Cognex Corporation Reports Record Results for Second Quarter of 2000; Machine Vision Company Reports Record Revenue, Earnings, Bookings and Backlog.

Business/Technology Editors

NATICK, Mass.--(BUSINESS WIRE)--July 17, 2000

Cognex Corporation (NASDAQ: CGNX) today announced revenue for the second quarter ended July 2, 2000 of $62,187,000, a 76% increase over the $35,271,000 reported for the second quarter of 1999. Net income for the second quarter ended July 2, 2000 increased 180% to $17,358,000, or $0.38 per diluted share, from $6,189,000, or $0.14 per diluted share, for the comparable period a year ago. Revenue, net income, and earnings per share for the quarter represent the highest results ever recorded in a single quarter in the company's 19-year history.

Revenue for the six months ended July 2, 2000 was $116,682,000, compared to $62,756,000 for the same six-month period a year ago. For the six months ended July 2, 2000, Cognex reported net income of $32,770,000, or $0.71 per diluted share, compared to $9,293,000, or $0.21 per diluted share, for the same six-month period in 1999.

"This has been another spectacular quarter for Cognex. We acquired Image Industries, a U.K.-based manufacturer of vision sensors. This acquisition immediately established Cognex as the leading vision supplier to end-users in the United Kingdom as well as added experienced development and sales engineers to our talent pool," said Dr. Robert J. Shillman, Cognex's President, Chief Executive Officer, and Chairman. "And, we continued to break new records in our business. Not only did we exceed the records for revenue and earnings set only last quarter, we also had record bookings in the quarter, and we ended the period with a record backlog."

Dr. Shillman continued, "Based upon this continued high level of demand and the positive guidance we are receiving from our customers, we now expect that revenue for fiscal year 2000 will be approximately $255 million to $260 million, and that earnings per share will exceed the current First Call consensus estimate of $1.50 by nearly 5%."

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 100,000 machine vision systems. 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 manufactured in a continuous fashion, such as metals, paper, 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.

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 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            Six Months Ended
                       July 2,     July 4,       July 2,       July 4,
Income Statement:       2000        1999          2000          1999
                          (unaudited)                 (unaudited)

Revenue            $   62,187   $  35,271    $  116,682    $  62,756

Cost of revenue        16,160      10,942        30,078       19,670

Gross profit           46,027      24,329        86,604       43,086

Research, development,
  and engineering
  expenses              8,112       6,600        15,424       13,134

Selling, general, and
 administrative
 expenses              14,564      10,651        27,112       20,364

Amortization of goodwill  553          54           644          109

Income from operations 22,798       7,024        43,424        9,479

Investment and
  other income          2,729       1,690         4,768        3,429

Income before
  provision for taxes  25,527       8,714        48,192       12,908

Income tax provision    8,169       2,525        15,422        3,615

Net income         $   17,358  $    6,189    $   32,770   $    9,293

Net income per diluted
  common and common
  equivalent share   $    .38    $    .14    $      .71   $      .21

Diluted weighted-average
  common and common
  equivalent shares
  outstanding          46,159      43,836        45,845       43,560


                                    July 2,             December 31,
Balance Sheet Highlights:            2000                  1999
                                  (unaudited)

Cash and investments           $   251,000              $   216,947

Accounts receivable                 39,075                   28,742

Inventories                         14,581                   10,872

Working capital                    276,681                  231,327

Total assets                       382,476                  314,822

Stockholders' equity               337,208                  276,624