---------------------------------------------------------------------- Change from Q3-04 to Q3-05 5% (7%) (11%) - ---------------------------------------------------------------------- Prior quarter: Q2-05 $54,603,000 $7,800,000 $0.17 - ---------------------------------------------------------------------- Change from Q2-05 to Q3-05 7% 39% 35% - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Year-to-Date Comparisons - ---------------------------------------------------------------------- Nine months ended October 2, 2005 $156,057,000 $23,952,000 $0.50 - ---------------------------------------------------------------------- Nine months ended October 3, 2004 $158,048,000 $31,100,000 $0.66 - ---------------------------------------------------------------------- Change from first nine months of 2004 to first nine months of 2005 (1%) (23%) (23%) - ---------------------------------------------------------------------- The company's reported results for 2005 include the results of DVT Corporation (since May 9, 2005), and also include the amortization costs related to that acquisition ($1,143,000 in the third quarter and $1,905,000 year to date). "The third quarter of 2005 was another good quarter for Cognex," said Dr. Robert J. Shillman, Cognex's Chairman and Chief Executive Officer. "Revenue increased on a sequential basis in the three primary markets we serve: Semiconductor and Electronics Capital Equipment, Factory Automation, and Surface Inspection. And, our net margin improved dramatically quarter-to-quarter due to higher revenue and synergies realized from our acquisition of DVT Corporation in May of this year." Dr. Shillman continued, "Q4 is shaping up nicely. With our current estimates of Q4 revenue in the range of $61 million to $64 million and earnings per diluted share between $0.24 and $0.27, we expect to show growth in both the top and bottom lines...both year-on-year and sequentially." Details of the Quarter Statement of Operations Highlights - Third Quarter of 2005 -- Revenue for the third quarter of 2005 increased 5% over the comparable quarter in 2004 despite a 40% decline in revenue from customers who make capital equipment for the semiconductor and electronics industries. Revenue increased year-on-year primarily due to record revenue from discrete manufacturers in the Factory Automation area as well as to record sales of SmartView(R), the company's surface inspection product. On a sequential basis, revenue increased 7% due to higher sales to customers in all three of the primary markets we serve, but primarily to those who make capital equipment for the semiconductor industry. -- Gross margin was 73% in the third quarter of 2005 compared to 73% in the comparable quarter in 2004 and 71% in the prior quarter. Cost of revenue for the third quarter of 2004, as well as the second and third quarters of 2005, includes a benefit of $422,000, $169,000, and $185,000 respectively, relating to the sale of inventory previously reserved. Excluding this benefit, gross margin would have been 73% in the third quarter of 2005, 72% in the third quarter of 2004, and 70% in the prior quarter. The increase in gross margin on a sequential basis is due to the higher revenue in the third quarter. -- Research, Development & Engineering (R, D & E) spending in the third quarter of 2005 increased 10% from the comparable quarter in 2004 and 1% from the prior quarter. The increase year-on-year is due primarily to higher expenses in the third quarter of 2005 relating to the new employees added from the DVT acquisition. -- Selling, General & Administrative (S, G & A) spending in the third quarter of 2005 increased 18% from the third quarter of 2004, and decreased 1% on a sequential basis. The increase year-on-year is due to incremental DVT costs. S, G & A declined 1% on a sequential basis despite an additional month of DVT costs due primarily to cost reductions implemented as part of the acquisition integration. In addition, the company also received a benefit from the positive impact of foreign exchange rates on the company's international operations. -- The company reported a foreign currency loss of $410,000 in the third quarter of 2005 compared to a loss of $502,000 in the comparable quarter of 2004 and a loss of $291,000 in the prior quarter. The company recognizes foreign currency gains and losses on the revaluation and settlement of accounts receivable and payable balances that are reported in one currency and collected or paid in another. -- Investment and other income was $1,156,000 in the third quarter of 2005 compared to $1,043,000 in the third quarter of 2004 and $973,000 in the prior quarter. The increase in investment and other income, both year-on-year and sequentially, is due to higher yields. -- The effective tax rate was 26% in the third quarter of 2005 as compared to 29% in the comparable quarter of 2004 and 26% 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 2005 than in 2004. Balance Sheet Highlights - October 2, 2005 -- Cognex's financial position at October 2, 2005 was very strong, with nearly $313,000,000 in cash and investments, and no debt. Cash and investments decreased by approximately $78,400,000 from the end of 2004 as the company paid out approximately $115,000,000 of cash in the second quarter to acquire DVT Corporation. During the first nine months of 2005, Cognex generated positive cash flow from operations of over $28,000,000 and paid out over $11,000,000 in dividends. Cumulative to date, the company has paid out nearly $70,000,000 in repurchases of its common stock on the open market and over $29,000,000 in dividends. -- Days sales outstanding (DSO) for the third quarter of 2005 was 58 days, and remains within the company's targeted range. -- Inventories at October 2, 2005 increased by approximately $500,000, or 3%, from the end of the prior quarter and inventory turns in the third quarter were equal to a rate equivalent to 3.5 times per year. Business Trends and Financial Outlook Bookings: -- For the third quarter of 2005, bookings were essentially flat on a sequential basis as higher orders from the Semiconductor and Electronics Capital Equipment market offset the seasonally soft Factory Automation market. The company's book-to-bill ratio was slightly less than 1.0 for the quarter due to record SmartView revenue, which had an unsustainably-high level of orders earlier in the year, and summer seasonality in the Factory Automation market. Financial Outlook -- For the fourth quarter of 2005, Cognex expects revenue to increase on a sequential basis to between $61 million and $64 million. At that revenue level, gross margin is expected to be in the low-to-mid 70% range. For the fourth quarter, operating expenses (R, D & E and S, G & A) are expected to increase by 5% to 10% on a sequential basis. The effective tax rate is expected to be 26%. As a result of the above, earnings for the fourth quarter are expected to be between $0.24 and $0.27 per diluted share. Analyst Conference Call and Simultaneous Webcast Cognex will host a conference call to discuss its results for the third quarter of 2005, as well as its financial outlook, on Tuesday, October 18, 2005 at 9:00 a.m. eastern time. The telephone number for the live call is 800-770-5589 (or 973-935-2039 if outside the U.S.). A replay will begin at approximately 11:00 a.m. eastern time on Tuesday, October 18, 2005 and will run continuously for 72 hours. The telephone number for the replay is 877-519-4471 (or 973-341-3080 if outside the U.S.) and the access code is 6574105. 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 275,000 machine vision systems, representing over $1.9 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 has regional offices and distributors located throughout North America, Latin 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; (7) challenges in integrating acquisitions and achieving anticipated benefits; and (8) 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, 2004. 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 October July October October October 2, 3, 3, 2, 3, 2005 2005 2004 2005 2004 ----------------------------- --------------------- (unaudited) (unaudited) Revenue $58,256 $54,603 $55,412 $156,057 $158,048 Cost of revenue 15,755 16,065 14,886 45,610 45,580 ----------- -------- -------- ----------- --------- Gross margin 42,501 38,538 40,526 110,447 112,468 Percentage of revenue 73% 71% 73% 71% 71% Research, development, and engineering expenses 7,224 7,185 6,552 20,724 20,105 Percentage of revenue 12% 13% 12% 13% 13% Selling, general, and administrative expenses 21,351 21,494 18,099 60,353 51,981 Percentage of revenue 37% 39% 33% 39% 33% ----------- -------- -------- ----------- --------- Operating income 13,926 9,859 15,875 29,370 40,382 Percentage of revenue 24% 18% 29% 19% 26% Foreign currency gain (loss) (410) (291) (502) (602) 73 Investment and other income 1,156 973 1,043 3,599 3,348 ----------- -------- -------- ----------- --------- Income before taxes 14,672 10,541 16,416 32,367 43,803 Income tax provision 3,814 2,741 4,761 8,415 12,703 ----------- -------- -------- ----------- --------- Net income $10,858 $7,800 $11,655 $23,952 $31,100 Percentage of revenue 19% 14% 21% 15% 20% =========== ======== ======== =========== ========= Net income per diluted common and common equivalent share $0.22 $0.17 $0.25 $0.50 $0.66 =========== ======== ======== =========== ========= Diluted weighted- average common and common equivalent shares outstanding 48,469 47,141 46,415 47,703 47,424 =========== ======== ======== =========== ========= Cash dividends per common share $0.08 $0.08 $0.08 $0.24 $0.20 =========== ======== ======== =========== ========= COGNEX CORPORATION Balance Sheets (In thousands) October December 2, 31, 2005 2004 --------------------- (unaudited) Assets Cash and investments $312,716 $391,076 Accounts receivable 38,063 33,816 Inventories 18,579 20,091 Property, plant, and equipment 24,100 23,995 Other assets 166,723 64,330 ----------- --------- Total assets $560,181 $533,308 =========== ========= Liabilities and Stockholders' Equity Current liabilities $59,134 $70,501 Stockholders' equity 501,047 462,807 ----------- --------- Total liabilities and stockholders' equity $560,181 $533,308 =========== ========= COGNEX CORPORATION Additional Information Schedule (Dollars in thousands) Three Months Ended Nine Months Ended Oct. 2, July 3, Oct. 3, Oct. 2, Oct. 3, 2005 2005 2004 2005 2004 ----------------------------- --------------------- (unaudited) (unaudited) Revenue $58,256 $54,603 $55,412 $156,057 $158,048 =========== ======== ======== =========== ========= Revenue by division: Modular Vision Systems Division 84% 83% 88% 84% 87% Surface Inspection Systems Division 16% 17% 12% 16% 13% ----------- -------- -------- ----------- --------- Total 100% 100% 100% 100% 100% =========== ======== ======== =========== ========= Revenue by geography: United States 37% 37% 30% 37% 30% Japan 30% 26% 41% 28% 41% Europe 27% 31% 24% 29% 24% Other 6% 6% 5% 6% 5% ----------- -------- -------- ----------- --------- Total 100% 100% 100% 100% 100% =========== ======== ======== =========== ========= Revenue by market: Discrete factory automation 57% 60% 42% 57% 41% Semiconductor and electronics capital equipment 27% 23% 46% 27% 46% Surface inspection 16% 17% 12% 16% 13% ----------- -------- -------- ----------- --------- Total 100% 100% 100% 100% 100% =========== ======== ======== =========== ========= Revenue by product: Vision sensors 41% 41% 27% 40% 28% PC-based vision systems 37% 35% 51% 37% 50% Surface inspection vision systems 12% 13% 9% 12% 10% Service 10% 11% 13% 11% 12% ----------- -------- -------- ----------- --------- Total 100% 100% 100% 100% 100% =========== ======== ======== =========== ========= CONTACT: Cognex Corporation Susan Conway, 508-650-3353 -----END PRIVACY-ENHANCED MESSAGE-----