<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995 Commission File Number 0-8623
ROBOTIC VISION SYSTEMS, INC.
(Exact name of Registrant as specified in charter)
DELAWARE 11-2400145
(State or other jurisdiction of IRS Employer
incorporation or organization) Identification Number
425 RABRO DRIVE EAST, HAUPPAUGE, NEW YORK 11788
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (516) 273-9700
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes ____X____ No_________
Number of shares of Common Stock outstanding
as of May 1, 1995 11,725,274
No of Pages 10
<PAGE>
ROBOTIC VISION SYSTEMS, INC.
CONDENSED BALANCE SHEETS
PART 1. FINANCIAL INFORMATION
Item 1. Financial statements
<TABLE>
<CAPTION>
March 31, September 30,
1995 1994
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 346,000 $ 1,568,000
Investments (Note 2)...................................... 1,500,000 1,495,000
Receivables - net (including unbilled receivables of
$678,000 at March 31, 1995 and $702,000 at September 30,
1994).................................................... 5,691,000 3,412,000
Inventories (Note 3)...................................... 4,533,000 2,634,000
Deferred income taxes..................................... 2,923,000 1,163,000
Prepaid expenses and other current assets................. 254,000 134,000
------------ ------------
Total Current Assets.................................... 15,247,000 10,406,000
Machinery and equipment (at cost, less accumulated
depreciation and amortization)............................. 2,210,000 1,923,000
Deferred income taxes....................................... 506,000 --
Other assets................................................ 1,260,000 1,159,000
Investments (Note 2)........................................ 2,487,000 1,500,000
------------ ------------
TOTAL................................................. $ 21,710,000 $ 14,988,000
------------ ------------
------------ ------------
LIABILITIES
Current Liabilities:
Accounts payable.......................................... $ 4,503,000 $ 2,717,000
Accrued expenses.......................................... 2,330,000 2,243,000
Advance contract payments received........................ 103,000 719,000
Notes payable (Note 4).................................... -- 63,000
------------ ------------
Total Current Liabilities............................. 6,936,000 5,742,000
Other liabilities........................................... 213,000 210,000
------------ ------------
Total Liabilities..................................... 7,149,000 5,952,000
------------ ------------
STOCKHOLDER'S EQUITY
Capital stock - common - authorized 20,000,000 shares, $.01
par value; issued and outstanding 11,671,615 shares at
March 31, 1995 and 11,583,602 shares at September 30,
1994....................................................... 117,000 116,000
Additional paid-in capital.................................. 33,047,000 32,805,000
Accumulated deficit......................................... (18,603,000) (23,885,000)
------------ ------------
Total Stockholders' Equity............................ 14,561,000 9,036,000
------------ ------------
TOTAL................................................. $ 21,710,000 $ 14,988,000
------------ ------------
------------ ------------
</TABLE>
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<PAGE>
ROBOTIC VISION SYSTEMS, INC.
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Month Ended March 31, Three Months Ended March 31,
---------------------------- ----------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues.................................................... $ 16,600,000 $ 11,790,000 $ 9,071,000 $ 5,901,000
Cost of revenues............................................ 7,616,000 6,439,000 4,054,000 3,101,000
------------ ------------ ------------ ------------
Gross profit................................................ 8,984,000 5,351,000 5,017,000 2,800,000
Research and development costs.............................. 2,389,000 1,798,000 1,270,000 968,000
Selling, general and administrative expenses................ 3,469,000 2,549,000 1,955,000 1,321,000
Interest (income) net....................................... (96,000) (2,000) (65,000) (9,000)
------------ ------------ ------------ ------------
Income before income tax benefit............................ 3,222,000 1,006,000 1,857,000 520,000
Income tax benefit.......................................... 2,060,000 1,093,000 2,606,000 1,123,000
------------ ------------ ------------ ------------
Net income.................................................. $ 5,282,000 $ 2,099,000 $ 4,463,000 $ 1,643,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net income per common share................................. $ .38 $ .16 $ .32 $ .13
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
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<PAGE>
ROBOTIC VISION SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended March 31,
------------------------------
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................. $ 5,284,000 $ 2,099,000
Adjustments to reconcile net income to net cash from
operating activities:
Deferred income taxes..................................... (2,266,000) (1,143,000)
Depreciation and amortization............................. 410,000 320,000
Issuance of common stock - defined contribution stock
ownership and deferred compensation plan................. 60,000 36,000
Provision for doubtful receivable......................... 20,000 --
Issuance of warrants for professional services rendered... 14,000 --
Asset and liability management:
Receivables............................................... (2,299,000) (1,293,000)
Inventories............................................... (1,899,000) (266,000)
Prepaid expenses and other current assets................. (121,000) (73,000)
Other assets.............................................. (247,000) (166,000)
Accounts payable.......................................... 1,786,000 95,000
Accrued expenses.......................................... 87,000 281,000
Advanced contract payment received........................ (616,000) (774,000)
Other liabilities......................................... 3,000 (40,000)
------------ ------------
Net cash provided by (used in) operating activities......... 216,000 (924,000)
------------ ------------
CASH FLOWS (USED IN) INVESTING ACTIVITIES:
Additions to property and equipment....................... (551,000) (715,000)
Investments............................................... (993,000) (3,000,000)
------------ ------------
Net cash used in investing activities....................... (1,544,000) (3,715,000)
------------ ------------
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:
Issuance of common stock in connection with the exercise
of stock option and warrants............................. 169,000 32,000
Notes payable............................................. (63,000) 187,000
Proceeds/net of expenses related to issuance of common
stock.................................................... -- 4,078,000
------------ ------------
Net cash provided by financing activities................... 106,000 4,297,000
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS....................... $ (1,222,000) $ (342,000)
------------ ------------
------------ ------------
</TABLE>
-4-
<PAGE>
ROBOTIC VISION SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED FINANCIAL STATEMENTS
The condensed balance sheet as of March 31, 1995, the condensed statements of
operations for the three and six month periods ended March 31, 1995 and 1994 and
the condensed statements of cash flows for the six month periods ended March 31,
1995 and 1994 have been prepared by the Company, without audit. The balance
sheet as of September 30, 1994 was derived from the audited balance sheet
included in the Company's September 30, 1994 Annual Report on Form 10-K. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial condition, results of
operations and cash flows at March 31, 1995 and for all periods presented have
been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's September 30, 1994 Form 10-K. The results of
operations for the period ended March 31, 1995 are not necessarily indicative of
the operating results for the full year.
2. INVESTMENTS
At March 31, 1995 and September 30, 1994, investments consist primarily of U.S.
Treasury Notes and U.S. Treasury Bills.
3. INVENTORIES
As of March 31, 1995 and September 30, 1994 inventories consisted of the
following:
<TABLE>
<CAPTION>
March 31, 1995 September 30, 1994
-------------- ------------------
<S> <C> <C>
Raw Materials $ 461,000 $ 356,000
Work-in-Process 4,072,000 2,278,000
__________ __________
Total $4,533,000 $2,634,000
========== ==========
</TABLE>
4. NOTES PAYABLE
The Company has an agreement with a bank under which the Company may borrow up
to $1,500,000. Loans under this agreement bear interest at a rate of prime plus
one percent per annum and are secured by all the assets of the Company. The
amount outstanding under this credit facility was $-0- at March 31, 1995 and
$63,000 at September 30, 1994. The agreement expires on June 7, 1995.
-5-
<PAGE>
ROBOTIC VISION SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
5. INCOME TAXES
The income tax benefit for the six months ended March 31, 1995 and 1994
consisted of the following:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Current benefit $ (206,000) $ (50,000)
Deferred benefit (1,036,000) -
Adjustment of valuation allowance 3,302,000 1,143,000
___________ __________
Total $ 2,060,000 $1,093,000
=========== ==========
</TABLE>
The adjustments to the valuation allowance during the quarters ended March 31,
1995 and 1994 emanate from the Company's profitable operations and the extent to
which the Company can substantiate projected future earnings. The deferred tax
assets as of March 31, 1995 and September 30, 1994 are equivalent to the benefit
to be derived from net operating loss carryforwards and other tax credits which
are expected to be utilized to offset future taxable income projected as of
those dates. The deferred tax assets as of March 31, 1995 and September 30,
1994 have been limited to the benefit to be derived from projected future
income, primarily due to the Company's limited history of earnings and its
projected future profitability currently being primarily dependent on one
existing product line.
6. PROPOSED MERGER AGREEMENT
On April 27, 1995, the Company and Acuity Imaging, Inc. ("Acuity") signed a
definitive merger agreement. Upon consummation of the merger, Acuity Imaging
will become a wholly-owned subsidiary of RVSI.
The merger terms contemplate that RVSI is to issue 1.072 shares of its common
stock for each Acuity share or approximately 2,638,420 shares of RVSI common
stock in exchange for all of Acuity's outstanding shares. In addition, Acuity's
outstanding stock options are to be exchanged for options upon RVSI's common
stock in the same 1.072 to one ratio.
Consummation of the merger, which is intended to be completed as a tax-free
reorganization and to be accounted for as a pooling of interests, is subject to
conditions customary for transactions of this nature, including approval by the
stockholders of each of RVSI and Acuity Imaging.
-6-
<PAGE>
ROBOTIC VISION SYSTEMS, INC.
Item 2. Management's discussion and analysis of financial condition results of
operations.
Three and Six Months Ended March 31, 1995 and 1994
RESULTS OF OPERATIONS
Revenues of $16,600,000 for the six months ended March 31, 1995 represent an
increase of $4,810,000, or 41%, in comparison to revenues of $11,790,000 for the
six months ended March 31, 1994. For the three months ended March 31, 1995
revenues of $9,071,000 represent an increase of $3,170,000, or 54%, over the
comparable period in 1994. The increase in revenues was a result of
substantially increased shipments of the Company's LS-2000 and LS-3000 Series
semiconductor lead inspection systems.
Gross profit margins for the six months ended March 31, 1995 and March 31, 1994
were 54% and 45%, respectively. The increase in gross profit margins was
primarily due to the improved profitability of the LS-2000 and LS-3000 Series
product lines.
Company-funded research and development expenditures for the six and three
months ended March 31, 1995 increased by $591,000 and $302,000 over the
comparable levels in 1994. The increase is attributable to continued
development of the Company's lead scanning systems and, in addition, research
and development associated with the Company's aircraft wing ice detection
product. Certain software development costs are capitalized in accordance with
the provisions of Statement of Financial Accounting Standards No. 86. For the
six months ended March 31, 1995, $173,000 of these costs were capitalized as
compared to $246,000 for the comparable 1994 period.
The company's selling, general and administrative costs for the six and three
months ended March 31, 1995 increased by $920,000, or approximately 36% and
$634,000, or 48% over the comparable level in 1994. The increase is primarily
as a result of increased marketing and distribution costs associated with the
lead scanning systems product line.
Net income for the six months ended March 31, 1995 was $5,282,000, or $.38 per
share as compared to net income of $2,099,000, or $.16 for the six months ended
March 31, 1994. Net income for the three months ended March 31, 1995 was
$4,463,000, or $.32 per share as compared to net income of $1,643,000, or $.13
per share for the three months ended March 31, 1994.
-7-
<PAGE>
ROBOTIC VISION SYSTEMS, INC.
Item 2. Management's discussion and analysis of financial condition results of
operations - Continued
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating, investing, and financing activities for the six months
ended March 31, 1995 utilized net cash of $1,222,000 as follows:
- Operating activities provided $216,000 during the six months ended
March 31, 1995;
- $993,000 was invested primarily in U.S. Treasury Notes;
- $551,000 was used to purchase property and equipment, primarily computer
and demonstration equipment, during the six months ended March 31,
1995; and
- Financing activities provided $106,000 primarily through the issuance of
stock upon the exercise of stock options and warrants.
The Company anticipates that its working capital needs for fiscal 1995 will be
satisfied by operating revenues and, if necessary, through borrowings under an
existing line of credit. The Company, however, will consider the possibility of
additional debt and/or equity financing, if such financing can be arranged on
terms favorable to the Company.
EFFECT OF INFLATION
Management believes that during the six months ended March 31, 1995 the effect
of inflation was not material.
PROPOSED MERGER AGREEMENT
On April 27, 1995, the Company and Acuity Imaging, Inc. ("Acuity") signed a
definitive merger agreement. Upon consummation of the merger, Acuity Imaging
will become a wholly-owned subsidiary of RVSI.
The merger terms contemplate that RVSI is to issue 1.072 shares of its common
stock for each Acuity share or approximately 2,638,420 shares of RVSI common
stock in exchange for all of Acuity's outstanding shares. In addition, Acuity's
outstanding stock options are to be exchanged for options upon RVSI's common
stock in the same 1.072 to one ratio.
Consummation of the merger, which is intended to be completed as a tax-free
reorganization and to be accounted for as a pooling of interests, is subject to
conditions customary for transactions of this nature, including approval by the
stockholders of each of RVSI and Acuity Imaging.
-8-
<PAGE>
ROBOTIC VISION SYSTEMS, INC.
PART II. OTHER INFORMATION
Item 3. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Statement re computation of net income per common share
The net income per common share was computed by dividing the net income by the
respective weighted average number of shares of common stock outstanding. For
the six month and three month periods ended March 31, 1995 and 1994 the weighted
average number of shares outstanding were calculated using the modified treasury
stock method. The weighted average number of common shares and common share
equivalents outstanding for the six months ended March 31, 1995 and 1994 was
13,765,000 and 12,830,000, respectively. The weighted average number of common
shares and common share equivalents outstanding for the three months ended March
31, 1995 and 1994 was 13,734,000 and 12,912,000, respectively.
(b) During the quarter ended March 31, 1995, Registrant did not file any
reports on Form 8-K.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROBOTIC VISION SYSTEMS, INC.
Registrant
Dated: May 8, 1995 /s/ PAT V. COSTA
______________________________
PAT V. COSTA
President and CEO
(Principal Executive Officer)
Dated: May 8, 1995 /s/ ROBERT H. WALKER
___________________________________
ROBERT H. WALKER
Executive Vice President and Treasurer
(Principal Financial Officer)
-10-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<CASH> 346
<SECURITIES> 3987
<RECEIVABLES> 5815
<ALLOWANCES> 124
<INVENTORY> 4533
<CURRENT-ASSETS> 15247
<PP&E> 3712
<DEPRECIATION> 1502
<TOTAL-ASSETS> 21710
<CURRENT-LIABILITIES> 6936
<BONDS> 0
<COMMON> 117
0
0
<OTHER-SE> 14444
<TOTAL-LIABILITY-AND-EQUITY> 21710
<SALES> 16600
<TOTAL-REVENUES> 16600
<CGS> 7616
<TOTAL-COSTS> 7616
<OTHER-EXPENSES> 5858
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3222
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5282
<EPS-PRIMARY> .38
<EPS-DILUTED> 0
</TABLE>
