<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 December 31, 1995 Commission File Number 0-8623
----------------- ------
ROBOTIC VISION SYSTEMS, INC.
----------------------------
(Exact name of Registrant as specified in charter)
DELAWARE 11-2400145
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(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 February 9, 1996 16,446,419
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<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
PART 1. FINANCIAL INFORMATION
Item 1. Consolidated Financial statements
<TABLE>
<CAPTION> December 31, September 30,
1995 1995
---- ----
(Unaudited) Restated
(Note 2)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.................................... $ 19,184,000 $ 16,424,000
Investments (Note 3)......................................... 1,000,000 1,000,000
Receivables - net (including unbilled
receivables of $1,687,000 at December 31, 1995
and $1,298,000 at September 30, 1995)....................... 12,932,000 12,082,000
Inventories (Note 4)......................................... 10,795,000 8,461,000
Deferred income taxes........................................ 2,375,000 2,375,000
Prepaid expenses and other current assets.................... 285,000 154,000
----------- ----------
Total Current Assets..................................... 46,571,000 40,496,000
Plant and equipment, net.................................... 4,395,000 4,145,000
Other Assets................................................ 1,783,000 1,748,000
Investments (Note 3)........................................ 1,491,000 1,989,000
----------- ----------
TOTAL..................................................... $54,240,000 $48,378,000
----------- ----------
----------- ----------
LIABILITIES
Current Liabilities:
Notes payable............................................. $270,000
Loan payable(Note 6)..................................... 1,385,000 1,385,000
Account payable........................................... 9,882,000 7,988,000
Accrued expenses and other current liabilities............ 5,187,000 5,473,000
Advance contract payments received........................ 690,000 1,078,000
----------- ---------
Total Current Liabilities................................ 17,144,000 16,194,000
Other liabilities........................................... 78,000 78,000
----------- ---------
Total Liabilities........................................ 17,222,000 16,272,000
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STOCKHOLDERS' EQUITY
Common stock, authorized 30,000,000
shares, $.01 par value; issued and outstanding
15,891,000 shares at December 31, 1995 and
15,175,000 shares at September 30, 1995..................... 159,000 152,000
Additional paid-in capital.................................. 110,863,000 109,834,000
Accumulated deficit......................................... (74,137,000) (78,023,000)
Cumulative translation adjustment........................... 133,000 143,000
----------- -----------
Total Stockholders' Equity............................... 37,018,000 32,106,000
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TOTAL.................................................... $54,240,000 $48,378,000
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----------- -----------
</TABLE>
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<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
------------------
1995 1994
---- ----
Restated
(Note 2)
<S> <C> <C>
Revenues......................................... $20,462,000 $13,685,000
Cost of revenues................................. 8,761,000 5,996,000
----------- ---------
Gross profit..................................... 11,701,000 7,689,000
Research and development costs................... 3,030,000 2,184,000
Selling, general and administrative expenses..... 4,612,000 3,608,000
Merger expenses.................................. 224,000 440,000
Interest income - net............................ (226,000) (2,000)
----------- ---------
Income before provision for income taxes.......... 4,061,000 1,459,000
Provision for income taxes........................ 175,000 539,000
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Net income........................................ $3,886,000 $ 920,000
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----------- ---------
Net income per common share....................... $ 0.22 $ 0.06
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</TABLE>
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<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
----------------------
1995 1994
---- Restated
(Note 2)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income................................................$3,886,000 $ 920,000
Adjustments to reconcile net income to cash provided
by operating activities:
Deferred income taxes.................................... - 439,000
Depreciation and amortization............................ 480,000 317,000
Other.................................................... (25,000) 64,000
Asset and liability management:
Receivables............................................. (832,000) (532,000)
Inventories............................................ (2,334,000) (1,183,000)
Prepaid expenses and other current assets............... (116,000) (24,000)
Other assets............................................ (126,000) (143,000)
Accounts payable........................................ 1,876,000 697,000
Accrued expenses and other current liabilities.......... (286,000) 693,000
Advanced contract payments received..................... (388,000) (983,000)
Other liabilities....................................... - 7,000
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Net cash provided by operating activities................. 2,135,000 272,000
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INVESTING ACTIVITIES:
Purchase of investments................................. - (748,000)
Proceeds from the maturity of investments............... 500,000 -
Additions to property and equipment..................... (630,000) (263,000)
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Net cash used in investing activities..................... (130,000) (1,011,000)
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FINANCING ACTIVITIES:
Issuance of common stock in connection with the
exercise of stock options and warrants................. 1,035,000 179,000
Notes payable.......................................... (270,000) 287,000
Proceeds from Bank loan................................ - 215,000
Payments of short-term debt and related accrued
interest............................................... - (49,000)
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Net cash provided by financing activities................. 765,000 632,000
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EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS............................. (10,000) (8,000)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.............................................. 2,760,000 (115,000)
CASH AND CASH EQUIVALENTS-BEGINNING OF
PERIOD................................................. 16,424,000 1,790,000
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CASH AND CASH EQUIVALENTS-END OF
PERIOD..................................................$19,184,000 $1,675,000
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SUPPLEMENTAL INFORMATION:
Interest Paid............................................$ 53,000 $ 31,000
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Income Taxes Paid...................................... $ 132,000 $129,000
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</TABLE>
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<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of December 31, 1995, the
condensed consolidated statements of operations for the three month periods
ended December 31, 1995 and 1994 and the condensed consolidated statements of
cash flows for the three month periods ended December 31, 1995 and 1994 have
been prepared by the Company, without audit. 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 December 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 consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
September 30, 1995 Form 10-K. The results of operations for the period ended
December 31, 1995 are not necessarily indicative of the operating results for
the full year.
2. ACQUISITIONS
On September 20, 1995, the Company acquired the outstanding shares of Acuity
Imaging, Inc. ("Acuity") for approximately 1,448,000 shares of the Company's
common stock, having a market value at the date of the merger of
approximately $31,141,000. Acuity is a developer, manufacturer and seller of
machine vision systems. Outstanding Acuity stock options were converted into
options to purchase approximately 114,000 shares of the Company's common
stock.
On October 23, 1995, the Company acquired the outstanding shares of
International Data Matrix, Inc. ("IDM") for approximately 370,000 shares of
the Company"s common stock, having a market value at the date of the merger
of approximately $8,183,000. IDM is a developer, manufacturer and seller of
high-density bar code reading products.
Both acquisitions were accounted for as poolings of interests and
accordingly, the consolidated financial statements have been retroactively
restated to include the accounts of Acuity and IDM for all periods presented.
The following is a reconciliation of certain restated amounts with amounts
previously reported.
<TABLE>
<CAPTION>
Three Months
ended
December 31, 1994
-----------------
<S> <C>
Revenues:
As previously reported...................... $ 7,529,000
Effect of Acuity and IDM poolings of
interests.................................. 6,156,000
-----------
As restated................................. $13,685,000
-----------
-----------
Net Income:
As previously reported...................... $ 819,000
Effect of Acuity and IDM poolings of
interests................................. 101,000
-----------
-----------
As restated................................. $ 920,000
-----------
-----------
Net income per share:
As previously reported...................... $ 0.06
Effect of Acuity and IDM poolings of
interests................................... -
-----------
As restated.................................. $ 0.06
-----------
-----------
</TABLE>
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<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(Unaudited)
3. INVESTMENTS
At December 31, 1995 and September 30, 1995, investments consist of certain
debt securities issued by the United States government with maturities
through November 1997.
4. INVENTORIES
Inventories at December 31, 1995 and September 30, 1995 consisted of the
following;
<TABLE>
<CAPTION>
December 31, 1995 September 30, 1995
----------------- -------------------
<S> <C> <C>
Raw Materials $ 2,820,000 $ 2,223,000
Work-in-Process 7,049,000 5,515,000
Finished Goods 736,000 533,000
Field Engineering Parts
and Components 190,000 190,000
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Total $10,795,000 $ 8,461,000
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----------- -----------
</TABLE>
5. INCOME TAXES
The provision for income taxes for the three months ended December 31, 1995
and 1994 consisted of the following:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Current provision $175,000 $100,000
Deferred provision - 439,000
-------- ---------
Total $175,000 $539,000
-------- ---------
-------- ---------
</TABLE>
6. Loan Payable
The Company has a revolving line of credit from a bank that provides for
maximum borrowing of $6,000,000. The agreement expires on January 31, 1999.
Borrowings under the agreement are secured by all accounts receivable of the
Company and bear interest at the adjusted LIBOR rate, as defined, plus two
percent. The Company is required to pay a commitment fee of one quarter of
one percent per annum on any unused portion of the credit facility. The
terms of the agreement, among other matters, require the Company to maintain
certain tangible net worth, debt to equity, working capital, and earnings
before depreciation and amortization to long-term debt ratios and restrict
the payment of cash dividends.
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<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
Item 2. Management's discussion and analysis of financial condition results
of operations.
Three Months Ended December 31, 1995 and 1994
RESULTS OF OPERATIONS
Revenues of $20,462,000 for the three months ended December 31, 1995
represent an increase of $6,777,000, or approximately 50%, in comparison to
revenues of $13,685,000 for the three months ended December 31, 1994. The
increase in revenues was a result of substantially increased shipments of the
Company's LS-3000 Series semiconductor lead inspection systems.
Gross profit margins for the three months ended December 31, 1995 and 1994
were 57% and 56%, respectively. The increase in gross profit margins
during fiscal 1995 was primarily due to the improved profitability of the
LS-3000 Series product lines.
Continued development of the LS-3000 Series of lead scanning systems, the
ID-1 aircraft wing ice detection systems, and computerized visual inspection
equipment primarily accounted for $3,030,000 in research and development
expense during the three months ended December 31, 1995 as contrasted with
$2,184,000 during the comparable period in fiscal 1995. Certain software
development costs are capitalized in accordance with the provisions of
Statement of Financial Accounting Standards No. 86. For the three months
ended December 31, 1995, $126,000 of these costs were capitalized as compared
to $119,000 for the comparable period in fiscal 1995.
Selling, general and administrative costs increased by $1,004,000, or 28% for
the three months ended December 31, 1995 as compared to the prior comparable
period, primarily as a result of increased marketing and distribution costs.
The Company incurred $224,000 for merger expenses relating to the acquisition
of I.D. Matrix by the Company on October 23, 1995.
Net income for the three months ended December 31, 1995 was $3,886,000, or
$.22 per share as compared to net income of $920,000, or $.06 for the three
months ended December 31, 1994.
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<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
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 three
months ended December 31, 1995 generated net cash and cash equivalents of
$2,760,000 as follows:
- Operating activities provided $2,135,000 during the three months
ended December 31, 1995;
- $ 500,000 was generated from the maturity of short-term investments;
- $ 630,000 was used to purchase property and equipment, primarily
leasehold improvements and office furniture and equipment,
during the three months ended December 31, 1995;
- $1,035,000 was generated through the issuance of common stock upon
the exercise of stock options and warrants;
- $ 270,000 was used to repay notes payable.
- The effect of exchange rate changes reduced cash and cash
equivalents by $10,000.
On November 20, 1995, the Company obtained a revolving line of credit from a
bank that provides for maximum borrowings of $6,000,000. The agreement
expires on January 31, 1999. Borrowings under the agreement are secured by
all accounts receivable of the Company and bear interest at the adjusted
LIBOR rate, as defined, plus two percent. The Company is required to pay a
commitment fee of one quarter of one percent per annum on any unused portion
of the credit facility. The terms of the agreement, among other matters,
require the Company to maintain certain tangible net worth, debt to equity,
working capital, and earnings before depreciation and amortization to
long-term debt ratios and restrict the payment of cash dividends.
The Company anticipates that its working capital needs for fiscal 1996 will
be satisfied by existing cash and cash equivalents, operating revenues and,
if necessary, through borrowings under an existing line of credit.
FOREIGN CURRENCY TRANSACTIONS
The Company does not currently engage in international currency hedging
transactions to mitigate its foreign currency exposure. Included in the
cumulative translation asjustment is unrealized foreign exchange gains and
losses resulting from the currency remeasurement of the financial statements
(primarily inventories and accounts receivable) of the foreign subsidiary of
the Company into U.S. dollars. To the extent the Company is unable to match
revenues received in foreign currencies with expenses paid in the same
currency, it is exposed to possible losses on international currency
transactions.
EFFECT OF INFLATION
Management believes that during the three months ended December 31, 1995 the
effect of inflation was not material.
-8-
<PAGE>
ROBOTIC VISION SYSTEMS, INC., AND SUBSIDIARIES
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.
(b) During the quarter ended December 31, 1995, Registrant filed
a current report on Form 8-K, dated 10/3/95 and an amendment
on 10/26/95 to disclose the acquisition of Acuity Imaging, Inc.
Registrant also filed a current report on Form 8-K, dated
11/2/95 to disclose the acquisition of International Data
Matrix, Inc.
-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: February 12, 1996 /s/ PAT V. COSTA
---------------------------
PAT V. COSTA
President and CEO
(Principal Executive Officer )
Dated: February 12, 1996 /s/ ROBERT H. WALKER
---------------------------
ROBERT H. WALKER
Executive Vice President
and Treasurer
(Principal Financial Officer)
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<PAGE>
EXHIBIT 11
ROBOTIC VISION SYSTEMS, INC AND SUBSIDIARIES
COMPUTATION OF PER SHARE ACCOUNTS
<TABLE>
<CAPTION>
Three Months Ended
------------------
December 31, 1995 December 31, 1994
----------------- -----------------
<S> <C> <C>
Net income................................... $3,886,000 $920,000
========== ========
Weighted average number of common shares...... 15,497,000 13,254,000
Assumed number of shares issued from common
share equivalents........................... 2,134,000 2,137,000
--------- ---------
Weighted average number of common and common
equivalent shares........................... 17,631,000 15,391,000
========== ==========
Net income per share......................... $0.22 $0.06
===== ====
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 19,184
<SECURITIES> 2,491
<RECEIVABLES> 12,932
<ALLOWANCES> 0
<INVENTORY> 10,795
<CURRENT-ASSETS> 46,571
<PP&E> 4,395
<DEPRECIATION> 0
<TOTAL-ASSETS> 54,240
<CURRENT-LIABILITIES> 17,144
<BONDS> 0
0
0
<COMMON> 159
<OTHER-SE> 36,859
<TOTAL-LIABILITY-AND-EQUITY> 54,240
<SALES> 0
<TOTAL-REVENUES> 20,462
<CGS> 8,761
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,866
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,061
<INCOME-TAX> 175
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,886
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
