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): February 15, 2017
COGNEX CORPORATION |
(Exact name of registrant as specified in charter) |
Massachusetts |
001-34218 |
04-2713778 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer 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 February 16, 2017, Cognex Corporation (the “Company”) issued a news release to report its financial results for the quarter and year ended December 31, 2016. The release is furnished as Exhibit 99.1 hereto. The information in Item 2.02 of 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 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On February 15, 2017, the Board of Directors of the Company appointed John J. Curran as Senior Vice President and Chief Financial Officer of the Company, commencing on February 17th. In such capacity, Mr. Curran will serve as the principal financial officer and principal accounting officer of the Company for purposes of filings with the Securities and Exchange Commission. Mr. Curran is succeeding Richard A. Morin, Executive Vice President of Finance and Administration and Chief Financial Officer (and current principal financial officer and principal accounting officer), who is retiring after 18 years with the Company. Mr. Morin will remain with the Company full time through the end of March 2017; after his retirement, he will continue with the Company in a non-executive role.
Mr. Curran, age 51, joined the Company in September 2016 as Senior Vice President of Finance. Prior to joining the Company, Mr. Curran had a 21-year career at EMC Corporation, a company that manages businesses involved in the transformation of information technology, where he most recently served as Senior Vice President of Finance and Corporate Controller. Prior to that, he was Interim CFO for Pivotal, Inc., a $200 million subsidiary of EMC focusing on application and data infrastructure software, agile development services and data science consulting. He holds a Bachelor of Science degree in Accounting and an MBA from Babson College.
Item 8.01 |
Other Events |
On February 16, 2017, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.075 per share. The dividend is payable on March 17, 2017 to all shareholders of record as of the close of business on March 3, 2017.
Item 9.01 |
Financial Statements and Exhibits |
(d) Exhibits
Exhibit No. Description
99.1 News release, dated February 16, 2017, 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: |
February 16, 2017 |
By: /s/ Richard A. Morin |
Richard A. Morin |
||
Executive Vice President of Finance and Administration |
||
and Chief Financial Officer |
Exhibit 99.1
Cognex Reports Record Results for Fourth Quarter and Full Year
NATICK, Mass.--(BUSINESS WIRE)--February 16, 2017--Cognex Corporation (NASDAQ: CGNX) today announced that the company set new records for both fourth quarter and annual revenue, net income and earnings per share in 2016. In Table 1 below, selected financial data for the quarter and year ended December 31, 2016 is compared to the third quarter of 2016, the fourth quarter of 2015 and the year ended December 31, 2015. A reconciliation of certain financial measures from GAAP to non-GAAP is shown in Exhibit 2 of this news release.
Table 1* |
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Revenue |
Net Income |
Net Income |
|||||||
Quarterly Comparisons |
|||||||||
Current quarter: Q4-16 | $129,322,000 | $38,253,000 | $0.43 | ||||||
Prior year’s quarter: Q4-15 | $97,768,000 | $18,854,000 | $0.22 | ||||||
Change from Q4-15 to Q4-16 | 32% | 103% | 95% | ||||||
Prior quarter: Q3-16 | $147,952,000 | $53,675,000 | $0.61 | ||||||
Change from Q3-16 to Q4-16 | (13%) | (29%) | (30%) | ||||||
Year-to-Date Comparisons |
|||||||||
Year ended December 31, 2016 | $520,753,000 | $149,827,000 | $1.72 | ||||||
Year ended December 31, 2015 | $450,557,000 | $107,664,000 | $1.22 | ||||||
Change from 2015 to 2016 | 16% | 39% | 41% |
*Table 1 excludes the results of discontinued operations, which relate to the company’s Surface Inspection Systems Division (SISD) that was sold on July 6, 2015.
“Cognex had an outstanding year in 2016 that was highlighted by annual revenue surpassing the half-billion dollar milestone,” said Dr. Robert J. Shillman, Chairman of Cognex. “We reported the highest annual revenue, net income and earnings per share from continuing operations in our company’s 36-year history. Importantly, these achievements came during a period of weaker spending in the industrial markets served by Cognex.”
“We are pleased with our performance in 2016,” said Robert J. Willett, Chief Executive Officer of Cognex. “Revenue grew 16% over 2015 with excellent fall through to the bottom line as evidenced by our record annual net margin of 29%. We completed four acquisitions that bring important technologies in the two fastest-growing areas of our business. And, we introduced new products that substantially expand our addressable market.”
Mr. Willett continued, “While there’s uncertainty in the world today, we’re encouraged by the level of demand that we experienced in the second half of the year. Our fourth quarter results were higher than our guidance to investors in October and that momentum continued into January, which leads us to expect strong year-on-year growth in Q1.”
Summary of the Year
Cognex reported record financial results for 2016 in a year of sluggish industrial sector spending. The three largest industries contributing to revenue—automotive, consumer electronics and logistics—all showed double-digit growth, as did all of the company’s major geographic regions. Operating income expanded to 31% of revenue from 27% reported for 2015, even with additional investments in new product development as well as in sales and support to drive long-term growth.
Details of the Quarter
Statement of Operations Highlights – Fourth Quarter of 2016
Balance Sheet Highlights – December 31, 2016
Financial Outlook – Q1 2017
Non-GAAP Financial Measures
Analyst Conference Call and Simultaneous Webcast
About Cognex Corporation
Cognex Corporation designs, develops, manufactures and markets a range of products that incorporate sophisticated machine vision technology that gives them the ability to “see.” Cognex products include barcode readers, machine vision sensors and machine vision systems that are used in factories, warehouses and distribution centers around the world to guide, gauge, inspect, identify and assure the quality of items during the manufacturing and distribution process. Cognex is the world's leader in the machine vision industry, having shipped more than 1 million vision-based products, representing over $4 billion in cumulative revenue, since the company's founding in 1981. Headquartered in Natick, Massachusetts, USA, Cognex has regional offices and distributors located throughout the Americas, Europe and Asia. For details visit Cognex online at http://www.cognex.com.
Certain statements made in this news release, which do not relate solely to historical matters, are forward-looking statements. These statements can be identified by use of the words “expects,” “anticipates,” “estimates,” “believes,” “projects,” “intends,” “plans,” “will,” “may,” “shall,” “could,” “should,” and similar words and other statements of a similar sense. These forward-looking statements, which include statements regarding business and market trends, future financial performance, customer order rates, expected areas of growth, emerging markets, future product mix, research and development activities, further stock repurchases, investments, and strategic plans, involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include: (1) the loss of a large customer; (2) current and future conditions in the global economy; (3) the reliance on revenue from the consumer electronics or automotive industries; (4) the inability to penetrate new markets; (5) the inability to achieve significant international revenue; (6) fluctuations in foreign currency exchange rates and the use of derivative instruments; (7) information security breaches or business system disruptions; (8) the inability to attract and retain skilled employees; (9) the reliance upon key suppliers to manufacture and deliver critical components for our products; (10) the failure to effectively manage product transitions or accurately forecast customer demand; (11) the inability to design and manufacture high-quality products; (12) the technological obsolescence of current products and the inability to develop new products; (13) the failure to properly manage the distribution of products and services; (14) the inability to protect our proprietary technology and intellectual property; (15) our involvement in time-consuming and costly litigation; (16) the impact of competitive pressures; (17) the challenges in integrating and achieving expected results from acquired businesses; (18) potential impairment charges with respect to our investments or for acquired intangible assets or goodwill; (19) exposure to additional tax liabilities; and (20) the other risks detailed in Cognex reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2016. You should not place undue reliance upon any such forward-looking statements, which speak only as of the date made. Cognex disclaims any obligation to update forward-looking statements after the date of such statements.
Exhibit 1 |
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COGNEX CORPORATION
|
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Three-months Ended | Twelve-months Ended | ||||||||||||||||||||||||
December 31, |
October 2, |
December 31, |
December 31, |
December 31, |
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Revenue | $ | 129,322 | $ | 147,952 | $ | 97,768 | $ | 520,753 | $ | 450,557 | |||||||||||||||
Cost of revenue (1) | 26,660 | 32,749 | 23,400 | 115,590 | 102,571 | ||||||||||||||||||||
Gross margin | 102,662 | 115,203 | 74,368 | 405,163 | 347,986 | ||||||||||||||||||||
Percentage of revenue | 79 | % | 78 | % | 76 | % | 78 | % | 77 | % | |||||||||||||||
Research, development, and engineering expenses (1) | 19,440 | 18,603 | 17,526 | 78,269 | 69,791 | ||||||||||||||||||||
Percentage of revenue | 15 | % | 13 | % | 18 | % | 15 | % | 15 | % | |||||||||||||||
Selling, general, and administrative expenses (1) | 42,985 | 42,072 | 37,694 | 166,110 | 156,674 | ||||||||||||||||||||
Percentage of revenue | 33 | % | 28 | % | 39 | % | 32 | % | 35 | % | |||||||||||||||
Operating income | 40,237 | 54,528 | 19,148 | 160,784 | 121,521 | ||||||||||||||||||||
Percentage of revenue | 31 | % | 37 | % | 20 | % | 31 | % | 27 | % | |||||||||||||||
Foreign currency gain (loss) | 478 | (607 | ) | 542 | 101 | 1,122 | |||||||||||||||||||
Investment and other income | 2,476 | 2,421 | 2,059 | 7,910 | 4,319 | ||||||||||||||||||||
Income from continuing operations before income tax expense | 43,191 | 56,342 | 21,749 | 168,795 | 126,962 | ||||||||||||||||||||
Income tax expense on continuing operations | 4,938 | 2,667 | 2,895 | 18,968 | 19,298 | ||||||||||||||||||||
Net income from continuing operations | 38,253 | 53,675 | 18,854 | 149,827 | 107,664 | ||||||||||||||||||||
Percentage of revenue | 30 | % | 36 | % | 19 | % | 29 | % | 24 | % | |||||||||||||||
Net income (loss) from discontinued operations (1) | — | — | (108 | ) | (255 | ) | 79,410 | ||||||||||||||||||
Net income | $ | 38,253 | $ | 53,675 | $ | 18,746 | $ | 149,572 | $ | 187,074 | |||||||||||||||
Basic earnings per weighted-average common and common-equivalent share: | |||||||||||||||||||||||||
Net income from continuing operations | $ | 0.45 | $ | 0.63 | $ | 0.22 | $ | 1.76 | $ | 1.25 | |||||||||||||||
Net income (loss) from discontinued operations | — | — | — | (0.01 | ) | 0.92 | |||||||||||||||||||
Net income | $ | 0.45 | $ | 0.63 | $ | 0.22 | $ | 1.75 | $ | 2.17 | |||||||||||||||
Diluted earnings per weighted-average common and common-equivalent share: | |||||||||||||||||||||||||
Net income from continuing operations | $ | 0.43 | $ | 0.61 | $ | 0.22 | $ | 1.72 | $ | 1.22 | |||||||||||||||
Net income (loss) from discontinued operations | — | — | — | — | 0.91 | ||||||||||||||||||||
Net income | $ | 0.43 | $ | 0.61 | $ | 0.22 | $ | 1.72 | $ | 2.13 | |||||||||||||||
Weighted-average common and common-equivalent shares outstanding: | |||||||||||||||||||||||||
Basic | 85,861 | 85,460 | 84,850 | 85,338 | 86,296 | ||||||||||||||||||||
Diluted | 88,251 | 87,346 | 86,212 | 87,072 | 87,991 | ||||||||||||||||||||
Cash dividends per common share | $ | 0.075 | $ | 0.075 | $ | 0.07 | $ | 0.30 | $ | 0.21 | |||||||||||||||
Cash and investments per common share | $ | 8.67 | $ | 8.23 | $ | 7.32 | $ | 8.67 | $ | 7.32 | |||||||||||||||
Book value per common share | $ | 11.20 | $ | 11.02 | $ | 9.73 | $ | 11.20 | $ | 9.73 | |||||||||||||||
(1) Amounts include stock option expense, as follows: | |||||||||||||||||||||||||
Cost of revenue | $ | 257 | $ | 273 | $ | 348 | $ | 1,052 | $ | 1,515 | |||||||||||||||
Research, development, and engineering | 1,329 | 1,366 | 1,097 | 6,271 | 5,194 | ||||||||||||||||||||
Selling, general, and administrative | 3,089 | 2,983 | 2,759 | 13,235 | 13,032 | ||||||||||||||||||||
Discontinued operations | — | — | — | — | 1,533 | ||||||||||||||||||||
Total stock option expense | $ | 4,675 | $ | 4,622 | $ | 4,204 | $ | 20,558 | $ | 21,274 |
Exhibit 2 |
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COGNEX CORPORATION |
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Three-months Ended | Twelve-months Ended | ||||||||||||||||||||||||
December 31, |
October 2, |
December 31, |
December 31, |
December 31, |
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Adjustment for stock option expense | |||||||||||||||||||||||||
Operating income (GAAP) | $ | 40,237 | $ | 54,528 | $ | 19,148 | $ | 160,784 | $ | 121,521 | |||||||||||||||
Stock option expense related to continuing operations | 4,675 | 4,622 | 4,204 | 20,558 | 19,741 | ||||||||||||||||||||
Operating income (Non-GAAP) | $ | 44,912 | $ | 59,150 | $ | 23,352 | $ | 181,342 | $ | 141,262 | |||||||||||||||
Percentage of revenue (Non-GAAP) | 35 | % | 40 | % | 24 | % | 35 | % | 31 | % | |||||||||||||||
Net income from continuing operations (GAAP) | $ | 38,253 | $ | 53,675 | $ | 18,854 | $ | 149,827 | $ | 107,664 | |||||||||||||||
Stock options expense related to continuing operations | 4,675 | 4,622 | 4,204 | 20,558 | 19,741 | ||||||||||||||||||||
Tax effect on stock options | (1,540 | ) | (1,520 | ) | (1,341 | ) | (6,747 | ) | (6,559 | ) | |||||||||||||||
Net income from continuing operations (Non-GAAP) | $ | 41,388 | $ | 56,777 | $ | 21,717 | $ | 163,638 | $ | 120,846 | |||||||||||||||
Percentage of revenue (Non-GAAP) | 32 | % | 38 | % | 22 | % | 31 | % | 27 | % | |||||||||||||||
Exclusion of tax adjustments | |||||||||||||||||||||||||
Income from continuing operations before income tax expense (GAAP) | $ | 43,191 | $ | 56,342 | $ | 21,749 | $ | 168,795 | $ | 126,962 | |||||||||||||||
Income tax expense (GAAP) | $ | 4,938 | $ | 2,667 | $ | 2,895 | $ | 18,968 | $ | 19,298 | |||||||||||||||
Effective tax rate (GAAP) | 11 | % | 5 | % | 13 | % | 11 | % | 15 | % | |||||||||||||||
Tax adjustments: | |||||||||||||||||||||||||
Discrete tax benefit related to employee stock option exercises | (4,643 | ) | (6,038 | ) | — | (11,889 | ) | — | |||||||||||||||||
Other discrete tax events | 1,807 | (1,436 | ) | (910 | ) | 475 | (2,925 | ) | |||||||||||||||||
Income tax expense excluding tax adjustments (Non-GAAP) | $ | 7,774 | $ | 10,141 | $ | 3,805 | $ | 30,382 | $ | 22,223 | |||||||||||||||
Effective tax rate (Non-GAAP) | 18 | % | 18 | % | 17.5 | % | 18 | % | 17.5 | % | |||||||||||||||
Net income from continuing operations excluding tax adjustments (Non-GAAP) | $ | 35,417 | $ | 46,201 | $ | 17,944 | $ | 138,413 | $ | 104,739 | |||||||||||||||
Percentage of revenue (Non-GAAP) | 27 | % | 31 | % | 18 | % | 27 | % | 23 | % |
Exhibit 3 |
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COGNEX CORPORATION
|
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December 31, 2016 | December 31, 2015 | ||||||||
Assets | |||||||||
Cash and investments | $ | 745,170 | $ | 621,531 | |||||
Accounts receivable | 55,438 | 42,846 | |||||||
Unbilled revenue | 2,217 | 24 | |||||||
Inventories | 26,984 | 37,334 | |||||||
Property, plant, and equipment | 53,992 | 53,285 | |||||||
Goodwill and intangible assets | 103,592 | 87,763 | |||||||
Other assets | 51,211 | 44,973 | |||||||
Total assets | $ | 1,038,604 | $ | 887,756 | |||||
Liabilities and Shareholders' Equity | |||||||||
Accounts payable and accrued liabilities | $ | 52,369 | $ | 41,132 | |||||
Deferred revenue and customer deposits | 8,211 | 11,571 | |||||||
Income taxes | 10,554 | 6,134 | |||||||
Other liabilities | 4,871 | 3,252 | |||||||
Shareholders' equity | 962,599 | 825,667 | |||||||
Total liabilities and shareholders' equity | $ | 1,038,604 | $ | 887,756 |
Exhibit 4 |
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COGNEX CORPORATION |
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Three-months Ended | Twelve-months Ended | ||||||||||||||||||||||||
December 31, |
October 2, |
December 31, |
December 31, |
December 31, |
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Revenue | $ | 129,322 | $ | 147,952 | $ | 97,768 | $ | 520,753 | $ | 450,557 | |||||||||||||||
Revenue by geography: | |||||||||||||||||||||||||
Europe | 38 | % | 50 | % | 35 | % | 45 | % | 44 | % | |||||||||||||||
Americas | 32 | % | 25 | % | 38 | % | 30 | % | 31 | % | |||||||||||||||
Greater China | 12 | % | 13 | % | 12 | % | 12 | % | 12 | % | |||||||||||||||
Other Asia | 18 | % | 12 | % | 15 | % | 13 | % | 13 | % | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Revenue by market: | |||||||||||||||||||||||||
Factory automation | 96 | % | 96 | % | 95 | % | 96 | % | 95 | % | |||||||||||||||
Semiconductor and electronics capital equipment | 4 | % | 4 | % | 5 | % | 4 | % | 5 | % | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
CONTACT:
Cognex Corporation
Susan Conway, 508-650-3353
Senior
Director of Investor Relations
susan.conway@cognex.com