Cognex Corporation Announces 2001 Results.Business Editors NATICK, Mass.--(BUSINESS WIRE)--Jan. 28, 2002 Cognex Corporation Cognex Corporation is an American corporation that manufactures commercial machine vision systems. Cognex is the world leader in its field, holding an array of patents and employing academic experts. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CGNX) today announced revenue for the year ended December 31, 2001 of $140,729,000, compared to $250,726,000 reported in 2000. Cognex Cog·nex A trademark for the drug tacrine hydrochloride. tacrine hydrochloride Cognex Pharmacologic class: Cholinergic (cholinesterase inhibitor) Therapeutic class: reported a loss for the year ended December 31, 2001 of $11,127,000, or $0.25 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $68,148,000, or $1.49 per diluted share, in 2000. Reported results for 2001 include pre-tax charges recorded in the fourth quarter totaling $27,547,000 for excess inventory and the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . Excluding these charges, net income for 2001 would have been $8,267,000, or $0.18 per diluted share. For the fourth quarter of 2001, revenue was $25,170,000, compared to $66,084,000 for the same period a year ago. Cognex reported a loss for the fourth quarter ended December 31, 2001 of $20,335,000, or $0.46 per diluted share, compared with net income of 15,987,000, or $0.36 per diluted share, for the fourth quarter of 2000. Excluding the charges recorded in the fourth quarter, the company would have reported a loss of $941,000, or $0.02 per diluted share. Results for the quarter and year ended December 31, 2001 include pre-tax charges of $16,615,000 in cost of revenue and $10,932,000 in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . The pre-tax charge in cost of revenue reflects $16,300,000 for excess inventory resulting from the extended slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in business as well as expected customer transition plans, and $315,000 for the write-down of complete technology. This charge reduced the gross margin for the quarter from 62% to (4%) and it reduced the gross margin for the year from 68% to 56%. In addition, the charge in cost of revenue reduced earnings for the quarter by $0.24 per diluted share and it reduced earnings for the year by $0.23 per diluted share. The pre-tax charge in operating expenses reflects the write-down of goodwill to its estimated fair value. For the quarter and year ended December 31, 2001, this charge reduced earnings by $0.20 per diluted share. "The very disappointing results for 2001 were due almost entirely to the worldwide slowdown in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. by manufacturers in the semiconductor and electronics industries. However, not all of the news in 2001 was bad," said Dr. Robert J. Shillman, Cognex's President, Chief Executive Officer, and Chairman. "During the year, we closed a record number of new customers...both OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and end-user. We had record revenue from our surface inspection systems, primarily due to an increase in sales of SmartView(R), our surface inspection product introduced in 2000. Revenue from In-Sight(TM), Cognex's family of low-cost vision sensors
compressed roughage in flat plates useful for feeding to animals in transit. as well as systems for inspecting the packaging of consumer products. We also introduced the world's smallest high-resolution digital CMOS camera A digital still or video camera that uses a CMOS-based image sensor chip rather than a CCD to record the picture. The CMOS image sensors enable the integration of all required camera circuits onto the same chip, making them well suited for tiny cameras such as in PDAs and cellphones. designed specifically for machine vision applications." Dr. Shillman continued, "We ended 2001 with only $16 million of orders in backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. , which is our lowest year-end backlog since 1993. In addition, the order rate since the beginning of 2002 has continued to be quite low. Based upon these facts, we currently believe that revenue for the first quarter of 2002 will be in the range of $21 million to $23 million, and that we will report a loss for the quarter in the range of $0.05 to $0.08 per diluted share. If business continues at the current dismal dis·mal adj. 1. Causing gloom or depression; dreary: dismal weather; took a dismal view of the economy. 2. run rate, it is likely that we will report a loss in each subsequent quarter of 2002, and, therefore, for the full year as well." "Like almost every other company that serves the semiconductor and electronics marketplace, we are losing money. But unlike many others, we have an exceptionally strong balance sheet with over $292 million in cash and investments...accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. and carefully managed in our prior 58 quarters of profitability. Because of our financial strength, we can afford to continue to invest in both new product development and in acquisitions until business conditions improve. At that time, we expect to emerge from this downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in an even stronger position relative to our competition than we have ever been in the past," concluded Dr. Shillman. Analyst Conference Call and Simultaneous Webcast Cognex Corporation will host an analyst conference call to discuss its results for the fourth quarter and full year of 2001, as well as the financial outlook, today at 5:30 p.m. eastern. The telephone number to listen to the live conference call is 646/862-1120. A replay of the conference call will begin at approximately 7:30 p.m. eastern today and will be available for one week. To listen to the replay of the conference call, the telephone number is 800/633-8284 (or 858/812-6440 if outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) and the access code for the replay is 20070800. Internet users Internet user n → internauta m/f Internet user Internet n → internaute m/f can listen to a real-time audio broadcast of the conference call on Cognex's website at http://www.cognex.com. An archive of the webcast will be available on Cognex's website for one week. 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 to date more than 150,000 machine vision systems, representing over $1 billion in cumulative revenue, since the company's founding in 1981. Cognex's Modular Vision Systems Division, headquartered in Natick, Massachusetts Natick (Pronunciation IPA: /ˈneɪtɪk/) is a town in Middlesex County, Massachusetts, United States. Natick is located near the center of the MetroWest region of Massachusetts, with a population of 32,170 at the , specializes in machine vision systems which 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 Alameda is a city in Alameda County, California, United States. It is located on a small island of the same name next to Oakland, California in the San Francisco Bay. An additional part of the city is Bay Farm Island, which is adjacent to the Oakland International Airport. , specializes in machine vision systems which are used for inspecting the surfaces of products that are manufactured in a continuous fashion, such as metals, paper, nonwovens and plastics. In addition to its corporate headquarters in Natick, Massachusetts, Cognex also has regional offices located throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Japan, Europe, and Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. . Visit Cognex on-line at http://www.cognex.com. Forward-Looking Statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements made in this press release are forward-looking statements. These statements are based on the company's current expectations and estimates as to prospective events and circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or which may or may not be in the company's control and as to which there can be no firm assurances given. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. The company wishes to caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The company disclaims any obligation subsequently to revise forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Further discussions of risk factors are also available in the company's registration statements filed with the Securities and Exchange Commission.
COGNEX CORPORATION
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Income Statement: 2001 2000 2001 2000
(unaudited)
Revenue $ 25,170 $ 66,084 $ 140,729 $ 250,726
Cost of revenue 26,232 16,340 62,345 63,820
Gross margin (1,062) 49,744 78,384 186,906
Research, development,
and engineering
expenses 6,674 9,710 30,094 33,341
Selling, general, and
administrative expenses 12,543 18,602 61,590 61,915
Amortization of goodwill 780 765 3,108 1,964
Charge for intangible
asset impairment 10,932 0 10,932 0
Operating income/(loss) (31,991) 20,667 (27,340) 89,686
Investment and other
income 2,780 2,843 11,669 10,532
Income/(loss) before
provision/(benefit)
for income taxes (29,211) 23,510 (15,671) 100,218
Income tax
provision/(benefit) (8,876) 7,523 (4,544) 32,070
Net income/(loss) $ (20,335) $ 15,987 $ (11,127) $ 68,148
Net income/(loss) per
diluted common and
common equivalent
share $ (0.46) $ 0.36 $ (0.25) $ 1.49
Diluted weighted-average
common and common
equivalent shares
outstanding 43,835 44,919 43,639 45,698
Dec. 31, Dec. 31,
Balance Sheet Highlights: 2001 2000
Cash and investments $ 292,715 $ 277,740
Accounts receivable 17,064 47,031
Inventories 23,078 27,664
Working capital 143,712 167,913
Total assets 406,904 436,141
Stockholders' equity 378,044 383,949
COGNEX CORPORATION
Supplemental Schedule: Reconciliation of Reported Amounts
to Amounts Excluding Charges
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2001 2000 2001 2000
(unaudited)
Gross Margin:
Gross margin, as
reported $ (1,062) $ 49,744 $ 78,384 $ 186,906
Percentage of revenue,
as reported (4%) 75% 56% 75%
Charge for excess
inventory 16,300 16,300
Charge for write-down
of complete technology 315 315
Gross margin,
excluding charges $ 15,553 $ 49,744 $ 94,999 $ 186,906
Percentage of revenue,
excluding charges 62% 75% 68% 75%
Net Income/(Loss):
Net income/(loss),
as reported $ (20,335) $ 15,987 $ (11,127) $ 68,148
Percentage of revenue,
as reported (81%) 24% (8%) 27%
Charge for excess
inventory, net of
taxes 10,269 10,269
Charge for write-down
of complete technology
and goodwill, net
of taxes 9,125 9,125
Net income/(loss),
excluding charges $ (941) $ 15,987 $ 8,267 $ 68,148
Percentage of revenue,
excluding charges (4%) 24% 6% 27%
Net income/(loss) per
diluted common and
common equivalent
share, excluding
charges $ (0.02) $ .36 $ 0.18 $ 1.49
Diluted weighted-average
common and common
equivalent shares
outstanding 43,835 44,919 45,187 45,698
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