Cognex Corporation Announces Reduction in Workforce.

Business/Technology Editors

NATICK, Mass.--(BUSINESS WIRE)--Aug. 1, 2002

Cognex Corporation (NASDAQ: CGNX) today announced that it will reduce its global work force by approximately 85 positions. The positions to be eliminated include approximately 75 employees and 10 open requisitions. The work force reduction is in response to the continuing severe slowdown in the semiconductor and electronics industries and is expected to reduce expenses by approximately $6,500,000 on an annualized basis. In the third quarter of 2002, the company intends to take a one-time charge of approximately $1,000,000, or $0.02 per share, for severance and related costs. As a result, Cognex now believes that it will report earnings per share in this third quarter in the range of ($0.02) to $0.00. Initial savings from the work force reduction will begin in the fourth quarter of 2002.

"This has been an especially difficult decision for us because these are all hardworking, experienced and dedicated employees," said Dr. Robert J. Shillman, Cognex's President, Chief Executive Officer, and Chairman. "At the start of this downturn, we chose to absorb losses in order to preserve the jobs of these highly valued employees. However, after three quarters of such losses, we have concluded that this slowdown is likely to continue for an indeterminate period of time, and, therefore, that it is prudent to reduce our expenses to be in line with the current level of business in order to return the company to profitability as soon as possible."

Dr. Shillman continued, "Many CEOs would follow bad news such as this with comments similar to the following: "In spite of this downturn, we remain confident about the long term future of our business, and I am confident that we will emerge even stronger, and better and leaner, than we have been in the past." But, in my view, that is simply wishful thinking; there is little reason for optimism today. My colleagues and I have spent the better part of our lives building this business, and it is very painful for us to dismantle parts of it today. However, our customers, employees, and shareholders should be comforted by our perseverance and by our very strong balance sheet, both of which ensure that we will make it through these very challenging times...irrespective of their duration."

About Cognex Corporation

Cognex Corporation designs, develops, manufacturers, 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, 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, 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, Japan, Europe, and Southeast Asia. Visit Cognex on-line at http://www.cognex.com

Forward-Looking Statement 

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, 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. 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 filings with the Securities and Exchange Commission.